<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE __ , 1998
REGISTRATION NO. 333-50717
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
BLUEGREEN CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MASSACHUSETTS 03-0300793
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
AND SUBSIDIARY GUARANTORS
BLUEGREEN RESORTS MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 65-0520217
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BLUEGREEN RESORTS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 65-0520212
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BLUEGREEN HOLDING CORPORATION (TEXAS)
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 65-0796382
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
PROPERTIES OF THE SOUTHWEST ONE, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 03-0315835
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
PROPERTIES OF THE SOUTHWEST, L.P.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 65-0796380
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BLUEGREEN ASSET MANAGEMENT CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 03-0325365
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BLUEGREEN CAROLINA LAND, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 03-031760
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BLUEGREEN CORPORATION OF MONTANA
(exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MONTANA 81-0400702
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BLUEGREEN CORPORATION OF TENNESSEE
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 03-0316460
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BLUEGREEN CORPORATION OF THE ROCKIES
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 65-0349373
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BLUEGREEN PROPERTIES OF VIRGINIA, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 52-1752664
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BLUEGREEN COMMUNITIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 65-0484313
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BLUEGREEN RESORTS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 65-0803615
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
CAROLINA NATIONAL GOLF CLUB, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NORTH CAROLINA 62-1667685
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
LEISURE CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
VERMONT 03-0327285
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
PROPERTIES OF THE WEST, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 59-3300205
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
BG/RDI ACQUISITION CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 65-0776572
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
RDI GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
FLORIDA 59-25041871
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
DELLONA ENTERPRISES, INC.
(exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
WISCONSIN 39-1130446
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
RESORT DEVELOPMENT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
FLORIDA 59-2151678
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
RDI RESORT SERVICES CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
FLORIDA 59-2257190
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
RDI RESOURCES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
FLORIDA 65-0433722
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
</TABLE>
6552
(Primary Standard Industrial Classification Code Number of each registrant)
---------------------
<TABLE>
<S> <C>
JOHN F. CHISTE
CHIEF FINANCIAL OFFICER
BLUEGREEN CORPORATION
4960 BLUE LAKE DRIVE 4960 BLUE LAKE DRIVE
BOCA RATON, FLORIDA 33431 BOCA RATON, FLORIDA 33431
(561) 912-8000 (561) 912-8000
(Address, including zip code, and telephone number, (Name, address, including zip code, and telephone number,
including area code, of each Registrant's Principal including area code, of agent for service)
Executive Offices)
</TABLE>
---------------------
WITH A COPY TO:
WILLIAM P. GELNAW, JR., ESQ.
CHOATE, HALL & STEWART
EXCHANGE PLACE
53 STATE STREET
BOSTON, DELAWARE 021098
(617) 248-5000
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and they are in compliance
with General Instruction G, check the following box: [ ]
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 17, 1998
PROSPECTUS
OFFER TO EXCHANGE UP TO $110,000,000 OF 10 1/2%
SENIOR SECURED NOTES DUE 2008, SERIES B OF BLUEGREEN CORPORATION,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
FOR ANY AND ALL OF ITS OUTSTANDING 10 1/2% SENIOR SECURED NOTES DUE 2008
(BLUEGREEN CORPORATION LOGO)
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1998, UNLESS EXTENDED
------------------------
Bluegreen Corporation, a Massachusetts corporation ("Bluegreen" or the
"Company"), hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus (as the same may be amended or supplemented from time
to time, this "Prospectus") and the accompanying letter of transmittal (the
"Letter of Transmittal," and together with this Prospectus, the "Exchange
Offer"), to exchange up to an aggregate amount of $110,000,000 of the Company's
10 1/2% Senior Secured Notes Due 2008, Series B (the "Exchange Notes"), which
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to a Registration Statement of which this Prospectus
is a part, which Exchange Notes shall be guaranteed (the "Exchange Guarantees"),
jointly and severally, by each of the Subsidiary Guarantors (as defined) for a
like principal amount of the Company's outstanding 10 1/2% Senior Secured Notes
due 2008 (the "Outstanding Notes"), of which $110,000,000 in aggregate principal
amount was issued on April 1, 1998 and is outstanding as of the date hereof,
which Outstanding Notes have been guaranteed by the Subsidiary Guarantors (the
"Outstanding Guarantees"). The form and terms of the Exchange Notes and the
Exchange Guarantees are identical in all material respects to the terms of the
Outstanding Notes and the Outstanding Guarantees, except that (i) the Exchange
Notes will bear a Series B designation and will have been registered under the
Securities Act and, therefore, will not bear legends restricting their transfer
and will not contain certain provisions relating to an increase in the interest
rate which were included in the terms of the Outstanding Notes in certain
circumstances relating to the timing of the Exchange Offer and (ii) holders of
the Exchange Notes will not be entitled to certain rights of the holders of the
Outstanding Notes under the Exchange and Registration Rights Agreement dated
April 1, 1998 (the "Registration Rights Agreement"), which rights shall
terminate upon the consummation of the Exchange Offer. See "The Exchange
Offer -- Purpose and Effect of Exchange Offer." The Exchange Notes will evidence
the same indebtedness as the Outstanding Notes (which they replace) and will be
issued pursuant to, and entitled to the benefits of, the Indenture, dated as of
April 1, 1998, between the Company, the Subsidiary Guarantors and SunTrust Bank,
Central Florida, National Association, as trustee (the "Notes Trustee"),
governing the Outstanding Notes. The Exchange Notes and the Outstanding Notes
are hereinafter sometimes collectively referred to as the "Notes" and the
Outstanding Guarantees and the Exchange Guarantees are hereinafter sometimes
collectively referred to as the "Note Guarantees." See "The Exchange Offer" and
"Description of Notes."
The Exchange Notes will bear interest at the same rate and on the same terms
as the Outstanding Notes. Consequently, the Exchange Notes will bear interest at
the rate of 10 1/2% per annum and the interest thereon will be payable
semi-annually on April 1 and October 1 of each year, commencing October 1, 1998.
The Exchange Notes will bear interest from the date of the last interest payment
on the Outstanding Notes or, if no interest has been paid, from the date of
original issuance of the Outstanding Notes. Holders whose Outstanding Notes are
accepted for exchange will be deemed to have waived the right to receive any
interest accrued on the Outstanding Notes.
The Outstanding Notes were sold in an aggregate principal amount of $110
million by the Company on April 1, 1998 (the "Issue Date") to NatWest Capital
Markets Limited and McDonald & Company Securities, Inc. (the "Initial
Purchasers") in a transaction (the "Note Offering") not registered under the
Securities Act in reliance upon an exemption under the Securities Act. The
Initial Purchasers subsequently placed the Outstanding Notes with qualified
institutional buyers within the meaning of and in reliance upon Rule 144A under
the Securities Act. Accordingly, the Outstanding Notes may not be reoffered,
resold or otherwise transferred in the United States unless registered under the
Securities Act or unless an applicable exemption from the registration
requirements of the Securities Act is available. The Exchange Notes are being
offered hereunder in order to satisfy the obligations of the Company and the
Subsidiary Guarantors under the Registration Rights Agreement.
Based on no-action letters issued by the staff of the Securities and
Exchange Commission (the "Commission") to third parties, the Company believes
that Exchange Notes to be issued pursuant to the Exchange Offer may be offered
for resale, resold and otherwise transferred by any holder thereof (other than
(i) a broker-dealer who purchasers such Exchange Notes from the Company to
resell pursuant to Rule 144A or any other available exemption under the
Securities Act or (ii) any such holder that is an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act) without compliance with
the registration and prospectus delivery provisions of the Securities Act,
provided that such Exchange Notes are acquired in the ordinary course of such
holder's business and such holder has no arrangement or understanding with any
person to participate in the distribution of such Exchange Notes. However, the
Company has not sought and does not intend to seek its own no-action letter in
connection with the Exchange Offer and there can be no assurance that the
Commission would make a similar determination with respect to the Exchange
Offer. Eligible holders of Outstanding Notes wishing to accept the Exchange
Offer must represent to the Company that such conditions have been met. Each
broker-dealer (a "Participating Broker-Dealer") that receives Exchange Notes for
its account pursuant to the Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such
(Continued on next page)
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 15 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY HOLDERS OF OUTSTANDING NOTES AND PROSPECTIVE
PURCHASES OF EXCHANGE NOTES.
------------------------
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is June , 1998.
<PAGE> 3
(Continued from previous page)
Exchange Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act. A
broker-dealer may nonetheless be deemed to be an "underwriter" under the
Securities Act notwithstanding such disclaimer. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of Exchange Notes received in exchange
for Outstanding Notes where such Outstanding Notes were acquired by such
Participating Broker-Dealer as a result of marketing making activities or other
trading activities, provided such Outstanding Notes do not constitute any
portion of an unsold allotment from the original sale of the Outstanding Notes.
The Company has agreed that, for a period of 180 days after the Expiration Date,
it will make this Prospectus available to any Participating Broker-Dealer for
use in connection with any such resale. See "Plan of Distribution."
Holders of Outstanding Notes whose Outstanding Notes are not tendered and
accepted in the Exchange Offer will continue to hold such Outstanding Notes and
will be entitled to all the rights and benefits and will be subject to the
limitations applicable thereto under the Indenture. Following the consummation
of the Exchange Offer, the holders of Outstanding Notes will continue to be
subject to the existing restrictions on the transfer thereof and the Company
will have no further obligation to such holders to provide for the registration
under the Securities Act of the Outstanding Notes held by them. The Company will
not receive any proceeds from, and has agreed to pay all the expenses incurred
by it incident to, the Exchange Offer. No underwriter is being used in
connection with this Exchange Offer. See "The Exchange Offer."
Prior to the Exchange Offer, there has been no public market for the Notes.
The Company does not intend to list the Outstanding Notes or Exchange Notes on
any securities exchange or to seek approval for quotation through any automated
quotation system. To the extent that a market for the Notes does develop, the
market value of the Notes will depend on market conditions (including yields on
alternative investments), general economic conditions, the Company's financial
condition and other factors. Such conditions might cause the Notes, to the
extent that they are traded, to trade at a significant discount from face value.
See "Risk Factors -- Lack of a Public Market for the Notes; Restrictions on
Resales." Moreover, to the extent that Outstanding Notes are tendered and
accepted in the Exchange Offer, the trading market for untendered and tendered
but unaccepted Outstanding Notes could be adversely affected. No assurances can
be given as to the liquidity of the trading market for either the Outstanding
Notes or the Exchange Notes.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS FOR EXCHANGES FROM, HOLDERS OF OUTSTANDING NOTES IN ANY JURISDICTION
IN WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
The Exchange Notes will be available initially only in book-entry form and
the Company expects that the Exchange Notes issued pursuant to the Exchange
Offer will be issued in the form of a Global Note (as defined herein), which
will be deposited with, or on behalf of, the Depository Trust Company ("DTC")
and registered in its name or in the name of Cede & Co., its nominee. Beneficial
interests in the Global Note representing the Exchange Notes will be shown on,
and transfers thereof will be effected through, records maintained by DTC and
its participants. So long as DTC or its nominee is the registered owner or
holder of the Global Note, DTC or such nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented by such Global Note
for all purposes under the Indenture. Payments of the principal of, premium (if
any), and interest on the Global Note will be made to DTC or its nominee, as the
case may be, as the registered owners thereof. None of the Company, the Notes
Trustee or any Paying Agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interest. After the
initial issuance of the Global Note, Exchange Notes in certificated form will be
issued in exchange for the Global Note only under the limited circumstances set
forth in the Indenture.
Except as described herein, the Company may not redeem the Notes prior to
April 1, 2003. On or after such date, the Company may redeem the Notes, in whole
or in part, in cash, at any time, at the redemption prices set forth herein,
together with accrued and unpaid interest, if any, to the date of redemption. In
addition, at any time and from time to time on or prior to April 1, 2001, the
Company may, subject to certain requirements, redeem up to 35% of the aggregate
principal amount of the Notes with the cash proceeds of one or more Equity
Offerings (as defined) at a redemption price equal to 110.5% of the principal
amount to be redeemed, together with accrued and unpaid interest, if any, to the
date of the redemption, provided that, with respect to any such redemption of
the Notes, at least $65 million of the aggregate principal amount of the Notes
remains outstanding immediately after each such redemption. The Notes will not
be subject to any sinking fund requirement. Upon the occurrence of a Change of
Control (as defined), the Company will be required to make an offer to
repurchase the Notes at a price equal to 101% of the principal amount thereof,
together with accrued and unpaid interest, if any, to the date of repurchase.
See "Description of the Notes -- Optional Redemption" and "-- Change of
Control."
The Outstanding Notes are and the Exchange Notes will be senior obligations
of the Company. The Outstanding Notes rank and the Exchange Notes will rank pari
passu in right of payment with all existing and future Senior Indebtedness (as
defined) of the Company. The Outstanding Notes rank and the Exchange Notes will
rank senior in right of payment to all Subordinated Obligations (as defined) of
the Company. The Outstanding Notes are and the Exchange Notes will be
unconditionally guaranteed (the "Note Guarantees"), jointly and severally, by
each of the Subsidiary Guarantors (as defined). The Note Guarantees are and will
be senior obligations of each Subsidiary Guarantor and rank and will rank pari
passu in right of payment with all existing and future Senior Indebtedness of
each such Subsidiary Guarantor and senior in right of payment to all existing
and future Subordinated Obligations of each such Subsidiary Guarantor. The Note
Guarantees of certain of the Subsidiary Guarantors are and will be secured by a
Mortgage (as defined) on certain real property owned by such Subsidiary
Guarantors (the "Pledged Properties"). Except for such secured Note Guarantees,
the Notes and the Note Guarantees are and will be effectively subordinated to
any Secured Indebtedness (as defined) of the Company and the Subsidiary
Guarantors to the extent of the assets serving as security therefor. See
"Description of Notes."
The Company will accept for exchange any and all Outstanding Notes that are
validly tendered and not withdrawn on or prior to 5:00 p.m., New York City time,
on the date the Exchange Offer expires, which will be , 1998, unless
the Exchange Offer is extended by the Company in its sole discretion (the
"Expiration Date"). Tenders of Outstanding Notes may be withdrawn at any time
prior to the Expiration Date. Outstanding Notes may be tendered only in integral
multiples of $1,000. The Exchange Offer is not conditioned upon any minimum
principal amount of Outstanding Notes being tendered for exchange. However, the
Exchange Offer is subject to certain customary conditions. See "The Exchange
Offer -- Conditions."
<PAGE> 4
THE INITIAL PURCHASERS WHO PARTICIPATED IN THE NOTE OFFERING MAY, SUBJECT
TO LEGAL AND REGULATORY LIMITATIONS, ENGAGE IN TRANSACTIONS THAT STABILIZE,
MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE NOTES. SPECIFICALLY, THE INITIAL
PURCHASERS MAY BID FOR AND PURCHASE NOTES IN THE OPEN MARKET.
The Company has agreed to obtain certain title insurance policies in
connection with the mortgaging of the Pledged Properties (as defined). If all
such title insurance policies are not obtained by June 1, 1998, the interest
rate on the Notes will increase and any additional interest resulting from such
increase will be payable on the interest payment dates set forth herein. See
"Description of Notes -- Security."
EACH PROSPECTIVE PURCHASER OF THE NOTES MUST COMPLY WITH ALL APPLICABLE
LAWS AND REGULATIONS IN FORCE IN ANY JURISDICTION IN WHICH IT PURCHASES, OFFERS
OR SELLS NOTES, OR POSSESSES OR DISTRIBUTES THIS PROSPECTUS AND MUST OBTAIN ANY
CONSENT, APPROVAL OR PERMISSION REQUIRED OF IT FOR THE PURCHASE, OFFER OR SALE
BY IT OF THE NOTES UNDER THE LAW AND REGULATIONS IN FORCE IN ANY JURISDICTION TO
WHICH IT IS SUBJECT OR IN WHICH IT MAKES SUCH PURCHASES, OFFERS OR SALES, AND
NEITHER THE COMPANY NOR THE INITIAL PURCHASERS SHALL HAVE ANY RESPONSIBILITY
THEREFOR.
IN MAKING AN INVESTMENT DECISION REGARDING THE EXCHANGE NOTES OFFERED
HEREBY, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE
TERMS OF THE EXCHANGE OFFER, INCLUDING THE MERITS AND RISKS INVOLVED. THE
CONTENTS OF THIS PROSPECTUS ARE NOT TO BE CONSTRUED AS LEGAL, INVESTMENT,
BUSINESS OR TAX ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN
ATTORNEY, BUSINESS ADVISOR AND TAX ADVISOR AS TO LEGAL, BUSINESS, TAX, FINANCIAL
AND RELATED ADVICE. NEITHER THE COMPANY NOR THE INITIAL PURCHASERS ARE MAKING
ANY REPRESENTATION TO ANY OFFEREE OR PURCHASER OF THE NOTES REGARDING THE
LEGALITY OF AN INVESTMENT THEREIN BY SUCH OFFEREE OR PURCHASER UNDER APPROPRIATE
LEGAL, INVESTMENT OR SIMILAR LAWS.
FORWARD-LOOKING STATEMENTS
The Company desires to take advantage of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. Certain statements in this
Prospectus under the captions "Prospectus Summary," "Use of Proceeds," "Risk
Factors," "Management's Discussion and Analysis of Results of Operations and
Financial Condition" and "Business" and elsewhere, including the information
incorporated by reference, constitute "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Such forward-looking
statements (including, without limitation, information concerning estimated
remaining life-of-project sales and estimated remaining life-of-project field
operating profit, planned development, anticipated future efficiencies and/or
cost savings and liquidity) are subject to a number of risks and uncertainties,
many of which are beyond the Company's control, that could cause the actual
results, performance or achievements of the Company, or industry results, to
differ materially from any future results, performance or achievements expressed
or implied by such forward-looking statements. Given these uncertainties,
prospective investors are cautioned not to place undue reliance on such
forward-looking statements and no assurances can be given that the plans,
estimates and expectations reflected in such statements will be achieved. Such
risks, uncertainties and other important factors include, among others, the
following factors (as well as the other factors referred to in "Risk Factors"
and elsewhere herein): (a) changes in national, international or regional
economic conditions that can affect the real estate and timeshare markets, which
is cyclical in nature and highly sensitive to such changes, including, among
other factors, levels of employment and discretionary disposable income,
consumer confidence, available financing and interest rates; (b) the imposition
of additional compliance costs on the Company as the result of changes in any
environmental, zoning or other laws and regulations that govern the acquisition,
subdivision and sale of real estate and various aspects of the
i
<PAGE> 5
Company's financing operation; (c) risks associated with a large investment in
real estate and timeshare inventory at any given time (including risks that
inventories will decline in value due to changing market and economic conditions
and that the development and carrying costs of inventories may exceed those
anticipated); (d) risks associated with an inability to locate suitable
inventory for acquisition; (e) risks associated with delays in bringing the
Company's inventories to market due to, among other things, changes in
regulations governing the Company's operations, adverse weather conditions or
changes in the availability of development financing on terms acceptable to the
Company; (f) changes in applicable usury laws or the availability of interest
deductions or other provisions of federal or state tax law; (g) a decreased
willingness on the part of banks to extend direct customer lot financing, which
could result in the Company receiving less cash in connection with the sales of
real estate and/or lower sales; (h) the inability of the Company to find
external sources of liquidity on favorable terms to support its operations,
acquire, carry and develop residential land and timeshare inventories and
satisfy its debt and other obligations; (i) the inability of the Company to find
sources of capital on favorable terms for the pledge of land and timeshare notes
receivable; (j) an increase in prepayment rates, delinquency rates or defaults
with respect to Company-originated loans or an increase in the costs related to
reacquiring, carrying and disposing of properties reacquired through foreclosure
or deeds in lieu of foreclosure; (k) costs to develop inventory for sale and/or
selling, general and administrative expenses exceed those anticipated; and (l)
an increase or decrease in the number of residential land or resort properties
subject to percentage of completion accounting which requires deferral of profit
recognition on such projects until development is substantially complete. See
"Risk Factors." All forward-looking statements contained in this Prospectus
speak only as of the date of this Prospectus, and the Company expressly
disclaims any obligation or undertaking to disseminate any updates or revisions
to any forward-looking statement contained herein to reflect any change in the
Company's expectations with regard thereto or any change in events, conditions
or circumstances on which any such statement is based.
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES
WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY
REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A
FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER
CHAPTER 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR
THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A
TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE
MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON,
SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY
PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH
THE PROVISIONS OF THIS PARAGRAPH.
INDUSTRY DATA
Market and industry data used throughout this Prospectus were obtained from
internal company surveys, industry publications, unpublished industry data and
estimates, discussions with industry sources and currently available
information. The sources for this data include, without limitation, the American
Resort Development Association ("ARDA"), a non-profit industry organization.
Industry publications generally state that the information contained therein has
been obtained from sources believed to be reliable, but there can be no
assurance as to the accuracy and completeness of such information. The Company
has not independently verified such market data. Similarly, internal Company
surveys, while believed by the Company to be reliable, have not been verified by
any independent sources. Accordingly, no assurance can be given that any such
data are accurate.
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<PAGE> 6
CERTAIN DEFINED TERMS
As used herein, the "Company" or "Bluegreen" refers to Bluegreen
Corporation and its subsidiaries, and "RDI" refers to RDI Group, Inc. and Resort
Title Agency, Inc. and their subsidiaries, in each case, unless the context
otherwise requires; "EBITDA" refers to net income before interest expense,
income taxes, depreciation and amortization; "estimated remaining
life-of-project sales" assumes sales of the existing, currently under
construction or development, and planned Timeshare Interests (as defined below)
or residential lots, as the case may be, at current retail prices; "estimated
remaining life-of-project field operating profit" is equal to the estimated
remaining life-of-project sales multiplied by average timeshare or residential
lot operating margins (gross profit less field selling, general and
administrative expenses, prior to the allocation of corporate overhead, as a
percentage of sales), as the case may be, for the nine-month period ended on the
applicable measurement date; "RDI Acquisition" means the Company's acquisition
effective September 30, 1997 of all of the issued and outstanding capital stock
of RDI; and "Aruba Transaction" means the December 15, 1997 acquisition by
Bluegreen Properties NV ("BG Aruba"), an Aruban limited liability company in
which the Company owns a 50% equity interest, of unsold Timeshare Interest
inventory (approximately 8,000 Timeshare Interests) of the La Cabana All Suite
Beach Resort & Racquet Club in Aruba (the "Aruba Resort"). Other capitalized
terms used in this Prospectus but not otherwise defined shall have the meanings
assigned to them in "Description of Notes -- Certain Definitions" beginning on
page 97. The Company's fiscal year ends on the Sunday closest to March 31.
Fiscal years are identified according to the calendar year in which they end.
For example, the fiscal year ended March 30, 1997 is referred to as "fiscal
1997." Unless the context otherwise requires, financial information for the
Company for the nine-month period ended December 28, 1997 includes financial
information for RDI and BG Aruba from September 30, 1997 and December 15, 1997,
respectively. See "Business -- Recent Acquisitions."
AVAILABLE INFORMATION
The Company and the Subsidiary Guarantors have filed with the Commission a
Registration Statement on Form S-4 (herein, together with all amendments,
exhibits and schedules thereto, the "Registration Statement") pursuant to the
Securities Act, and the rules and regulations promulgated thereunder, covering
the Exchange Notes being offered hereby. This Prospectus does not contain all
the information set forth in the Registration Statement. For further information
with respect to the Company and the Exchange Offer, reference is made to the
Registration Statement. Statements made in this Prospectus, or in any document
incorporated by reference herein, as to the contents of any contract, agreement
or other document referred to are not necessarily complete and, in each
instance, reference is made to the copy of such contract, agreement or other
document filed as an exhibit to the Exchange Offer Registration Statement for a
more complete description of the document or matter involved, and each such
statement shall be deemed qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy or information statements
and other information with the Commission. Such reports, proxy statements and
other information may be inspected and copies at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street N.W., Room
1024, Washington, D.C. 20549, and at the following Regional Offices of the
Commission: 7 World Trade Center, Suite 1300, New York, New York 10048; and the
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such reports and other information may be obtained
from the Public Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, upon payment of prescribed fees. The
Commission maintains a site on the World Wide Web at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants, such as the Company, that file electronically with the
Commission through the Commission's Electronic Data Gathering, Analysis and
Retrieval (EDGAR) system.
The Company has agreed that, if at any time while the Notes are "restricted
securities" within the meaning of the Securities Act, the Company is not subject
to the informational requirements of the Exchange Act, the Company will furnish
to holders of the Notes, and to prospective purchasers designated by such
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<PAGE> 7
holders, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act to permit compliance with Rule 144A in connection with
resales of the Notes.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the Offering made hereby shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
of such documents. The Company's Exchange Act file number is 0-19292.
Any statement contained herein or in a document incorporated or deemed to
be incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document that is incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Prospectus incorporates documents by reference which are not presented
herein or delivered herewith. Bluegreen will provide, without charge, to each
person to whom this Prospectus is delivered, on the written or oral request of
such person, a copy of any or all of the documents incorporated herein by
reference (other than exhibits thereto, unless such exhibits are specifically
incorporated by reference into such documents). Written requests for such copies
should be directed to John F. Chiste, Chief Financial Officer and Treasurer of
the Company. Telephone inquiries may be directed to (561) 912-8000.
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<PAGE> 8
PROSPECTUS SUMMARY
The following is a summary of certain information contained elsewhere in
this Prospectus. Reference is made to, and this summary is qualified in its
entirety by, the more detailed information and the financial statements,
including the notes thereto, appearing elsewhere or incorporated by reference in
this Prospectus. This Prospectus contains forward-looking statements which
involve risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed in "Risk Factors."
THE COMPANY
The Company is a leading marketer of vacation and residential lifestyle
choices through its resorts and residential land businesses. The Company's
resorts business (the "Resorts Division") strategically acquires, develops and
markets Timeshare Interests in resorts generally located in popular high-volume,
"drive-to" vacation destinations. Timeshare Interests typically entitle the
buyer to a fully-furnished vacation residence for an annual one-week period in
perpetuity ("Timeshare Interests"), as well as access to over 1,500 resorts
worldwide through the Company's participation in timeshare exchange networks.
The Company currently markets and sells Timeshare Interests in eight resorts
located in the United States and the Caribbean. Prior to investing in new
timeshare projects, the Company performs extensive market research and testing
and, prior to completion of development, pre-sells a significant portion of its
Timeshare Interests inventory. The Company's residential land business (the
"Residential Land Division") strategically acquires, develops and subdivides
property and markets the subdivided residential lots to retail customers seeking
to build a home in a high quality residential setting. The Residential Land
Division's strategy is to locate its projects near major metropolitan centers
outside the perimeter of intense subdivision development or in popular
retirement areas. The Company has focused the Residential Land Division's
activities in certain proven, core markets in which the Company has developed
substantial marketing expertise and has a strong track record of success. Prior
to acquiring residential land, the Company typically utilizes market research,
conducts due diligence and, in the case of new project locations, engages in
pre-marketing techniques to evaluate market response and price acceptance. Once
a parcel of property is acquired, the Company pre-sells a significant portion of
its planned residential lots on such property prior to extensive capital
investment as a result of the Company's ability to bond its projects to
completion. The Company also generates significant interest income through its
financing of individual purchasers of Timeshare Interests and, to a lesser
extent, land sold by the Residential Land Division. For the nine-month period
ended December 28, 1997, the Company had aggregate revenues of approximately
$131.8 million and EBITDA of approximately $21.4 million.
The Resorts Division. The Company's Resorts Division was founded in 1994
to capitalize on the consistent growth of the timeshare industry. According to
ARDA and other industry sources, timeshare industry sales and the number of
Timeshare Interest owners grew at compound annual rates of approximately 16% and
22%, respectively, from 1980 to 1997 (see charts on page 2). The Company
currently markets and sells Timeshare Interests in eight resorts located in the
Smoky Mountains of Tennessee; Myrtle Beach, South Carolina; Orlando, Florida;
Branson, Missouri; Wisconsin Dells, Wisconsin; and Aruba. The Company also
manages 33 timeshare resorts (including seven of its own resorts) with an
aggregate of approximately 70,000 members, which the Company believes makes it
the second largest manager of timeshare resorts in North America (based on the
number of resorts managed). For the nine-month period ended December 28, 1997,
the Company sold 4,903 Timeshare Interests, an increase of 90.1%, compared to
2,579 Timeshare Interests sold for the comparable period in 1996. The Company's
estimated remaining life-of-project sales and estimated remaining
life-of-project field operating profit with respect to the Resorts Division
increased to approximately $674.6 million and $65.4 million, respectively, as of
December 28, 1997 from approximately $260.4 million and $11.2 million,
respectively, as of December 29, 1996. These increases are a direct result of
new projects developed by the Company in fiscal 1998, the RDI Acquisition and
the Aruba Transaction, which the Company believes will result in a significant
increase in revenues and field operating profit in fiscal 1999.
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<PAGE> 9
The Resorts Division utilizes a variety of techniques to attract
prospective purchasers of Timeshare Interests, including targeted mailings,
direct mail mini-vacations, kiosks in retail locations, marketing to current
owners of Timeshare Interests and referrals. The majority of the Company's
Timeshare Interests are sold through on-site sales presentations. The Company
believes its ability to effectively implement and manage these marketing
activities has resulted in the generation of a predictable and increasing supply
of sales prospects. To support its marketing and sales efforts, the Company has
developed and continues to enhance its database to track its timeshare marketing
and sales programs. Management believes that, as the Company's timeshare
operations grow, this database will become an increasingly significant asset,
enabling it to take advantage of, among other things, less costly marketing and
referral opportunities.
According to ARDA, the primary reason cited by consumers for purchasing a
Timeshare Interest is the ability to exchange a Timeshare Interest for
accommodations at other resorts through worldwide exchange networks. Each of the
Company's timeshare resorts is affiliated with either Interval International
("II") or Resorts Condominium International, Inc. ("RCI"), the two largest
worldwide timeshare exchange companies. Participation in an exchange network
entitles owners to exchange their annual Timeshare Interests for occupancy at
over 1,500 participating II resorts or over 3,200 participating RCI resorts
worldwide. To further enhance the ability of its Timeshare Interest owners to
customize their vacation experience, the Company also intends to expand the
points-based vacation club system it acquired in the RDI Acquisition which, when
completed, will permit its Timeshare Interest owners to purchase an annual
allotment of points which can be redeemed for occupancy rights at all
Company-owned and participating managed resorts.
Prior to acquiring property for resorts, the Resorts Division undertakes a
full property review, including an environmental assessment, which is presented
for approval to the Company's investment committee ("Investment Committee"),
which was established in 1990 and consists of certain key members of senior
management. During the review process, acquisition specialists analyze market,
tourism and demographic data as well as the quality and diversity of the
location's existing amenities and attractions to determine the potential
strength of the timeshare market in such area and the availability of a variety
of recreational opportunities for prospective Timeshare Interest purchasers.
The Company has historically provided financing to approximately 89% of its
timeshare customers, who are required to make a downpayment of at least 10% of
the Timeshare Interest sales price and who typically finance the balance of the
sales price over a period of seven to ten years. As of December 28, 1997, the
Company had a timeshare receivables portfolio totaling approximately $66.5
million in principal amount, with a weighted average contractual yield of
approximately 15.8% per annum. The Company is currently negotiating with a
financial institution to provide the Company with a combined timeshare warehouse
financing and receivables purchase facility and a separate timeshare acquisition
and development facility. See "Management's Discussion and Analysis of Results
of Operations and Financial Condition."
Set forth below is certain information relating to the timeshare industry.
(Timeshare Graphs)
Source: ARDA (includes, with respect to 1995, 1996 and 1997, unpublished
estimates provided by ARDA)
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<PAGE> 10
The Residential Land Division. The Residential Land Division is focused
primarily on land projects located in states in which the Company has developed
substantial marketing expertise and has a strong track record of success, such
as Texas, the Carolinas, New Mexico, Virginia, Tennessee and Arizona. The
Company believes no other company in the United States of comparable size or
financial resources markets and sells residential land to retail customers. For
the nine-month period ended December 28, 1997, the Residential Land Division had
revenues of approximately $78.8 million, an increase of 44.4% compared to
revenues of approximately $54.6 million for the comparable period in 1996. The
Company's estimated remaining life-of-project sales and estimated remaining
life-of-project field operating profit with respect to the Residential Land
Division increased to approximately $224.5 million and $47.6 million,
respectively, as of December 28, 1997 from approximately $209.3 million and
$32.4 million, respectively, as of December 29, 1996.
The Residential Land Division utilizes its proven marketing techniques and
proprietary Sales Information Management System ("SIMS") and other residential
land databases maintained by the Company to target families seeking a quality
lifestyle improvement which is generally unavailable in traditional suburban
developments. Based on the Company's extensive experience in marketing and
selling residential lots to its target customers, the Company has been able to
develop a comprehensive marketing and sales program that generates a significant
number of on-site sales presentations to potential prospects through low-cost,
high-yield newspaper advertising. In addition, SIMS and the other Residential
Land Division databases enable the Company to compile, process and maintain
comprehensive information concerning future sales prospects within each of its
operating regions. The Company currently has over 250,000 potential sales
prospects in its Residential Land Division databases. Through the Company's
targeted sales and marketing program, the Company believes that it has been able
to achieve a high conversion ratio of sales to prospects receiving on-site sales
presentations. The conversion ratio of sales to on-site sales presentations for
the ten-month period ended January 31, 1998 was approximately 20%.
The Residential Land Division acquires and develops land in two markets:
(i) near major metropolitan centers outside the perimeter of intense subdivision
development; and (ii) popular retirement areas. Prior to acquiring undeveloped
land, the Company researches market depth and forecasts market absorption. In
new market areas, the Company typically supplements its research with a
structured classified ad test marketing system that evaluates market response
and price acceptance. The Company's sales and marketing efforts begin as soon as
practicable after the Company enters into an agreement to acquire a parcel of
land. The Company's ability to bond projects to completion allows it to sell a
significant portion of its residential land inventory on a pre-development
basis, thereby reducing the Company's need for external capital to complete
improvements. The Company believes that its pre-acquisition research and test
marketing allow it to market its residential lots at predictable margins. As is
the case with the Resorts Division, all acquisitions of residential land are
subject to Investment Committee approval.
In fiscal 1997, the Company began construction of its first daily-fee golf
course as part of its long-term plan to participate in the growing daily-fee
golf market. The Company believes that because the demographics of this market
are similar to those of the Residential Land Division, daily-fee golf courses
are an attractive amenity that will increase the marketability of the Company's
adjacent residential lots in certain projects. The Company's first golf course,
the Carolina National Golf Club, is located near Southport, North Carolina, just
30 miles north of Myrtle Beach, South Carolina, one of the nation's most popular
golf destinations, and was designed by Masters Champion Fred Couples. Also, as
part of the RDI Acquisition, the Company acquired a daily-fee golf course
located in Wisconsin Dells, Wisconsin.
The Company's Common Stock is listed on the New York Stock Exchange and on
the Pacific Stock Exchange under the symbol "BXG." The Company's executive
offices are currently located at 4960 Blue Lake Drive, Boca Raton, Florida
33431. The Company's telephone number at such address is (561) 912-8000.
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<PAGE> 11
COMPETITIVE STRENGTHS
SUBSTANTIAL INTERNAL GROWTH CAPACITY
The Company believes its substantial investment in resort infrastructure
and core residential land holdings will allow it to convert current and planned
inventory into positive and sustainable revenues and cash flow. As of December
28, 1997, the Company had existing completed inventory of 19,659 Timeshare
Interests at its resorts, 7,900 Timeshare Interests under construction or
development, and plans to develop approximately 53,300 additional Timeshare
Interests at existing resorts. Based on the foregoing, the Resorts Division's
estimated remaining life-of-project sales and estimated remaining
life-of-project field operating profit were approximately $674.6 million and
$65.4 million, respectively, at December 28, 1997. The aggregate carrying amount
of Residential Land Division inventory at December 28, 1997 was $51.7 million.
The Residential Land Division's estimated remaining life-of-project sales and
estimated remaining life-of-project field operating profit were approximately
$224.5 million and $47.6 million, respectively, at December 28, 1997.
ATTRACTIVE LOCATIONS AND HIGH QUALITY LIFESTYLE PRODUCTS
The Company seeks to maximize sales penetration and cash flow by marketing
and selling high quality lifestyle products in attractive locations possessing
positive demographic and population attributes. The Resorts Division generally
markets Timeshare Interests in popular "drive-to" locations providing a high
quality, cost-effective vacation alternative to its buyers. The Resorts Division
also provides its customers, through its participation in II and RCI, access to
over 1,500 and 3,200 participating resorts worldwide, respectively. The
Residential Land Division markets residential lots (typically two to five
acres), which are larger than those generally available in traditional suburban
developments. These lots are often near attractive amenities and are located
near major metropolitan centers outside the perimeter of intense subdivision
development or in popular retirement areas.
STRONG INDUSTRY FUNDAMENTALS
The timeshare industry is one of the fastest growing segments of the
hospitality industry with a compound annual sales growth rate from 1980 to 1997
of approximately 16%. In addition, the number of timeshare resorts worldwide
increased 167.4% from 1,550 in 1984 to over 4,100 in 1994 (the most recent date
for which ARDA statistics are available). The Company believes that several
factors have contributed to this sustained industry growth including: (i)
increased flexibility of ownership due to the growth in the international
exchange programs and points-based vacation club systems; (ii) increased
consumer awareness of the economic values and benefits of timeshare ownership;
(iii) improvement in both the quality and management of the resorts; (iv) an
influx of brand-name national lodging companies to the timeshare industry; (v)
implementation of consumer protection regulations; (vi) availability of consumer
financing; and (vii) improvement in inventory management systems. The Company
believes that, despite the industry's growth, timeshare ownership has achieved
only an approximate 5% market penetration among United States households with
income above $50,000 per year.
RISK MANAGEMENT THROUGH PRE-SELLING AND RIGOROUS INTERNAL CONTROLS
The Company's acquisition and development strategies for both its Resorts
and its Residential Land Divisions are designed to reduce capital risk. Prior to
acquiring timeshare projects or residential land, the Company typically utilizes
market research and conducts due diligence. In addition, in the case of new
Residential Land Division locations, the Company engages in pre-marketing
techniques prior to acquiring residential land. The Company typically develops
its projects in phases, and its ability to bond projects to completion allows it
to sell a significant portion of Timeshare Interests or planned residential lots
on a pre-development basis prior to full capital investment. All acquisitions
must be approved by the Investment Committee.
ATTRACTIVE MARKET DEMOGRAPHICS
Both the Resorts and Residential Land Divisions target customers in the
40-55 year old age group. The Company's target group, which is one of the
fastest growing segments in the U.S., seeks to use its growing
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<PAGE> 12
earning power to effect quality lifestyle improvements. The Company believes
that its products will allow it to effectively capitalize on the anticipated
growth and objectives of this target market.
SOPHISTICATED SALES INFORMATION MANAGEMENT SYSTEM
The Company's significant investment in its sales and marketing information
systems has enabled both its Resorts Division and its Residential Land Division
to compile, process and maintain comprehensive, valuable data regarding future
sales prospects. The Company currently has over 250,000 potential prospective
buyers in its databases. The Company believes that the ability to access this
information allows the Company to more accurately target its prospective
customers and, thus, reduce marketing costs and increase closing rates.
SUPERIOR SALES AND MARKETING PERSONNEL
The success of the Company's sales and marketing efforts depends heavily on
the knowledge and experience of its marketing and commission-based sales
personnel. The Company believes its marketing and sales personnel are among the
most experienced in the timeshare and residential land industries. The Company
has expended considerable resources in training such personnel in the effective
use of the Company's databases and sales marketing systems, site attributes and
surrounding area amenities. The Company enhances this sales and marketing
expertise through the Bluegreen Institute, a mandatory training program designed
to instill the Company's marketing and customer service philosophy in middle-
and lower-level management.
COST EFFICIENCIES THROUGH MULTI-SITE OPERATIONS AND RESORT MATURATION
As the Resorts Division grows, the Company believes it has significant
opportunities to realize economies of scale through the operation of a
multi-resort management system and the reduction of fixed operating costs as a
percentage of sales. In addition, the Company believes that, as its existing
resorts mature, a greater percentage of Timeshare Interests will be sold through
less expensive marketing techniques such as referrals and upgrade sales to
existing Timeshare Interest owners.
EXPERIENCED MANAGEMENT TEAM
The Company's five senior executive officers have over 100 years of
industry-related experience. The Company has employment agreements with each of
these executive officers, which expire in March 2001.
BUSINESS STRATEGY
In order to further enhance its market positions and to maximize
profitability and cash flow, the Company's principal strategic objectives are as
follows:
CAPITALIZE ON SIGNIFICANT GROWTH OPPORTUNITIES IN THE TIMESHARE INDUSTRY
The Resorts Division was founded in 1994 to capitalize on the rapid growth
of the timeshare industry. The Company intends to continue to aggressively
market and sell its existing and planned Timeshare Interest inventory through
the further development of in-house sales and marketing programs, exchange
program synergies and the use of technology and database management systems. The
Company's goal is to continue to increase sales of Timeshare Interests as a
percentage of the Company's total consolidated revenue, further diversifying the
Company's base of revenue.
IMPROVEMENT OF MARGINS IN RESORTS DIVISION
The Company believes that increased efficiency and a multi-resort
management system will reduce operating costs as a percentage of sales and allow
the Company to experience increased margins at its existing resorts by spreading
operating and corporate overhead costs over a larger revenue base. In addition,
the Company expects operating margins at its resorts to improve over time as a
greater percentage of Timeshare Interests are sold through more efficient, less
costly marketing techniques, such as referrals and sales of additional Timeshare
Interests to existing customers. The Company also believes that it will reduce
the Resorts Division's sales and marketing expenses, as a percentage of sales,
over time by targeting more
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<PAGE> 13
potential buyers through its Resorts Division database system and through lead
generation assistance and cross-marketing and selling from the Residential Land
Division.
ACQUISITIONS OF TIMESHARE RESORT ASSETS
The Company intends to continue to grow the Resorts Division through
acquisitions in destinations that will complement the Company's current resort
locations. Because the timeshare industry is highly fragmented, the Company
believes that significant opportunities exist to make selected acquisitions at
attractive valuations. Acquisitions the Company may consider include acquiring
additional Timeshare Interest inventory, operating companies, management
contracts, Timeshare Interest mortgage portfolios and properties or other
timeshare-related assets which may be integrated into the Company's operations.
FOCUS ON RESIDENTIAL LAND BUSINESS CORE MARKETS
The Company intends to continue to focus the Residential Land Division on
those regions where the market for its products is strongest, such as the
Southeast, Southwest, Rocky Mountain and Western regions of the United States
and to replenish its residential land inventory in such regions as existing
projects are sold-out. The Company believes that its in-depth knowledge of these
markets, together with the current strong economic growth and favorable
demographic trends in these regions, will enable it to continue to maintain
favorable operating margins and cash flows.
DEVELOPMENT OF POINTS-BASED VACATION CLUB SYSTEM
The Company intends to expand the points-based vacation club system that it
acquired in the RDI Acquisition. The Company's objective in expanding its
points-based vacation club system is to create, in conjunction with its
participation in worldwide timeshare exchange networks, a Bluegreen timeshare
system that maximizes the vacation flexibility of its current and prospective
Timeshare Interest owners.
INTERNATIONAL EXPANSION
The Company intends to selectively add timeshare resort locations in areas
outside the United States. Through the Aruba Transaction, the Company has
obtained Timeshare Interest inventory in the Caribbean. The Company intends to
continue to focus on the Caribbean region, as well as Central and South America,
as possible locations for additional resort properties.
GOLF COURSE DEVELOPMENT
In fiscal 1997, the Company began construction of its first 27 hole
daily-fee golf course as part of its long-term strategy to participate in the
growing daily-fee golf market. Management believes that the demographics of this
market are similar to those of the Company's Residential Land Division. As a
result, management believes that daily-fee golf courses are an attractive
amenity that will increase the marketability of the Company's adjacent
residential lots in certain projects.
CROSS UTILIZATION OF DATABASES
The Company intends to cross-utilize information contained in its
Residential Land Division and Resorts Division databases. Because the
Residential Land and Resorts Divisions target similar geographic markets and
demographics classes, the Company believes that such cross-utilization will
significantly enhance its sales and marketing efforts for each division.
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<PAGE> 14
THE EXCHANGE OFFER
Issuer..................... Bluegreen Corporation
Outstanding Notes.......... The Outstanding Notes were sold by the Company on
April 1, 1998 to NatWest Capital Markets Limited
and McDonald & Company Securities, Inc.
(collectively, the "Initial Purchasers") pursuant
to a Purchase Agreement, dated March 26, 1998 (the
"Purchase Agreement"). The Initial Purchasers
subsequently resold the Outstanding Notes to
qualified institutional buyers pursuant to Rule
144A under the Securities Act.
Registration Rights
Agreement................ Pursuant to the Purchase Agreement, the Company and
the Initial Purchasers entered into the
Registration Rights Agreement, which grants the
holders of the Outstanding Notes certain exchange
and registration rights. The Exchange Offer is
intended to satisfy such exchange and registration
rights which terminate upon the consummation of the
Exchange Offer.
Securities Offered......... $110,000,000 aggregate principal amount of 10 1/2%
Senior Secured Notes due 2008, Series B (the
"Exchange Notes").
The Exchange Offer......... The Company is offering to exchange $1,000
principal amount of Exchange Notes for each $1,000
principal amount of Outstanding Notes that are
properly tendered and accepted. The Company will
issue Exchange Notes on or promptly after the
Expiration Date. As of the date hereof, there is
$110,000,000 aggregate principal amount of
Outstanding Notes outstanding. The terms of the
Exchange Notes are identical in all material
respects to the terms of the Outstanding Notes for
which they may be exchanged pursuant to the
Exchange Offer, except that (i) the Exchange Notes
will bear a Series B designation and will have been
registered under the Securities Act and, therefore,
will not bear legends restricting their transfer
and will not contain certain provisions relating to
an increase in the interest rate which were
included in the terms of the Outstanding Notes in
certain circumstances relating to the timing of the
Exchange Offer and (ii) holders of the Exchange
Notes will not be entitled to certain rights of the
holders of the Outstanding Notes under the
Registration Rights Agreement, which rights shall
terminate upon the consummation of the Exchange
Offer. See "The Exchange Offer." The Exchange Offer
is not conditioned upon any minimum aggregate
principal amount of Outstanding Notes being
tendered for exchange.
Based on no-action letters issued by the staff of
the Commission to third parties with respect to
similar transactions, the Company believes that the
Exchange Notes issued pursuant to the Exchange
Offer in exchange for Outstanding Notes may be
offered for resale, resold and otherwise
transferred by holders thereof (other than (i) a
broker-dealer who purchases such Exchange Notes
from the Company to resell pursuant to Rule 144A or
any other available exemption under the Securities
Act, or (ii) a person that is an "affiliate" of the
Company within the meaning of Rule 405 of the
Securities Act) without compliance with the
registration and prospectus delivery requirements
of the Securities Act, provided that such Exchange
Notes are acquired in the ordinary course of such
holders' business and such holders are not engaged
in, have no arrangement or understanding with any
person to participate in, and do not intend to
engage in, any distribution of the Exchange Notes.
However, the Company has not sought and does not
intend to seek a no-action
7
<PAGE> 15
letter with respect to the Exchange Offer and there
can be no assurance that the staff of the
Commission would make a similar determination with
respect to the Exchange Offer. Each holder of
Exchange Notes other than a broker-dealer, must
represent that such conditions have been met. In
addition, each broker-dealer that receives Exchange
Notes for its own account pursuant to the Exchange
Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such
Exchange Notes.
The Letter of Transmittal accompanying this
Prospectus states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not
be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act. A
broker-dealer may nonetheless be deemed to be an
"underwriter" under the Securities Act
notwithstanding such disclaimer. This Prospectus,
as it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection
with resales of Exchange Notes received in exchange
for Outstanding Notes where such Outstanding Notes
were acquired by such broker-dealer as a result of
market-making activities or other trading
activities. Pursuant to the Registration Rights
Agreements, the Company has agreed that, for a
period of 180 days after the Expiration Date, it
will make this Prospectus available to any
broker-dealer for use in connection with any such
resale. See "The Exchange Offer -- Purpose and
Effect of the Exchange Offer" and "Plan of
Distribution."
Any holder who tenders in the Exchange Offer with
the intention to participate, or for the purpose of
participating, in a distribution of the Exchange
Notes could not rely on the position of the staff
of the Commission enunciated in no-action letters
and, in the absence of an applicable exemption,
must comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with any resale transaction. Failure to
comply with such requirements in such instance may
result in such holder incurring liability under the
Securities Act for which the holder is not
indemnified by the Company.
Expiration Date............ 5:00 p.m., New York City time, on ,
1998, unless the Exchange Offer is extended in the
sole discretion of the Company, in which case the
term "Expiration Date" means the latest date and
time to which the Exchange Offer is extended. See
"The Exchange Offer -- Expiration Date; Extensions;
Amendments."
Accrued Interest on the
Exchange Notes........... Each Exchange Note will bear interest from the most
recent date to which interest has been paid on the
Outstanding Notes or, if no interest has been paid
on such Outstanding Notes, from April 1, 1998.
Holders whose Outstanding Notes are accepted for
exchange will be deemed to have waived the right to
receive any interest accrued on the Outstanding
Notes.
Exchange Date.............. As soon as practicable after the close of the
Exchange Offer, the Company will accept for
exchange all Outstanding Notes properly tendered
and not validly withdrawn prior to 5:00 p.m., New
York City time, on the Expiration Date. See "The
Exchange Offer -- Withdrawal of Tenders."
8
<PAGE> 16
Conditions to the Exchange
Offer.................... The Exchange Offer is subject to customary
conditions, certain of which may be waived by the
Company. The Company reserves the right to
terminate or amend the Exchange Offer at any time
prior to the Expiration Date upon the occurrence of
any such condition. The Exchange Offer is not
conditioned on any minimum aggregate principal
amount of Outstanding Notes being tendered for
exchange. See "The Exchange Offer -- Conditions."
Consequences of Failure to
Exchange................. Any Outstanding Notes not tendered pursuant to the
Exchange Offer will remain outstanding and continue
to accrue interest. Such Outstanding Notes will
remain "restricted securities" under the Securities
Act, subject to the transfer restrictions described
herein and contained in the Indenture. As a result,
the liquidity of the market for such Outstanding
Notes could be adversely affected upon completion
of the Exchange Offer. See "Risk
Factors -- Consequences of Failure to Exchange" and
"The Exchange Offer -- Consequences of Failure to
Exchange."
Certain Federal Income Tax
Considerations........... The exchange of the Outstanding Notes for Exchange
Notes by tendering holders should not be a taxable
exchange for U.S. Federal income tax purposes, and
such holders should not recognize any taxable gain
or loss for U.S. Federal income tax purposes as a
result of such exchange. See "Certain U.S. Federal
Income Tax Considerations."
Use of Proceeds............ There will be no cash proceeds to the Company from
the Exchange Offer. See "Use of Proceeds."
PROCEDURES FOR TENDERING OUTSTANDING NOTES
Tendering Outstanding
Notes.................... Each beneficial owner owning interests in
Outstanding Notes ("Beneficial Owner") through a
DTC Participant (as defined) must instruct such DTC
Participant to cause Outstanding Notes to be
tendered in accordance with the procedures set
forth in this Prospectus and in the applicable
Letter of Transmittal. See "The Exchange
Offer -- Procedures for Tendering -- Outstanding
Notes held through DTC."
Each participant (a "DTC Participant") in the
Depository Trust Company ("DTC") holding
Outstanding Notes through DTC must (i)
electronically transmit its acceptance to DTC
through the DTC Automated Tender Offer Program
("ATOP"), for which the transaction will be
eligible, and DTC will then verify the acceptance,
execute a book-entry delivery to the Exchange
Agent's (as defined herein) account at DTC and send
an Agent's Message (as defined herein) to the
Exchange Agent for its acceptance, or (ii) comply
with the guaranteed delivery procedures set forth
in this Prospectus and in the Letter of
Transmittal. By tendering through ATOP, DTC
Participants will expressly acknowledge receipt of
the accompanying Letter of Transmittal and agree to
be bound by its terms and the Company will be able
to enforce such agreement against such DTC
Participants. See "The Exchange Offer -- Procedures
for Tendering -- Outstanding Notes held through
DTC" and "-- Guaranteed Delivery
Procedures -- Outstanding Notes held through DTC."
9
<PAGE> 17
Each Holder must (i) complete and sign a Letter of
Transmittal, and mail or deliver such Letter of
Transmittal, and all other documents required by
the Letter of Transmittal, together with
certificate(s) representing all tendered
Outstanding Notes, to the Exchange Agent at its
address set forth in this Prospectus and in the
Letter of Transmittal, or (ii) comply with the
guaranteed delivery procedures set forth in this
Prospectus. See "The Exchange Offer -- Procedures
for Tendering," "-- Exchange Agent" and
"-- Guaranteed Delivery Procedure -- Outstanding
Notes held by Holders."
By tendering, each holder will represent to the
Company that, among other things, (i) the Exchange
Notes are to be acquired by the holder or the
person receiving such Exchange Notes, whether or
not such person is the holder, in the ordinary
course of business, (ii) the holder or any such
other person (other than a broker-dealer referred
to in the next sentence) is not engaging and does
not intend to engage, in the distribution of the
Exchange Notes, (iii) the holder or any such other
person has no arrangement or understanding with any
person to participate in the distribution of the
Exchange Notes, (iv) neither the holder nor any
such other person is an "affiliate" of the Company
within the meaning of Rule 405 under the Securities
Act, and (v) the holder or any such other person
acknowledges that if such holder or other person
participates in the Exchange Offer for the purpose
of distributing the Exchange Notes it must comply
with the registration and prospectus delivery
requirements of the Securities Act in connection
with any resale of the Exchange Notes. Each
broker-dealer participating in the Exchange Offer
that receives Exchange Notes for its own account in
exchange for Outstanding Notes must acknowledge
that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "The
Exchange Offer -- Procedures for Tendering."
Guaranteed Delivery
Procedures............... DTC Participants holding Outstanding Notes through
DTC who wish to cause their Outstanding Notes to be
tendered, but who cannot transmit their acceptances
through ATOP prior to the Expiration Date, may
effect a tender in accordance with the procedures
set forth in this Prospectus and in the Letter of
Transmittal. See "The Exchange Offer -- Guaranteed
Delivery Procedures." Holders who wish to tender
their Outstanding Notes but (i) whose Outstanding
Notes are not immediately available and will not be
available for tendering prior to the Expiration
Date, or (ii) who cannot deliver their Outstanding
Notes, the Letter of Transmittal or any other
required documents to the Exchange Agent prior to
the Expiration Date, may effect a tender in
accordance with the procedures set forth in this
Prospectus. See "The Exchange Offer -- Guaranteed
Delivery Procedures."
Withdrawal Rights.......... The tender of Outstanding Notes pursuant to the
Exchange Offer may be withdrawn at any time prior
to 5:00 p.m., New York City time, on the Expiration
Date, in accordance with the procedures set forth
in this Prospectus. See "The Exchange
Offer -- Withdrawal of Tenders."
Exchange Agent............. SunTrust Bank, Central Florida, National
Association is serving as Exchange Agent in
connection with the Exchange Offer. See "The
Exchange Offer -- Exchange Agent."
10
<PAGE> 18
Shelf Registration
Statement................ Under certain circumstances described in the
Registration Rights Agreement, certain holders of
Outstanding Notes (including holders who are not
permitted to participate in the Exchange Offer or
who may not freely resell Exchange Notes received
in the Exchange Offer) may require the Company to
file and use its reasonable efforts to cause to
become effective, a shelf registration statement
under the Securities Act, which would cover resales
of Outstanding Notes by such holders. See "The
Exchange Offer -- Purpose and Effect of the
Exchange Offer."
THE EXCHANGE NOTES
Securities Offered......... $110,000,000 aggregate principal amount of 10 1/2%
Senior Secured Notes due 2008, Series B that have
been registered under the Securities Act. See
"Description of Notes."
Maturity Date.............. April 1, 2008.
Interest Payment Dates..... April 1 and October 1 of each year, commencing
October 1, 1998.
Optional Redemption........ The Notes will be redeemable at the option of the
Company, in whole or in part, in cash, on or after
April 1, 2003, at the redemption prices set forth
herein, together with accrued and unpaid interest,
if any, to the date of redemption. In addition,
prior to April 1, 2001, the Company may redeem up
to 35% of the aggregate principal amount of the
Notes with the proceeds of one or more Equity
Offerings, at a redemption price equal to 110.5% of
the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of redemption,
provided that at least $65 million principal amount
of Notes remains outstanding after any such
redemption. See "Description of the
Notes -- Optional Redemption."
Ranking.................... The Outstanding Notes are and the Exchange Notes
will be senior obligations of the Company. The
Outstanding Notes rank and the Exchange Notes will
rank pari passu in right of payment with all
existing and future Senior Indebtedness of the
Company. The Outstanding Notes rank and the
Exchange Notes will rank senior in right of payment
to all existing and future Subordinated Obligations
of the Company. None of the assets of Bluegreen
Corporation will secure its obligations under the
Notes, and the Notes will be effectively
subordinated to Secured Indebtedness of the Company
to any third party to the extent of assets serving
as security therefor. As of December 28, 1997, on a
pro forma basis after giving effect to the Note
Offering and the application of the net proceeds
therefrom and excluding the Notes, the Company
would have approximately $25.9 million of Secured
Indebtedness outstanding. See "Description of
Notes -- Ranking."
Guarantees................. The Outstanding Notes are and the Exchange Notes
will be unconditionally guaranteed, jointly and
severally, by each of the Subsidiary Guarantors.
The Note Guarantees are and will be senior
obligations of each Subsidiary Guarantor and rank
and will rank pari passu in right of payment with
all existing and future Senior Indebtedness of each
such Subsidiary Guarantor and senior in right of
payment to all existing and future Subordinated
Indebtedness of each such Subsidiary Guarantor. See
"Description of Notes -- Note Guarantees."
Security................... The Note Guarantees of certain Subsidiary
Guarantors are and will be secured by a first
(subject to customary exceptions) mortgage or
similar
11
<PAGE> 19
instrument (each, a "Mortgage") on the Pledged
Properties of such Subsidiary Guarantors. Absent
the occurrence and the continuance of an Event of
Default, the Notes Trustee will be required to
release its lien on the Pledged Properties as
property is sold and the Trustee will not have a
lien on the proceeds of any such sale. As of
January 25, 1998, the Pledged Properties had an
aggregate book value of approximately $46.1
million. The Company has agreed to obtain certain
title insurance policies for the Pledged
Properties. If all such title insurance policies
are not obtained by June 1, 1998, the interest rate
on the Notes will increase. See "Description of
Notes -- Security." Except to the extent of the
assets serving as security for such Note
Guarantees, the Note Guarantees of each Subsidiary
Guarantor are and will be effectively subordinated
to the Secured Indebtedness of each Subsidiary
Guarantor to the extent of the assets serving as
security therefor. See "Description of
Notes -- Security."
Change of Control.......... Upon the occurrence of a Change of Control, the
Company will be required to make an offer to
repurchase the Notes at a price equal to 101% of
the principal amount thereof, together with accrued
and unpaid interest, if any, to the date of
repurchase. See "Description of Notes -- Optional
Redemption" and "-- Change of Control."
Restrictive Covenants...... The indenture under which the Outstanding Notes
were and the Exchange Notes will be issued (the
"Indenture") contains certain covenants that, among
other things, will limit (i) the incurrence of
additional indebtedness by the Company and its
Restricted Subsidiaries (as defined), (ii) the
payment of dividends on, and redemption of, capital
stock of the Company and the redemption of certain
Subordinated Obligations of the Company, (iii)
investments, (iv) sales of assets and subsidiary
stock, (v) transactions with affiliates and (vi)
consolidations, mergers and transfers of all or
substantially all the assets of the Company. The
Indenture also prohibits certain restrictions on
distributions from Restricted Subsidiaries.
However, all of these limitations and prohibitions
are subject to a number of important qualifications
and exceptions. See "Description of
Notes -- Certain Covenants."
Exchange Offer and Absence
of a Public Market for
the Notes................ The Exchange Notes will generally be freely
transferable (subject to the restrictions discussed
elsewhere herein) but will be new securities for
which there will not initially be a market. The
Outstanding Notes have been designated for trading
in the PORTAL market. The Company does not intend
to apply for a listing of the Exchange Notes on any
securities exchange or on any automated dealer
quotation system. See "Plan for Distribution."
FOR MORE COMPLETE INFORMATION REGARDING THE NOTES, SEE "DESCRIPTION OF NOTES."
RISK FACTORS
Prospective acquirors of the Exchange Notes should consider carefully all
of the information set forth in this Prospectus and, in particular, should
evaluate the specific factors set forth under "Risk Factors" for risks involved
with an acquisition of the Exchange Notes.
12
<PAGE> 20
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
The summary consolidated financial data presented below for each of the
five years in the period ended March 30, 1997 are derived from the Company's
audited consolidated financial statements. The summary consolidated financial
data presented below for the nine month periods ended December 29, 1996 and
December 28, 1997 have been derived from unaudited financial statements. The
unaudited financial statements include all adjustments, consisting of normal
recurring accruals, which the Company considers necessary for a fair
presentation of its financial position and the results of operations for these
periods. Operating results for the nine months ended December 28, 1997 are not
necessarily indicative of the results that may be expected for the entire fiscal
year ended March 29, 1998. The summary consolidated financial data should be
read in conjunction with the Consolidated Financial Statements, related notes,
and other financial information appearing elsewhere or incorporated by reference
herein.
<TABLE>
<CAPTION>
AS OF OR FOR THE NINE
AS OF OR FOR THE YEAR ENDED, MONTHS ENDED,
-------------------------------------------------------- ---------------------------
MARCH 28, MARCH 27, APRIL 2, MARCH 31, MARCH 30, DECEMBER 29, DECEMBER 28,
1993 1994 1995 1996 1997 1996 1997
--------- --------- -------- --------- --------- ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT AVERAGE SALES PRICE DATA AND SELECTED STATISTICAL DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Sales of real estate and
services......................... $ 53,349 $ 63,389 $ 91,922 $113,422 $109,722 $ 81,712 $124,487
Interest income and other(1)....... 10,191 7,952 7,264 7,388 6,159 4,577 7,324
-------- -------- -------- -------- -------- -------- --------
Total revenues................. 63,540 71,341 99,186 120,810 115,881 86,289 131,811
Cost of sales...................... 28,450 30,773 45,106 59,393 57,091 41,384 56,786
Selling, general and administrative
expenses......................... 22,652 26,444 36,521 43,735 51,441 38,051 55,526
-------- -------- -------- -------- -------- -------- --------
Operating income................... 12,438 14,124 17,559 17,682 7,349 6,854 19,499
Interest expense................... 7,284 6,551 6,737 6,276 5,459 3,916 6,512
Provisions for losses.............. 1,550 795 792 612 9,539 9,101 1,349
Other income....................... 1,727 1,175 372 122 259 184 120
Provision (benefit) for income
taxes............................ 1,874 3,022 4,265 4,449 (3,030) (2,451) 4,774
-------- -------- -------- -------- -------- -------- --------
Net income (loss).................. $ 3,457 $ 4,931 $ 6,137 $ 6,467 $ (4,360) $ (3,528) $ 6,984
======== ======== ======== ======== ======== ======== ========
OTHER DATA AND CREDIT STATISTICS:
EBITDA(2).......................... $ 14,172 $ 16,164 $ 18,522 $ 18,978 $ 8,291 $ 7,366 $ 21,396
EBITDA to senior interest expense
(as adjusted)(3)................. -- -- -- -- -- -- 2.4x
EBITDA to interest expense (as
adjusted)(3)..................... -- -- -- -- -- -- 1.9x
Total senior debt to EBITDA (as
adjusted)(4)..................... -- -- -- -- -- -- 4.1x
Total debt to EBITDA (as
adjusted)(4)..................... -- -- -- -- -- -- 5.5x
Weighted average interest rate on
notes receivable at period end... 11.0% 10.9% 12.4% 12.4% 13.3% 14.4% 15.0%
RESIDENTIAL LAND STATISTICS:
Gross margin on sales of real
estate(5)........................ 46.7% 51.5% 50.9% 47.6% 48.0% 49.4% 55.0%
Average sales price of land parcels
sold(6).......................... $ 21,368 $ 25,511 $ 30,969 $ 34,856 $ 38,572 $ 37,207 $ 47,449
Number of land parcels sold........ 2,560 2,489 2,397 2,347 2,057 1,498 1,740
RESORTS STATISTICS:
Number of resorts at period
end(7)........................... 0 1 2 3 4 3 8
Average sales price of timeshare
intervals sold(6)................ $ -- $ -- $ 7,119 $ 7,325 $ 8,362 $ 8,342 $ 8,695
Number of timeshare intervals
sold(6).......................... -- -- 952 1,865 3,195 2,579 4,903
BALANCE SHEET DATA:
Notes receivable, net.............. $ 35,653 $ 44,203 $ 40,311 $ 37,014 $ 34,619 $ 31,873 $ 73,116
Inventory, net..................... 28,245 38,793 62,345 73,595 86,661 81,108 112,297
Total assets....................... 122,853 139,617 152,222 154,963 169,627 158,301 254,808
Lines-of-credit, notes payable and
receivable-backed notes
payable.......................... 26,602 37,297 39,946 37,011 56,961 50,896 89,621(8)
Convertible debt................... 34,739 34,739 34,739 34,739 34,739 34,739 40,739
Shareholders' equity............... 46,868 51,854 58,040 64,698 59,243 60,041 66,649
</TABLE>
13
<PAGE> 21
- ---------------
(1) Interest income for fiscal 1993, 1994, 1995, 1996 and 1997 includes a
$695,000 gain, a $238,000 loss, a $411,000 loss, a $1.1 million gain and a
$96,000 loss, respectively, from sales of notes receivable in connection
with private placement REMIC transactions. See "Management's Discussion and
Analysis of Results of Operations and Financial Condition."
(2) EBITDA represents net income before interest expense, income taxes,
depreciation and amortization and, in the case of fiscal 1997, the provision
for non-recurring costs described below. EBITDA should not be considered in
isolation or construed as a substitute for the Company's net income, income
from operations, cash flows from operating activities or liquidity in
analyzing the Company's operating performance, financial position or cash
flows. EBITDA is not necessarily comparable to other similarly titled
captions of other companies due to potential inconsistencies in the method
of calculation. The Company has included EBITDA herein to provide additional
information related to the Company's ability to incur and service debt. The
following table reconciles EBITDA to net income (loss) (amounts in
thousands):
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
FOR THE YEAR ENDED, ENDED,
-------------------------------------------------------- ---------------------------
MARCH 28, MARCH 27, APRIL 2, MARCH 31, MARCH 30, DECEMBER 29, DECEMBER 28,
1993 1994 1995 1996 1997 1996 1997
--------- --------- -------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income (loss)........... $ 3,457 $ 4,931 $ 6,137 $ 6,467 $(4,360) $(3,528) $ 6,984
Interest expense............ 7,284 6,551 6,737 6,276 5,459 3,916 6,512
Capitalized interest expense
included in cost of real
estate sold............... -- -- 82 149 956 422 1,781
Income taxes................ 1,874 3,022 4,265 4,449 (3,030) (2,451) 4,774
Provision for non-recurring
costs (a)................. -- -- -- -- 8,200 8,200 --
Depreciation and
amortization.............. 1,557 1,660 1,301 1,637 1,066 807 1,345
------- ------- ------- ------- ------- ------- -------
EBITDA...................... $14,172 $16,164 $18,522 $18,978 $ 8,291 $ 7,366 $21,396
======= ======= ======= ======= ======= ======= =======
</TABLE>
(a) The provision for non-recurring costs, which is included in Provision
for losses on the Consolidated Statement of Operations, represents the
Company's $8.2 million write-down of certain Communities Division and
Residential Land Division properties in the first quarter of fiscal
1997. See Note 4 to the Consolidated Financial Statements and
"Management's Discussion and Analysis of Results of Operations and
Financial Condition."
(3) Interest expense is pro forma after giving effect to the Note Offering and
the application of net proceeds therefrom assuming the Note Offering closed
on April 1, 1997, and includes amounts capitalized into inventory and pro
forma interest expense on the Notes. Senior interest expense excludes
interest expense on the Public Debentures (as defined) and the Convertible
Notes (as defined).
(4) Total debt is pro forma after giving effect to the Note Offering and the
application of net proceeds therefrom and excludes $15.4 million of
non-recourse indebtedness incurred by BG Aruba in connection with the Aruba
Transaction and $8.4 million of RDI debt related to notes receivable
previously sold with recourse to financial institutions. See
"Business -- Recent Acquisitions." Total senior debt also excludes the
Public Debentures and the Convertible Notes.
(5) Gross margin is computed as the difference between the sales price and the
related cost of inventory (including the cost of improvements, amenities and
in certain cases capitalized interest and real estate taxes), divided by the
sales price.
(6) Average sales price and unit sales data include those sales made during the
applicable period where recognition of revenue is deferred under the
percentage of completion method of accounting. See "Contracts Receivable and
Revenue Recognition" under Note 1 to the Consolidated Financial Statements.
(7) The number of resorts at December 28, 1997 includes the two resorts acquired
in the RDI Acquisition and the Aruba Resort. See "Business -- Recent
Acquisitions."
(8) Excludes $15.4 million of non-recourse indebtedness incurred by BG Aruba in
connection with the Aruba Transaction and $8.4 million of RDI debt related
to notes receivable previously sold with recourse to financial institutions.
See "Business -- Recent Acquisitions."
14
<PAGE> 22
RISK FACTORS
The following risk factors should be considered carefully in addition to
the other information contained in this Prospectus before purchasing the Notes
offered hereby. Unless otherwise indicated, references in this section to real
estate and inventories collectively encompass the Resorts Division, the
Residential Land Division and the Company's other operations.
REAL ESTATE MARKET AND GENERAL ECONOMIC CONDITIONS; INVENTORY CONCENTRATION
Real estate markets are cyclical in nature and highly sensitive to changes
in national and regional economic conditions, including, among other factors,
levels of employment and discretionary disposable income, consumer confidence,
available financing and interest rates. A downturn in the economy in general or
in the market for residential land or timeshare property could have a material
adverse effect on the Company's business, operating results and financial
condition. In addition, concentration in a given region may increase the
Company's susceptibility to a downturn in such region. The Company has in recent
years been dedicating greater resources to more capital intensive residential
land and timeshare projects and the level of its inventory has increased
materially. The Company will be required to make material capital expenditures
to develop its existing inventory as currently planned. There are substantial
risks associated with a large investment in residential land and timeshare
property inventory at any given time. These include the risks that (i)
residential land and timeshare property inventories will decline in value due to
changing market and economic conditions, (ii) development and carrying costs may
exceed those anticipated, (iii) there may be delays in bringing inventories to
market due to, among other things, changes in regulations, adverse weather
conditions or changes in the availability of development financing on terms
acceptable to the Company and (iv) banks and other lenders will cease financing
residential land and timeshare property sold by the Company with respect to
which the Company does not provide financing. No assurances can be given that
the Company will be able to continue sales at their current levels or that its
gross margins will not decline. See "Management's Discussion and Analysis of
Results of Operations and Financial Condition" and "Business."
With respect to the Company's timeshare operations, any adverse changes
affecting the timeshare industry such as an oversupply of Timeshare Interests, a
reduction in demand for Timeshare Interests, changes in travel and vacation
patterns, changes in governmental regulations of the timeshare industry and
increases in construction costs or taxes, as well as negative publicity for the
timeshare industry, could have a material adverse effect on the Company's
business, operating results and financial condition. See "Management's
Discussion and Analysis of Results of Operations and Financial Condition."
LEVERAGE; ABILITY TO SERVICE DEBT AND LIQUIDITY AND FINANCING REQUIREMENTS
Following the Note Offering and the Exchange Offer, the Company will
continue to have significant interest expense and principal repayment
obligations under its indebtedness. As of December 28, 1997, after giving effect
to the Note Offering and the application of the net proceeds therefrom, the
Company and its consolidated subsidiaries would have had total indebtedness of
approximately $181.1 million, including total secured indebtedness (other than
the Notes), of approximately $25.9 million. See "Selected Consolidated Financial
Data" and "Capitalization." Moreover, the Company is required to seek external
sources of liquidity to support its operations, finance the acquisition and
development of residential land and timeshare property inventory, finance a
substantial percentage of its sales and satisfy its debt and other obligations.
The Company anticipates that it will continue to require external sources of
liquidity to support its operations in the future. The Indenture permits the
Company to incur material additional indebtedness. See "Description of Notes."
The Company's ability to service or to refinance its indebtedness (including the
Notes) or to obtain additional financing (including its ability to consummate
future notes receivable securitizations) depends on its future performance,
which is subject to a number of factors, including the Company's business,
results of operations, leverage, financial condition and business prospects, the
performance of its receivables, prevailing interest rates, general economic
conditions and perceptions about the residential land and timeshare industries.
The Company is currently negotiating certain credit facilities for (i) the
financing and sale of its timeshare receivables, (ii) the financing of its
acquisition and development of timeshare properties and (iii) the acquisition
and development of residential land properties. No assurances can be given that
such credit
15
<PAGE> 23
facilities will be entered into or that funding will be provided on the terms
discussed herein, if at all, or that the Company will be able to obtain
sufficient external sources of liquidity on attractive terms, or at all. The
Company's existing credit facilities and its proposed facilities, if
consummated, will include, among other things, various representations and
warranties, conditions to funding, eligibility requirements for collateral,
affirmative, negative and financial covenants and events of default. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition -- Liquidity and Capital Resources," "Business," "Description of Other
Indebtedness" and "Description of Notes."
The Company's level of debt and debt service requirements will have several
important effects on its future operations, including the following: (i) the
Company will have significant cash requirements to service debt, reducing funds
available for operations and future business opportunities and increasing the
Company's vulnerability to adverse economic and industry conditions; (ii) the
Company's leveraged position will increase its vulnerability to competitive
pressures; (iii) the financial covenants and other restrictions contained in the
Indenture, the Credit Agreements and other agreements relating to the Company's
indebtedness will require the Company to meet certain financial tests and will
restrict its ability to, among other things, borrow additional funds, dispose of
assets or pay cash dividends on, or repurchase, preferred or common stock; and
(iv) funds available for working capital, capital expenditures, acquisitions and
general corporate purposes may be limited. Certain of the Company's competitors
operate on a less leveraged basis and will have greater operating and financial
flexibility than the Company.
In addition to its other debt service obligations, the Company will be
required to redeem a specified amount of its 8 1/4% Convertible Subordinated
Debentures due 2012 (the "Public Debentures"), if not sooner converted into
Common Stock of the Company, annually commencing in 2003 and, if not sooner
converted into Common Stock of the Company, to repay in 2002 the $6 million
aggregate principal amount of convertible subordinated note indebtedness (the
"Convertible Notes") incurred in connection with the RDI Acquisition owed to one
of its directors and an affiliate of another of its directors. Absent an Event
of Default, the Indenture permits the making of scheduled payments on such
subordinated indebtedness. The Company's ability to make scheduled principal
payments, or to refinance its obligations, with respect to such indebtedness,
other existing indebtedness and future indebtedness, and to pay interest
thereon, will depend on its financial and operating performance, which, in turn,
is subject to prevailing economic conditions and to certain financial, business,
industry and other factors beyond its control. If the Company's cash flow and
capital resources are insufficient to fund its debt service obligations and
support its operations, the Company, among other consequences, may be forced to
reduce or delay planned capital expenditures, reduce its financing of sales,
sell assets, obtain additional equity capital or refinance or restructure its
debt. There can be no assurance that the Company's cash flow and capital
resources will be sufficient for payment of its indebtedness in the future. If
the Company is not able to satisfy its debt service obligations, it could
default on its indebtedness, including the Notes, which would entitle the
holders of such indebtedness to, among other things, accelerate the maturity
thereof. Any default under the documents governing indebtedness of the Company
could have a material adverse effect on the market value of the Notes. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition -- Liquidity and Capital Resources" and "Description of Certain
Indebtedness."
ACQUISITION STRATEGY
A principal component of the Company's strategy is to continue to grow by
acquiring the land on which to develop additional timeshare projects or acquire
existing resorts from third party operators. Since the end of fiscal 1997, the
Resorts Division has acquired the land and begun development of its Harbour
Lights Resort in Myrtle Beach, South Carolina, acquired The Falls Village Resort
in Branson, Missouri and consummated the RDI Acquisition and the Aruba
Transaction. The Company's future growth and financial success will depend upon
a number of factors, including its ability to identify attractive resort
acquisition opportunities, consummate the acquisitions on favorable terms,
develop the resort and profitably sell Timeshare Interests at such resorts.
There can be no assurance that the Company will be successful with respect to
such factors. Currently, there are numerous potential buyers of resort real
estate which are better capitalized than the Company competing to acquire resort
properties which the Company may consider attractive acquisition
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opportunities. There can be no assurance that the Company will be able to
compete against such other buyers successfully.
Moreover, to successfully implement its business strategies, the Company
must integrate the newly acquired or developed resorts into its existing sales
and marketing programs. During the start-up phase of a new resort, the Company
expects to experience lower operating margins at that resort until the resort's
operations mature. The lower margins could be substantial and could negatively
impact the Company's cash flow. No assurances can be given that the Company's
operating margins will be maintained or improved as its resorts achieve maturity
or that new resorts will not reduce the Company's over-all operating margins.
Acquisitions involve certain risks and uncertainties. Such risks include
undisclosed liabilities, potential claims against the seller for which
indemnification will not be available (by virtue of caps or otherwise),
uncertainty as to future financial results, the failure of the seller of a
property or project to comply with applicable law in connection with such
property or project or otherwise (including the risks of monetary liabilities
and governmental liens and forfeiture), integrating distinct business operations
and projects, the increased demands acquisitions place on management resources
and other similar factors. No assurance can be given that past or future
acquisitions will be profitable. See "Business -- Recent Acquisitions."
RISKS RELATED TO DEVELOPMENT ACTIVITIES
The Company's growth strategy involves certain inherent risks including the
following: (i) the Company will be required to make material capital
expenditures to develop its residential land and timeshare property inventory
(the Company estimates that the total cash required to complete preparation for
the sale of its residential land and timeshare property inventory as of December
28, 1997 was approximately $186.0 million), (ii) planned development may be
delayed or abandoned and development and carrying costs may exceed those
anticipated, possibly making the project uneconomical or unprofitable, (iii) the
Company may experience a fluctuation in quarterly results due to an increase or
decrease in the number of residential land or timeshare projects subject to
percentage of completion accounting which requires net profit on such projects
to be recognized on a pro rata basis as development is completed, (iv) the
period between acquisition and sale of property may increase and the Company may
experience delays in bringing inventories to market, resulting in decreased
revenues and increased interest expense and carrying charges and (v) inventories
may decline in value due to changing market and economic conditions. Certain
inventories with a carrying value of $23.2 million were written-down by $8.2
million during the first quarter of fiscal 1997, in recognition of the change in
the Company's focus towards expansion of the Residential Land Division and the
Resorts Division in certain locations. See "Management's Discussion and Analysis
of Results of Operations and Financial Condition" and "Business." There can be
no assurance that the Company will complete planned development activities or be
able to acquire additional properties on attractive terms.
In addition, the Company's construction activities typically are performed
by third-party contractors, and, accordingly, the timing, quality and completion
of such activities cannot be controlled by the Company. Nevertheless,
construction claims may be asserted against the Company for construction defects
and such claims may give rise to liabilities. New development activities,
regardless of whether or not they are ultimately successful, typically require a
substantial portion of management's time and attention. Development activities
are also subject to risks relating to the inability to obtain, or delays in
obtaining, all necessary zoning, land-use, building, occupancy and other
required governmental permits and authorizations, the ability of the Company to
coordinate construction activities with the process of obtaining such permits
and authorizations, and the ability of the Company to obtain the financing
necessary to complete the necessary acquisition, construction, and/or conversion
work at its projects and resorts. In addition, certain states and local laws may
impose liability on property developers with respect to construction defects
discovered or repairs made by future owners of such property.
RISKS ASSOCIATED WITH CUSTOMER FINANCING AND RECEIVABLES
The Company offers financing of up to 90% of the purchase price to all
purchasers of its residential land properties or Timeshare Interests, as the
case may be, who qualify for such financing. Such loans are
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collateralized by liens on the underlying property and Timeshare Interest.
Currently, approximately 89% of the Company's timeshare buyers finance with the
Company, while approximately eight percent of the Company's residential land
customers use Company financings. As noted above, the Company requires external
sources of liquidity in order to offer financing to its customers. The
receivables arising from sales of Timeshare Interests and residential land
generally are pledged to institutional lenders or, in the case of residential
land receivables, sold in connection with private placement REMIC financings.
Under the pledged receivables facilities, the Company is typically advanced 90%
of the principal balance of eligible pledged receivables. The Company is
required to replace receivables that become delinquent or to pay down the loan
secured by such receivables to remain within required loan to value ratios. To
the extent the Company's receivables bear interest at a fixed rate and its
borrowings bear interest at a variable rate, the Company bears the risk of
increases in interest rates. The terms of REMIC financings require the Company
to repurchase or replace mortgage loans to the extent the Company has breached
any representations and warranties at the time of sale of its receivables to the
REMIC trust, and the Company, as servicer, is also required to make advances on
delinquent payments to the extent deemed recoverable. The Company is currently
negotiating with a financial institution to provide the Company with a combined
timeshare warehouse financing and receivables purchase facility and a timeshare
acquisition and development facility. See "Description of Other Indebtedness."
No assurances can be given that the Company will be able to obtain such
facilities on favorable terms, or at all. See "Management's Discussion and
Analysis of Results of Operations and Financial Condition."
The Company bears the risk of delinquencies and defaults by buyers who
finance through the Company the purchase of their Timeshare Interests or
residential land. General economic conditions have an impact on the ability of
borrowers to repay loans. Loss of earnings, illness and other similar factors
may lead to an increase in delinquencies. As of December 28, 1997, approximately
4.5% or $3.0 million principal amount of timeshare receivables and approximately
7.9% or $1.2 million principal amount of residential land receivables which were
held by the Company or by third parties under sales transactions where the
Company had a recourse liability were more than 30 days past due compared to
approximately 1.8% or $424,000 principal amount of timeshare receivables and
approximately 11.9% or $1.5 million principal amount of residential land
receivables as of March 30, 1997. Included in the above percentages are loans
with respect to which a foreclosure proceeding or other legal process had
commenced. The Company ceases to carry a receivable upon a foreclosure or when
it receives a deed in lieu of foreclosure, at which time the property goes back
into inventory. Historically, delinquencies on timeshare receivables have been
greater than those on land receivables. If the real estate market should
experience an overall decline in values such that the outstanding balances of
the Company's notes receivable are greater than the value of the mortgaged
properties, the actual rates of delinquencies, foreclosures and losses could be
materially higher than those now experienced. An increase in delinquency rates
or defaults on the Company's receivables could have a material adverse effect on
the Company's business, operating results and financial condition. The Company
may incur substantial costs and delays in connection with its servicing of
receivables, including costs in foreclosing or realizing on its collateral and
additional marketing and sales costs with respect to reacquired property. No
assurances can be given that reacquired property will be sold at a profit.
During fiscal 1997 and the nine-month period ended December 28, 1997, the
Company charged $1.3 million and $568,000, respectively, to its provision for
loan losses to reflect the difference between the unpaid principal balance of
the non-performing receivables and the estimated net realizable value of the
reacquired property. See "Business -- Customer Financing."
The majority of the Company's residential land sales are currently not
financed by the Company but rather with local banks. A decrease in the
willingness of such lenders to extend direct customer lot financing could cause
a decline in the level of the Company's sales and/or require material additional
credit facilities in order to enable the Company to provide financing to such
customers.
A portion of the Company's revenues historically has comprised gains on
sales of loans, and, although no assurances can be given, assuming the proposed
timeshare receivables purchase facility that the Company is currently
negotiating is consummated, it is anticipated that the portion of the Company's
revenues comprising such gains on sales is expected to increase significantly.
The gains are recorded in the Company's revenues and on its balance sheet (as
retained interests on loan sales) at the time of sale, and the amount of gains
recorded is based in part on management's estimates of future prepayment and
default rates and other considerations in
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light of then-current conditions. If actual prepayments with respect to loans
occur more quickly than was projected at the time such loans were sold, as can
occur when interest rates decline, interest would be less than expected and
earnings would be charged in the current period. If actual defaults with respect
to loans sold are greater than estimated, charge-offs would exceed previously
estimated amounts and earnings would be charged in the current period. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition."
RISKS ASSOCIATED WITH TIMESHARE INTEREST EXCHANGE NETWORKS
The attractiveness of Timeshare Interests is enhanced significantly by the
availability of exchange networks that allow owners of Timeshare Interests to
exchange their occupancy right granted by their Timeshare Interests during a
particular year for an occupancy right granted at another participating network
resort. Several companies, including II and RCI, provide broad-based Timeshare
Interests exchange services. RDI's timeshare resorts (and its vacation club) are
currently qualified for participation in the RCI exchange network while the
Company's other timeshare resorts (and the Aruba Resort) are currently qualified
for participation in the II exchange network. No assurance can be given that the
Company's existing resorts and vacation club will continue to qualify, or its
future resorts will be able to qualify, for participation in either the RCI or
the II network or any other exchange network, or that the Company's customers
will continue to be satisfied with RCI's or II's exchange network. If such
exchange networks cease to function effectively, if the Company's resorts are
not accepted as exchanges for other desirable resorts, or if II or RCI ceases to
be a leading Timeshare Interest exchange network, the Company's sales of
Timeshare Interests could be materially adversely affected. The Company entered
into a five year agreement with II in May 1995, pursuant to which the Company
agreed to include in II's exchange network all vacation ownership resorts that
have been or will be acquired, developed or controlled by the Company. In
December 1993, and prior to its acquisition by the Company, RDI and its
point-based vacation club entered into a six year agreement with RCI pursuant to
which RDI agreed to include in RCI's exchange network the RDI point-based
vacation club. In connection with the RDI Acquisition, the Company has advised
each of II and RCI of the existence of its agreement with the other timeshare
interest exchange network and of the potential conflict. Although no assurances
can be given, based on its relationships with the exchange networks and its
discussions with such exchange networks to date, the Company believes that it
will be able to enter into a satisfactory resolution of this situation with each
of II and RCI. See "Business -- Industry Overviews -- Resorts
Division -- Participation in Timeshare Interest Exchange Networks."
HOLDING COMPANY STRUCTURE
The Notes will be obligations exclusively of the Company and the Subsidiary
Guarantors. Because a significant portion of the operations of the Company
currently are conducted through subsidiaries, the cash flow of the Company and
its ability to service its debt, including the Notes, are dependent upon the
cash flows of such subsidiaries and the distribution of those cash flows to the
Company, or upon loans or other payments of funds by such subsidiaries to the
Company. The Company's subsidiaries are separate and distinct legal entities
and, except pursuant to the Note Guarantees, have no obligation, contingent or
otherwise, to pay any amounts due pursuant to the Notes or to make any funds
available therefor, whether by dividends, loans or other payments. In addition,
the payment of dividends and certain loans and advances to the Company by such
subsidiaries may be subject to certain statutory or contractual restrictions,
are contingent upon the earnings of such subsidiaries and are subject to various
business considerations and legal restrictions. The Notes will be effectively
subordinated to all Indebtedness and other liabilities and commitments
(including trade payable and lease obligations) of the Company's subsidiaries
that are not Subsidiary Guarantors and to all Secured Indebtedness of the
Company and its subsidiaries (except to the extent of any Mortgages on the
Pledged Properties securing certain of the Note Guarantees). Any right of the
Company to receive assets of any such subsidiary upon the liquidation or
reorganization of such subsidiary (and the consequent right of the holders of
the Notes to participate in those assets) will be effectively subordinated to
the claims of those subsidiary's creditors, except to the extent that the
Company or the Notes Trustee, on behalf of the holders of Notes, pursuant to the
Note Guarantees, is itself recognized as a creditor of such subsidiary, in which
case the claims of the Company or the Notes Trustee, on behalf of the holders of
Notes, would still be subordinate to any
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security in the assets of such subsidiary and any Indebtedness of such
subsidiary senior to that held by the Company.
LIMITATION ON REPURCHASE OF NOTES UPON A CHANGE OF CONTROL
Upon a Change of Control (as defined in the Indenture), each holder of the
Notes will have certain rights, at the holder's option, to require the Company
to repurchase all or a portion of such holder's Notes. If a Change of Control
were to occur, there can be no assurances the Company would have sufficient
financial resources, or would be able to arrange financing, to repay the
repurchase price for all Notes tendered by the holders thereof. Certain events
involving a Change of Control may constitute an event of default under the
Company's other credit agreements and other debt instruments (including the
Credit Agreements). Moreover, the exercise by the holders of their right to
require the Company to repurchase the Notes as a result of the occurrence of a
Change of Control may create an event of default under the Company's credit
agreements and other debt instruments, and could create an event of default
under other future Credit Agreements or other debt instruments. Any such event
of default could effectively block the repurchase of the Notes. See "Description
of the Notes -- Change of Control."
FRAUDULENT CONVEYANCE CONSIDERATIONS
The issuance by the Subsidiary Guarantors of the Note Guarantees and the
grant of a Mortgage by certain Subsidiary Guarantors on the Pledged Properties
owned by such Subsidiary Guarantors to secure their Note Guarantees could be
subject to review under applicable federal and state fraudulent transfer or
conveyance laws in a bankruptcy proceeding or a lawsuit by or on behalf of
unpaid creditors of a Subsidiary Guarantor or a representative of such
creditors, such as a trustee or a Subsidiary Guarantor as debtor-in-possession.
Under such laws, if a court were to find that, at the time a Subsidiary
Guarantor issued the Note Guarantee or granted a Mortgage, either (i) the
Subsidiary Guarantor issued such Note Guarantee or granted such Mortgage with
the intent of hindering, delaying or defrauding creditors, or (ii) the
Subsidiary Guarantor received less than a reasonably equivalent value or fair
consideration for issuing such Note Guarantee or granting such Mortgage, and the
Subsidiary Guarantor (a) was insolvent or rendered insolvent by reason of the
issuance of such Note Guarantee or the granting of such Mortgage, (b) was
engaged in a business or a transaction, or was about to engage in a business or
a transaction, for which the assets remaining with the Subsidiary Guarantor
after giving effect to the issuance of such Note Guarantee or the granting of
such Mortgage, constituted an unreasonably small amount of capital, or (c)
intended to incur, or believed that it would incur, debts beyond its ability to
pay as they matured, such court could void the Subsidiary Guarantor's
obligations under such Note Guarantee and any Mortgage securing such Note
Guarantee and direct the repayment of any amounts paid thereunder to the
Subsidiary Guarantor or to a fund for the benefit of the Subsidiary Guarantor's
creditors, or take other action detrimental to the holders of the Notes.
The measure of insolvency for purposes of the foregoing will vary depending
upon the law of the jurisdiction which is being applied. Generally, however, an
entity will be considered insolvent for purposes of the foregoing if the sum of
its debts is greater than all of its property at a fair valuation, or if the
present fair saleable value of its assets is less than the amount that will be
required to pay its probable liabilities on its existing debts as they become
absolute and matured or if it could not pay its debts as they were due. Based
upon management's analysis of internal cash flow projections and other financial
information and estimated values of assets and liabilities of the Company's
subsidiaries which are Subsidiary Guarantors, the Company believes that,
immediately after issuance of the Notes and assuming no Event of Default exists
under the Indenture, the Subsidiary Guarantors will be solvent, and will have
sufficient capital to carry on their businesses and that the Subsidiary
Guarantors will be able to pay their debts as they mature. No assurance can be
given, however, as to what standard a court could apply in making such
determinations or that a court would reach the same conclusions with regard to
these issues.
RISK OF INABILITY TO REALIZE UPON MORTGAGES; INSUFFICIENT COLLATERAL
The Note Guarantees of six Subsidiary Guarantors will be secured by a
Mortgage on the Pledged Properties of each such Subsidiary Guarantor. The
ability of the Trustee to foreclose on such collateral upon the occurrence of an
Event of Default under the Indenture will be subject to legal requirements,
potential
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delays and practical problems associated with realization upon mortgages and
security interests in real property generally. Foreclosures are regulated by law
and are subject to a court's equitable powers. In certain circumstances, the
liens of the Trustee could become junior to certain governmental or other liens,
including, without limitation, liens for unpaid taxes or assessments or certain
environmental remediation liabilities. See "Description of Notes -- Security."
The proceeds of any sale of the Pledged Properties following an Event of
Default under the Indenture would not be sufficient to repay the Notes in full.
No appraisals were obtained on the Pledged Properties in connection with the
Note Offering or the Exchange Offer. As of January 25, 1998, the real property
comprising the Pledged Properties had an aggregate book value of approximately
$46.1 million. As noted below, inventory has been sold from the Pledged
Properties since such date. No assurances can be given that the property subject
to the Mortgages could be sold for such amount in the event of a foreclosure or
other comparable proceeding realizing on the Mortgages or that the property will
not decline in value. If a bankruptcy proceeding were to be commenced by or
against the Company and/or the Subsidiary Guarantors and the bankruptcy court
concluded that the applicable Subsidiary Guarantees were not adequately secured,
the holders of the Notes would have only an unsecured deficiency claim with
respect to the applicable Note Guarantee to the extent of such deficiency, and
would not be entitled to post-petition interest or reimbursement of costs of
collection (including attorney's fees). Any deficiency claim of the holder of
the Notes with respect to the Subsidiary Guarantors who executed Mortgages would
rank pari passu with any deficiency claims of all other general unsecured
creditors of the Company and/or the Subsidiary Guarantors. In addition, the
ability of the holders of the Notes to effect a sale of the Pledged Properties
may be subject to certain bankruptcy limitations in the event of a bankruptcy
proceeding involving the Company and/or the Subsidiary Guarantors, including
without limitation, the so called "automatic stay" under Section 362 of the
United States Bankruptcy Code, 11 U.S.C. sec. 101 et. seq., as amended from time
to time.
Pursuant to the terms of the Indenture and the Mortgages, the Notes Trustee
shall be required to release the lien of the Mortgages with respect to the sale
of any property covered thereby unless an Event of Default shall have occurred
and be continuing. Absent such an Event of Default, the Notes Trustee shall not
have a lien on the proceeds from a sale of the Pledged Properties. Consequently,
the value of the collateral covered by the Mortgages will diminish over time as
Pledged Properties are sold. Lots are currently being sold at each of the
Pledged Properties. Although no assurances can be given and the Pledged
Properties may be sold more quickly, the Company currently estimates based on
historical sales that the Pledged Properties will be sold-out over a one to
three year period. Except for the Mortgages on the Pledged Properties, neither
the Company nor any of its subsidiaries including the Subsidiary Guarantors has
provided or is required to provide any security for its obligations under the
Notes or the Note Guarantees, as applicable.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends to a significant extent upon the experience
and abilities of the Company's senior management. The loss of the services of
one or more members of senior management could have a material adverse effect on
the Company and its business prospects. Although the Company has entered into
employment agreements with certain members of senior management, no assurances
can be given the Company will be able to retain the services of such
individuals. The Company's continued success is also dependent upon its ability
to hire, train and retain qualified marketing, sales, development, acquisition,
finance, management and administrative personnel. Such personnel are in
substantial demand and the cost of attracting or retaining such key personnel
could escalate over time. There can be no assurance that the Company will be
successful in attracting or retaining such personnel. See "Management."
VARIABILITY OF QUARTERLY RESULTS
The Company's earnings may be impacted by, among other things, the timing
of the completion of the acquisition and development of its timeshare resorts
and residential land projects, a shortage of ready-for-sale inventory in its key
market areas, inventory write-downs, levels of loan losses, and the potential
impact of adverse weather and other natural disasters at the Company's resorts.
Material fluctuations in operating results may also occur due to the requirement
that the Company use of the percentage of completion method of accounting. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition."
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CONSEQUENCES OF FAILURE TO EXCHANGE
The Outstanding Notes have not been registered under the Securities Act or
any state securities laws, and therefore, may not be offered, sold or otherwise
transferred except in compliance with the registration requirements of the
Securities Act and any other applicable securities laws, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case in
compliance with certain other conditions and restrictions, including the right
of the Company and the Notes Trustee (as defined) in certain cases to require
the delivery of opinions of counsel, certifications and other information prior
to any such transfer. Outstanding Notes that remain outstanding after the
consummation of the Exchange Offer will continue to bear a legend reflecting
such restrictions on transfer. In addition, upon consummation of the Exchange
Offer, holders of Outstanding Notes that remain outstanding will not be entitled
to any rights to have such Outstanding Notes registered under the Securities Act
or to any similar rights under the Registration Rights Agreement (subject to
certain limited exceptions). The Company currently intends to register under the
Securities Act Outstanding Notes that remain outstanding after consummation of
the Exchange Offer only if such Outstanding Notes are held by Initial Purchasers
or persons ineligible to participate in the Exchange Offer (other than due
solely to the status of such holder as an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act). If Outstanding Notes are tendered
and accepted in the Exchange Offer, the market for untendered Outstanding Notes
is likely to diminish; accordingly, holders who do not tender their Outstanding
Notes may encounter difficulties in selling such notes following the Exchange
Offer. The Exchange Notes and any Outstanding Notes that remain outstanding
after consummation of the Exchange Offer will constitute a single series of debt
securities under the Indenture and, accordingly, will vote together as a single
class for purposes of determining whether holders of the requisite percentage in
outstanding principal amount of the Notes have taken certain actions or
exercised certain rights under the Indenture.
ABSENCE OF PUBLIC MARKET
The Outstanding Notes were issued to, and the Company believes are
currently owned by, a relatively small number of beneficial owners. The
Outstanding Notes have not been registered under the Securities Act and will be
subject to restrictions on transferability to the extent that they are not
exchanged for Exchange Notes. See "-- Consequences of Failure to Exchange."
Although the Exchange Notes will generally be permitted to be resold or
otherwise transferred by the holders (who are not affiliates of the Company)
without compliance with the registration and prospectus delivery requirements
under the Securities Act, they will constitute a new issue of securities with no
established trading market. If the Exchange Notes are traded after their initial
issuance, they may trade at a discount from their initial offering price,
depending upon prevailing interest rates, the market for similar securities and
other factors including general economic conditions and the financial condition
of the Company. The Company does not intend to apply for a listing or quotation
of the Exchange Notes on any securities exchange or stock market. Accordingly,
there can be no assurance as to the development or liquidity of any market for
the Exchange Notes. The liquidity of, and trading market for, the Notes also may
be adversely affected by general declines in the market for similar securities.
Such a decline may adversely affect such liquidity and trading markets
independent of the financial performance of, and prospects for, the Company.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Outstanding Notes, where such Outstanding Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Exchange Notes. Subject to certain provisions set forth in the Registration
Rights Agreement, the Company has agreed that, for a period of up to 180 days
after the consummation of the Exchange Offer, it will make this Prospectus
available to any Participating Broker-Dealer for use in connection with any such
resale. However, under certain circumstance, the Company has the right to
require that Participating Broker-Dealers suspend the resale of Exchange Notes
pursuant to this Prospectus. Notwithstanding that the Company may cause the
resale of Exchange Notes pursuant to this Prospectus to be suspended, the
Company has no obligation to extend the 180-day period referred to above
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during which Participating Broker-Dealers are entitled to use this Prospectus in
connection with such resales. See "The Exchange Offer -- Resale of the Exchange
Notes."
REGULATION
The Company is subject to extensive and complex federal, state, local and,
as a result of the Aruba Transaction, foreign regulation, and is required to
comply with various federal, state, local and foreign environmental, zoning,
land use, consumer protection, anti-fraud, labor, usury, truth-in-lending, equal
opportunity, timeshare registration, land sales, licensing and other laws and
regulations which govern its operations. Existing or future regulations may have
a material adverse impact on the Company's operations by, among other things,
imposing additional compliance costs, delaying the period in which projects are
brought to market and limiting the interest rate which the Company may charge to
customers who utilize its financing. The Company believes that it is in material
compliance with all applicable laws and regulations to which it is currently
subject. However, no assurances can be given that the costs of future compliance
will not be significant or that the Company is in fact in compliance with all
applicable laws and regulations. In addition, there can be no assurance that
laws and regulations applicable to the Company in any specific jurisdiction will
not be revised or that other laws or regulations (including without limitation
with respect to tax matters) will not be adopted which could increase the
Company's cost of compliance or prevent the Company from marketing or selling
its residential land or timeshare properties or conducting other operations in
such jurisdictions or otherwise have a material adverse impact on the Company's
operations. Any failure of the Company to comply with applicable laws or
regulations or any increase in the costs of compliance could have a material
adverse effect on the Company's business, operating results and financial
condition. See "Business -- Regulation" and "-- Litigation."
COMPETITION
The real estate industry is highly competitive. The Company's Resorts
Division competes with various high profile and well-established timeshare
resort operators. Many of the world's most recognized lodging, hospitality and
entertainment companies have begun to develop and sell Timeshare Interests in
resort properties. Major companies that now operate or are developing or
planning to develop timeshare resorts include Marriott Ownership Resorts
("Marriott"), The Walt Disney Company ("Disney"), Hilton Hotels Corporation
("Hilton"), Hyatt Corporation ("Hyatt"), Four Seasons Hotels & Resorts ("Four
Seasons") and Inter-Continental Hotels and Resorts ("Inter-Continental"). The
Company also competes with other publicly-traded timeshare companies, including
Signature Resorts, Inc. ("Signature"), Vistana, Inc. ("Vistana"), Fairfield
Communities, Inc. ("Fairfield") and Silverleaf, Inc. ("Silverleaf"), as well as
numerous other owners and operators of timeshare resorts. The Company's
Residential Land Division competes with builders, developers and others for the
acquisition of property and with local, regional and national developers,
homebuilders and others with respect to the sale of residential lots. Many of
the Company's competitors are larger and possess greater financial, marketing,
personnel and other resources than the Company. Although the Company believes it
can effectively compete in its market areas, no assurances can be given as to
the Company's future ability to locate, develop and sell attractive properties
in the markets in which it wishes to operate or that the entrance of high
profile and well-established operators into the Company's market areas will not
have a material adverse effect on the Company's operations. The development and
operation of additional timeshare resorts in the Company's markets could have a
material adverse impact on the demand for the Company's Timeshare Interests and
the Company's results of operations. In addition, with respect to its timeshare
business, the Company's management believes that industry competition will be
increased by recent and possible future consolidation in the timeshare industry
as the Company's competitors get larger. With respect to its finance operations,
the Company competes with banks, mortgage companies, other financial
institutions and government agencies offering financing of real estate. In
recent years, the Company has experienced increased competition with respect to
the financing of residential land sales as evidenced by the low percentage of
residential land sales financed by the Company since 1995. See
"Business -- Competition."
23
<PAGE> 31
RISKS OF DEVELOPMENT OF POINTS-BASED VACATION CLUB
The Company intends to actively pursue the expansion of the points-based
vacation club system currently operated by RDI to include the Company's other
existing and future timeshare resorts. However, there can be no assurance that
the Company will complete the expansion of RDI's points-based vacation club
system in this manner, if at all, or that, if completed, such expansion will be
successful. Risks associated with the Company's expansion of RDI's points-based
vacation club system include the risks that such expansion may be substantially
delayed or abandoned; the RDI points-based vacation club system cannot be
legally and efficiently combined or operated with the Company's current and
future timeshare operations; and points-based vacation club systems may be or
become subject to extensive regulation by federal, state and local
jurisdictions, possibly making such points-based system uneconomical or
unprofitable. In particular, the expansion will require the approval of various
regulators, homeowners' associations and others. No assurance can be given that
the necessary approvals will be obtained.
RISKS RELATED TO ARUBA TRANSACTION AND INTERNATIONAL OPERATIONS
The unsold Timeshare Interests acquired in the Aruba Transaction are owned
by BG Aruba, an Aruban limited liability company in which the Company has a
fifty percent equity interest and over which the Company exercises operational
control. Property ownership through a joint venture involves additional risks,
including the requirement of consents for certain decisions. If a dispute arises
between the Company and the holder of the other equity interest in BG Aruba, an
adverse resolution could have a material adverse effect on the Company's
investment in BG Aruba. In addition, the Company will be subject to certain
fiduciary obligations with respect to holders of other equity interest in BG
Aruba which may obligate it to act in a manner which is not necessarily in the
best interests of the Company. The Aruba Resort is managed and operated by an
unaffiliated third party. Sales of the unsold Timeshare Interest inventory
acquired by BG Aruba could be materially adversely affected by other
developments at the Aruba Resort, including without limitation any past or
future failure by the Aruba Resort and its owners (or the entity which sold the
Timeshare Interest inventory to BG Aruba) to comply with applicable laws and the
applicable agreements governing the Aruba Resort, which are outside of BG
Aruba's control. See "Business -- Recent Acquisitions."
As a result of the Aruba Transaction, the Company is now subject to a
number of risks related to international operations, including, among other
things, difficulties relating to administering its business globally and
managing foreign operations. These risks could have a material adverse effect on
the Company's business, results of operations and financial condition.
Additionally, part of the Company's strategy is to acquire additional timeshare
properties outside the United States. Changes in inflation, interest rates,
currencies, taxation, regulation or other social, political, economic, legal,
regulatory or diplomatic developments affecting the countries in which the
Company has (or intends to have) international operations could have a material
adverse effect on the Company's business, operating results and financial
condition.
RISKS ASSOCIATED WITH RESORT MANAGEMENT
The Company currently provides homeowners' association management services
at its existing timeshare resorts other than the Aruba Resort and intends to
provide the same services at its future timeshare resorts pursuant to management
agreements with the homeowners' associations at such resorts. In addition, RDI
also manages 26 timeshare resorts located in Florida, Alabama, Georgia, Virginia
and South Carolina. The Company's management agreements are generally for annual
terms and require the approval of the homeowners' association for renewal. If
the Company is unable to manage a resort in a manner which maintains
satisfaction among the homeowners, applicable law may give the homeowners'
association rights to terminate the management agreement. For the three months
ended December 28, 1997, the Company's revenues derived from fees paid by
homeowners' associations pursuant to the management agreements were
approximately $859,000. The Company did not derive any material management fees
prior to September 30, 1997, as the resort management business was acquired as
part of the RDI Acquisition. There can be no assurance that any homeowners'
association will not terminate its management agreement with the Company. Any
such termination could have a material adverse effect on the results of the
Company's resort management
24
<PAGE> 32
operations and revenues. In addition, as is the case with any manager of a
resort, the Company may become subject to disputes with members who are not
satisfied with the resort or its management.
NATURAL DISASTERS; UNINSURED LOSS
Certain of the Company's timeshare resorts and residential land projects
are located in areas that are susceptible to tropical storms and hurricanes. The
Company's resorts and residential land projects could suffer significant damage
as a result of wind storms, hurricanes, floods and other natural disasters. Any
such damage could impair the Company's ability to sell Timeshare Interests at
its resorts or residential lots at its residential land projects, and to collect
on outstanding notes receivable and adversely affect the Company's business,
operating results and financial condition.
There are certain types of losses that are not generally insured because
they are either uninsurable or not economically feasible to insure and for which
the Company does not have insurance coverage. Should an uninsured loss or a loss
in excess of insured limits occur, the Company could lose its investment in a
timeshare resort or any improvements at a residential land project as well as
the anticipated future revenues from such timeshare resort or residential land
project, and would continue to be obligated on any mortgage indebtedness or
other obligations related to the timeshare resort or residential land project.
LIMITED RESALE MARKET FOR TIMESHARE INTERESTS
The Company sells Timeshare Interests to buyers for leisure purposes and
not for investment. The Company believes that the market for resale of Timeshare
Interests by such buyers is presently limited and that any resales of Timeshare
Interests are typically at prices substantially less than the original purchase
price. These factors may make ownership of Timeshare Interests less attractive
to prospective buyers. In addition, attempts by buyers to resell their Timeshare
Interests may compete with sales of Timeshare Interests by the Company and could
depress the market price of Timeshare Interests sold by the Company.
POSSIBLE ENVIRONMENTAL LIABILITIES
Under various federal, state and local laws, ordinances and regulations,
the current or previous owner, manager or operator of real property may be
liable for the costs of removal or remediation of certain hazardous or toxic
substances located on or in, or emanating from, such property, as well as
related costs of investigation and property damage. Such laws often impose such
liability without regard to whether the owner, manager or operator knew of, or
was responsible for, the presence of such hazardous or toxic substances. Under
the Federal Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA"), a lender may be liable either to the government
or to private parties for cleanup costs on property securing a loan, even if the
lender does not cause or contribute to the contamination. Certain states impose
a statutory lien for associated costs on property that is the subject of a
cleanup action by the state on account of hazardous wastes or hazardous
substances released or disposed of on the property. Such a lien will generally
have priority over all subsequent liens on the property and, in certain of these
states, will have priority over prior recorded liens including the lien of a
mortgage or deed of trust. In addition, under federal environmental legislation
and possibly under state law in a number of states, a secured party which takes
a deed in lieu of foreclosure or acquires a mortgaged property at a foreclosure
sale or otherwise is deemed an "owner" or "operator" of the property and may be
liable for the full costs of cleaning up a contaminated site. Such costs could
be substantial and are not limited to the value of property. The Company
believes that it is in compliance in all material respects with all federal,
state and local laws, ordinances and regulations regarding hazardous or toxic
substances, but no assurance can be given that hazardous or toxic substances
will not be found on its property or properties that it previously owned.
25
<PAGE> 33
COMPLIANCE WITH LAWS GOVERNING ACCESS
A number of state and federal laws, including the Fair Housing Act and the
Americans with Disabilities Act, impose requirements related to access and use
by disabled persons of a variety of public accommodations and facilities.
Although the Company believes that its timeshare resorts are in compliance with
these laws in all material respects, the Company may incur additional costs of
complying with such laws and no assurances can be given that the Company is in
fact in compliance with such laws. The ultimate amount of the cost of compliance
with such legislation is not currently ascertainable, and, while such costs are
not expected to have a material effect on the Company, such costs could be
substantial.
26
<PAGE> 34
USE OF PROCEEDS
The Company will not receive any of the proceeds of the issuance of the
Exchange Notes offered hereby. In consideration for issuing the Exchange Notes
as contemplated in this Prospectus, the Company will receive in exchange
Outstanding Notes in like principal amount. The issuance of the Exchange Notes
in exchange for the surrender of the Outstanding Notes will not result in any
increase in the indebtedness of the Company.
The net proceeds to the Company from the sale of the $110 million aggregate
principal amount of Outstanding Notes, after deducting discounts and estimated
expenses of the Note Offering, were approximately $105.7 million.
The Company used the net proceeds of the Note Offering to retire
approximately $91.8 million of existing indebtedness of the Company. The
indebtedness repaid consisted of approximately $88.1 million in aggregate
principal amount, approximately $1,028,000 in accrued interest and approximately
$2.7 million in costs associated with early extinguishment of debt. The
remainder of the net proceeds were used for working capital and to repay other
obligations of the Company. The Company will continue to require external
sources of capital to finance new property purchases and development, fund
operations, satisfy debt obligations and provide financing to purchasers of its
Timeshare Interests and residential land. See "Management's Discussion and
Analysis of Results of Operations and Financial Condition -- Liquidity and
Capital Resources."
The indebtedness to be repaid out of the proceeds from the Note Offering
bore interest at a weighted average interest rate of approximately 9.6% per
annum and had maturities ranging between April 1998 and November 2019.
Indebtedness repaid that was incurred within the year prior to April 1, 1998,
which included indebtedness advanced by the Initial Purchasers, was incurred for
inventory and acquisitions and development of residential land projects and
resorts, to finance the Company's operations and for working capital and general
corporate purposes. See "Plan of Distribution." None of the proceeds from the
Note Offering were used to pay any delinquent indebtedness.
27
<PAGE> 35
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
December 28, 1997, and the pro forma capitalization at such date as adjusted to
give effect to the Note Offering and the application of the net proceeds
therefrom. See "Use of Proceeds." This table should be read in conjunction with
the Consolidated Financial Statements of the Company, including the notes
thereto, included elsewhere in this Prospectus. The amounts are in thousands,
except per share data.
<TABLE>
<CAPTION>
AT DECEMBER 28, 1997
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
(UNAUDITED)
<S> <C> <C>
Cash and cash equivalents (including restricted cash of
$13,300).................................................. $ 25,124 $ 44,996(1)
======== =========
Senior Debt:
Lines-of-credit and notes payable......................... $ 46,463 $ 1,910
10 1/2% Senior Secured Notes, due 2008.................... -- 110,000
Receivable-backed notes payable(2)........................ 51,536 13,033
Non-recourse Aruba Debt................................... 15,446 15,446
-------- ---------
Total senior debt................................. 113,445 140,389
Subordinated debt:
8.00% convertible subordinated notes payable to related
parties, due 2002...................................... 6,000 6,000
8.25% convertible subordinated debentures, due 2012....... 34,739 34,739
-------- ---------
Total debt........................................ 154,184 181,128
Minority interest........................................... 250 250
Total shareholders' equity(3)............................... 66,649 64,502(4)
-------- ---------
Total capitalization.............................. $221,083 $ 245,880
======== =========
</TABLE>
- ---------------
(1) Includes approximately $5.9 million of net proceeds from the Note Offering
which were used to retire additional indebtedness incurred after December
28, 1997 but prior to the closing of the Note Offering and approximately
$13.9 million of net proceeds from the Note Offering which were used for
working capital and to repay other obligations of the Company.
(2) Includes $8.4 million of RDI debt related to notes receivable previously
sold with recourse to financial institutions.
(3) Common Shares outstanding were approximately 20,743,000 actual and as
adjusted and do not include an aggregate of 2,287,190 shares of Common Stock
reserved for issuance under the Company's stock benefit and option plans,
4,215,898 shares of Common Stock issuable upon conversion of the Public
Debentures and 1,530,612 shares of Common Stock issuable upon conversion of
the Convertible Notes. See "Management -- Executive Compensation" and
"Description of Other Indebtedness."
(4) Includes the approximately $2,147,000 after tax effect of $2,700,000 of
estimated prepayment penalties and $878,000 of debt issuance costs
anticipated to be written off due to the early extinguishment of debt.
28
<PAGE> 36
BLUEGREEN CORPORATION
INTRODUCTION TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
The following pro forma condensed consolidated financial information
consists of a Pro Forma Condensed Consolidated Balance Sheet as of December 28,
1997 and Pro Forma Condensed Consolidated Statements of Operations for the Year
Ended March 30, 1997 and the Nine Months Ended December 28, 1997 (collectively,
"the Pro Forma Statements"). The Pro Forma Condensed Consolidated Balance Sheet
gives effect to the Note Offering as if it had occurred on December 28, 1997.
The Pro Forma Condensed Consolidated Statements of Operations give effect to the
Note Offering as if it had occurred at the beginning of the periods presented.
The pro forma adjustments to the Pro Forma Statements are based on the
assumptions and adjustments described in the accompanying notes to the Pro Forma
Statements.
The pro forma information for the Note Offering assumes the repayment of
certain indebtedness of the Company using a portion of the net proceeds received
from the Note Offering as if the Note Offering and the repayment had occurred as
of the beginning of the respective period.
The pro forma adjustments are based upon currently available information
and upon certain assumptions that management of the Company believes are
reasonable under the circumstances. The Pro Forma Statements do not purport to
be indicative of what the Company's financial position or results of operations
would actually have been if the aforementioned transactions in fact had occurred
on such date or at the beginning of the period indicated or to project the
Company's financial position or results of operations at any future date or for
any future period. The Pro Forma Condensed Consolidated Financial Information
should be read in conjunction with the Company's Consolidated Financial
Statements and related notes thereto included elsewhere herein.
29
<PAGE> 37
BLUEGREEN CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 28, 1997
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
FOR NOTE
HISTORICAL OFFERING PRO FORMA
DECEMBER 28, AND USE OF DECEMBER 28,
1997 PROCEEDS 1997
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents............................ $ 25,124 $ 19,872(D) $ 44,996
Contracts receivable, net............................ 12,646 -- 12,646
Notes receivable, net................................ 73,115 -- 73,115
Investment in securities............................. 10,600 -- 10,600
Inventory, net....................................... 112,297 -- 112,297
Property and equipment, net.......................... 11,147 -- 11,147
Debt issuance costs, net............................. 1,783 4,275(B)
(878)(C) 5,180
Other assets......................................... 8,096 -- 8,096
-------- -------- --------
Total assets............................... $254,808 $ 23,269 $278,077
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable..................................... $ 4,590 $ -- $ 4,590
Deferred income...................................... 8,322 -- 8,322
Accrued liabilities and other........................ 14,101 (97)(B)
(1,431)(C) 12,573
Lines-of-credit and notes payable.................... 61,909 (44,553)(B) 17,356
Deferred income taxes................................ 6,712 -- 6,712
Receivable-backed notes payable...................... 51,536 (38,503)(B) 13,033
10.50% senior secured notes payable.................. -- 110,000(A) 110,000
8.00% convertible notes payable to related parties... 6,000 -- 6,000
8.25% convertible subordinated debentures............ 34,739 -- 34,739
-------- -------- --------
Total liabilities.......................... 187,909 25,416 213,325
Minority interest.................................... 250 -- 250
SHAREHOLDERS' EQUITY
Common stock......................................... 208 -- 208
Capital-in-excess of par value....................... 71,844 -- 71,844
Accumulated deficit.................................. (4,179) (2,147)(C) (6,326)
Treasury stock....................................... (1,389) -- (l,389)
Net unrealized gains................................. 165 -- 165
-------- -------- --------
Total shareholders' equity................. 66,649 (2,147) 64,502
-------- -------- --------
Total liabilities and shareholders'
equity................................... $254,808 $ 23,269 $278,077
======== ======== ========
</TABLE>
- ---------------
(A) Issuance of the Notes.
(B) Extinguishment of existing debt of the Company and related accrued
interest. Also includes payment of $4.275 million of debt issuance costs.
(C) Payment of prepayment penalties of $2.7 million and write-off of debt
issuance costs on extinguished debt of $878,000, and related impact on
accumulated deficit.
(D) Includes $5.9 million of assumed net proceeds from the Note Offering which
will be used to retire additional indebtedness anticipated to be incurred
after December 28, 1997 but prior to the closing of the Note Offering and
approximately $13.9 million of assumed net proceeds from the Note Offering
which will be used for working capital and to repay other obligations of
the Company.
30
<PAGE> 38
BLUEGREEN CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED DECEMBER 28, 1997
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
NINE MONTHS FOR NOTE NINE MONTHS
ENDED OFFERING ENDED
DECEMBER 28, AND USE OF DECEMBER 28,
1997 PROCEEDS 1997
------------ ----------- ------------
<S> <C> <C> <C>
REVENUES:
Sales of real estate................................ $122,902 $ -- $122,902
Other resort services revenue....................... 1,585 1,585
Interest income and other(1)........................ 7,324 7,324
-------- ------- --------
131,811 -- 131,811
COST AND EXPENSES:
Cost of real estate sold............................ 55,277 55,277
Cost of other resort services....................... 1,509 1,509
Selling, general and administrative expense......... 55,526 55,526
Interest expense 6,512 (2,701)(A)
8,663(B)
321(C)
(419)(D) 12,376
Provisions for losses............................... 1,349 1,349
-------- ------- --------
120,173 5,864 126,037
-------- ------- --------
Income from operations.............................. 11,638 (5,864) 5,774
-- --
Other income........................................ 120 120
-------- ------- --------
Income before income taxes.......................... 11,758 (5,864) 5,894
Provision for income taxes.......................... 4,774 (2,416)(E) 2,358
-------- ------- --------
Income before extraordinary item.................... $ 6,984 $(3,448) $ 3,536
======== ======= ========
EARNINGS PER SHARE BEFORE EXTRAORDINARY ITEM:
Basic............................................. $ 0.35 $ 0.18
======== ========
Diluted........................................... $ 0.33 $ 0.17
======== ========
WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON
EQUIVALENT SHARES:
Basic............................................. 20,193 20,193
======== ========
Diluted........................................... 25,467 20,553(F)
======== ========
</TABLE>
- ---------------
(1) Interest income excludes $1.8 million of estimated interest income that
would have been earned on net proceeds from the Note Offering in excess of
historical debt that would have been repaid as of March 31, 1997.
(A) Elimination of historical interest expense incurred during the period on
debt assumed to be retired by the Note Offering.
(B) Pro forma interest expense on the Notes.
(C) Amortization of the pro forma $4.275 million of debt issuance costs
incurred in connection with the Note Offering.
(D) Elimination of historical amortization of debt issuance costs on debt
retired in connection with the Note Offering.
(E) Adjustment to the provision for income taxes for the above pro forma
adjustments.
(F) Pro Forma Diluted Weighted Average Number of Common and Common Equivalent
Shares is less than the historical amount, as the assumed conversion of the
Company's 8.00% convertible notes payable and 8.25% convertible debentures
would have an anti-dilutive effect on earnings per share on a pro forma
basis.
31
<PAGE> 39
BLUEGREEN CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED MARCH 30, 1997
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
HISTORICAL FOR NOTE PRO FORMA
YEAR ENDED OFFERING YEAR ENDED
MARCH 30, AND USE OF MARCH 30,
1997 PROCEEDS 1997
---------- ----------- ----------
<S> <C> <C> <C>
REVENUES:
Sales for real estate.................................. $109,721 $ -- $109,721
Interest income and other(1)........................... 6,159 -- 6,159
-------- -------- --------
115,880 -- 115,880
COST AND EXPENSES:
Cost of real estate sold............................... 57,090 -- 57,090
Selling, general and administrative expense............ 51,441 -- 51,441
Interest expense....................................... 5,459 (1,414)(A)
11,550(B)
428(C)
(199)(D) 15,824
Provisions for losses.................................. 9,539 -- 9,539
-------- -------- --------
123,529 10,365 133,894
-------- -------- --------
Loss from operations................................... (7,649) (10,365) (18,014)
Other income........................................... 260 -- 260
-------- -------- --------
Loss before income taxes............................... (7,389) (10,365) (17,754)
Benefit for income taxes............................... (3,029) (4,072)(E) (7,101)
-------- -------- --------
Loss before extraordinary item......................... $ (4,360) $ (6,293) $(10,653)
======== ======== ========
LOSS PER SHARE BEFORE EXTRAORDINARY ITEM:
Basic................................................ $ (0.21) $ (0.52)
======== ========
Diluted.............................................. $ (0.21) $ (0.52)
======== ========
WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT
SHARES:
Basic................................................ 20,319 20,319
======== ========
Diluted.............................................. 20,319 20,319
======== ========
</TABLE>
- ---------------
(1 ) Interest income excludes $3.2 million of estimated interest income that
would have been earned on net proceeds from the Note Offering in excess of
historical debt that would have been repaid as of April 1, 1996.
(A) Elimination of interest expense incurred during the period on debt assumed
to be retired by the Note Offering.
(B) Pro forma interest expense on the Notes.
(C) Amortization of the pro forma $4.275 million of debt issuance costs
incurred in connection with the Note Offering.
(D) Elimination of historical amortization of debt issuance costs on debt
retired in connection with the Note Offering.
(E) Adjustment to the provision for income taxes for the above pro forma
adjustments.
32
<PAGE> 40
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below for each of the
five years in the period ended March 30, 1997 are derived from the Company's
audited consolidated financial statements, which have been audited by Ernst &
Young LLP, independent certified public accountants. The selected consolidated
financial data presented below for the nine month periods ended December 29,
1996 and December 28, 1997 have been derived from unaudited financial
statements. The unaudited financial statements include all adjustments,
consisting of normal recurring accruals, which the Company considers necessary
for a fair presentation of its financial position and the results of operations
for these periods. Operating results for the nine months ended December 28, 1997
are not necessarily indicative of the results that may be expected for the
entire fiscal year ended March 29, 1998. The selected consolidated financial
data should be read in conjunction with the Consolidated Financial Statements,
related notes, and other financial information appearing elsewhere or
incorporated by reference herein.
<TABLE>
<CAPTION>
AS OF OR FOR THE NINE
AS OF OR FOR THE YEAR ENDED, MONTHS ENDED,
-------------------------------------------------------- -----------------------------
MARCH 28, MARCH 27, APRIL 2, MARCH 31, MARCH 30, DECEMBER 29, DECEMBER 28,
1993 1994 1995 1996 1997 1996 1997
--------- --------- -------- --------- --------- ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT AVERAGE SALES PRICE DATA AND SELECTED STATISTICAL DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Sale of real estate................... $ 53,349 $ 63,389 $ 91,922 $113,422 $109,722 $ 81,712 $122,902
Other resort services revenue......... -- -- -- -- -- -- 1,585
Interest income and other(1).......... 10,191 7,952 7,264 7,388 6,159 4,577 7,324
-------- -------- -------- -------- -------- -------- --------
Total revenues.................... 63,540 71,341 99,186 120,810 115,881 86,289 131,811
Cost of real estate sold.............. 28,450 30,773 45,106 59,393 57,091 41,384 55,277
Cost of other resort services......... -- -- -- -- -- -- 1,509
Selling, general and administrative
expenses............................ 22,652 26,444 36,521 43,735 51,441 38,051 55,526
Interest expense...................... 7,284 6,551 6,737 6,276 5,459 3,916 6,512
Provisions for losses................. 1,550 795 792 612 9,539 9,101 1,349
-------- -------- -------- -------- -------- -------- --------
Total expenses.................... 59,936 64,563 89,156 110,016 123,530 92,452 120,173
-------- -------- -------- -------- -------- -------- --------
Income (loss) from operations......... 3,604 6,778 10,030 10,794 (7,649) (6,163) 11,638
Other income.......................... 1,727 1,175 372 122 259 184 120
Provision (benefit) for income
taxes............................... 1,874 3,022 4,265 4,449 (3,030) (2,451) 4,774
-------- -------- -------- -------- -------- -------- --------
Net income (loss)..................... $ 3,457 $ 4,931 $ 6,137 $ 6,467 $ (4,360) $ (3,528) $ 6,984
======== ======== ======== ======== ======== ======== ========
OTHER DATA AND CREDIT STATISTICS:
EBITDA(2)............................. $ 14,172 $ 16,164 $ 18,522 $ 18,978 $ 8,291 $ 7,366 $ 21,396
EBITDA to senior interest expense (as
adjusted)(3)........................ -- -- -- -- -- -- 2.4x
EBITDA to interest expense (as
adjusted)(3)........................ -- -- -- -- -- -- 1.9x
Total senior debt to EBITDA (as
adjusted)(4)........................ -- -- -- -- -- -- 4.1x
Total debt to EBITDA (as
adjusted)(4)........................ -- -- -- -- -- -- 5.5x
Weighted average interest rate on
notes receivable at period end...... 11.0% 10.9% 12.4% 12.4% 13.3% 14.4% 15.0%
Ratio of earnings to fixed
charges(5).......................... 1.7x 2.2x 2.4x 2.1x nmf nmf 2.3x
Pro forma ratio of earnings to fixed
charges(5) -- -- -- -- nmf -- 1.4x
RESIDENTIAL LAND STATISTICS:
Gross margin on sales of real
estate(6)........................... 46.7% 51.5% 50.9% 47.6% 48.0% 49.4% 55.0%
Average sales price of land parcels
sold(7)............................. $ 21,368 $ 25,511 $ 30,969 $ 34,856 $ 38,572 $ 37,207 $ 47,449
Number of land parcels sold........... 2,560 2,489 2,397 2,347 2,057 1,498 1,740
RESORTS STATISTICS:
Number of resorts at period end(8).... -- 1 2 3 4 3 8
Average sales price of timeshare
intervals sold(7)................... $ -- $ -- $ 7,119 $ 7,325 $ 8,362 $ 8,342 $ 8,695
Number of timeshare intervals
sold(7)............................. -- -- 952 1,865 3,195 2,579 4,903
BALANCE SHEET DATA:
Notes receivable, net................. $ 35,653 $ 44,203 $ 40,311 $ 37,014 $ 34,619 $ 31,873 $ 73,116
Inventory, net........................ 28,245 38,793 62,345 73,595 86,661 81,108 112,297
Total assets.......................... 122,853 139,617 152,222 154,963 169,627 158,301 254,808
Lines-of-credit, notes payable and
receivable-backed notes payable..... 26,602 37,297 39,946 37,011 56,961 50,896 113,445
8.00% convertible subordinated notes
to related parties.................. -- -- -- -- -- -- 6,000
8.25% convertible subordinated
debentures.......................... 34,739 34,739 34,739 34,739 34,739 34,739 34,739
Shareholders' equity.................. 46,868 51,854 58,040 64,698 59,243 60,041 66,649
</TABLE>
33
<PAGE> 41
- ---------------
(1) Interest income for fiscal 1993, 1994, 1995, 1996 and 1997 includes a
$695,000 gain, a $238,000 loss, a $411,000 loss, a $1.1 million gain and a
$96,000 loss, respectively, from sales of notes receivable in connection
with private placement REMIC transactions. See "Management's Discussion and
Analysis of Results of Operations and Financial Condition."
(2) EBITDA represents net income before interest expense, income taxes,
depreciation and amortization and in the case of fiscal 1997, the provision
for non-recurring costs described below. EBITDA should not be considered in
isolation or construed as a substitute for the Company's net income, income
from operations, cash flows from operating activities or liquidity in
analyzing the Company's operating performance, financial position or cash
flows. EBITDA is not necessarily comparable to other similarly titled
captions of other companies due to potential inconsistencies in the method
of calculation. The Company has included EBITDA herein to provide additional
information related to the Company's ability to incur and service debt. The
following table reconciles EBITDA to net income (loss) (amounts in
thousands):
<TABLE>
<CAPTION>
FOR THE YEAR ENDED, FOR THE NINE MONTHS ENDED,
-------------------------------------------------------- ---------------------------
MARCH 28, MARCH 27, APRIL 2, MARCH 31, MARCH 30, DECEMBER 29, DECEMBER 28,
1993 1994 1995 1996 1997 1996 1997
--------- --------- -------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income (loss).................. $ 3,457 $ 4,931 $ 6,137 $ 6,467 $ (4,360) $ (3,528) $ 6,984
Interest expense................... 7,284 6,551 6,737 6,276 5,459 3,916 6,512
Capitalized interest expense
included in cost of real estate
sold............................. -- -- 82 149 956 422 1,781
Income taxes....................... 1,874 3,022 4,265 4,449 (3,030) (2,451) 4,774
Provision for non-recurring
costs(a)......................... -- -- -- -- 8,200 8,200 --
Depreciation and amortization...... 1,557 1,660 1,301 1,637 1,066 807 1,345
------- ------- ------- ------- -------- -------- --------
EBITDA............................. $14,172 $16,164 $18,522 $18,978 $ 8,291 $ 7,366 $ 21,396
======= ======= ======= ======= ======== ======== ========
</TABLE>
(a) The provision non-recurring costs, which is included in Provision for
losses on the Consolidated Statement of Operations, represents the
Company's $8.2 million write-down of certain Communities Division and
Residential Land Division properties in the first quarter of fiscal
1997. See Note 4 to the Consolidated Financial Statements and
"Management's Discussion and Analysis of Results of Operations and
Financial Condition."
(3) Interest expense is pro forma after giving effect to the Note Offering and
the application of the net proceeds therefrom assuming the Note Offering
closed on April 1, 1997, and includes amounts capitalized into inventory and
pro forma interest expense on the Notes. Senior interest expense excludes
the interest expense on the Public Debentures and the Convertible Notes.
(4) Total debt is pro forma after giving effect to the Note Offering and the
application of the net proceeds therefrom and excludes $15.4 million of
non-recourse indebtedness incurred by BG Aruba in connection with the Aruba
Transaction and $8.4 million of RDI debt related to notes receivable
previously sold with recourse to financial institutions. See
"Business -- Recent Acquisitions." Total senior debt also excludes the
Public Debentures and the Convertible Notes.
(5) The pro forma ratios of earnings to fixed charges for the year ended March
30, 1997 and for the nine months ended December 28, 1997 give effect to the
Note Offering as if it occurred at the beginning of each applicable period.
For fiscal 1997, pro forma fiscal 1997 and for the nine-month period ended
December 29, 1996, the Company's fixed charges exceeded earnings by $9.4
million, $19.8 million and $7.8 million, respectively.
(6) Gross margin is computed as the difference between the sales price and the
related cost of inventory (including the cost of improvements, amenities and
in certain cases capitalized interest and real estate taxes), divided by the
sales price.
(7) Average sales price and unit sales data include those sales made during the
applicable period where recognition of revenue is deferred under the
percentage of completion method of accounting. See "Contracts Receivable and
Revenue Recognition" under Note 1 to the Consolidated Financial Statements.
(8) The number of resorts at December 28, 1997 includes the two resorts acquired
in the RDI Acquisition and the Aruba Resort. See "Business -- Recent
Acquisitions."
34
<PAGE> 42
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion of the results of operations and financial
condition of the Company should be read in conjunction with the Company's
Consolidated Financial Statements and related Notes and the other financial
information included elsewhere in this Prospectus. Unless otherwise indicated in
this discussion, references to "real estate" and to "inventories" collectively
encompass the Resorts Division, Residential Land Division and the Company's
other inventories held for sale.
GENERAL
Real estate markets are cyclical in nature and highly sensitive to changes
in national and regional economic conditions, including, among other factors,
levels of employment and discretionary disposable income, consumer confidence,
available financing and interest rates. A downturn in the economy in general or
in the market for real estate could have a material adverse effect on the
Company.
The Company recognizes revenue on residential land and Timeshare Interest
sales when a minimum of 10% of the sales price has been received in cash, the
refund or rescission period has expired, collectibility of the receivable
representing the remainder of the sales price is reasonably assured and the
Company has completed substantially all of its obligations with respect to any
development relating to the real estate sold. In cases where all development has
not been completed, the Company recognizes revenue in accordance with the
percentage of completion method of accounting. Under this method of revenue
recognition, income is recognized as work progresses. Measures of progress are
based on the relationship of costs incurred to date to expected total costs. The
Company has been dedicating greater resources to more capital intensive
residential land and timeshare projects. As a result, the results for fiscal
1997 and the nine months ended December 28, 1997 reflect an increased amount of
revenue deferred under the percentage of completion method of accounting. See
"Contracts Receivable and Revenue Recognition" under Note 1 to the Consolidated
Financial Statements.
Costs associated with the acquisition and development of timeshare resorts
and residential land properties, including carrying costs such as interest and
taxes, are capitalized as real estate and development costs and allocated to
cost of real estate sold as the respective revenue is recognized.
The RDI Acquisition closed effective September 30, 1997 and was accounted
for using the purchase method of accounting and, accordingly, the results of
operations of RDI have been included in the Company's consolidated financial
statements from September 30, 1997. The Company, through BG Aruba, acquired
approximately 8,000 unsold Timeshare Interests inventory at the Aruba Resort on
December 15, 1997. The Company has a controlling interest in BG Aruba and has
therefore included the accounts of BG Aruba in its consolidated financial
statements as of and for the 13 days period ended December 28, 1997. Operations
for BG Aruba were not material for such 13-day period. See "Business -- Recent
Acquisitions."
The Company has historically experienced and expects to continue to
experience seasonal fluctuations in its gross revenues and net earnings in the
third fiscal quarter. This seasonality may cause significant fluctuations in the
quarterly operating results of the Company. As the Company's timeshare revenues
grow as a percentage of total revenues, the Company believes that the
fluctuations in revenues due to seasonality may be mitigated. In addition, other
material fluctuations in operating results may occur due to the timing of
development and the Company's use of the percentage of completion method of
accounting. Management expects that the Company will continue to invest in
projects that will require more substantial development (with greater capital
requirements) than in years prior to fiscal 1997. No assurances can be given
that the amount of revenue deferred under the percentage of completion
accounting method will not increase.
The Company believes that inflation and changing prices have not had a
material impact on its revenues and results of operations during any of fiscal
1995, 1996 or 1997 or the nine months ended December 28, 1997. Based on the
current economic climate, the Company does not expect that inflation and
changing prices will have a material impact on the Company's revenues or results
of operations. To the extent inflationary trends
35
<PAGE> 43
affect short-term interest rates, a portion of the Company's debt service costs
may be affected as well as the rate the Company charges on its new receivables.
During the periods covered by this discussion, the Company's real estate
operations were managed under three divisions and much of this discussion is
organized by such divisions. The Resorts Division manages the Company's
timeshare operations and the Residential Land Division acquires large tracts of
real estate which are subdivided, improved and sold, typically on a retail
basis. The Company's Communities Division, markets factory-built manufactured
homes and lot packages and undeveloped lots. In the first quarter of fiscal 1997
(June 1996), the Company decided to focus on the expansion of the Resorts
Division and the Residential Land Division in certain locations. Consistent with
this strategy, the Company does not intend to acquire any additional communities
related inventories and present Communities Division inventories are being
liquidated through a combination of bulk sales and retail sales. As of and for
the nine month period ended December 28, 1997, the Communities Division
comprised approximately 3% of consolidated inventory and sales of real estate.
Therefore, no separate discussion with respect to the Communities Division is
contained herein relative to the nine month period ended December 28, 1997 due
to immateriality.
Inventory is carried at the lower of cost, including costs of improvements
and amenities, incurred subsequent to acquisition, or fair value, net of costs
to dispose. See Note 1 of Notes to Consolidated Financial Statements. During the
first quarter of fiscal 1997, management changed its focus for marketing certain
of the Company's inventories in conjunction with a plan to accelerate the sale
of properties managed under the Communities Division and certain properties
managed under the Residential Land Division. This decision was largely the
result of management's focus on expansion of the Resort Division and Residential
Land Division in certain locations. Because of the strategy to accelerate sales,
management determined that inventories with a carrying value of $23.2 million
should be written-down by $8.2 million during the first quarter of fiscal 1997.
The $8.2 million in provisions included $4.8 million for certain Communities
Division inventories and $3.4 million for certain Residential Land Division
inventories. Management adopted a plan to aggressively pursue opportunities for
the bulk sale of a portion of the written-down assets and has reduced retail
prices on others to increase sales activity. At the time of the write-down, the
Company's Communities Division primarily consisted of three North Carolina
properties acquired in 1988. The Company began marketing home/lot packages in
1995 to accelerate sales at the properties. However, the projects had been slow
moving and yielded low gross profits and little to no operating profits. A
majority of the Residential Land Division parcels subject to write-down were
scattered lots acquired through foreclosure or deedback in lieu of foreclosure,
odd lots from former projects or properties located in parts of the country
where the Company has no plans for expansion. As of December 28, 1997,
approximately 73% (as measured by historical cost basis) of the inventories
subject to write-down had been sold. See Note 4 of Notes to Consolidated
Financial Statements.
A portion of the Company's revenues historically has comprised gains on
sales of loans, and, although no assurances can be given, assuming the proposed
timeshare receivables facility that the Company is currently negotiating is
consummated, the portion of the Company's revenues comprising such gains on
sales is expected to increase significantly. The gains are recorded in the
Company's revenues and on its balance sheet (as retained interests on loan
sales) at the time of sale, and the amount of gains recorded is based in part on
management's estimates of future prepayment and default rates and other
considerations in light of then-current conditions. If actual prepayments with
respect to loans occur more quickly than was projected at the time such loans
were sold, as can occur when interest rates decline, interest would be less than
expected and earnings would be charged in the current period. If actual defaults
with respect to loans sold are greater than estimated, charge-offs would exceed
previously estimated amounts and earnings would be charged in the current
period.
For purposes of the following discussion, gross margin is computed as the
difference between the sales price and the related cost of inventory (including
the costs of improvements, amenities and in certain cases capitalized interest)
divided by the sales price.
36
<PAGE> 44
RESULTS OF OPERATIONS
NINE MONTHS ENDED DECEMBER 29, 1996 AND DECEMBER 28, 1997
Sales. Consolidated sales of real estate increased 50% from $81.7 million
for the nine month period ended December 29, 1996 (the "1996 Period") to $122.9
million for the nine month period ended December 28, 1997 (the "1997 Period").
Increases in residential land and Timeshare Interest sales during the 1997
Period were partially offset by lower Communities Division sales.
As of December 28, 1997, approximately $18.0 million in sales or $8.3
million in estimated income was deferred under percentage of completion
accounting. At March 30, 1997, approximately $8.4 million of sales or $3.8
million in estimated income was deferred and is included on the Consolidated
Balance Sheet under the caption Deferred Revenue.
Residential Land Division
During the 1996 and 1997 Periods, residential land sales contributed $54.6
million or 67% and $78.8 million or 64%, respectively, of the Company's total
consolidated revenues from the sale of real estate.
The table set forth below outlines the number of parcels sold and the
average sales price per parcel for the Residential Land Division by geographic
region for the fiscal periods indicated, before giving effect to the percentage
of completion method of accounting and excluding a $2 million bulk land sale
during the 1997 Period.
<TABLE>
<CAPTION>
NINE MONTHS ENDED,
-----------------------------------------------------------
DECEMBER 29, 1996 DECEMBER 28, 1997
--------------------------- ---------------------------
AVERAGE AVERAGE
NUMBER OF SALES PRICE NUMBER OF SALES PRICE
GEOGRAPHIC REGION PARCELS SOLD PER PARCEL PARCELS SOLD PER PARCEL
- ----------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Southwest................................... 822 $ 37,378 850 $ 44,417
Southeast................................... 178 35,375 268 54,021
Midwest..................................... 137 24,550 195 35,324
Mid-Atlantic................................ 123 34,274 148 42,717
Rocky Mountains............................. 175 41,163 184 35,554
West........................................ 20 149,425 59 170,478
Northeast and Canada........................ 43 21,952 36 14,417
----- -----
Totals...................................... 1,498 37,207 1,740 47,449
===== =====
</TABLE>
The aggregate number of parcels sold and aggregate average sales price per
parcel increased from the 1996 Period to the 1997 Period due to the following:
- Southwest region -- Increases attributable to the Company's Bentwater and
White Oak Estates projects in Granbury, Texas and Conroe, Texas, which
opened in February 1997.
- Southeast region -- Increases attributable to the Winding River property in
North Carolina which opened in February 1997. The project will feature a
host of amenities including a beach club, 27-hole championship golf course,
club-house, river amenities and bike paths.
- Midwest region -- Increases attributable to the opening of two properties
in Tennessee in March 1997. One project features lake frontage and the
other property lies adjacent to a daily-fee golf course currently under
development by a third party.
- West region -- Increases attributable to greater parcel sales and higher
average sales prices, which are indicative of the Company's Arizona project
gaining more momentum as it enters its third year in marketing and sales.
The majority of the Arizona property is being marketed in parcels of 36
acres at retail prices ranging from $100,000 to $185,000.
The Company plans to continue to dedicate greater resources to residential
land properties located in areas with proven records of success. These locations
include, but are not limited to, Texas, the Carolinas, Virginia, Tennessee, New
Mexico and Arizona.
37
<PAGE> 45
The average gross margin for the Residential Land Division was 46.9% and
48.3% for the 1996 and 1997 Periods, respectively. The average gross margin
increased primarily due to the opening of the Company's Winding River Property
in North Carolina and increased sales at the Company's properties in New Mexico
and Arizona, which generated gross margins of 58.6%, 55.2% and 50.9%,
respectively, during the 1997 Period. The Company's Investment Committee
approves all property acquisitions. In order to be approved for purchase by the
Investment Committee, all residential land properties are expected to achieve
certain minimum economics including a minimum gross margin. No assurances can be
given that such minimum economics will be achieved.
Resorts Division
During the 1996 and 1997 Periods, sales of Timeshare Interests contributed
$20.8 million or 25% and $39.9 million or 32%, respectively, of the Company's
total consolidated revenues from the sale of real estate.
The following tables set forth information for sales of Timeshare Interests
associated with the Company's Resorts Division for the periods indicated, before
giving effect to the percentage of completion method of accounting and excluding
approximately $126,000 of incremental revenues from the conversion in the 1997
Period of 62 existing Timeshare Interests owners to the points-based vacation
club acquired in connection with the RDI Acquisition.
<TABLE>
<CAPTION>
NINE MONTHS ENDED,
---------------------------
DECEMBER 29, DECEMBER 28,
1996 1997
------------ ------------
<S> <C> <C>
Number of Timeshare Interests sold.......................... 2,579 4,903
Average sales price per Timeshare Interest.................. $8,342 $8,695
Gross margin................................................ 70% 74%
</TABLE>
The increase in Timeshare Interest sales during the 1997 Period was
partially due to the RDI Acquisition effective September 30, 1997, which
contributed approximately $4.2 million in Timeshare Interest sales (including
543 Timeshare Interests sold) during the 1997 Period. The increase in the number
of Timeshare Interests sold during the 1997 Period was also partially due to two
new resort properties that became operational during such period - Harbour
Lights in Myrtle Beach, South Carolina, and The Falls Village in Branson,
Missouri, which generated 569 and 556 Timeshare Interest sales, respectively,
during the 1997 Period. In addition, Timeshare Interest sales increased due to
the maturation of existing resorts and the increased effectiveness of marketing
programs.
During the 1997 Period, the improvement in gross margins from the Company's
resorts was primarily the result of increases in the retail selling prices,
particularly at the Company's Mountain Loft (Gatlinburg, Tennessee) and Laurel
Crest (Pigeon Forge, Tennessee) resorts, which generated gross margins of
approximately 75% and 76%, respectively, during the 1997 Period.
During the 1997 Period, other resort service revenue and related costs were
approximately $1.6 million and $1.5 million, respectively. Other resort services
include the resort property management services, resort title services and
certain retail amenity and lodging operations acquired in connection with the
RDI Acquisition. There were no resort service operations during the 1996 Period.
Interest Income and Other
Interest income and other increased 60% from $4.6 million for the 1996
Period to $7.3 million for the 1997 Period. The Company's interest income is
earned from its receivable portfolio, securities retained pursuant to REMIC
financings and cash and cash equivalents. The increase in interest income is
primarily due to an increase in the average note receivable balance during the
1997 Period as compared to the 1996 Period.
Selling, General and Administrative Expense (S,G&A Expense)
The Company's S,G&A Expense consists primarily of marketing costs,
advertising expenses, sales commissions and corporate overhead. S,G&A Expense
totaled $38.1 million and $55.5 million for the 1996
38
<PAGE> 46
Period and the 1997 Period, respectively. A significant portion of S,G&A Expense
is variable relative to sales and profitability levels and, therefore, increases
with growth in sales of real estate. As a percentage of sales of real estate,
S,G&A Expense (including corporate administrative expense) decreased from 44% in
the 1996 Period to 42% in the 1997 Period. The decrease in S,G&A Expense as a
percentage of sales is primarily due to the Company's strategic emphasis on
controlling costs, coupled with increasing the revenue base in the Resorts
Division to support the existing infrastructure.
Interest Expense
Interest expense totaled $3.9 million and $6.5 million for the 1996 Period
and 1997 Period, respectively. The 66% increase in interest expense for the 1997
Period was primarily attributable to increased borrowings associated with the
Company's receivable-backed notes payable and for the acquisition of residential
land and Timeshare Interest inventory.
Provisions for Losses
The Company recorded provisions for loan losses and for real estate taxes
and other costs associated with delinquent customers of $901,000 and $1.3
million during the 1996 Period and 1997 Period. The increase in the provision
for losses is commensurate with the significant increase in timeshare revenues
and receivables during the 1997 Period, as delinquencies as a percentage of
sales are higher for timeshare receivables than for residential land
receivables.
Summary
Based on the factors discussed above, the Company's net income increased
from a net loss of $3.5 million in the 1996 Period to net income of $7.0 million
in the 1997 Period.
YEARS ENDED APRIL 2, 1995, MARCH 31, 1996 AND MARCH 30, 1997
Sales. Consolidated sales of real estate were $91.9 million for the year
ended April 2, 1995 ("fiscal 1995") compared to $113.4 million for the year
ended March 31, 1996 ("fiscal 1996") and $109.7 million for the year ended March
30, 1997 ("fiscal 1997") representing an increase of 23.4% from fiscal 1995 to
fiscal 1996 and a decrease of 3.3% from fiscal 1996 to fiscal 1997. Increases in
fiscal 1997 Timeshare Interest sales were more than offset by lower Residential
Land Division and Communities Division sales. Among other reasons, decreases in
fiscal 1997 residential land revenues were the result of $6.7 million more in
sales being deferred subject to percentage of completion accounting.
Residential Land Division. During fiscal 1995, 1996 and 1997, residential
land sales contributed $72.6 million or 79%, $84.9 million or 75% and $72.6
million or 66%, respectively, of the Company's total consolidated revenues from
the sale of real estate.
39
<PAGE> 47
The table set forth below outlines the number of parcels sold and the
average sales price per parcel for the Residential Land Division by geographic
region for the periods indicated, before giving effect to the percentage of
completion method of accounting.
<TABLE>
<CAPTION>
YEARS ENDED,
------------------------------------------------------------------------------------
APRIL 2, 1995 MARCH 31, 1996 MARCH 30, 1997
-------------------------- -------------------------- --------------------------
AVERAGE AVERAGE AVERAGE
NUMBER OF SALES PRICE NUMBER OF SALES PRICE NUMBER OF SALES PRICE
GEOGRAPHIC REGION PARCELS SOLD PER PARCEL PARCELS SOLD PER PARCEL PARCELS SOLD PER PARCEL
- ----------------- ------------ ----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Southwest................. 1,107 $34,999 1,117 $ 37,489 1,131 $ 39,719
Southeast................. 289 28,311 223 36,925 291 35,736
Rocky Mountains........... 339 32,033 297 44,524 218 40,499
Midwest................... 317 28,740 334 27,451 175 24,111
West...................... -- -- 19 138,347 34 147,816
Mid-Atlantic.............. 215 23,136 236 21,951 152 31,605
Northeast and Canada...... 130 18,176 121 12,313 56 20,423
----- ----- -----
Totals.................... 2,397 30,969 2,347 34,856 2,057 38,572
===== ===== =====
</TABLE>
1995 vs 1996 Comparison of Residential Land Division Parcels Sold and
Average Sales Prices. The number of parcels sold in the Southwest increased
only slightly from fiscal 1995 to 1996 due to a shortage of ready-to-market
Texas property during the first quarter. The reduction in the number of sales
from Texas properties was offset by an increase in the number of sales from the
Company's New Mexico project. The average sales price per parcel in the
Southwest increased during fiscal 1996 due to a greater number of parcel sales
from the Company's New Mexico project at a higher average selling price than
during 1995. There were 139 sales from the New Mexico project at an average
sales price of $44,141 during fiscal 1996 compared to 71 sales at an average
sales price of $41,599 during 1995.
The Company did not sell any parcels in the West during fiscal 1996.
The number of parcels sold in the Rocky Mountains region decreased during
fiscal 1996 due to fewer sales from the Company's Montana properties, partially
offset by more sales from Colorado properties. The average sales price per
parcel in the Rocky Mountains region increased during fiscal 1996 due to the
sale of larger tracts in two projects located in Colorado. In addition, during
fiscal 1996 the average sales price was affected by a single bulk sale
constituting approximately 8,300 acres in Colorado for $2.5 million. The average
sales price per parcel in the Rocky Mountains region, excluding the $2.5 million
bulk sale, was $36,228.
The number of parcels sold in the Midwest increased during fiscal 1996 due
to more sales momentum from the Tennessee properties which were reaching
maturity.
The number of parcels sold in the Southeast decreased because of slow sales
in a new project in South Carolina during the first quarter of fiscal 1996. This
was partially offset by higher sales of more expensive parcels from a North
Carolina property.
1996 vs 1997 Comparison of Residential Land Division Parcels Sold and
Average Sales Prices. The number of parcels sold in the Southwest, which
includes Texas and New Mexico, increased during fiscal 1997 due to more sales
made from the Company's Houston and Dallas projects than during fiscal 1996. The
increase in sales from these markets in the current year was partially offset by
lower sales from San Antonio properties due to a temporary shortage of
ready-to-market inventories which was remedied with a large acquisition in June,
1996.
The number of parcels sold in the Southeast, which includes North and South
Carolina, increased during fiscal 1997 due to the introduction of lots at
Winding River, the Company's 1,100 acre golf course community located in North
Carolina.
The number of parcels sold in the Rocky Mountains region decreased during
fiscal 1997 due to fewer sales from the Company's Idaho and Montana properties.
The Company does not expect to expand operations in these states beyond the
properties currently being marketed.
40
<PAGE> 48
The number of parcels sold in the Midwest decreased during fiscal 1997 due
to a shortage of inventory in Tennessee. The Company acquired two Tennessee
properties during the fourth quarter of fiscal 1997 and sales activity at the
projects commenced March 1997.
Sales in the West in fiscal 1996 and 1997 were derived from the Company's
subdivision in Arizona. Increased parcel sales and higher average sales prices
are indicative of the project gaining more momentum as it matures. The majority
of the Arizona property is being marketed in parcels of 36 acres at retail
prices during such periods from $130,000 to $150,000, although certain five acre
lots are also being marketed.
Projects in the Mid-Atlantic region have historically been located in
Pennsylvania, Virginia and West Virginia. Lower parcel sales in fiscal 1997
reflect reduced inventory holdings in Pennsylvania and West Virginia where the
Company has no plans for expansion.
The number of parcels sold in the Northeast and Canada reflect lower
inventory levels in these regions where the Company has no plans for expansion.
As mentioned above, the Company plans to continue to dedicate greater
resources to residential land properties located in areas with proven records of
success.
Comparison of Residential Land Division Gross Margins. The average gross
margin for the Residential Land Division was 57%, 51% and 45% for fiscal 1995,
1996 and 1997, respectively. The decrease in the gross margin from fiscal 1995
to 1997 was attributable to the continued liquidation of properties where the
Company is discontinuing residential land operations (and experienced sub-par
operating results) in locations such as the Northeast, Pennsylvania, West
Virginia, Montana and Idaho. As mentioned above, the Company's Investment
Committee approves all property acquisitions. In order to be approved for
purchase by the Investment Committee, all residential land (and timeshare)
properties are expected to achieve certain minimum economics including a minimum
gross margin. No assurances can be given that such minimum economics will be
achieved.
During the first quarter of fiscal 1997, the Company recorded provisions
for the write-down of certain residential land inventories in the amount of $3.4
million.
Resorts Division
During fiscal 1995, 1996 and 1997, sales of Timeshare Interests contributed
$5.9 million or 6%, $13.8 million or 12% and $27.4 million or 25%, respectively,
of the Company's total consolidated revenues from the sale of real estate.
The following table sets forth certain information for sales of Timeshare
Interests associated with the Company's Resorts Division for the periods
indicated, before giving effect to the percentage of completion method of
accounting.
<TABLE>
<CAPTION>
YEARS ENDED,
--------------------------------
APRIL 2, MARCH 31, MARCH 30,
1995 1996 1997
-------- --------- ---------
<S> <C> <C> <C>
Number of Timeshare Interests sold.......................... 952 1,865 3,195
Average sales price per Timeshare Interests................. $7,119 $7,325 $8,362
Gross margin................................................ 62% 67% 71%
</TABLE>
During fiscal 1995, all Timeshare Interest sales were generated from the
Company's first resort in Gatlinburg, Tennessee. During fiscal 1996, 1,374
Timeshare Interests were sold from the Gatlinburg resort, 484 Timeshare
Interests were sold from the Company's second resort in neighboring Pigeon
Forge, Tennessee and seven Timeshare Interests were sold from the Company's
resort in Myrtle Beach, South Carolina. During fiscal 1997, 1,451 Timeshare
Interests were sold from the Gatlinburg resort, 976 Timeshare Interests were
sold from the Company's second resort in neighboring Pigeon Forge, Tennessee and
768 Timeshare Interests were sold from the Company's resort in Myrtle Beach,
South Carolina. An immaterial amount of revenues were deferred under the
percentage of completion method of accounting at March 30, 1997.
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<PAGE> 49
During fiscal 1997, gross margins from the Company's resorts in Gatlinburg,
Pigeon Forge and Myrtle Beach were 69%, 72% and 73%, respectively. The
improvement in gross margins from the Company's resorts was primarily the result
of increases to the retail selling prices.
Communities Division
During fiscal 1995, 1996 and 1997, the Communities Division generated $13.4
million or 15%, $14.7 million or 13% and $9.7 million or 9%, respectively, of
the Company's total consolidated revenues from the sale of real estate.
The following table sets forth certain information for sales associated
with the Company's Communities Division for the periods indicated.
<TABLE>
<CAPTION>
YEARS ENDED,
--------------------------------
APRIL 2, MARCH 31, MARCH 30,
1995 1996 1997
-------- --------- ---------
<S> <C> <C> <C>
Number of homes/lots sold................................... 133 206 146
Average sales price......................................... $100,866 $71,546 $66,422
Gross margin (1)............................................ 12% 10% 3%
</TABLE>
- ---------------
(1) A charge of $4.8 million was recorded during fiscal 1997 for the write-down
of certain inventories managed under the Communities Division and is
included in the Consolidated Statement of Operations under "Provisions for
losses."
The reduction in the average sales price from fiscal 1995 to 1997 was
primarily attributable to a smaller number of site-built homes and a greater
number of lot-only sales. The $13.4 million in fiscal 1995 sales was comprised
of 110 manufactured homes with an average sales price of $77,243 and 23
site-built homes with an average sales price of $213,640. The $14.7 million in
fiscal 1996 sales was comprised of 114 manufactured homes with an average sales
price of $75,232, an additional 20 site-built homes with an average sales price
of $198,592, 71 sales of lots-only at an average sales price of $23,279 and one
larger acreage Southwestern bulk lot sale for $530,320. The $9.7 million in
fiscal 1997 sales was comprised of 73 manufactured homes with an average sales
price of $79,282, an additional 4 site-built homes with an average sales price
of $172,225 and 69 sales of lots at an average sales price of $46,355. During
fiscal 1997, as discussed above, the Company recorded provisions for the
write-down of certain communities related inventories in the amount of $4.8
million. See Note 4 to the Consolidated Financial Statements and discussion of
"Provisions for Losses" below.
Interest Income and Other
Interest income and other was $7.3 million, $7.4 million and $6.2 million
for 1995, 1996 and 1997, respectively. The Company's interest income is earned
from its note receivables, securities retained pursuant to REMIC financings and
cash and cash equivalents. Interest income for each year was also affected by
the sale of receivables in REMIC transactions, which resulted in a loss of
$411,000 in fiscal 1995, a gain of $1,119,572 in fiscal 1996 and a loss of
$96,211 in fiscal 1997.
Selling, General and Administrative Expenses (S, G & A Expenses)
S,G & A expenses totaled $36.5 million, $43.7 million and $51.4 million for
fiscal 1995, 1996 and 1997, respectively. As a percentage of sales of real
estate, S, G&A expenses were 40% for fiscal 1995, 39% for fiscal 1996 and 47%
for 1997. The increase as a percent of sales in fiscal 1997 was largely the
result of higher S,G&A expenses for the Resorts Division as well as higher
corporate general and administrative expenses. The Company invested in human
resources and other infrastructure during fiscal 1997 to support the anticipated
long-term growth of its Resorts Division. Furthermore, marketing expense tends
to be higher during the early years of a resort project and decreases as the
property reaches some maturity.
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<PAGE> 50
Interest Expense
Interest expense totaled $6.7 million, $6.3 million and $5.5 million for
fiscal 1995, 1996 and 1997, respectively. The 13% decrease in interest expense
for fiscal 1997 was primarily attributable to an increase in the amount of
interest capitalized to inventory. The Company capitalized interest totaling
$1.9 million during fiscal 1996, compared to $3.0 million for 1997. The increase
in capitalized interest is the direct result of the Company acquiring certain
inventory which requires significant development with longer sell-out periods
(and therefore qualifying for interest capitalization). The effective cost of
borrowing (when adding back capitalized interest) was 10.5%, 11.1% and 10.2% for
fiscal 1995, 1996 and 1997, respectively.
Provisions for Losses
As noted above, the Company wrote down certain inventory in fiscal 1997. As
of March 30, 1997, approximately 50% of the inventories subject to write-down
had been sold (as measured by both number of properties and cost basis).
The Company recorded provisions for loan losses (or related advanced real
estate taxes for delinquent customers) totaling $792,000, $612,000 and $1.3
million during fiscal 1995, 1996 and 1997, respectively. Because a greater
percentage of the fiscal 1997 note portfolio consists of timeshare loans (where
historical default rates exceed those for land loans), higher provisions were
recorded. See the discussion below under "-- Liquidity and Capital Resources."
Summary
Based on the factors discussed above, the Company's net income increased
from $6.1 million in fiscal 1995 to $6.5 million in fiscal 1996 and decreased to
a net loss of $(4.4) million in 1997.
CHANGES IN FINANCIAL CONDITION
Years Ended April 2, 1995, March 31, 1996 and March 30, 1997
Cash and cash equivalents decreased by $1.7 million during fiscal 1995 and
increased $3.8 million and $200,000 during fiscal 1996 and fiscal 1997,
respectively.
Net cash provided by the Company's operations was $9.4 million and $15.0
million for fiscal 1995 and 1996, respectively. Net cash used by the Company's
operations was $8.2 million for fiscal 1997. The increase in cash flow from
operations during fiscal 1996 was primarily attributable to the Company
receiving $28.7 of net proceeds from private placement REMIC transactions during
fiscal 1996 compared to $22.7 million in fiscal 1995. The decrease in cash flow
from operations during fiscal 1997 was due to the Company receiving only $16.9
million of net proceeds from REMIC transactions combined with a $3.6 million
increase in cash paid for the acquisition and development of the Company's
inventories, a $4.1 million increase in cash paid to suppliers, employees and
sales representatives, and a $6.5 million decrease in cash received from
customers.
Net cash used by investing activities was $1.6 million and $1.2 million for
fiscal 1995 and 1996, respectively. Net cash provided by investing activities
was $1.3 million for fiscal 1997. The decrease in net cash used by investing
activities during fiscal 1996 was due to approximately $337,000 of additional
proceeds from sales of property and equipment as compared to fiscal 1995. The
increase in cash provided by investing activities during fiscal 1997 was
primarily due to $1.4 million of additional cash received from sales of
investments in securities and an $854,000 decrease in purchases of property and
equipment as compared to fiscal 1996.
Net cash used by financing activities was $9.6 million and $10.0 million
for fiscal 1995 and 1996, respectively. Net cash provided by financing
activities was $7.1 million for fiscal 1997. The increase in net cash used by
financing activities during fiscal 1996 was due to an increase in the net
payments under the Company's lines-of-credit and other notes payable. The
increase in net cash provided by financing activities during fiscal 1997 was due
to an $18.5 million increase in net borrowings under the Company's
lines-of-credit and other notes payable, partially offset by $1.4 million of
cash paid to buy treasury stock.
43
<PAGE> 51
Nine Months Ended December 29, 1996 and December 28, 1997
Cash and cash equivalents increased by $3.3 million and $13.5 million
during the 1996 Period and 1997 Period, respectively.
Net cash provided by the Company's operations was $892,000 and $14.1
million for the 1996 Period and 1997 Period, respectively. The increase in cash
flow from operations was primarily attributable to an increase in sales of
inventory during the 1997 Period as well as an increase in net cash provided by
the hypothecation of the Company's notes receivable from residential land and
Timeshare Interest sales.
Net cash provided by investing activities was $702,000 for the 1996 Period.
Net cash used by investing activities was $3.6 million for the 1997 Period. The
decrease in net cash provided by investing activities was due to cash paid to
acquire RDI of $6.2 million (including acquisition costs), net of cash acquired
with RDI of $3.8 million and a $2.0 million increase in property and equipment
purchases, partially offset by a $400,000 increase in cash received from the
Company's investment in REMIC securities.
Net cash provided by financing activities was $1.7 million and $3.0 million
for the 1996 Period and 1997 Period, respectively. The increase in net cash
provided by financing activities was due to the $6.0 million proceeds from the
issuance of the Convertible Notes and a decrease in cash payments for treasury
stock of $1.2 million offset by an increase in the net payments under the
Company's lines-of-credit and other notes payable of $5.5 million.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital resources are provided from both internal and
external sources. The Company's primary capital resources from internal
operations are: (i) cash sales of real estate, (ii) downpayments on real estate
and timeshare sales which are financed, (iii) principal and interest payments on
the purchase money mortgage loans arising from residential land sales and
contracts for deed arising from sales of Timeshare Interests (collectively
"Receivables") and (iv) proceeds from the sale of, or borrowings collateralized
by, Receivables. Historically, external sources of liquidity have included
borrowings under secured lines-of-credit, seller and bank financing of inventory
acquisitions and the issuance of debt securities. The Company's capital
resources are used to support the Company's operations, including (i) acquiring
and developing inventory, (ii) providing financing for customer purchases, (iii)
meeting operating expenses and (iv) satisfying the Company's debt and other
obligations. The net proceeds of the Note Offering were used to repay certain
outstanding indebtedness. The Company anticipates that it will continue to
require external sources of liquidity to support its operations and satisfy its
debt and other obligations.
Credit Facilities for Timeshare Receivables and Timeshare Inventories
The Company has various credit facilities with financial institutions that
provide for receivable financing for its timeshare projects. The interest rates
charged under these facilities range from the three-month London Interbank
Offered Rate ("LIBOR") plus 4.25% to the prime lending rate plus 3.75%. At
December 28, 1997, the aggregate outstanding principal balance under the credit
facilities was $43.3 million, including approximately $8.4 million of debt
associated with receivables previously sold by RDI to financial institutions
with recourse. In addition, the Company has various credit facilities with
financial institutions that provide for the financing of acquisition and
development of certain of its timeshare projects. At December 28, 1997, the
aggregate outstanding balance under such facilities was approximately $15.0
million.
In connection with the Note Offering, the Company retired all outstanding
indebtedness related to timeshare receivable and inventory financings, except
for debt associated with receivables previously sold to financial institutions
with recourse. The Company terminated the existing credit facilities for
timeshare receivable and inventory financings concurrently with the closing of
the Note Offering.
The Company has obtained from a financial institution a $135 million
combined timeshare warehouse financing and receivables purchase facility. The
$35 million warehouse facility and the $100 million receivable purchase facility
will bear interest at LIBOR plus 2.35% and a fixed rate equal to the weighted
average term Treasury rate plus 1.40%, respectively. Should the Company fail to
sell to such financial institution during the
44
<PAGE> 52
term of the purchase facility notes receivable with a cumulative present value
of at least $100 million, the interest rate on the purchase facility will
increase by .05% for each $10 million shortfall, to a maximum applicable margin
of 1.60%. Under the facility, eligible notes receivable would periodically move
from the warehouse facility to the purchase facility. Both the warehouse and the
purchase facility will have detailed requirements with respect to the
eligibility of notes receivable for inclusion and other conditions to funding.
The borrowing base under the warehouse facility will be 95% of the outstanding
principal balance of eligible notes arising from the sale of Timeshare
Interests. Under the purchase facility, the Company is required to maintain a
specified overcollateralization level and a cash reserve account. Loans sold
under this facility are without recourse to the Company except for breaches of
representations and warranties made at the time of sale. Fundings under the
facility will terminate upon the occurrence of specified trigger events. The
Company will act as servicer under the purchase facility and will be required to
make advances to the financial institution to the extent it believes such
advances will be recoverable. If obtained, the combined facility will expire two
years from the closing date of the Note Offering. In addition to other customary
fees and expenses, the Company anticipates that it will pay a fee equal to
$575,000, $250,000 at the closing of this facility and $325,000 within 12 months
of closing. In addition, the Company anticipates it will pay an annual
utilization fee equal to 1% of the incremental amount by which outstanding
indebtedness under the facility is below $10 million. The facility includes
various conditions to funding, eligibility requirements for collateral,
affirmative, negative and financial covenants, and events of default. See
"Description of Other Indebtedness."
In addition, the Company is currently negotiating with the same financial
institution referred to in the preceding paragraph to provide the Company with a
$25 million acquisition and development facility for its timeshare inventories.
The facility would include a two-year draw down period and have a term of seven
years. Principal would be repaid through agreed-upon release prices as Timeshare
Interests are sold at the financed resort, subject to minimum required
amortization. It is anticipated that the indebtedness under the facility would
bear interest at the three-month LIBOR plus 3.0%. With respect to any inventory
financed under the facility, the Company will be required to have provided
equity of at least 15% of the approved project costs. In connection with the
facility, the Company will also be required to pay certain fees and expenses to
the financial institution. See "Description of Other Indebtedness."
Credit Facilities for Residential Land Receivables and Residential Land
Inventories
The Company has a credit facility with a financial institution for the
pledge of land receivables. The Company uses this facility as a warehouse until
it accumulates a sufficient quantity of land receivables to sell under private
placement REMIC transactions. Under the terms of this facility, the Company is
entitled to advances secured by Receivables equal to 90% of the outstanding
principal balance of eligible pledged Receivables. The interest rates charged on
outstanding borrowings range from the prime lending rate plus 0.5% to prime plus
2.25%. At December 28, 1997, the aggregate outstanding principal balance under
this facility was $3.5 million. In connection with the Note Offering, the
Company intends to retire this indebtedness.
The Company has an existing $20.0 million revolving credit facility with a
financial institution for the pledge of Residential Land Division Receivables.
The Company uses the facility as a temporary warehouse until it accumulates a
sufficient quantity of residential land receivables to sell under private
placement REMIC transactions. Under the terms of this facility, the Company is
entitled to advances secured by Residential Land Division receivables up to 90%
of the outstanding principal balance of eligible pledged Residential Land
Division receivables. In addition, up to $8.0 million of the facility can be
used for land acquisition and development purposes. The interest rate charged on
outstanding borrowings ranges from prime plus 0.5% to 1.5%. At December 28,
1997, the outstanding principal balance under the facility was $4.7 million. All
principal and interest payments received on pledged Receivables are applied to
principal and interest due under the facility. The ability to borrow under the
facility expires in September 2000. Any outstanding indebtedness is due in
September 2002. This facility will be retained by the Company following the Note
Offering.
Over the past three years, the Company has received 80% to 90% of its land
sales in cash. Accordingly, in recent years the Company has reduced the
borrowing capacity under credit agreements secured by land
45
<PAGE> 53
receivables. The Company attributes the significant volume of cash sales to an
increased willingness on the part of certain local banks to extend more direct
customer lot financing. No assurances can be given that local banks will
continue to provide such customer financing.
Historically, the Company has funded development for road and utility
construction, amenities, surveys, and engineering fees from internal operations
and has financed the acquisition of residential land property through seller,
bank or financial institution loans. Terms for repayment under these loans
typically call for interest to be paid monthly and principal to be repaid
through lot releases. The release price is usually defined as a pre-determined
percentage of the gross selling price (typically 25% to 50%) of the parcels in
the subdivision. In addition, the agreements generally call for minimum
cumulative annual amortization. When the Company provides financing for its
customers (and therefore the release price is not available in cash at closing
to repay the lender), it is required to pay the creditor with cash derived from
other operating activities, principally from cash sales or the pledge of
Receivables originated from earlier property sales.
At December 28, 1997, the aggregate outstanding balance on the Company's
residential land acquisition and development loans was approximately $16.0
million. In connection with the Note Offering, the Company retired all
outstanding indebtedness under such loans. In addition, the Company is currently
negotiating with a financial institution for a $35 million revolving credit
facility. The Company expects to use this facility to finance the acquisition
and development of residential land projects and to finance land receivables.
The facility when drawn upon will be secured by the real property (and personal
property related thereto) with respect to which borrowings are made, with the
lender to advance up to a specified percentage of the value of the mortgaged
property and eligible pledged receivables, provided that the maximum outstanding
amount secured by pledged receivables may not exceed $20.0 million. The interest
charged on outstanding borrowings is expected to be approximately prime plus
1.5%. It is anticipated that the facility will include customary conditions to
funding, eligibility requirements for collateral, affirmative, negative and
financial covenants and events of default. See "Description of Other
Indebtedness."
On December 15, 1997, the Company entered into a short-term loan with the
Initial Purchasers. The loan bore interest at the greater of 10% or the prime
rate plus 2.75% and was repaid on the closing of the Note Offering. The Company
was required to pay a fee equal to 1% of each advance. The Company borrowed
$22.1 million under the loan.
The Indenture and the Company's other credit facilities include certain
covenants restricting, among other things, the incurrence of debt, the payment
of dividends and other restricted payments, the incurrence of liens and
transactions with affiliates. Certain current and future credit facilities do or
will include financial covenants. No assurances can be given that such covenants
will not limit the Company's ability to satisfy or refinance its obligations or
otherwise adversely affect the Company's operations. See "Risk Factors --
Leverage; Ability to Service Debt and Liquidity and Financing Requirements."
See "Description of Other Indebtedness" for a further description of
certain indebtedness and facilities anticipated to be outstanding following the
effective date of this Prospectus.
The Company estimates that the total cash required to complete preparation
for the sale of its residential land and timeshare property inventory as of
December 28, 1997 was approximately $186.0 million. During the three-month
period ending March 29, 1998 and during fiscal 1998, the Company anticipates
spending approximately $7.9 million and approximately $47.5, respectively, for
expansion and development activities at the Company's timeshare resorts, and
approximately $14.6 million and approximately $55.7 million, respectively, for
the acquisition and development of residential land. The Company plans to fund
these expenditures primarily with available capacity on existing or proposed
credit facilities and cash generated from operations. There can be no assurances
that the Company will be able to obtain the financing necessary to complete the
foregoing plans.
Summary. The Company intends to continue to pursue a growth-oriented
strategy, particularly with respect to its Resorts Division. In connection with
this strategy, the Company may from time to time acquire,
46
<PAGE> 54
among other things, additional resort properties and completed Timeshare
Interests; land upon which additional resorts may be built; management
contracts; loan portfolios of Timeshare Interest mortgages; portfolios which
include properties or assets which may be integrated into the Company's
operations; and operating companies providing or possessing management, sales,
marketing, development, administration and/or other expertise with respect to
the Company's operations in the timeshare industry. In addition, the Company
intends to continue to focus the Residential Land Division on larger more
capital intensive projects particularly in those regions where the Company
believes the market for its products is strongest, such as the Southeast,
Southwest, Rocky Mountains and Western regions of the United States and to
replenish its residential land inventory in such regions as existing projects
are sold-out.
The Company believes that the net proceeds from the Note Offering and
anticipated cash generated from operations and anticipated future permitted
borrowings under existing or proposed credit facilities will be sufficient to
meet the Company's working capital, capital expenditures and debt service
requirements for the foreseeable future. The Company may, in the future, require
additional credit facilities or issuances of other corporate debt or equity
securities in connection with acquisitions or otherwise. Any debt incurred or
issued by the Company may be secured or unsecured, fixed or variable rate
interest and may be subject to such terms as management deems prudent. There can
be no assurance that the proposed credit facilities will be consummated on the
terms described herein, if at all, or that sufficient funds will be available
from operations or under existing, proposed or future revolving credit or other
borrowing arrangements to meet the Company's cash needs, including, without
limitation, its debt service obligations. As noted above the Indenture and the
Company's other credit facilities include customary conditions to funding,
eligibility requirements for collateral, certain financial and other affirmative
and negative covenants, including, among others, limits on the incurrence of
indebtedness, covenants concerning net worth and fixed charge coverage
requirements and debt to equity ratios and events of default. In addition, the
Company's future operating performance and ability to meet its financial
obligations will be subject to future economic conditions and to financial,
business and other factors, many of which will be beyond the Company's control.
Impact of Year 2000
Some of the Company's older computer programs were written using two digits
rather than four to define the applicable year. As a result, those computer
programs have time-sensitive software that recognizes a date using "00" as the
year 1900 rather than the year 2000. This could cause a system failure and
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities.
The Company has completed an assessment relative to the modification or
replacement of portions of its software so that its computer systems will
function properly with respect to dates in the year 2000 and thereafter. The
total "Year 2000" project cost is estimated at approximately $400,000, which
consists of costs to be incurred to acquire upgraded software that will be
capitalized. It is anticipated that these costs will be paid for using cash from
operations.
The project is estimated to be completed not later than June 30, 1999,
which is prior to any anticipated impact on the Company's operating systems. The
Company believes that with modifications to existing software and conversions to
new software, the Year 2000 issue will not pose significant operational problems
for its computer systems. However, if such modifications and conversions are not
made, or are not completed timely, the Year 2000 issue could have a material
impact on the operations of the Company.
The costs of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources and other factors. However,
there can be no guarantee that these estimates will be achieved and actual
results could differ materially from those anticipated. Specific factors that
might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes, and similar uncertainties.
47
<PAGE> 55
THREE MONTHS AND FISCAL YEAR ENDED MARCH 29, 1998
The Company expects that its total revenues for the three months ended
March 29, 1998 (the "1998 Quarter") will be approximately $55.8 million, an
increase of 88.5% from the Company's total revenues in the comparable prior year
period (the "1997 Quarter") of $29.6 million, and that its total revenues for
the fiscal year ended March 29, 1998 ("fiscal 1998") will be approximately
$187.6 million, an increase of 61.9% from the Company's total revenues for the
prior fiscal year of $115.9 million. Timeshare sales (from the Resorts Division)
are expected to increase 215% to $20.9 million in the 1998 Quarter from $6.6
million in the 1997 Quarter and 122% to $60.8 million in fiscal 1998 from $27.4
million in fiscal 1997. Lot sales (from the Residential Land Division) are
expected to increase 51.2% to $27.2 million in the 1998 Quarter from $18.0
million in the 1997 Quarter and 46.1% to $106.1 million in fiscal 1998 from
$72.6 million in fiscal 1997. The Company anticipates net income of $3.0 million
(or $0.15 per share (basic) and $0.13 per share (diluted)) in the 1998 Quarter,
compared to a net loss of $832,000 (or $(0.04) per share) in the 1997 Quarter,
and net income of $10.0 million (or $0.49 per share (basic) and $0.46 (diluted))
in fiscal 1998, compared to a net loss of $4.4 million (or $(0.21) per share) in
fiscal 1997.
The increase in timeshare sales for the 1998 Quarter and Fiscal 1998 is
partially due to the RDI Acquisition effective September 30, 1997, which
contributed approximately $9.0 million in timeshare sales during fiscal 1998.
The increase was also partially due to two new resort properties that became
operational during fiscal 1998 -- Harbour Lights in Myrtle Beach, South
Carolina, and The Falls Village in Branson, Missouri. In addition, the Company's
interest in BG Aruba accounted for $4.6 million in timeshare sales in fiscal
1998, primarily all of which occurred in the 1998 Quarter. Timeshare sales also
increased due to the maturation of existing resorts and the increased
effectiveness of marketing programs.
Results for fiscal 1997 reflect the write-down of certain inventories by
$8.2 million in the first quarter of fiscal 1997. See "-- General" and Note 4 of
Notes to Consolidated Financial Statements.
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<PAGE> 56
BUSINESS
The Company is a leading marketer of vacation and residential lifestyle
choices through its resorts and residential land businesses. The Resorts
Division strategically acquires, develops and markets Timeshare Interests in
resorts generally located in popular high-volume, "drive-to" vacation
destinations. Timeshare Interests typically entitle the buyer to a
fully-furnished vacation residence for an annual one-week period in perpetuity,
as well as access to over 1,500 resorts worldwide through the Company's
participation in timeshare exchange networks. The Company currently markets and
sells Timeshare Interests in eight resorts located in the United States and the
Caribbean. Prior to investing in new timeshare projects, the Company performs
extensive market research and testing and, prior to completion of development,
pre-sells a significant portion of its Timeshare Interests inventory. The
Residential Land Division strategically acquires, develops and subdivides
property and markets the subdivided residential lots to retail customers seeking
to build a home in a high quality residential setting. The Residential Land
Division's strategy is to locate its projects near major metropolitan centers
outside the perimeter of intense subdivision development or in popular
retirement areas. The Company has focused the Residential Land Division's
activities in certain proven, core markets in which the Company has developed
substantial marketing expertise and has a strong track record of success. Prior
to acquiring residential land, the Company typically utilizes market research,
conducts due diligence and, in the case of new project locations, engages in
pre-marketing techniques to evaluate market response and price acceptance. Once
a parcel of property is acquired, the Company pre-sells a significant portion of
its planned residential lots on such property prior to extensive capital
investment as a result of the Company's ability to bond its projects to
completion. The Company also generates significant interest income through its
financing of individual purchasers of Timeshare Interests and, to a lesser
extent, land sold by the Residential Land Division. For the nine-month period
ended December 28, 1997, the Company had aggregate revenues of approximately
$131.8 million and EBITDA of approximately $21.4 million.
The Resorts Division. The Company's Resorts Division was founded in 1994
to capitalize on the consistent growth of the timeshare industry. According to
ARDA and other industry sources, timeshare industry sales and the number of
Timeshare Interest owners grew at compound annual rates of approximately 16% and
22%, respectively, from 1980 to 1997 (see charts on page 53). The Company
currently markets and sells Timeshare Interests in eight resorts located in the
Smoky Mountains of Tennessee; Myrtle Beach, South Carolina; Orlando, Florida;
Branson, Missouri; Wisconsin Dells, Wisconsin; and Aruba. The Company also
manages 33 timeshare resorts (including seven of its own resorts) with an
aggregate of approximately 70,000 members, which the Company believes makes it
the second largest manager of timeshare resorts in North America (based on the
number of resorts managed). For the nine-month period ended December 28, 1997,
the Company sold 4,903 Timeshare Interests, an increase of 90.1%, compared to
2,579 Timeshare Interests sold for the comparable period in 1996. The Company's
estimated remaining life-of-project sales and estimated remaining
life-of-project field operating profit with respect to the Resorts Division
increased to approximately $674.6 million and $65.4 million, respectively, as of
December 28, 1997 from approximately $260.4 million and $11.2 million,
respectively, as of December 29, 1996. These increases are a direct result of
new projects developed by the Company in fiscal 1998, the RDI Acquisition and
the Aruba Transaction, which the Company believes will result in a significant
increase in revenues and field operating profit in fiscal 1999.
The Resorts Division utilizes a variety of techniques to attract
prospective purchasers of Timeshare Interests, including targeted mailings,
direct mail mini-vacations, kiosks in retail locations, marketing to current
owners of Timeshare Interests and referrals. The majority of the Company's
Timeshare Interests are sold through on-site sales presentations. The Company
believes its ability to effectively implement and manage these marketing
activities has resulted in the generation of a predictable and increasing supply
of sales prospects. To support its marketing and sales efforts, the Company has
developed and continues to enhance its database to track its timeshare marketing
and sales programs. Management believes that, as the Company's timeshare
operations grow, this database will become an increasingly significant asset,
enabling it to take advantage of, among other things, less costly marketing and
referral opportunities.
According to ARDA, the primary reason cited by consumers for purchasing a
Timeshare Interest is the ability to exchange a Timeshare Interest for
accommodations at other resorts through worldwide exchange
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networks. Each of the Company's timeshare resorts is affiliated with either II
or RCI, the two largest worldwide timeshare exchange companies. Participation in
an exchange network entitles owners to exchange their annual Timeshare Interests
for occupancy at over 1,500 participating II resorts or over 3,200 participating
RCI resorts worldwide. To further enhance the ability of its Timeshare Interest
owners to customize their vacation experience, the Company also intends to
expand the points-based vacation club system it acquired in the RDI Acquisition
which, when completed, will permit its Timeshare Interest owners to purchase an
annual allotment of points which can be redeemed for occupancy rights at all
Company-owned and participating managed resorts.
Prior to acquiring property for resorts, the Resorts Division undertakes a
full property review, including an environmental assessment, which is presented
for approval to the Company's Investment Committee, which was established in
1990 and consists of certain key members of senior management. During the review
process, acquisition specialists analyze market, tourism and demographic data as
well as the quality and diversity of the location's existing amenities and
attractions to determine the potential strength of the timeshare market in such
area and the availability of a variety of recreational opportunities for
prospective Timeshare Interest purchasers.
The Company has historically provided financing to approximately 89% of its
timeshare customers, who are required to make a downpayment of at least 10% of
the Timeshare Interest sales price and who typically finance the balance of the
sales price over a period of seven to ten years. As of December 28, 1997, the
Company had a timeshare receivables portfolio totaling approximately $66.5
million in principal amount, with a weighted average contractual yield of
approximately 15.8% per annum. The Company is currently negotiating with a
financial institution to provide the Company with a combined timeshare warehouse
financing and receivables purchase facility and a separate timeshare acquisition
and development facility. See "Management's Discussion and Analysis of Results
of Operations and Financial Condition."
The Residential Land Division. The Residential Land Division is focused
primarily on land projects located in states in which the Company has developed
substantial marketing expertise and has a strong track record of success, such
as Texas, the Carolinas, New Mexico, Virginia, Tennessee and Arizona. The
Company believes no other company in the United States of comparable size or
financial resources markets and sells residential land to retail customers. For
the nine-month period ended December 28, 1997, the Residential Land Division had
revenues of approximately $78.8 million, an increase of 44.4% compared to
revenues of approximately $54.6 million for the comparable period in 1996. The
Company's estimated remaining life-of-project sales and estimated remaining
life-of-project field operating profit with respect to the Residential Land
Division increased to approximately $224.5 million and $47.6 million,
respectively, as of December 28, 1997 from approximately $209.3 million and
$32.4 million, respectively, as of December 29, 1996.
The Residential Land Division utilizes its proven marketing techniques and
proprietary SIMS database and other residential land databases maintained by the
Company to target families seeking a quality lifestyle improvement which is
generally unavailable in traditional suburban developments. Based on the
Company's extensive experience in marketing and selling residential lots to its
target customers, the Company has been able to develop a comprehensive marketing
and sales program that generates a significant number of on-site sales
presentations to potential prospects through low-cost, high-yield newspaper
advertising. In addition, SIMS and the other Residential Land Division databases
enable the Company to compile, process and maintain comprehensive information
concerning future sales prospects within each of its operating regions. The
Company currently has over 250,000 potential sales prospects in its Residential
Land Division databases. Through the Company's targeted sales and marketing
program, the Company believes that it has been able to achieve a high conversion
ratio of sales to prospects receiving on-site sales presentations. The
conversion ratio of sales to on-site sales presentations for the ten-month
period ended January 31, 1998 was approximately 20%.
The Residential Land Division acquires and develops land in two markets:
(i) near major metropolitan centers outside the perimeter of intense subdivision
development; and (ii) popular retirement areas. Prior to acquiring undeveloped
land, the Company researches market depth and forecasts market absorption. In
new market areas, the Company typically supplements its research with a
structured classified ad test marketing
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system that evaluates market response and price acceptance. The Company's sales
and marketing efforts begin as soon as practicable after the Company enters into
an agreement to acquire a parcel of land. The Company's ability to bond projects
to completion allows it to sell a significant portion of its residential land
inventory on a pre-development basis, thereby reducing the Company's need for
external capital to complete improvements. The Company believes that its
pre-acquisition research and test marketing allow it to market its residential
lots at predictable margins. As is the case with the Resorts Division, all
acquisitions of residential land are subject to Investment Committee approval.
In fiscal 1997, the Company began construction of its first daily-fee golf
course as part of its long-term plan to participate in the growing daily-fee
golf market. The Company believes that because the demographics of this market
are similar to those of the Residential Land Division, daily-fee golf courses
are an attractive amenity that will increase the marketability of the Company's
adjacent residential lots in certain projects. The Company's first golf course,
the Carolina National Golf Club, is located near Southport, North Carolina, just
30 miles north of Myrtle Beach, South Carolina, one of the nation's most popular
golf destinations, and was designed by Masters Champion Fred Couples. Also, as
part of the RDI Acquisition, the Company acquired a daily-fee golf course
located in Wisconsin Dells, Wisconsin.
COMPETITIVE STRENGTHS
SUBSTANTIAL INTERNAL GROWTH CAPACITY
The Company believes its substantial investment in resort infrastructure
and core residential land holdings will allow it to convert current and planned
inventory into positive and sustainable revenues and cash flow. As of December
28, 1997, the Company had existing completed inventory of 19,659 Timeshare
Interests at its resorts, 7,900 Timeshare Interests under construction or
development, and plans to develop approximately 53,300 additional Timeshare
Interests at existing resorts. Based on the foregoing, the Resorts Division's
estimated remaining life-of-project sales and estimated remaining
life-of-project field operating profit were approximately $674.6 million and
$65.4 million, respectively, at December 28, 1997. The aggregate carrying amount
of Residential Land Division inventory at December 28, 1997 was $51.7 million.
The Residential Land Division's estimated remaining life-of-project sales and
estimated remaining life-of-project field operating profit were approximately
$224.5 million and $47.6 million, respectively, at December 28, 1997.
ATTRACTIVE LOCATIONS AND HIGH QUALITY LIFESTYLE PRODUCTS
The Company seeks to maximize sales penetration and cash flow by marketing
and selling high quality lifestyle products in attractive locations possessing
positive demographic and population attributes. The Resorts Division generally
markets Timeshare Interests in popular "drive-to" locations providing a high
quality, cost-effective vacation alternative to its buyers. The Resorts Division
also provides its customers, through its participation in II and RCI, access to
over 1,500 and 3,200 participating resorts worldwide, respectively. The
Residential Land Division markets residential lots (typically two to five
acres), which are larger than those generally available in traditional suburban
developments. These lots are often near attractive amenities and are located
near major metropolitan centers outside the perimeter of intense subdivision
development or in popular retirement areas.
STRONG INDUSTRY FUNDAMENTALS
The timeshare industry is one of the fastest growing segments of the
hospitality industry with a compound annual sales growth rate from 1980 to 1997
of approximately 16%. In addition, the number of timeshare resorts worldwide
increased 167.4% from 1,550 in 1984 to over 4,100 in 1994 (the most recent date
for which ARDA statistics are available). The Company believes that several
factors have contributed to this sustained industry growth including: (i)
increased flexibility of ownership due to the growth in the international
exchange programs and points-based vacation club systems; (ii) increased
consumer awareness of the economic values and benefits of timeshare ownership;
(iii) improvement in both the quality and management of the resorts; (iv) an
influx of brand-name national lodging companies to the timeshare industry; (v)
implementation of consumer protection regulations; (vi) availability of consumer
financing; and (vii) improvement in inventory management systems. The Company
believes that, despite the industry's growth,
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timeshare ownership has achieved only an approximate 5% market penetration among
United States households with income above $50,000 per year.
RISK MANAGEMENT THROUGH PRE-SELLING AND RIGOROUS INTERNAL CONTROLS
The Company's acquisition and development strategies for both its Resorts
and its Residential Land Divisions are designed to reduce capital risk. Prior to
acquiring timeshare projects or residential land, the Company typically utilizes
market research and conducts due diligence. In addition, in the case of new
Residential Land Division locations, the Company engages in pre-marketing
techniques prior to acquiring residential land. The Company typically develops
its projects in phases, and its ability to bond projects to completion allows it
to sell a significant portion of Timeshare Interests or planned residential lots
on a pre-development basis prior to full capital investment. All acquisitions
must be approved by the Investment Committee.
ATTRACTIVE MARKET DEMOGRAPHICS
Both the Resorts and Residential Land Divisions target customers in the
40-55 year old age group. The Company's target group, which is one of the
fastest growing segments in the U.S., seeks to use its growing earning power to
effect quality lifestyle improvements. The Company believes that its products
will allow it to effectively capitalize on the anticipated growth and objectives
of this target market.
SOPHISTICATED SALES INFORMATION MANAGEMENT SYSTEM
The Company's significant investment in its sales and marketing information
systems has enabled both its Resorts Division and its Residential Land Division
to compile, process and maintain comprehensive, valuable data regarding future
sales prospects. The Company currently has over 250,000 potential prospective
buyers in its databases. The Company believes that the ability to access this
information allows the Company to more accurately target its prospective
customers and, thus, reduce marketing costs and increase closing rates.
SUPERIOR SALES AND MARKETING PERSONNEL
The success of the Company's sales and marketing efforts depends heavily on
the knowledge and experience of its marketing and commission-based sales
personnel. The Company believes its marketing and sales personnel are among the
most experienced in the timeshare and residential land industries. The Company
has expended considerable resources in training such personnel in the effective
use of the Company's databases and sales marketing systems, site attributes and
surrounding area amenities. The Company enhances this sales and marketing
expertise through the Bluegreen Institute, a mandatory training program designed
to instill the Company's marketing and customer service philosophy in middle-
and lower-level management.
COST EFFICIENCIES THROUGH MULTI-SITE OPERATIONS AND RESORT MATURATION
As the Resorts Division grows, the Company believes it has significant
opportunities to realize economies of scale through the operation of a
multi-resort management system and the reduction of fixed operating costs as a
percentage of sales. In addition, the Company believes that, as its existing
resorts mature, a greater percentage of Timeshare Interests will be sold through
less expensive marketing techniques such as referrals and upgrade sales to
existing Timeshare Interest owners.
EXPERIENCED MANAGEMENT TEAM
The Company's five senior executive officers have over 100 years of
industry-related experience. The Company has employment agreements with each of
these executive officers, which expire in March 2001.
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BUSINESS STRATEGY
In order to further enhance its market positions and to maximize
profitability and cash flow, the Company's principal strategic objectives are as
follows:
CAPITALIZE ON SIGNIFICANT GROWTH OPPORTUNITIES IN THE TIMESHARE INDUSTRY
The Resorts Division was founded in 1994 to capitalize on the rapid growth
of the timeshare industry. The Company intends to continue to aggressively
market and sell its existing and planned Timeshare Interest inventory through
the further development of in-house sales and marketing programs, exchange
program synergies and the use of technology and database management systems. The
Company's goal is to continue to increase sales of Timeshare Interests as a
percentage of the Company's total consolidated revenue, further diversifying the
Company's base of revenue.
IMPROVEMENT OF MARGINS IN RESORTS DIVISION
The Company believes that increased efficiency and a multi-resort
management system will reduce operating costs as a percentage of sales and allow
the Company to experience increased margins at its existing resorts by spreading
operating and corporate overhead costs over a larger revenue base. In addition,
the Company expects operating margins at its resorts to improve over time as a
greater percentage of Timeshare Interests are sold through more efficient, less
costly marketing techniques, such as referrals and sales of additional Timeshare
Interests to existing customers. The Company also believes that it will reduce
the Resorts Division's sales and marketing expenses, as a percentage of sales,
over time by targeting more potential buyers through its Resorts Division
database system and through lead generation assistance and cross-marketing and
selling from the Residential Land Division.
ACQUISITIONS OF TIMESHARE RESORT ASSETS
The Company intends to continue to grow the Resorts Division through
acquisitions in destinations that will complement the Company's current resort
locations. Because the timeshare industry is highly fragmented, the Company
believes that significant opportunities exist to make selected acquisitions at
attractive valuations. Acquisitions the Company may consider include acquiring
additional Timeshare Interest inventory, operating companies, management
contracts, Timeshare Interest mortgage portfolios and properties or other
timeshare-related assets which may be integrated into the Company's operations.
FOCUS ON RESIDENTIAL LAND BUSINESS CORE MARKETS
The Company intends to continue to focus the Residential Land Division on
those regions where the market for its products is strongest, such as the
Southeast, Southwest, Rocky Mountain and Western regions of the United States
and to replenish its residential land inventory in such regions as existing
projects are sold-out. The Company believes that its in-depth knowledge of these
markets, together with the current strong economic growth and favorable
demographic trends in these regions, will enable it to continue to maintain
favorable operating margins and cash flows.
DEVELOPMENT OF POINTS-BASED VACATION CLUB SYSTEM
The Company intends to expand the points-based vacation club system that it
acquired in the RDI Acquisition. The Company's objective in expanding its
points-based vacation club system is to create, in conjunction with its
participation in worldwide timeshare exchange networks, a Bluegreen timeshare
system that maximizes the vacation flexibility of its current and prospective
Timeshare Interest owners.
INTERNATIONAL EXPANSION
The Company intends to selectively add timeshare resort locations in areas
outside the United States. Through the Aruba Transaction, the Company has
obtained Timeshare Interest inventory in the Caribbean. The Company intends to
continue to focus on the Caribbean region, as well as Central and South America,
as possible locations for additional resort properties.
GOLF COURSE DEVELOPMENT
In fiscal 1997, the Company began construction of its first 27 hole
daily-fee golf course as part of its long-term strategy to participate in the
growing daily-fee golf market. Management believes that the demographics
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of this market are similar to those of the Company's Residential Land Division.
As a result, management believes that daily-fee golf courses are an attractive
amenity that will increase the marketability of the Company's adjacent
residential lots in certain projects.
CROSS UTILIZATION OF DATABASES
The Company intends to cross-utilize information contained in its
Residential Land Division and Resorts Division databases. Because the
Residential Land and Resorts Divisions target similar geographic markets and
demographics classes, the Company believes that such cross-utilization will
significantly enhance its sales and marketing efforts for each division.
INDUSTRY OVERVIEWS
Resorts Division
The Market. The resort component of the leisure industry is serviced
primarily by two separate alternatives for overnight accommodations: commercial
lodging establishments and timeshare resorts. Commercial lodging consists
principally of hotels and motels in which a room is rented on a nightly, weekly
or monthly basis for the duration of the visit or rentals of privately-owned
condominium units or homes. For many vacationers, particularly those with
families, a lengthy stay at a quality commercial lodging establishment can be
expensive, and the space provided to such vacationers by these establishments
relative to the cost is often not economical. In addition, room rates at
commercial lodging establishments are subject to change periodically and
availability is often uncertain. The Company believes that Timeshare Interest
ownership presents an attractive vacation alternative to commercial lodging.
First introduced in Europe in the mid-1960's, Timeshare Interest ownership
has been one of the fastest growing segments of the hospitality industry over
the past two decades. According to ARDA, timeshare industry sales and the number
of Timeshare Interest owners have grown at compound annual rates of
approximately 16% and 22%, respectively, from 1980 to 1997 (see charts below).
(Timeshare Graphs)
Source: ARDA (includes, with respect to 1995, 1996 and 1997, unpublished
estimates provided by ARDA)
The Company believes that, based on ARDA reports and other industry data,
the following factors have contributed to the increased acceptance of the
timeshare concept among the general public and the substantial growth of the
timeshare industry:
- Consumer awareness of the value and benefits of Timeshare Interest
ownership, including the cost savings relative to other lodging
alternatives;
- Flexibility of Timeshare Interest ownership due to the growth of
international exchange organizations such as II and RCI and points-based
vacation club systems;
- The quality of the timeshare resorts and their management;
- Consumer confidence resulting from consumer protection regulation of the
timeshare industry and an influx of brand name national lodging companies
to the timeshare industry; and
- Availability of consumer financing for purchasers of Timeshare Interests.
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The timeshare industry traditionally has been highly fragmented and
dominated by a large number of local and regional resort developers and
operators, each with small resort portfolios generally of differing quality. The
Company believes that one of the most significant factors contributing to the
current success of the timeshare industry is the entry into the market of some
of the world's major lodging, hospitality and entertainment companies, such as
Marriott, Disney, Hilton, Hyatt, Four Seasons and Inter-Continental. Although
timeshare operations currently comprise only a small portion of these companies'
overall operations, their involvement in the timeshare industry, together with
other publicly-traded timeshare companies, has enhanced the industry's image
with the general public.
The Consumer. According to information compiled by ARDA, customers in the
40-55 year age range represented approximately 45.1% of all Timeshare Interest
owners in 1997. During the past two years, the median age of a Timeshare
Interest buyer at the time of purchase was 48. The median annual household
income of current Timeshare Interest owners in the United States is
approximately $71,000, with approximately 24% of all Timeshare Interest owners
having annual household incomes greater than $100,000 and approximately 12% of
such owners having annual household incomes greater than $125,000. The Company
believes that, despite the industry's growth, Timeshare Interest ownership has
achieved only an approximate 5% market penetration among United States
households with incomes above $50,000 per year.
Timeshare Interest Ownership. The purchase of a Timeshare Interest
typically entitles the buyer to use a fully-furnished vacation residence,
generally for a one-week period each year in perpetuity. Typically, the buyer
acquires an ownership interest in the vacation residence, which is often held as
tenant-in-common with other buyers of interests in the property.
The owners of Timeshare Interests manage the property through a non-profit
homeowners' association, which is governed by a board of directors or trustees
consisting of representatives of the developer and owners of Timeshare Interests
at the resort. The board hires a management company to which it delegates many
of the rights and responsibilities of the homeowners' association, including
grounds landscaping, security, housekeeping and operating supplies, garbage
collection, utilities, insurance, laundry and repairs and maintenance.
Each Timeshare Interest owner is required to pay the homeowners'
association a share of all costs of maintaining the property. These charges can
consist of an annual maintenance fee plus applicable real estate taxes and
special assessments, assessed on an as-needed basis. If the Timeshare Interest
owner does not pay such charges, such owner's use rights may be suspended and
the homeowners' association may foreclose on the owner's Timeshare Interest.
Participation in Timeshare Interest Exchange Networks. The Company
believes that its Timeshare Interests are made more attractive by the Company's
affiliation with Timeshare Interest exchange networks operated by II and RCI,
the two largest worldwide, timeshare exchange companies. Six of the Company's
timeshare resorts (including the Aruba Resort) are affiliated with II and have
been awarded II's highest designation (five stars), while the two resorts
acquired in the RDI Acquisition are affiliated with RCI. A Timeshare Interest
owner's participation in the II or RCI exchange network (the fee for which is
paid by the Company in the first year of such owner's participation) allows such
owner to exchange his annual Timeshare Interest for occupancy at over 1,500
participating resorts in the case of II and over 3,200 participating resorts in
the case of RCI, based upon availability and the payment of a variable exchange
fee. A member may exchange his Timeshare Interest for an occupancy right in
another participating resort by listing his Timeshare Interest as available with
the exchange organization and by requesting occupancy at another participating
resort, indicating the particular resort or geographic area to which the member
desires to travel, the size of the unit desired and the period during which
occupancy is desired. The exchange network assigns ratings to each listed
Timeshare Interest, based upon a number of factors, including the location and
size of the unit, the quality of the resort and the period during which the
Timeshare Interest is available, and attempts to satisfy the exchange request by
providing an occupancy right in another Timeshare Interest with a similar
rating. If the exchange network is unable to meet the member's initial request,
it suggests alternative resorts based on availability. The failure of the
Company to participate in qualified exchange networks or the failure of such
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networks to operate effectively could have a material adverse effect on the
Company. See "Risk Factors -- Risks Associated with Timeshare Interest Exchange
Networks."
Residential Land Division
The Residential Land Division operates within a specialized niche of the
real estate industry which focuses on the sale of residential land to retail
customers who intend to build a home on such land at some point in the future.
The participants in this market niche are generally individual landowners who
are selling specific parcels of property and small developers who focus
primarily on projects in their region. Although no specific data is available
regarding this market niche, the Company believes that no other company in the
United States of comparable size or financial resources currently markets and
sells residential land to retail customers.
Unlike commercial homebuilders who focus on vertical development, the
Residential Land Division focuses primarily on horizontal development
activities, such as grading, roads and utilities. As a result, the projects
undertaken by the Company and other participants in this market niche are
significantly less capital intensive than those undertaken by the commercial
homebuilders, which reduces the Company's risk of holding a large inventory of
property. In addition, the Company believes that, through its financial and
marketing resources, it is able to acquire properties in attractive locations
throughout the United States on a cost-effective basis thereby enabling the
Company's projects to achieve desired cash flows and targeted gross margins. The
Company's market niche is also the beneficiary of a number of trends, including
the large number of people entering into the 40-55 year age bracket and the
economic and population growth in certain of its primary markets.
RECENT ACQUISITIONS
Effective September 30, 1997, the Company consummated the RDI Acquisition.
RDI owns and operates timeshare projects located in Orlando, Florida (the
"Orlando Resort") and Wisconsin Dells, Wisconsin (the "Wisconsin Resort") and
provides management services to 31 other vacation ownership resorts. Although
all the existing Timeshare Interests at the Orlando Resort have been sold, the
Company plans to develop and market an additional 2,496 Timeshare Interests at
this property. As of December 28, 1997, the Wisconsin Resort consisted of 960
unsold Timeshare Interests. The amenities at the Wisconsin Resort include an
18-hole golf course and seven ski trails serviced by two chair lifts. The
Company plans to add nine more holes to the golf course, continue expanding the
Wisconsin Resort and develop land located on the property for sale by the
Residential Land Division. The purchase price for RDI was $7.5 million, of which
$6.0 million was paid in cash and $1.5 million was paid in the form of a
promissory note bearing interest at 9% per annum. The RDI Acquisition was
accounted for using the purchase method of accounting. No goodwill was recorded
by the Company as a result of the RDI Acquisition. See "Description of Other
Indebtedness" for a description of the indebtedness incurred by the Company to
finance the RDI Acquisition.
In connection with the RDI Acquisition, the Company (a) was granted an
option (the "Amclub Option") to acquire the capital stock or assets of AmClub,
Inc. ("AmClub"), a corporation owned by Jeffrey J. Keim, Randy Keim and David
Bidgood (collectively, the "RDI Stockholders"), which owns a timeshare resort in
Virginia known as Shenandoah Crossing Farm & Club (the "Virginia Resort"), and
(b) agreed to indemnify the RDI Stockholders from any obligations in respect of
guarantees executed by the RDI Stockholders of indebtedness of RDI and its
affiliates (including indebtedness of AmClub). Although all AmClub indebtedness
covered by such guarantees is collateralized by notes receivable, there can be
no assurance that the Company will not be required to make payments with respect
to such indemnification obligation. Pursuant to the AmClub Option the exercise
price for the purchase of AmClub's capital stock is $10,000, while the exercise
price for any assets of AmClub is equal to the fair market value of such assets
at the time of exercise. As of December 28, 1997, AmClub's total liabilities
were $14.0 million, and the total indebtedness guaranteed by the Company was
$2.7 million. The Company manages the Virginia Resort through RDI. The Company
has lent AmClub $300,000 for working capital purposes pursuant to 8% promissory
notes due April 30, 1998. AmClub's liabilities include approximately $4.4 owed
to a financial institution which has a mortgage on the Virginia Resort (the
"AmClub Senior Lender"). The Company and
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the AmClub Senior Lender have agreed in principle, subject to certain
conditions, to certain arrangements pursuant to which, among other things, (i)
the debt owed to the AmClub Senior Lender would cease to accrue interest, (ii)
the Company would lend up to $1 million to AmClub to fund the completion of
certain capital improvements, such loan to bear interest at the prime rate plus
1% and be secured by a mortgage on the Virginia Resort (the "Bluegreen Loan"),
(iii) the Company would market approximately ninety residential lots at the
Virginia Resort, with the Company receiving 55% of the net sales proceeds to
compensate it for its services and the remaining 45% to be paid to the Company
until the Bluegreen Loan has been paid in full, at which time such 45% of net
sales proceeds will be paid to the AmClub Senior Lender to repay indebtedness,
(iv) the Company would use its best efforts to sell certain other property at
the Virginia Resort and (v) the Company would have the option to repay the debt
owed to the AmClub Senior Lender with a lump sum cash payment reflecting a
specified discount on the outstanding balance owed. No assurances can be given
that the proposed arrangements will be consummated on these terms, if at all, or
that the Company's arrangements with respect to AmClub will be profitable.
In December 1997, the Company invested $250,000 of capital in BG Aruba in
exchange for a fifty percent equity interest. Concurrently, the Company and an
affiliate of the individual who owns the remaining equity interest in BG Aruba
each lent $3 million to BG Aruba. The loans are evidenced by promissory notes
due on December 15, 2000 and bearing interest at the prime rate plus 1%. BG
Aruba then acquired from a third party the unsold Timeshare Interest inventory
(approximately 8,000 Timeshare Interests) at the Aruba Resort (the "Aruba
Transaction"). Established in 1989, the Aruba Resort is a 449-suite ocean front
property which offers one, two and three-bedroom suites, garden suites and
penthouse accommodations. The purchase price for the Aruba Resort's timeshare
inventory was $6 million in cash and the assumption of approximately $16.6
million of indebtedness owed by the seller to a bank in Aruba. The indebtedness
is not guaranteed by Bluegreen or any of its wholly-owned subsidiaries. An
affiliate of the seller in the Aruba Transaction is responsible for the payment
of all interest on the indebtedness. BG Aruba recorded this indebtedness net of
imputed interest using a 12% discount rate. The debt is to be repaid over five
years from the release prices as Timeshare Interests are sold; BG Aruba will be
required to pay approximately 32% of the sales price of each Timeshare Interest
to the bank, subject to minimum monthly payments of approximately $278,000. See
"Description of Other Indebtedness." Under the terms of its agreement with its
joint venture partner, BG Aruba pays to the Company a quarterly management fee
equal to 7% of the net sales price (as defined) of Timeshare Interests (less any
discounts or incentives) sold by BG Aruba during the quarter for certain
management services performed for BG Aruba by the Company. After making minimum
principal payments (more fully described in "Description of Other Indebtedness")
and payment of the quarterly management fee, BG Aruba distributes cash flow from
operations, after deducting specified reserves, to the shareholders in
proportion to their equity interests. The shareholder agreement between the
Company and the individual who owns the remaining equity interest in BG Aruba
provides that the Company shall have majority control of BG Aruba's Board of
Directors and places certain restrictions on the transfer of equity interests in
BG Aruba. Due to its controlling financial interest in BG Aruba, the Company has
included BG Aruba in its consolidated financial statements as of December 28,
1997. See "Description of Other Indebtedness."
COMPANY PRODUCTS
Timeshare Resorts
Set forth below is a description of each of the Company's timeshare
resorts. All units at each of the properties have certain standard amenities,
including a full kitchen, at least two televisions, a VCR player and a CD
player. Some units have additional amenities, such as larger televisions and
game systems. Each property offers guests a clubhouse (with an indoor/outdoor
pool, a game room, exercise facilities and a lounge) and a hotel-type staff. The
Company manages each resort other than the Aruba Resort.
MountainLoft Resort -- Gatlinburg, Tennessee. The MountainLoft Resort in
Gatlinburg, Tennessee is located near the Great Smoky Mountains National Park
and is minutes from the family attractions of Pigeon Forge, Tennessee. Units are
located in individual chalets or mid-rise villa buildings. Each unit is fully
furnished with a whirlpool bath and private balconies, and certain units include
gas fireplaces.
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Laurel Crest -- Pigeon Forge, Tennessee. Laurel Crest is located in
proximity to the Great Smoky Mountains National Park and the Dollywood theme
park. In addition, visitors to Pigeon Forge can enjoy over 200 factory outlet
stores and music shows featuring renowned country music stars as well as partake
in a variety of outdoor activities, such as horseback riding, trout fishing,
boating, golfing and white water rafting.
Shore Crest Vacation Villas -- Myrtle Beach, South Carolina. Shore Crest
Vacation Villas is located on the beach in the Windy Hill section of North
Myrtle Beach a mile from the famous Barefoot Landing, with its restaurants,
theaters, shops and outlet stores.
Harbour Lights -- Myrtle Beach, South Carolina. Harbour Lights is located
in the Fantasy Harbour Complex in the center of Myrtle Beach. Nearby are Theater
Row, shopping, golf and restaurants. The resort's Activities Center overlooks
the Intracoastal Waterway.
The Falls Village -- Branson, Missouri. The Falls Village is located in
the Ozark Mountains. Fishing, boating and swimming are available at nearby Table
Rock Lake and Lake Taneycomo, and area theaters feature shows by country music
stars. Most customers of the resort come from areas within an eight to ten hour
drive of Branson.
Christmas Mountain -- Wisconsin Dells, Wisconsin. The Company acquired the
Christmas Mountain resort as part of the RDI Acquisition. Christmas Mountain
offers an 18-hole golf course and seven ski trails served by two chair lifts.
Other on-site amenities include horseback riding, tennis courts, a five-acre
lake with paddleboats and rowboats and four outdoor swimming pools. Christmas
Mountain attracts customers primarily from the greater Chicago area and other
locations within an eight to ten hour drive of Wisconsin Dells.
Orlando Sunshine -- Orlando, Florida. Orlando Sunshine was also acquired
as part of the RDI Acquisition. The resort is located on International Drive,
near Wet'n'Wild water park and Universal Studios.
La Cabana All Suite Beach Resort & Racquet Club -- Aruba, Dutch
Caribbean. BG Aruba acquired the unsold Timeshare Interest inventory of the
Aruba Resort (approximately 8,000 Timeshare Interests) in December 1997.
Established in 1989, the Aruba Resort is a 449-suite ocean front property which
offers one, two and three bedroom suites, garden suites and penthouse
accommodations. On-site amenities include tennis, racquetball, squash, casino,
two pools and private beach cabanas, none of which are owned or managed by the
Company.
The following table sets forth additional data with respect to each of the
properties managed under the Resorts Division.
<TABLE>
<CAPTION>
ORLANDO
SHORE CREST HARBOUR THE FALLS CHRISTMAS SUNSHINE
MOUNTAINLOFT LAUREL CREST MYRTLE LIGHTS VILLAGE MOUNTAIN(1) (1)
GATLINBURG, PIGEON FORGE, BEACH, MYRTLE BEACH, BRANSON, WISCONSIN ORLANDO,
LOCATION TN TN SC SC MO DELLS, WI FL
- -------- ------------ ------------- ----------- ------------- --------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Date sales commenced.......... 7/94 8/95 4/96 6/97 7/97 9/97 --
Number of Timeshare Interests
completed as of December 28,
1997 (3).................... 7,540 4,160 5,928 -- 1,535 1,137 --
Number of Timeshare Interests
under construction as of
December 28, 1997 (3)....... 1,040 1,664 -- 3,744 1,248 204 --
Number of additional Timeshare
Interests planned (3)(4).... 4,332 6,067 5,160 11,091 15,261 8,906 2,496
Average Timeshare Interests
selling price through
December 28, 1997........... $8,691 $8,509 $10,042 $ 7,990 $ 7,968 $8,093 $10,000(5)
Number of Timeshare Interests
sold through December 28,
1997........................ 3,788 2,642 2,554 617 587 177 --
<CAPTION>
LACABANA
RESORT(2)
LOCATION ARUBA
- -------- ----------
<S> <C>
Date sales commenced.......... 1/98
Number of Timeshare Interests
completed as of December 28,
1997 (3).................... 8,030
Number of Timeshare Interests
under construction as of
December 28, 1997 (3)....... --
Number of additional Timeshare
Interests planned (3)(4).... --
Average Timeshare Interests
selling price through
December 28, 1997........... $10,000(5)
Number of Timeshare Interests
sold through December 28,
1997........................ --
</TABLE>
- ---------------
(1) Acquired by the Company in the RDI Acquisition. See "-- Recent
Acquisitions."
(2) BG Aruba acquired unsold Timeshare Interests inventory at this resort in
December, 1997. See "-- Recent Acquisitions."
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<PAGE> 66
(3) The number of Timeshare Interests completed, under construction or planned
are intended to be sold in 52 weekly intervals.
(4) There can be no assurance that the Company will have the resources to
complete all such planned Timeshare Interests or that such Timeshare
Interests will be sold at favorable prices.
(5) Anticipated average selling prices once sales commence.
Certain Residential Land Projects
Set forth below is a description of the four largest projects currently
marketed by the Residential Land Division, which are representative of the types
of projects that the Company has been focusing on since 1993. These properties
represented 48.7% of the Residential Land Division's estimated remaining
life-of-project sales at December 28, 1997.
River Mountain Ranch -- San Antonio, Texas. The Company acquired 3,600
acres located approximately 35 miles outside of San Antonio, Texas in fiscal
1997 for $6.5 million. The property features frontage along the Guadalupe River
and is characteristic of the Texas Hill Country with its rolling meadows and
mature trees. The property also includes private river parks for picnics and
outings. The project includes 608 lots, with most ranging in size from three to
five acres. The Company began selling lots in October 1996 and aggregate sales
through December 28, 1997 were $14.4 million. Aggregate development costs
through December 28, 1997 were $4.1 million and the Company anticipates that the
remaining capital expenditures for the project will be $1.9 million. The Company
anticipates that the remaining lots will be sold-out over the next year.
Winding River Plantation -- Southport, North Carolina. The Company
acquired approximately 1,300 acres located near Southport, North Carolina (and
between Myrtle Beach, South Carolina and Wilmington, North Carolina) for $3.4
million in fiscal 1997. The property has frontage along the Lockwood Folly
River, a navigable waterway that leads to the Intercoastal Waterway and the
Atlantic Ocean. The project will include river amenities, a beach club and
tennis courts. In addition, the project is the site of the Company's first
daily-fee golf course, which opened for limited play in November 1997 and was
developed by Masters Champion Fred Couples. The Company anticipates that the
project will consist of a total of approximately 1,000 lots, which average
approximately one acre. The Company began selling lots in February 1997, and
aggregate sales through December 28, 1997 were $9.2 million. Aggregate
development costs through December 28, 1997 were $10.9 million and the Company
anticipates that the aggregate capital expenditures to complete development at
the project will be $13.4 million. The Company anticipates that the remaining
lots will be sold-out over the next four years.
Lake Ridge at Joe Pool Lake -- Cedar Hill, Texas. The Company acquired
1,400 acres located approximately 19 miles outside of Dallas, Texas and 30 miles
outside of Fort Worth, Texas in April 1994 for $6.1 million. The property is
located at Joe Pool Lake and is atop the highest elevation within 100 miles. The
lake has in excess of 7,500 acres of water for boating, fishing, windsurfing and
other water activities. Adjacent amenities (not owned or managed by the Company)
include a 154 acre park with baseball, football and soccer fields, a fishing
pool with a pier, camping areas and an 18-hole golf course. The project includes
252 lots, with most ranging in size from 1/4 to five acres and 399 acres
available for future development. The Company began selling lots in April 1994
and aggregate sales through December 28, 1997 were $25.1 million. Aggregate
development costs through December 28, 1997 were $11.7 million and the Company
anticipates that the remaining capital expenditures will be $10 million. The
Company anticipates that unsold lots will be sold-out over the next two years.
Crossroads Ranch -- Prescott, Arizona. The Company acquired 6,500 acres
located 20 miles north of Prescott, Arizona in July 1995 for $6.0 million. The
property has elevations ranging from 4,600 to 5,600 feet and a four-season
climate. The terrain includes pasture lands with seasonal creeks and rolling
hills. The property is 95 miles north of Phoenix and Scottsdale, approximately
2 1/2 hours south of the Grand Canyon and approximately one hour away from
Sedona. The Company anticipates that the project will include 153 lots, each
averaging 36 acres, and 26 lots, each averaging five acres. The Company provided
gravel roads and trails for hiking and horseback riding. Electric service was
installed underground so that utility poles would not spoil
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<PAGE> 67
the views. The Company also created deed restrictions designed to ensure that
future development on the property is compatible with the land's ranch
character. The Company began selling lots in January 1996 and aggregate sales
through December 28, 1997 were $17.3 million. Aggregate development costs
through December 28, 1997 were $5.1 million and the Company anticipates that the
remaining capital expenditures will be $2.0 million. The Company anticipates
that the unsold lots will be sold-out over the next year.
ACQUISITION OF TIMESHARE AND RESIDENTIAL LAND INVENTORY
In order to provide centralized and uniform controls on the type, location
and amount of timeshare and residential land inventory that the Company
acquires, all such inventory acquisitions have required the approval of the
Investment Committee since 1990. The Investment Committee consists of George F.
Donovan, President and Chief Executive Officer; John F. Chiste, Treasurer and
Chief Financial Officer; Patrick E. Rondeau, Senior Vice President, Director of
Legal Affairs; L. Nicolas Gray, Senior Vice President -- Resorts Division; and
Daniel C. Koscher, Senior Vice President -- Residential Land Division. The
Investment Committee reviews each proposed inventory acquisition to determine
whether the property meets certain criteria, including estimated cash flows and
gross profit margins.
Resorts Division
The Company obtains information with respect to resort acquisition
opportunities through interaction by the Company's management team with resort
operators, lodging companies and financial institutions with which the Company
has established business relationships. The four resorts acquired and directly
developed by the Company (the Tennessee and South Carolina resorts) were
specifically designed and built for timeshare use to appeal to the Company's
targeted customers. Prior to acquiring property for future resorts, the Resorts
Division undertakes a full property review, including an environmental
assessment, which is presented to the Investment Committee for approval. During
the review process, acquisition specialists analyze market, tourism and
demographic data as well as the quality and diversity of the location's existing
amenities and attractions to determine the potential strength of the timeshare
market in such area and the availability of a variety of recreational
opportunities for prospective Timeshare Interest purchasers. Specifically, the
Company evaluates the following factors, among others, to determine the
viability of a potential new timeshare resort: (i) supply/demand ratio for
Timeshare Interests in the relevant market, (ii) the market's growth as a
vacation destination, (iii) competitive accommodation alternatives in the
market, (iv) uniqueness of location, and (v) barriers to entry that would limit
competition. The Company anticipates that its timeshare resorts will generally
have a sell-out term of approximately seven years.
During fiscal 1998, the Company acquired the land and began development of
its Harbour Lights Resort in Myrtle Beach, South Carolina, acquired The Falls
Village Resort in Branson, Missouri and consummated the RDI Acquisition and the
Aruba Transaction. As a result of these transactions, the Company's Timeshare
Interest inventory increased from 9,935 unsold Timeshare Interests as of March
30, 1997 to 19,659 unsold Timeshare Interests as of December 28, 1997, an
increase of 97.9%. See "-- Recent Acquisitions."
The Company intends to continue to pursue growth by expanding or
supplementing the Company's existing resorts operations through acquisitions in
destinations that will complement such existing operations. Because the
timeshare industry is highly fragmented, the Company believes that significant
opportunities exist to make selected acquisitions at attractive valuations.
Acquisitions the Company may consider include acquiring additional Timeshare
Interest inventory, operating companies, management contracts, Timeshare
Interest mortgage portfolios and properties or other timeshare-related assets
which may be integrated into the Company's operations. In addition, the Company
intends to continue to pursue timeshare resort locations in areas outside the
United States, particularly in the Caribbean, as well as Central and South
America. No assurances can be given that the Company will be successful in its
acquisition strategy. See "Risk Factors -- Acquisition Strategy."
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<PAGE> 68
Residential Land Division
The Residential Land Division, through the Company's regional offices, and
subject to Investment Committee review and approval, typically acquires
inventory that (i) is located near a major population center outside the
perimeter of intense subdivision development or in popular retirement areas,
(ii) is suitable for subdivision, (iii) has attractive topographical features
and (iv) the Company believes will result in an acceptable profit margin and
cash flow to the Company based upon anticipated retail value. Properties are
generally subdivided for resale into parcels typically ranging in size from two
to five acres. During the nine-month period ended December 28, 1997, the Company
acquired 3,082 acres in nine separate transactions for a total purchase price of
approximately $9.5 million, or $3,090 per acre, and during fiscal 1997, the
Company acquired 19,254 acres in 23 separate transactions for a total purchase
price of $29.7 million, or $1,541 per acre. Seller, bank or similar financial
institution financing of $4.9 million, or 52% of the $9.5 million total purchase
price, was obtained with respect to purchases during the nine-month period ended
December 28, 1997, and $15.0 million, or 51% of the $29.7 million total purchase
price, was obtained with respect to purchases during fiscal 1997.
In connection with its review of potential residential land inventory, the
Investment Committee considers such established criteria as the economic
conditions in the area in which the parcel is located, environmental
sensitivity, availability of financing, whether the property is consistent with
the Company's general policies and the anticipated ability of that property to
produce acceptable profit margins and cash flow. As part of its long-term
strategy for the Residential Land Division, the Company in recent years has
focused on fewer, more capital-intensive projects. The Company intends to
continue to focus the Residential Land Division on those regions where the
Company believes the market for its products is strongest, such as the
Southeast, Southwest, Rocky Mountain and Western regions of the United States
and to replenish its residential land inventory in such regions as existing
projects are sold-out.
The Residential Land Division has several specialists who assist regional
management in locating inventory for acquisition. The Company has established
contacts with numerous land owners and real estate brokers in many of its market
areas, and because of such contacts and its long history of acquiring
properties, the Company believes that it is generally in a favorable position to
learn of available properties, often before the availability of such properties
is publicly known. In order to ensure such access, the Company attempts to
develop and maintain strong relationships with major property owners and
brokers. Regional offices regularly contact property owners, such as timber
companies, financial institutions and real estate brokers, by a combination of
telephone, mail and personal visits. In addition, prior to acquiring property in
new areas, the Company will conduct test marketing for a prospective project
prior to entering into an acquisition agreement to determine whether sufficient
customer demand exists for the project. To date, the Company's regional offices
generally have been able to locate and acquire adequate quantities of inventory
which meet the criteria established by the Investment Committee to support their
operational activities. In certain cases, however, the Company has experienced
short-term shortages of ready-for-sale inventory due to either difficulties in
acquiring property or delays in the approval and/or development process.
Shortfalls in ready-for-sale inventory may materially adversely affect the
Company's business, operating results and financial condition. See "Risk
Factors -- Acquisition Strategy" and "-- Risks Related to Development
Activities."
Once a desirable property is identified, the Company completes its initial
due diligence procedures and enters into a purchase agreement with the seller to
acquire the property. It is generally the Company's policy to advance only a
small downpayment of 1%-3% of the purchase price upon signing the purchase
agreement and to limit the liquidated damages associated with such purchase
agreement to the amount of its downpayment and any preliminary development
costs. In most cases, the Company is not required to advance the full purchase
price or enter into a note payable obligation until regulatory approvals for the
subdivision and sale of at least the initial phase of the project have been
obtained. While local approvals are being sought, the Company typically engages
in pre-marketing techniques and, with the consent of the seller and the
knowledge of prospective purchasers, occasionally attempt to pre-sell parcels,
subject to closing its purchase of the property. When the necessary regulatory
approvals have been received, the closing on the property occurs and the Company
obtains title to the property. The time between execution of a purchase
agreement and closing on a property has generally been six to 12 months.
Although the Company generally retains the right to cancel
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<PAGE> 69
purchase agreements without any loss beyond forfeiture of the downpayment and
preliminary development costs, few purchase agreements have been canceled
historically.
By requiring, in most cases, that regulatory approvals be obtained prior to
closing and by making small downpayments upon signing purchase agreements, the
Company is typically able to place a number of properties under contract without
expending significant amounts of cash. This strategy enables the Residential
Land Division to reduce (i) the time during which it actually owns specific
properties, (ii) the market risk associated with holding such properties and
(iii) the risk of acquiring properties that may not be suitable for sale. It
also provides the Residential Land Division an additional source of available
properties to meet customer demand. In certain circumstances, however, the
Company has acquired properties and then held such properties until their prime
marketing seasons.
Prior to closing on a purchase of residential land, the Company's policy is
to complete its own environmental assessment of the property. The purpose of the
Company's assessment is to evaluate the impact the proposed subdivision will
have on such items as flora and fauna, wetlands, endangered species, open space,
scenic vistas, recreation, transportation and community growth and character. To
obtain this information, the Company's acquisition specialists typically consult
with various groups and agencies including the appropriate county and state
planning agencies, environmental groups, state heritage programs, soil
conservation agencies and forestry groups. If the Company's environmental
assessment indicates that the proposed subdivision meets environmental criteria
and complies with zoning, building, health and other laws, the Company develops
a formal land use plan, which forms a basis for determining an appropriate
acquisition price. The Company attempts, where possible, to accommodate the
existing topographical features of the land, such as streams, hills, wooded
areas, stone walls, farm buildings and roads. Prior to closing on an
acquisition, the Company will typically have the property surveyed by a
professional surveyor and have soil analyses conducted to determine the
suitability of the site for septic systems. At closing, the Company also obtains
title insurance on the property.
MARKETING AND SALE OF INVENTORY
Resorts Division
The Resorts Division utilizes a variety of techniques to attract
prospective purchasers of Timeshare Interests, including targeted mailings,
direct mail mini-vacation invitations, kiosks in retail locations, marketing to
current owners and referrals. The Resorts Division provides hotel accommodations
to prospective purchasers at reduced prices in exchange for their touring the
timeshare resort. To support its marketing and sales efforts, the Company has
developed and continues to enhance its database to track its timeshare marketing
and sales programs. Management believes that, as the Resort Division's timeshare
operations grow, this database will become an increasingly significant asset,
enabling the Company to focus its marketing and sales efforts to take advantage
of, among other things, less costly marketing and referral opportunities.
Timeshare resorts are staffed with sales representatives, sales managers and an
on-site manager who oversees the day-to-day operations, all of whom are
employees of the Company. Sales personnel are generally experienced in resort
sales and undergo ongoing Company-sponsored training. During the nine-month
period ended December 28, 1997, total advertising expense for the Resorts
Division was $10.1 million or 25.5% of the division's $39.9 million in sales,
and during fiscal 1997, total advertising expense for the Resorts Division was
$7.6 million or 28% of such division's $27.4 million in sales.
The Company requires its sales staff to provide each timeshare customer
with a written disclosure statement regarding the Timeshare Interest to be sold
prior to the time the customer signs a purchase agreement. This disclosure
statement sets forth relevant information regarding timeshare ownership at the
resort and must be signed by every purchaser. The Company believes that this
information statement contains all material and relevant information a customer
requires to make an informed decision as to whether or not to purchase a
Timeshare Interest at one of its resorts.
After deciding to purchase a Timeshare Interest, a purchaser enters into a
purchase agreement and is required to pay the Company a deposit of at least 10%
of the purchase price. Purchasers are entitled to cancel
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<PAGE> 70
purchase agreements within specified periods after execution in accordance with
statutory requirements. Substantially all timeshare purchasers visit the resort
prior to purchasing.
The Company intends to expand the points-based vacation club system that it
acquired in the RDI Acquisition, which is currently only available to owners of
Timeshare Interests at the Company's Wisconsin Dells, Wisconsin and Orlando,
Florida resorts. Under a points-based vacation club system, members purchase an
annual allotment of points which can be redeemed for occupancy rights at
participating resorts. Compared to other vacation ownership arrangements, the
points-based system offers members significant flexibility in planning their
vacations. The number of points that are required for a stay at any one resort
varies, depending on a variety of factors, including the resort location, the
size of a unit, the vacation season and the days of the week used. Under this
system, members can select vacations according to their schedules, space needs
and available points. Subject to certain restrictions, members are typically
allowed to carry over for one year any unused points and to "borrow" points from
the forthcoming year. In addition, members are required to pay annual fees for
certain maintenance and management costs associated with the operation of the
resorts based on the number of points to which they are entitled. The Company's
expansion of the RDI points-based vacation club system involves certain risks
and uncertainties and no assurances can be given that the Company will be
successful. See "Risk Factors -- Acquisition Strategy", "-- Risks Related to
Development Activities" and "-- Risks of Development of Points-Based Vacation
Club".
The attractiveness of Timeshare Interest ownership has been enhanced
significantly by the availability of exchange networks that allow Timeshare
Interest owners to exchange the occupancy right in their Timeshare Interest in a
particular year, for an occupancy right at another participating network resort
at either the same or a different time. The two resorts acquired in the RDI
Acquisition are affiliated with the timeshare exchange network operated by RCI,
while the Company's six other resorts (including Aruba) are affiliated with II's
timeshare exchange network. In connection with the RDI Acquisition, the Company
has advised each of II and RCI of the existence of its agreement with the other
timeshare interest exchange network and of the potential conflict. Although the
Company believes this conflict will be resolved satisfactorily, no assurances
can be given. If the Company's resorts ceased to qualify for the exchange
networks or such networks ceased to operate effectively, the Company's sales of
Timeshare Interests and the performance of its timeshare receivables could be
materially adversely affected. See "Risk Factors -- Dependence on Timeshare
Interest Exchange Networks."
The following table sets forth certain information for sales of Timeshare
Interests by the Resorts Division for the periods indicated. Certain sales have
been deferred under percentage of completion accounting. See Contracts
Receivable and Revenue Recognition under Note 1 to the Consolidated Financial
Statements.
<TABLE>
<CAPTION>
YEAR ENDED, NINE MONTHS ENDED,
-------------------------------- ---------------------------
APRIL 2, MARCH 31, MARCH 30, DECEMBER 29, DECEMBER 28,
1995 1996 1997 1996 1997
-------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Number of Timeshare Interests sold......... 952 1,865 3,195 2,579 4,903
Average sales price per Timeshare
Interest................................. $7,119 $7,325 $8,362 $8,342 $8,695
Gross margin(1)............................ 62% 67% 71% 70% 74%
</TABLE>
- ---------------
(1) Gross margin is computed as the difference between the sales price and the
related cost of inventory (including the cost of improvements, amenities and
in certain cases capitalized interest), divided by the sales price.
For further information on sales attributable to the Resorts Division, see
"Management's Discussion and Analysis of Results of Operations and Financial
Condition."
Residential Land Division
In general, as soon as practicable after agreeing to acquire a property and
during the time period that appropriate improvements are being completed, the
Company establishes selling prices for the individual parcels taking into
account such matters as regional economic conditions, quality as a building
site, scenic views, road frontage and natural features such as lakes, mountains,
streams, ponds and wooded areas. The
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<PAGE> 71
Company also considers recent sales of comparable parcels in the area. Initial
decisions on pricing of parcels in a given area are made by the Company's
regional managers and, in all cases, are subject to approval by the Investment
Committee. Once such selling prices are established the Company commences its
marketing efforts.
The most widely used marketing technique by the Residential Land Division
is advertising in major newspapers in metropolitan areas located within a one to
three hour drive from the property and local newspapers. In addition, the
Company uses its proprietary database and inventory management system, which
enables the Company to compile quickly information on the previously identified
prospects most likely to be interested in a particular project. The Residential
Land Division also conducts direct mail campaigns to market property through the
use of brochures describing available parcels, as well as television and radio
advertising. Through this sales and marketing program, the Company believes that
it has been able to achieve a high conversion ratio of sales to prospects
receiving on-site sales presentations. The conversion ratio of sales to
prospects receiving on-site sales presentations for the ten-month period ended
January 31, 1998 was approximately 20%. A sales representative who is
knowledgeable about the property answers each inquiry generated by the Company's
marketing efforts, discusses the property with the prospective purchaser,
attempts to ascertain the purchaser's needs and determine whether the parcel
would be suitable for that person, and arranges an appointment for the purchaser
to visit the property. Substantially all prospective purchasers inspect a
property before purchasing. During the nine-month period ended December 28,
1997, the Residential Land Division incurred $5.6 million in advertising
expenses, or 7.2% of such division's $78.8 million in sales, and during fiscal
1997, the Residential Land Division incurred $6.3 million in advertising
expense, or 9% of such division's $72.6 million in sales.
The success of the Company's marketing efforts depends heavily on the
knowledge and experience of its sales personnel. The Company requires that,
prior to initiating the marketing effort for a property, every sales
representatives walk the property and become knowledgeable about each parcel and
applicable zoning, subdivision and building code requirements. Continued
training programs are conducted, including training with regional office sales
managers, weekly sales meetings and frequent site visits by an executive officer
of the Company. The Company enhances its sales and marketing organization
through the Bluegreen Institute, a mandatory training program, which is designed
to instill the Company's marketing and customer service philosophy in middle and
lower-level management. Additionally, the sales staff is evaluated against
performance standards established by the executive officers of the Company.
Substantially all of a sales representative's compensation is commission-based.
The Company requires its sales staff to provide each prospective purchaser
with a written disclosure statement regarding the property to be sold prior to
the time such purchaser signs a purchase agreement. This information statement,
which is either in the form of a U.S. Department of Housing and Urban
Development ("HUD") lot information statement, where required, or a Company
generated "Vital Information Statement," sets forth relevant information with
respect to, and risks associated with, the property and must be signed by each
purchaser. The Company believes that these information statements contain all
material and relevant information necessary for a prospective purchaser to make
an informed decision as to whether or not to purchase such property, including
the availability and estimated cost of utilities, restrictions regarding
property usage, status of access roads and information regarding rescission
rights.
After deciding to purchase a parcel, a purchaser enters into a purchase
agreement and is required to pay the Company a deposit of at least 10% of the
purchase price. Purchasers are entitled to cancel purchase agreements within
specified periods after execution in accordance with statutory requirements. The
closing of a residential land sale usually occurs two to eight weeks after
payment of the deposit. Upon closing of a residential land sale, the Company
typically delivers a warranty deed and a recent survey of the property to the
purchaser. Title insurance is available at the purchaser's expense.
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<PAGE> 72
The table to follow sets forth certain information regarding sales of
parcels by the Residential Land Division for the periods indicated. Certain
sales have been deferred under percentage of completion accounting. See
Contracts Receivable and Revenue Recognition under Note 1 to the Consolidated
Financial Statements and "Management's Discussion and Analysis of Results of
Operations and Financial Condition."
<TABLE>
<CAPTION>
YEAR ENDED, NINE MONTHS ENDED,
-------------------------------- ---------------------------
APRIL 2, MARCH 31, MARCH 30, DECEMBER 29, DECEMBER 28,
1995 1996 1997 1996 1997
-------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Number of parcels sold.................... 2,397 2,347 2,057 1,498 1,740
Average sales price per parcel............ $30,969 $34,856 $38,572 $37,207 $47,449
Gross margin(1)........................... 57% 51% 45% 47% 48%
</TABLE>
- ---------------
(1) Gross margin is computed as the difference between the sales price and the
related cost of inventory (including the cost of improvements, amenities and
in certain cases capitalized interest), divided by the sales price.
CUSTOMER FINANCING
General
During fiscal 1995, 1996 and 1997, and the nine-month period ended December
28, 1997, the Company financed 24%, 26%, 30% and 33%, respectively, of the
aggregate purchase price of its sales of Timeshare Interests and residential
land to customers that closed during these periods and received cash for the
remaining balance of the purchase price. The increase in the percentage of sales
financed by the Company since 1995 is primarily attributable to an increase in
the sales of Timeshare Interests over the same period. Sales of Timeshare
Interests accounted for 32% of consolidated sales of real estate during the
nine-month period ended December 28, 1997, compared to 6%, 12% and 25% of
consolidated sales during fiscal 1995, 1996 and 1997, respectively.
Approximately 89% of all Timeshare Interests finance with the Company (compared
to 8% of residential land purchasers in the nine-month period ended December 28,
1997 and 14% of residential land buyers in fiscal 1997). In recent years the
percentage of residential land customers who utilized the Company's financing
has declined materially due, among other things, to an increased willingness on
the part of local banks to extend direct lot financing to purchasers.
The Company believes that its financing is attractive to purchasers who
find it convenient to handle all facets of the purchase of residential land and
Timeshare Interests through a single source and because the downpayments
required by the Company are similar to those required by banks and mortgage
companies which offer this type of credit.
The Company offers financing of up to 90% of the purchase price of its
Timeshare Interests. The typical financing extended by the Company on a
Timeshare Interest during the nine-month period ended December 28, 1997 and
fiscal 1997 provides for a term of seven years and a fixed interest rate.
Historically, at the closing, the Company and the purchaser have executed a
contract for deed agreement. After the obligation is paid in full, the Company
delivers a deed to the purchaser. RDI has historically delivered the deed to
purchasers at the Closing of a sale, while securing repayment of the purchaser's
obligation by obtaining a mortgage on the purchaser's Timeshare Interest. In
connection with the expansion of its points-based vacation club system, the
Company anticipates that it will move to a note and mortgage system. The Company
does not believe that the transfer to a note and mortgage system will have a
material adverse effect on its servicing operations or financial results.
The Company also offers financing of up to 90% of the purchase price of all
parcels sold under the Residential Land Division to all purchasers who qualify
for such financing. The term of repayment on such financing has historically
ranged from five to 15 years although the Company, by offering reduced interest
rates, has been successful in encouraging customers during recent years to
finance their purchases over shorter terms with increased downpayments.
Management believes such strategy has improved the quality of the notes
receivable generated by its Residential Land Division in recent years. An
average note receivable underwritten by the Company during fiscal 1997 and the
nine month period ended December 28, 1997 has a
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<PAGE> 73
term of ten years. Most notes receivable bear interest at a fixed interest rate
and are secured by a first lien on the land.
The weighted average interest rate on the Company's notes receivable was
12.4%, 13.3% and 15.0% at March 31, 1996, March 30, 1997 and December 28, 1997,
respectively. The table below sets forth additional information relating to the
Company's notes receivable (amounts in thousands).
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED, ENDED,
--------------------- ------------
MARCH 31, MARCH 30, DECEMBER 28,
1996 1997 1997
--------- --------- ------------
<S> <C> <C> <C>
Notes receivable secured by land............................ $26,243 $12,334 $14,675
Notes receivable secured by Timeshare Interests............. 11,667 23,501 59,912
------- ------- -------
Notes receivable, gross..................................... 37,910 35,835 74,587
Reserve for loan losses..................................... (896) (1,216) (1,472)
------- ------- -------
Notes receivable, net....................................... $37,014 $34,619 $73,115
======= ======= =======
</TABLE>
Loan Underwriting
Resorts Division. Consistent with industry practice, Timeshare Interest
financing is not subject to extensive loan underwriting criteria. Customer
financing on sales of Timeshare Interests requires (i) receipt of a minimum
downpayment of 10% of the purchase price and (ii) a contract for deed and other
closing documents between the Company and the purchaser. The Company encourages
purchasers to make increased downpayments by offering a lower interest rate. In
addition, purchasers who do not elect to participate in the Company's
pre-authorized payment plan are charged interest at a rate which is one percent
greater than the otherwise prevailing rate. Historically, timeshare receivables
have had a higher default rate than residential land receivables. See
"-- Collection Policies" below.
Residential Land Division. The Company has established loan underwriting
criteria and procedures designed to reduce credit losses on its residential land
loan portfolio. The loan underwriting process undertaken by the Company's credit
department includes reviewing the applicant's credit history, verifying
employment and income as well as calculating certain debt-to-income ratios. The
primary focus of the Company's underwriting review is to determine the
applicant's ability to repay the loan in accordance with its terms. This
assessment is based on a number of factors, including the relationship of the
applicant's required monthly payment to disposable income. The Company also
examines the applicant's credit history through various credit reporting
agencies. In order to verify an applicant's employment status, the Company
generally contacts the applicant's employer. The Company also obtains current
pay stubs, recent tax returns and other tax forms from the applicant.
In order to obtain financing from the Residential Land Division, a
prospective purchaser must submit a completed and signed credit application,
purchase and sale agreement and pre-authorized checking agreement accompanied by
a voided check, if applicable, to the Company's credit department. All credit
decisions are made at the Company's corporate headquarters. Loan amounts under
$50,000 are approved by designated personnel located in the Company's corporate
headquarters, while loan amounts of $50,000 or more require approval from a
senior executive officer. In addition, rejected applications and any material
exceptions to the underwriting policy are also reviewed by senior management.
Customers are notified of the reasons for credit denial by mail.
The Company encourages customers to increase their downpayment and reduce
the loan term through the structure of its loan programs. Customers receive a
lower rate of interest as their downpayment increases and the loan term
shortens. Additionally, the Company encourages its customers to make timely
payments through a pre-authorized payment arrangement. Customers who do not
choose a pre-authorized payment plan are charged interest at a rate which is one
percent greater than the prevailing rate. Approximately 75% of purchasers using
the Company's financing have historically participated in the pre-authorized
payment plan.
After the credit decision has been made, the credit department categorizes
the file as either approved, pending or declined. Upon receipt of a credit
approval, the regional office schedules the closing with the
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<PAGE> 74
customer. Closings are typically conducted at the office of the Company's local
attorney or settlement agent, although in some cases the closing may take place
at the sales site or by mail.
When the original closing documents are received from the closing agent,
the Company verifies that the loan closed under terms approved by the Company's
credit department. A quality control audit is performed to verify that required
documents have been received and that they have been prepared and executed
correctly. If any revisions are required, notification is sent to the regional
office.
A loan file typically includes a copy of the signed security instrument,
the mortgage note, a copy of the deed, Truth-in-Lending disclosure, purchase and
sale agreement, credit application, local counsel opinion, Vital Information
Statement or purchaser's acknowledgment of receipt of HUD lot information
statement, HUD settlement statement and a copy of the assignment of mortgage and
an original note endorsement from the Company's subsidiary originating the sale
and the loan to the Company (if applicable). After the initial closing documents
are received, the recorded mortgage and assignment and original title insurance
policy are obtained in order to complete the loan file.
Collection Policies
Resorts Division. The Company's timeshare receivables have been
historically documented by contracts for deed, which allows the Company to
retain title to the Timeshare Interest until the obligation is paid in full,
thereby eliminating the need to foreclose in the event of a default. Collection
efforts and delinquency information concerning the Resorts Division are managed
at the Company's corporate headquarters. Servicing of the division's receivables
is handled by a staff of experienced collectors, assisted by an on-line mortgage
collection computer system. Unless circumstances otherwise dictate, collection
efforts are generally made by mail and telephone. If a contract for deed becomes
delinquent for ten days, a reminder letter is mailed to the customer. If the
customer fails to bring the account current, a late notice is mailed when the
account is 15 days delinquent (and telephone contact commences). After an
account is 45 days delinquent, the Company typically sends a third letter
advising the customer that such customer has 15 days within which to bring the
account current. Under the terms of the contract for deed, the borrower is in
default when the account becomes 60 days delinquent. At this time a default
letter is sent advising the customer that he or she has 30 days to bring the
account current or lose his or her contractual interest in the timeshare unit.
When the account becomes 90 days delinquent, the Company forwards a final letter
informing the customer that the contract for deed has been terminated. At such
time, the Timeshare Interest can be resold to a new purchaser. In connection
with the expansion of its points-based vacation club system, the Company
anticipates moving to a note and mortgage system. To the extent that this change
occurs, the Company does not anticipate that the period of time for realizing on
a defaulted timeshare receivable will be materially longer, because title to the
applicable property will be held by the vacation club trust.
Residential Land Division. Collection efforts and delinquency information
concerning the Residential Land Division are also managed at the Company's
corporate headquarters. Servicing of the division's receivables is handled by a
staff of experienced collectors, assisted by an on-line mortgage collection
computer system. Unless circumstances otherwise dictate, collection efforts are
generally made by mail and telephone. Collection efforts begin when an account
is ten days past due, at which time the Company mails a reminder letter.
Attempts are then made to contact the customer via telephone to determine the
reason for the delinquency and to bring the account current. The determination
of how to handle a delinquent loan is based upon many factors, including the
customer's payment history and the reason for the current inability to make
timely payments. If no agreement is made or the customer does not abide by the
agreement, collection efforts continue until the account is either brought
current or legal action is commenced. If not accelerated sooner, the Company
declares the loan in default when the loan becomes 60 days delinquent. When the
loan is 90 days past due, the accrual of interest is stopped (unless the loan is
considered an in-substance foreclosure loan, in which case all accrued interest
is reversed since the Company's means of recovery is determined through the
resale of the underlying collateral and not through collection on the note) and
the Credit/Collection Manager determines the action to be taken.
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<PAGE> 75
Loan Loss Reserves. At December 28, 1997, approximately 5.0% or $4.1
million of the aggregate $81.9 million principal amount of loans which were held
by the Company or by third parties under sales transactions in which the Company
had a limited recourse liability, were more than 30 days past due. At March 30,
1997, approximately 6% or $2.1 million of the aggregate $36.7 million principal
amount of loans which were held by the Company or by third parties under sales
transactions in which the Company had a limited recourse liability, were more
than 30 days past due. Of the $36.7 million principal amount of loans, $35.8
million were held by the Company, while approximately $840,000 were associated
with programs under which the Company has a limited recourse liability. In most
cases of limited recourse liability, the recourse to the Company terminates when
the principal balance of the loan becomes 70% or less of the original selling
price of the property underlying the loan. At March 31, 1996, approximately 7%
or $2.8 million of the aggregate $39.2 million principal amount of loans which
were held by the Company or by third parties under sales transactions in which
the Company had a limited recourse liability, were more than 30 days past due.
Reserve for loan losses as a percentage of period end notes receivable was
2.4%, 3.4% and 2.0% at March 31, 1996, March 30, 1997 and December 28, 1997,
respectively. The adequacy of the Company's reserve for loan losses is
determined by management and reviewed on a regular basis considering, among
other factors, historical frequency of default, loss experience, present and
expected economic conditions as well as the quality of the receivables. The
increase in the reserve for loan losses as a percent of period end loans is
primarily the result of the portfolio consisting of more timeshare receivables
where historical default rates exceed those on Residential Land Division
receivables. See "Risk Factors -- Risks Associated with Customer Financing and
Receivables."
The table below sets forth activity in the reserve for estimated loan
losses.
<TABLE>
<S> <C>
Reserve for loan losses, April 2, 1995...................... $1,089,652
Provision for loan losses................................... 344,718
Charge-offs................................................. (537,901)
----------
Reserve for loan losses, March 31, 1996..................... 896,469
Provision for loan losses................................... 1,008,271
Charge-offs................................................. (688,619)
----------
Reserve for loan losses, March 30, 1997..................... 1,216,121
Provision for loan losses................................... 1,109,540
Charge-offs................................................. (853,544)
----------
Reserve for loan losses, December 28, 1997.................. $1,472,117
==========
</TABLE>
SALES OF RECEIVABLES/PLEDGING OF RECEIVABLES
Since 1986, the Company has sold or pledged substantially all of its
receivables, generally retaining the right and obligation to service such
receivables. In the case of residential land receivables, the Company typically
transfers the receivables to a special purpose finance subsidiary, which in turn
enters into a receivables securitization. The receivables are typically sold by
such subsidiary with limited or no recourse. In the case of receivables in
securitization transactions pledged to a financial institution, the Company
generally must maintain a debt to eligible collateral rate (based on outstanding
principal balance of the pledged loans) of 90%. The Company is obligated to
pledge additional eligible receivables or make additional principal payments in
order to maintain this collateralization rate. Repurchases and additional
principal payments have not been material to date. At December 28, 1997, the
Company was subject to limited recourse requirements on approximately $8.6
million of receivables sold to financial institutions. See "Management's
Discussion and Analysis of Results of Operations and Financial
Condition -- Liquidity and Capital Resources."
As discussed above, private placement REMIC financings have provided
substantial capital resources to the Company. Under the terms of these
transactions, the receivables are sold to a REMIC trust and the Company has no
obligation to repurchase the receivables due to default by the borrowers. The
Company does, however, have the obligation to repurchase the receivables in the
event that there is any material defect in the loan documentation and related
representations and warranties as of the time of sale.
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<PAGE> 76
As discussed under "Management's Discussion and Analysis of Results of
Operations and Financial Condition," the Company is currently negotiating with a
financial institution to provide the Company with a combined warehouse financing
and receivables purchase facility. The Company will have no obligation to
repurchase the receivables due to default by the borrowers under the proposed
purchase facility. The Company will, however, have the obligation to repurchase
the receivables in the event that there is any material defect in the loan
documentation and related representations and warranties as of the time of sale.
RECEIVABLES SERVICING
Receivables servicing includes collecting payments from borrowers and
remitting such funds to the owners, lenders or investors in such receivables,
accounting for receivables principal and interest, making advances when
required, contacting delinquent borrowers, foreclosing in the event that
defaults are not remedied and performing other administrative duties. The
Company's obligation to provide receivables servicing and its rights to collect
fees are set forth in a servicing agreement. The Company has the obligation and
right to service all of the receivables it originates and retains the obligation
and right with respect to substantially all of the receivables it sells through
REMICs. The Company typically receives an annual servicing fee of approximately
.5% of the scheduled principal balance, which is deducted from payments
received.
CUSTOMER SERVICE
The Company emphasizes customer satisfaction and maintains full-time
customer service representatives in its Boca Raton headquarters to respond to
customer inquiries. At closing, all purchasers are provided with a toll-free
customer service phone number to facilitate any additional information requests.
Customer service surveys are sent to each purchaser to measure customer
satisfaction and to alert the Company to problems, if any.
REGULATION
The real estate industry is subject to extensive and complex regulation.
The Company is subject to compliance with various federal, state and local
environmental, zoning and other statutes and regulations regarding the
acquisition, subdivision and sale of real estate and Timeshare Interests and
various aspects of its financing operations. On a federal level, the Federal
Trade Commission has taken an active regulatory role through the Federal Trade
Commission Act, which prohibits unfair or deceptive acts or competition in
interstate commerce. In addition to the laws applicable to the Company's
customer financing and other operations discussed below, the Company is or may
be subject to the Fair Housing Act and various other federal statutes and
regulations. The Company is also subject to various foreign laws with respect to
the Aruba Resort. The Company believes that it is in compliance in all material
respects with such regulations. However, no assurance can be given that the cost
of complying with applicable laws and regulations will not be significant or
that the Company is in fact in compliance with applicable law. Any failure to
comply with applicable laws or regulations could have a material adverse effect
on the Company. See "Risk Factors -- Acquisition Strategy" and "-- Regulation."
The Company's sales and marketing of residential land are subject to
various consumer protection laws and to the Interstate Land Sales Full
Disclosure Act which establishes strict guidelines with respect to the marketing
and sale of land in interstate commerce. HUD has enforcement powers with respect
to this statute. In some instances, the Company has been exempt from HUD
registration requirements because of the size or number of the subdivided
parcels and the limited nature of its offerings. The Company, at its discretion,
may formally request an exemption advisory opinion from HUD to confirm the
exempt status of any particular offering. Several such exemption requests have
been submitted to, and approved by, HUD. In those cases where the Company and
its legal counsel determine parcels must be registered to be sold, the Company
files registration materials disclosing financial information concerning the
property, evidence of title and a description of the intended manner of offering
and advertising such property. The Company bears the cost of such registration,
which includes legal and filing fees. Many states also have statutes and
regulations governing the sale of real estate. Consequently, the Company
regularly consults with counsel for assistance in complying
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with federal, state and local law. The Company must obtain the approval of
numerous governmental authorities for its acquisition and marketing activities
and changes in local circumstances or applicable laws may necessitate the
application for, or the modification of, existing approvals.
The Company's timeshare resorts are subject to various regulatory
requirements including state and local approvals. The laws of most states
require the Company to file with a designated state authority for its approval a
detailed offering statement describing the Company and all material aspects of
the project and sale of Timeshare Interests. Laws in each state where the
Company sells Timeshare Interests generally grant the purchaser of a Timeshare
Interest the right to cancel a contract of purchase at any time within a
specified period following the earlier of the date the contract was signed or
the date the purchaser has received the last of the documents required to be
provided by the Company. Most states have other laws which regulate the
Company's activities, such as real estate licensure; seller's of travel
licensure; anti-fraud laws; telemarketing laws; price, gift and sweepstakes
laws; and labor laws. In addition, certain state and local laws may impose
liability on property developers with respect to construction defects discovered
or repairs made by future owners of such property. Pursuant to such laws, future
owners may recover from the Company amounts in connection with the repairs made
to the developed property. In compliance with state laws, the Company provides
its timeshare purchasers with a public disclosure statement which contains,
among other items, detailed information about the surrounding vicinity, the
resort and the purchaser's rights and obligations as a Timeshare Interests
owner.
Under various federal, state and local laws, ordinances and regulations,
the owner of real property generally is liable for the costs of removal or
remediation of certain hazardous or toxic substances located on or in, or
emanating from, such property, as well as related costs of investigation and
property damage. Such laws often impose such liability without regard to whether
the owner knew of, or was responsible for, the presence of such hazardous or
toxic substances. The presence of such substances, or the failure to properly
remediate such substances, may adversely affect the owner's ability to sell or
lease a property or to borrow using such real property as collateral. Other
federal and state laws require the removal or encapsulation of
asbestos-containing material when such material is in poor condition or in the
event of construction, demolition, remodeling or renovation. Other statutes may
require the removal of underground storage tanks. Noncompliance with these and
other environmental, health or safety requirements may result in the need to
cease or alter operations at a property.
The Company's customer financing activities are also subject to extensive
regulation, which may include, Truth-in-Lending Act and Regulation Z, the Fair
Housing Act, the Fair Debt Collection Practices Act, the Equal Credit
Opportunity Act and Regulation B, the Electronic Funds Transfer Act and
Regulation E, the Home Mortgage Disclosure Act and Regulation C, Unfair or
Deceptive Acts or Practices and Regulation AA and Right to Financial Privacy
Act.
Management is not aware of any pending regulatory contingencies that are
expected to have a materially adverse impact on the Company. See "Risk
Factors -- Regulation."
COMPETITION
The real estate industry is highly competitive. In each of its markets, the
Company competes against numerous developers and others in the real estate
business. The Resorts Division competes with various high profile and
well-established operators. Many of the world's most recognized lodging,
hospitality and entertainment companies have begun to develop and sell Timeshare
Interests in resort properties. Major companies that now operate or are
developing or planning to develop timeshare resorts include Marriott, Disney,
Hilton, Hyatt, Four Seasons and Inter-Continental. The Company also competes
with other publicly traded timeshare companies, including Signature, Vistana,
Fairfield, Silverleaf and numerous other owners and operators of timeshare
resorts. The Residential Land Division competes with builders, developers and
others for the acquisition of property and with local, regional and national
developers, housebuilders and others with respect to the sale of residential
lots. Competition may be generally smaller with respect to the Company's
residential lot sales in the more rural markets in which it operates. The
Company believes that it can compete on the basis of its reputation and the
price, location and quality of the products it offers for sale, as well as on
the basis of its experience in land acquisition, development and sale. Although,
as noted above, the Resorts Division competes with various high profile and
well-established operators, the Company believes
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that it can compete on the basis of its general reputation and the price,
location and quality of its timeshare resorts. The development and operation of
additional timeshare resorts in the Company's markets could have a material
adverse impact on the demand for the Company's Timeshare Interests and its
results of operations. In its customer financing activities, the Company
competes with banks, mortgage companies, other financial institutions and
government agencies offering financing of real estate. In recent years, the
Company has experienced increased competition with respect to the financing of
Residential Land Division sales as evidenced by the low percentage of
residential land sales internally financed since 1995. The Company believes
that, based on its interest rates and repayment schedules, the financing
packages it offers are convenient for customers and competitive with those of
other institutions which offer such financing. See "Risk
Factors -- Competition."
PERSONNEL
As of December 28, 1997, the Company had 1,501 full-time and 132 part-time
employees. Of the 1,633 employees, 105 were located at the Company's
headquarters in Boca Raton, Florida, 116 at the Company's corporate office in
Fort Myers, Florida and 1,412 in regional offices throughout the United States
and Canada (the field personnel include 269 field employees supporting the
Company's Residential Land Division as follows: three residential land
divisional presidents, seven residential land regional and district managers,
114 residential land sales personnel, 12 residential land project managers, nine
residential land acquisition specialists and 124 residential land administrative
and other support personnel. In addition, the Company employed 1,143 field
employees supporting the Company's Resorts Division as follows: four timeshare
divisional Presidents/regional directors, 264 timeshare sales personnel, two
directors of development and 873 timeshare administrative and other support
personnel). None of the Company's employees are represented by a collective
bargaining unit, and the Company believes that relations with its employees
generally are excellent.
LITIGATION
In the ordinary course of its business, the Company from time to time
becomes subject to claims or proceeding relating to the purchase, subdivision,
sale and/or financing of real estate. Additionally, from time to time, the
Company becomes involved in disputes with existing and former employees. The
Company believes that substantially all of the above are incidental to its
business.
On November 26, 1997, an action was filed in the U.S. District Court for
the Eastern District of Tennessee against the Company. The complaint purports to
be brought on behalf of a class of current and former timeshare sales
representative employees of the Company. It asserts claims for violations of the
minimum wage and overtime provisions of the Fair Labor Standards Act. The
Company is in the early stages of evaluating this litigation's potential impact,
if any, on the Company, and accordingly cannot predict the outcome with any
degree of certainty. Although no assurances can be given, the Company does not
believe that any likely outcome will have a material adverse effect on the
Company.
In May 1996, RDI and the RDI Stockholders entered into a letter agreement
(the "Letter Agreement") with certain individuals on behalf of an entity to be
formed by such individuals (the "Prospective Buyer") regarding the proposed
acquisition of RDI. The Letter Agreement indicated, among other things, that the
agreement was binding, the parties proposed to negotiate and execute a
definitive agreement consistent with the Letter Agreement by June 15, 1996 and
that the transaction would close by December 31, 1996. The Letter Agreement also
included an exclusivity provision pursuant to which the parties agreed to
negotiate in good faith exclusively with each other to enter into a definitive
agreement until June 30, 1996. On July 1, 1996, counsel for the Prospective
Buyer forwarded to RDI's counsel a letter which would have extended the June 15,
1996 and June 30, 1996 dates referred to above had it been executed by RDI and
the RDI Stockholders; the letter was not executed by RDI or the RDI
Stockholders. In September 1996, RDI informed the Prospective Buyer that RDI did
not wish to proceed with negotiations. The Prospective Buyer advised RDI in
writing shortly thereafter that, among other things, the Prospective Buyer
believed that the Letter Agreement was a binding agreement for the sale of RDI
and that the Prospective Buyer would assert its alleged right to prevent an
acquisition by RDI by any third party and take action against any such third
party and RDI and the RDI Stockholders. After September 1996, no further
negotiations with respect to the
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acquisition took place between RDI and the Prospective Buyer. The Company
executed and announced a purchase agreement for the RDI Acquisition in July 1997
and closed this transaction on October 3, 1997. To date, the Prospective Buyer
has taken no further action. Although no assurances can be given, the Company
believes that any claim by the Prospective Buyer would be meritless and the
Company would defend any such claim vigorously.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information concerning each person
who is a director or executive officer of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
George F. Donovan......................... 59 President, Chief Executive Officer and Director
Daniel C. Koscher......................... 40 Senior Vice President -- Residential Land Division
L. Nicolas Gray........................... 51 Senior Vice President -- Resorts Division
Patrick E. Rondeau........................ 51 Senior Vice President, Director of Corporate
Legal Affairs and Clerk
John F. Chiste............................ 41 Chief Financial Officer and Treasurer
Joseph C. Abeles.......................... 83 Director
Ralph A. Foote............................ 75 Director
Frederick M. Myers........................ 75 Chairman of the Board and Director
J. Larry Rutherford....................... 51 Director
Stuart A. Shikiar......................... 51 Director
Bradford T. Whitmore...................... 40 Director
</TABLE>
GEORGE F. DONOVAN joined the Company as a Director in 1991 and was
appointed President and Chief Operating Officer in October 1993. He became Chief
Executive Officer in December, 1993. Mr. Donovan has served as an officer of a
number of other recreational real estate corporations, including Leisure
Management International, of which he was President from 1991 to 1993, and
Fairfield Communities, Inc., of which he was President from April 1979 to
December 1985.
DANIEL C. KOSCHER joined the Company in 1986. During his tenure, he has
served in various financial management positions including Chief Accounting
Officer, Vice President and Director of Planning/Budgeting. In 1997, he became
Senior Vice President, Residential Land Division. Prior to his employment with
the Company, Mr. Koscher was employed by the William Carter Company, a
manufacturing company located in Needham, Massachusetts. He has also been
employed by Cipher Data Products, Inc., a computer peripheral manufacturer
located in San Diego, California, as well as the State of Nevada as an audit
agent. Mr. Koscher holds an M.B.A. along with a B.B.A. in Accounting.
L. NICOLAS GRAY joined the Company in 1995 to oversee the Company's
timeshare resorts operation and was named Senior Vice President in 1997. Mr.
Gray has over 25 years of experience in the hospitality, timeshare and related
resort industries. Mr. Gray served as Director of Development for Resort
Condominium International, a timeshare exchange organization from 1993 to 1995.
Prior to that time, Mr. Gray was Executive Vice President and General Manager
for resort developments of Thousand Trails from 1989 to 1991 and Fairfield
Communities from 1979 to 1989.
PATRICK E. RONDEAU joined the Company in 1990 and was elected Vice
President and Director of Corporate Legal Affairs. He became Clerk in 1993 and
Senior Vice President in 1997. For more than five years prior to his employment
with the Company, Mr. Rondeau was a senior partner of Freedman, DeRosa &
Rondeau, located in North Adams, Massachusetts, which firm serves as legal
counsel to the Company on various matters. Mr. Rondeau holds a B.A. in Political
Science along with a J.D.
JOHN F. CHISTE joined the Company in July 1997 as Treasurer and Chief
Financial Officer. From January 1997 to June 1997, Mr. Chiste was employed by
Compscript, Inc. From December 1992 to January 1997, he served as the Chief
Financial Officer, Secretary and Treasurer of Computer Integration Corporation,
a publicly-held distribution company which provides information products and
services to corporations nationwide. From 1983 through 1992, Mr. Chiste
practiced as a Certified Public Accountant with Ernst & Young LLP.
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JOSEPH C. ABELES, a private investor, has been a Director of the Company
since 1987. Mr. Abeles has been a Director of Intermagnetics General Corporation
since 1986. He has also served as a Director of Igene Biotechnology, Inc. and
Ultralife Batteries, Inc. since 1991.
RALPH A. FOOTE has been a Director of the Company since 1987. Since 1955 he
has been a senior partner of Conley & Foote, a Middlebury, Vermont law firm
which serves as legal counsel to the Company with respect to various matters.
FREDERICK M. MYERS has been a Director of the Company since 1990 and has
served as Chairman of the Board since 1997. Since 1964 he has been a senior
partner of Cain, Hibbard, Myers & Cook, a Pittsfield, Massachusetts law firm
which serves as legal counsel to the Company with respect to various matters.
J. LARRY RUTHERFORD was elected to the Board of Directors in April 1997.
Since 1990, he has been President and Chief Executive Officer of Atlantic Gulf
Communities, a publicly traded real estate development company. In 1992, Mr.
Rutherford was named as a defendant in a three-count Information filed by the
State Attorney for Broward County, Florida. The charges in the Information,
which include a charge of vehicular homicide, relate to an April 1991 traffic
accident in which a passenger was killed. Following review of the circumstances
surrounding this accident and the charges, the Board determined that the
pendency of this proceeding likely will not adversely affect Mr. Rutherford's
ability to perform his duties as a Director of the Company.
STUART A. SHIKIAR has been a Director since 1994. Mr. Shikiar is an
investment advisor and has served as President of Shikiar Asset Management, Inc.
since November 1994. From 1993 to 1994, Mr. Shikiar was a general partner of
Omega Advisors, a private investment partnership. From 1985 to 1993, Mr. Shikiar
served as a Managing Director for Prudential Securities Investment Management,
Inc. Mr. Shikiar has been a Director of Ultralife Batteries, Inc. since 1991 and
Intermagnetics General Corporation since 1995.
BRADFORD T. WHITMORE has been a Director of the Company since 1990. Mr.
Whitmore has been a general partner of Grace Brothers, Ltd., an investment
partnership and securities broker-dealer, since 1986. He has been a trustee of
Aerospace Creditors Liquidating Trust since 1993.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth compensation
for the past three fiscal years for the Company's Chief Executive Officer and
the other four most highly compensated executive officers (the "Named Executive
Officers").
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<PAGE> 82
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION --------------
-------------------- SECURITIES ALL OTHER
FISCAL BONUS UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) ($)(1) OPTIONS(#)(2) ($)(3)
- --------------------------- ------ --------- -------- -------------- ------------
<S> <C> <C> <C> <C> <C>
George F. Donovan....................... 1998 $350,000 $200,000 146,775 $60,772
President and Chief 1997 300,000 86,000 30,000 59,183
Executive Officer 1996 300,000 139,129 52,500 39,120
Patrick E. Rondeau...................... 1998 175,000 100,000 59,362 20,431
Senior Vice President, 1997 160,000 38,000 15,000 17,666
Director of Corporate 1996 160,000 61,475 26,250 --
Legal Affairs and Clerk
Daniel C. Koscher....................... 1998 175,000 100,000 73,500 13,973
Senior Vice President, 1997 150,000 38,000 15,000 8,369
Resid. Land Division 1996 150,000 61,475 26,250 1,751
L. Nicolas Gray......................... 1998 160,000 115,000 73,500 22,920
Senior Vice President, 1997 130,000 38,000 -- 20,582
Resorts Division 1996 120,000 39,076 -- 24,245
John F. Chiste(4)....................... 1998 113,846 75,000 59,362 --
Treasurer and Chief 1997 -- -- -- --
Financial Officer 1996 -- -- -- --
</TABLE>
- ---------------
(1) Amounts represent bonus earned for each fiscal year and paid during the
subsequent year.
(2) Figures for 1998 and 1997 represent incentive stock options granted under
the Company's 1995 Stock Incentive Plan. Figures for 1996 represent
incentive stock options granted under the Company's Second Amended and
Restated 1985 Stock Option Plan. Incentive stock options for 1996 have been
adjusted to reflect the Common Stock dividends.
(3) Other compensation for 1998 includes contributions to the Company's Section
401(k) Retirement Savings Plan for the benefit of each Named Executive
Officer (Mr. Donovan, $3,964; Mr. Rondeau, $3,868; Mr. Koscher, $3,916; and
Mr. Gray, $3,961) and dollar amounts of premiums paid on life insurance
policies for the benefit of the Named Executive Officer (Mr. Donovan,
$56,808; Mr. Rondeau, $16,563; Mr. Koscher, $10,057; and Mr. Gray, $18,959).
(4) Mr. Chiste became the Company's treasurer and chief financial officer on
July 1, 1997.
Options Grants In Last Fiscal Year. The following table shows all stock
option grants to the Named Executive Officers during fiscal 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATE OF STOCK
PERCENT OF TOTAL PRICE APPRECIATION FOR
NUMBER OF SHARES OPTIONS GRANTED TO OPTION TERM(2)
UNDERLYING OPTIONS EMPLOYEES EXERCISE PRICE EXPIRATION -----------------------
NAME GRANTED (#)(1) IN FISCAL YEAR PER SHARE DATE 5% 10%
- ---- ------------------ ------------------ -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
George F. Donovan......... 75,000 $3.13 7/31/07 $147,422 $373,594
71,775 4.88 2/24/08 220,089 557,746
------- -------- --------
146,775 16% $367,511 $931,339
Patrick E. Rondeau........ 30,000 $3.13 7/31/07 $ 58,969 $149,438
29,362 4.88 2/24/08 90,035 228,165
------- -------- --------
59,362 6% $149,004 $377,602
Daniel C. Koscher......... 30,000 $3.13 7/31/07 $ 58,969 $149,438
43,500 4.88 2/24/08 133,387 338,028
------- -------- --------
73,500 8% $192,356 $487,465
</TABLE>
75
<PAGE> 83
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATE OF STOCK
PERCENT OF TOTAL PRICE APPRECIATION FOR
NUMBER OF SHARES OPTIONS GRANTED TO OPTION TERM(2)
UNDERLYING OPTIONS EMPLOYEES EXERCISE PRICE EXPIRATION -----------------------
NAME GRANTED (#)(1) IN FISCAL YEAR PER SHARE DATE 5% 10%
- ---- ------------------ ------------------ -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
L. Nicolas Gray........... 30,000 $3.13 7/31/07 $ 58,969 $149,438
43,500 4.88 2/24/08 133,387 338,028
------- -------- --------
73,500 8% $192,356 $487,465
John F. Chiste............ 30,000 $2.75 7/01/07 $ 51,893 $131,505
29,362 4.88 2/24/08 90,035 228,165
------- -------- --------
59,362 6% $141,927 $359,670
</TABLE>
- ---------------
(1) These options vest in five equal annual installments, commencing one year
from their respective dates of grant.
(2) As required by the rules of the Securities and Exchange Commission,
potential values stated are based on the prescribed assumption that the
Company's common stock will appreciate in value from the date of grant to
the end of the option term at rates (compounded annually) of 5% and 10%,
respectively, and therefore are not intended to forecast possible future
appreciation, if any, in the price of the Company's common stock.
Fiscal Year-End Option Values. During fiscal 1998, none of the Named
Executive Officers exercised stock options issued by the Company. The following
table sets forth information regarding the number of vested and unvested options
and the unrealized value or spread (the difference between the exercise price
and the market value) of the unexercised options issued by the Company and held
by the Named Executive Officers on March 29, 1998. Unrealized value is computed
by multiplying the number of shares purchasable by the amount by which the
closing market price of the Company's Common Stock on the New York Stock
Exchange on March 27, 1998 exceeds the exercise price.
<TABLE>
<CAPTION>
NUMBER OF
SHARES UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED IN-
AT FISCAL YEAR-END THE-MONEY OPTIONS AT FISCAL
(#) YEAR-END ($)
-------------------- ---------------------------
NAME VESTED UNVESTED VESTED UNVESTED
- ---- -------- --------- ------------ ------------
<S> <C> <C> <C> <C>
George F. Donovan.................................... 268,033 274,599 $1,248,071 $1,157,878
Patrick E. Rondeau................................... 81,273 100,342 474,793 416,005
Daniel C. Koscher.................................... 95,949 114,480 558,967 461,954
L. Nicolas Gray...................................... 6,300 82,950 22,712 325,442
John F. Chiste....................................... -- 59,362 -- 256,677
</TABLE>
Employment Agreements
In March, 1998, the Company entered into employment agreements with each of
George F. Donovan, John F. Chiste, L. Nicolas Gray, Daniel C. Koscher and
Patrick E. Rondeau. Each employment agreement is for a three year period (six
years in the case of Mr. Donovan) (subject to extension) and provides that the
employee will receive a base salary ($375,000 for Mr. Donovan and $175,000 for
each of Messrs. Chiste, Gray, Koscher and Rondeau) and certain other benefits
and will be eligible to receive a cash bonus as determined by the Board of
Directors. Under the employment agreements, if the Company terminates any
employee without cause, the Company will pay the employee his base salary for
the 12 months (24 months in the case of Mr. Donovan) following such termination
(which shall be reduced by the amount of any compensation the employee receives
from subsequent employment during such period). A termination of the employee
without cause shall be deemed to occur upon, among other things, a significant
decrease of the employee's position, duties or responsibilities, the failure by
the Company to obtain the assumption of the employment agreement by any
successor to the Company's business, or the sale of all or substantially all of
the business or assets of the Company or the Company's liquidation. Upon any
termination by the Company for
76
<PAGE> 84
cause (as defined in the employment agreements) or by the employee, the employee
shall be entitled only to amounts then due to him. In the event the employee is
disabled, the employee's employment shall be terminated and the employee shall
be entitled to receive his base salary for 12 months (24 months in the case of
Mr. Donovan) following such termination. Pursuant to his employment agreement,
each employee agrees, for 12 months (24 months in the case of Mr. Donovan)
following his termination, not to compete with the Company, disclose
confidential information about the Company, or solicit the Company's current or
former employees. In addition, Mr. Donovan's employment agreement provides that
the aggregate of $219,328 of indebtedness owing by Mr. Donovan to the Company
will be forgiven on a pro rata basis (20% per year) over the five year period
commencing on April 1, 1998. See "Certain Relationships and Related
Transactions."
In connection with the RDI Acquisition, each of the RDI stockholders
entered into a three-year employment agreement with the Company providing for an
annual base salary of $180,000 and the grant by the Company of an incentive
stock option to acquire 60,000 shares of the Company's Common Stock. The options
vest ratably over five years.
Compensation of Divisional Presidents and Regional Managers. The Company's
Divisional Presidents/Regional Executive Directors and Regional Managers have
oversight responsibility for the acquisition, development and sale of the
Company's real estate inventories. Compensation for the Company's six Divisional
Presidents/Regional Executive Directors includes a base salary that currently
ranges from $50,000 to $144,000 accompanied by performance bonuses. Compensation
for the Company's seven Regional Managers typically includes a base salary that
currently ranges from $25,000 to $80,000 accompanied by several performance
bonuses. Bonuses are established to reward strong performance by a subsidiary
and the payment of a bonus is subject to exceeding predetermined, acceptable
performance objectives. Management defined these objectives to address operating
benchmarks deemed critical to the success of the subsidiary. They include, but
are not limited to, the attainment of projected retail sales and operating
profit, containment of overhead costs, achievement of maximum operating profits,
optimizing transactional cash flow and, on a project by project basis,
surpassing gross margin projections. Annual bonus awards for Divisional
Presidents/Regional Managers generally do not exceed $200,000, with the
exception of those awards for management of the Company's Texas residential land
operation, where aggregate annual bonuses for fiscal 1998 ranged from $160,000
to $975,000.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 15, 1997, the Company entered into a short-term loan agreement
with the Initial Purchasers. The loan bears interest at the greater of 10% or
the prime rate plus 2.75%. The Company is required to pay a fee equal to 1% of
each advance. The Company repaid all amounts outstanding under the loan
(approximately $22.1 million principal amount as of the date hereof) upon the
closing of the Note Offering. See "Use of Proceeds."
The Company borrowed an aggregate of $6,000,000 from Joseph Abeles, a
director of the Company, and Grace Brothers, Ltd., an affiliate of Bradford T.
Whitmore, a director of the Company, pursuant to a Note Purchase Agreement dated
as of September 11, 1997 (the "Note Agreement"), which amount was used to fund a
portion of the purchase price in connection with the RDI Acquisition. In
December 1997, Stuart A. Shikiar, a Director of the Company purchased $200,000
of the Convertible Notes originally issued pursuant to the Note Agreement from
Mr. Abeles in a private transaction. See "Description of Other Indebtedness --
Convertible Notes."
Frederick M. Myers, a Director of the Company, is a senior partner of the
Pittsfield, Massachusetts law firm of Cain, Hibbard, Myers & Cook, which
rendered services to the Company during fiscal 1998. The total amount paid to
Cain, Hibbard, Myers & Cook by the Company for services rendered during fiscal
1998 was approximately $35,369. It is anticipated that Cain, Hibbard, Myers &
Cook will continue to perform certain legal services for the Company during
fiscal 1998.
In connection with George F. Donovan's appointment as the Company's Chief
Executive Officer and his relocation, on November 15, 1993, the Board of
Directors authorized a $130,000 loan which accrued interest at the prime lending
rate through June 1, 1996. The loan has been interest-free from June 2, 1996 to
date. The Board also approved a $33,209 equity advance against the sale of Mr.
Donovan's former residence and the
77
<PAGE> 85
payment of $28,000 to Mr. Donovan's current residential community for an equity
membership. The equity membership is fully refundable by the residential
community in the event Mr. Donovan's home is sold. Mr. Donovan's employment
agreement provides that the aggregate indebtedness of $191,209 plus accrued
interest of $28,119 will be forgiven on a pro rata basis (20% per year) over the
five-year period commencing on April 1, 1998. See "Management -- Executive
Compensation -- Employment Agreements."
Bradford T. Whitmore, a director of the Company, is a general partner of
Grace Brothers, Ltd., an investment partnership and broker-dealer. In March
1997, Grace Brothers, Ltd. extended a short-term loan to the Company in the
amount of $1.5 million which loan was repaid in May 1997. The interest rate
charged under the agreement was prime plus 1%.
In May 1988, the Company's Board of Directors approved a policy regarding
the purchase of property from the Company by employees or executive officers,
which policy was amended in March 1993. Under this policy, one residential
lot/Timeshare Interests per year may be purchased from the Company for 15% below
the retail price of such residential lot/Timeshare Interests. An employee taking
advantage of a discount may not receive a commission on the sale and the sale
will not be included for purposes of any bonus calculations. In addition,
employees or executive officers may receive financing on one residential
lot/Timeshare Interests at a time for up to 90% of the purchase price at the
prevailing rate provided that the employee qualifies for such financing under
the Company's credit policy with no exceptions. Under the policy, borrowings by
any employee will be limited to $100,000. Any purchaser under the policy must
agree to hold the parcel for at least two years before selling, provided that a
sale may be made at any time after termination of employment. Notwithstanding
the foregoing, all purchases by executive officers under the policy are required
to be approved by the Board of Directors. No purchases under the policy were
made by any executive officer during fiscal 1998.
Any existing loans to the Company's officers and employees other than in
the ordinary course of business have been approved, and any such future loans
will be approved, by a majority of disinterested, non-management Directors. It
is also the Company's policy that any transaction with an employee, officer,
Director or principal shareholder, or affiliate of any of them, involving in
excess of $1,000 (other than in the ordinary course of the Company's business)
shall be approved by a majority vote of disinterested Directors, and any such
transaction will be on terms no less favorable to the Company than those which
could reasonably be obtained from an independent third party.
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<PAGE> 86
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of May 1, 1998 by (a) each person who
is known by the Company to own beneficially more than 5% of the Common Stock,
(b) each director and Named Executive Officer of the Company, and (c) all
directors and executive officers as a group. Unless otherwise indicated below,
to the knowledge of the Company, all persons listed below have sole voting and
investment power with respect to their shares of Common Stock, except to the
extent authority is shared by spouses under applicable law.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
ISSUABLE UPON
OPTIONS CONVERSION OF TOTAL SHARES PERCENT OF
COMMON EXERCISABLE DEBENTURES AND BENEFICIALLY SHARES
STOCK WITHIN 60 DAYS NOTES(1) OWNED OUTSTANDING(2)
--------- -------------- -------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Beth Investments International
Inc............................ 1,629,858 -- 166,617 1,796,475 8.8%
P.O. Box N-3242, IDB House
East Bay Street
Nassau, Bahamas(3)
Grace Brothers, Ltd. ............ 1,676,766 -- 1,782,244 3,459,010 15.7%
1560 Sherman Avenue
Suite 900
Evanston, Illinois 60201(3)
Friess Associates of Delaware,
Inc. .......................... 1,206,000 -- -- 1,206,000 5.9%
3908 Kennett Pike
Greenville, Delaware 19807(3)
Joseph C. Abeles(4).............. 364,553 79,048 442,065 885,666 4.3%
John F. Chiste................... -- -- -- -- --
George F. Donovan................ 84,187 274,033 -- 358,220 1.7%
Ralph A. Foote................... 7,870 102,897 -- 110,767 *
L. Nicolas Gray.................. -- 6,300 -- 6,300 *
Daniel C. Koscher................ 1,218 98,949 -- 100,167 *
Frederick M. Myers(5)............ 34,398 90,973 -- 125,371 *
Patrick E. Rondeau............... 11,339 84,273 -- 95,612 *
J. Larry Rutherford.............. -- -- -- -- --
Stuart A. Shikiar(6)............. 721,182 32,038 80,145 833,365 4.1%
Bradford T. Whitmore(7).......... 758,146 85,011 -- 843,157 4.1%
All Directors and executive
officers as a group
(15 persons)................... 1,991,713 896,109 522,210 3,410,032 15.7%
</TABLE>
- ---------------
* Less than 1%.
(1) The conversion prices of $8.24 per share and $3.92 per share (the conversion
price on May 1, 1998) are used to determine the shares of Common Stock into
which the Company's 8.25% Convertible Subordinated Debentures due 2012 (the
"Debentures") and the Company's 8.00% Convertible Subordinated Notes Payable
due 2002 (the "Notes") are convertible, respectively.
(2) The denominator used to calculate the percent of shares outstanding includes
shares issuable upon conversion of any Debentures and Notes held by the
applicable stockholder or group and upon exercise of any options that are
exercisable within 60 days and held by the applicable stockholder or group,
plus 20,317,042 shares outstanding on May 1, 1998.
(3) Based on the most recent (as of May 1, 1998) Form 13F, 13G or 13D (as
applicable) filed with the Securities and Exchange Commission.
(4) Includes 11,574 shares and 36,407 shares issuable upon the conversion of
$300,000 aggregate principal amount of Debentures held by Mr. Abeles' wife
and 16,018 shares issuable upon the conversion of
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<PAGE> 87
$132,000 aggregate principal amount of Debentures held by family trusts for
which he disclaims beneficial ownership.
(5) Includes 34,398 shares of Common Stock held by Mr. Myers' wife for which he
disclaims beneficial ownership.
(6) Includes 3,034 shares of Common Stock issuable upon the conversion of
$25,000 aggregate principal amount of Debentures held by a family trust for
which Mr. Shikiar disclaims beneficial ownership. Also includes 534,706
shares of Common Stock and 15,169 shares issuable upon the conversion of
$125,000 aggregate principal amount of Debentures over which Mr. Shikiar
exercises voting and investment power.
(7) Mr. Whitmore is a general partner of Grace Brothers, Ltd. Mr. Whitmore
exercises shared voting and investment power with respect to shares held by
Grace Brothers, Ltd. and disclaims beneficial ownership of such shares
except to the extent of his proportionate interest therein.
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<PAGE> 88
DESCRIPTION OF NOTES
GENERAL
The Outstanding Notes were and the Exchange Notes will be issued under the
Indenture, dated as of April 1, 1998 (the "Indenture"), among the Company, the
Subsidiary Guarantors and SunTrust Bank, Central Florida, National Association
("SunTrust"), as Notes Trustee (the "Notes Trustee"), a copy of which is
available upon request to the Company as set forth under "Available
Information." The Exchange Notes and the Outstanding Notes will constitute a
single class of debt securities under the Indenture and, accordingly, will vote
together as a single class for purposes of determining whether holders of the
requisite percentage in outstanding principal amount of the Notes have taken
certain actions or exercised certain rights under the Indenture. The following
is a summary of certain provisions of the Indenture and the Notes and does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the Indenture (including the definitions of
certain terms therein and those terms made a part thereof by the Trust Indenture
Act of 1939, as amended) and the Notes. The definitions of certain terms used in
the following summary are set forth below under "-- Certain Definitions." As
used in this Description of the Notes, the "Company" refers to Bluegreen
Corporation and not its subsidiaries.
Except as otherwise indicated, the following description relates both to
the Outstanding Notes issued in the Note Offering and the Exchange Notes to be
issued in the Exchange Offer. The form and terms of the Exchange Notes are the
same as the form and terms of the Outstanding Notes in all material respects,
except that (i) the Exchange Notes will bear a Series B designation and have
been registered under the Securities Act and therefore will not bear legends
restricting the transfer thereof and will not contain certain provisions
relating to an increase in the interest rate which were included in the terms of
the Outstanding Notes in certain circumstances relating to the timing of the
Exchange Offer and (ii) the holders of the Exchange Notes will not be entitled
to certain rights of the holders of the Outstanding Notes under the Registration
Rights Agreement, which rights shall terminate upon the consummation of the
Exchange Offer. The Exchange Notes will be obligations of the Company evidencing
the same indebtedness as the outstanding Notes.
Principal of, premium, if any, and interest on the Notes will be payable,
and the Notes may be exchanged or transferred, at the office or agency of the
Company in the Borough of Manhattan, The City of New York (which initially shall
be the corporate trust office of the Notes Trustee in New York, New York),
except that, at the option of the Company, payment of interest may be made by
check mailed to the address of the holders as such address appears in the Note
Register. Initially, the Notes Trustee will act as Paying Agent and Registrar
for the Notes. The Notes may be presented for registration of transfer and
exchange at the offices of the Registrar, which initially will be the Notes
Trustee's corporate trust office. The Company may change any Paying Agent and
Registrar without notice to holders of the Notes.
For each Outstanding Note accepted for exchange, the holder of such
Outstanding Note will receive an Exchange Note having a principal amount equal
to that of the surrendered Outstanding Note.
The Notes will be issued only in fully registered form, without coupons, in
denominations of $1,000 and any integral multiple of $1,000. No service charge
will be made for any registration of transfer or exchange of Notes, but the
Company may require payment of a sum sufficient to cover any transfer tax or
other similar governmental charge payable in connection therewith.
TERMS OF NOTES
The Company sold $110 million aggregate principal amount of Outstanding
Notes in the Note Offering. The Notes will mature on April 1, 2008. Each Note
will bear interest at the rate of 10 1/2% per annum from the date of issuance,
or from the most recent date to which interest has been paid or provided for,
and will be payable semiannually on April 1 and October 1 of each year (each an
"Interest Payment Date"), commencing on October 1, 1998, to holders of record at
the close of business on the March 15 or September 15 immediately preceding the
Interest Payment Date. The interest rate on the Outstanding Notes is subject to
increase under certain circumstances. See "The Exchange Offer." Interest will be
computed on the basis of a
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<PAGE> 89
360-day year comprised of twelve 30-day months. The Notes will not be entitled
to the benefit of any mandatory sinking fund.
OPTIONAL REDEMPTION
Except as set forth below, the Notes will not be redeemable at the option
of the Company prior to April 1, 2003. On and after such date, the Notes will be
redeemable, at the Company's option, in whole or in part, at any time upon not
less than 30 nor more than 60 days' prior notice mailed by first-class mail to
each holder's registered address, at the following redemption prices (expressed
in percentages of principal amount), if redeemed during the 12-month period
commencing on April 1 of the years set forth below, plus accrued and unpaid
interest to the redemption date (subject to the right of holders of record on
the relevant record date to receive interest due on the relevant Interest
Payment Date):
<TABLE>
<CAPTION>
REDEMPTION
PERIOD PRICE
- ------ ----------
<S> <C>
2003........................................................ 105.25%
2004........................................................ 103.50
2005........................................................ 101.75
2006 and thereafter......................................... 100.00
</TABLE>
Optional Redemption Upon Equity Offering. In addition, at any time prior
to April 1, 2001, the Company may, at its option, redeem up to 35% of the
original aggregate principal amount of the Notes, with net cash proceeds of one
or more Equity Offerings, at a redemption price equal to 110.5% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the date of
redemption; provided, however, that after any such redemption the aggregate
principal amount of the Notes outstanding must equal at least $65 million. In
order to effect the foregoing redemption with the proceeds of any Equity
Offering, the Company shall make such redemption not more than 90 days after the
consummation of any such Equity Offering.
Selection. In the case of any partial redemption, selection of the Notes
for redemption will be made by the Notes Trustee on a pro rata basis, by lot or
by such other method as the Notes Trustee in its sole discretion shall deem to
be fair and appropriate; provided, however, that if a partial redemption is made
with proceeds of an Equity Offering, selection of the Notes or portion thereof
for redemption shall be made by the Notes Trustee only on a pro rata basis,
unless such method is otherwise prohibited. Notes may be redeemed in part in
multiples of $1,000 principal amount only. Notice of redemption will be sent, by
first class mail, postage prepaid, at least 45 days (unless a shorter period is
acceptable to the Notes Trustee) prior to the date fixed for redemption to each
holder whose Notes are to be redeemed at the last address for such holder then
shown on the registry books. If any Note is to be redeemed in part only, the
notice of redemption that relates to such Note shall state the portion of the
principal amount thereof to be redeemed. A new Note in principal amount equal to
the unredeemed portion thereof will be issued in the name of the holder thereof
upon cancellation of the original Note. On and after any redemption date,
interest will cease to accrue on the Notes or part thereof called for redemption
as long as the Company has deposited with the Paying Agent funds in satisfaction
of the redemption price pursuant to the Indenture.
RANKING
The Outstanding Notes are and the Exchange Notes will be senior obligations
of the Company. The Outstanding Notes rank and the Exchange Notes will rank pari
passu in right of payment with all existing and future Senior Indebtedness of
the Company (i.e., all indebtedness that is not by its terms expressly
subordinate or junior in right of payment to any other Indebtedness of the
Company). The Outstanding Notes rank and the Exchange Notes will rank senior in
right of payment to any existing and future Subordinated Obligations of the
Company. None of the assets of Bluegreen will secure its obligations under the
Notes, and the Notes will be effectively subordinated to Secured Indebtedness of
the Company to any third party to the extent of any assets serving as security
therefor. As described below, the Indenture allows the Company to incur
Permitted Liens. As of December 28, 1997, on a pro forma basis after giving
effect to the Note Offering
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<PAGE> 90
and the application of the net proceeds therefrom and excluding the Notes, the
Company would have approximately $25.9 million of Secured Indebtedness
outstanding.
SECURITY
The Note Guarantees of certain Subsidiary Guarantors are secured by a
Mortgage (subject to customary exceptions) on the respective Pledged Properties
of such Subsidiary Guarantors. The Pledged Properties consist of real property
presently owned by one of the Subsidiary Guarantors and located in: Texas, New
Mexico, Montana, Arizona, Virginia, Colorado, Idaho, and North Carolina. Such
Mortgages secure the payment and performance when due of all of the obligations
of each Subsidiary Guarantor that owns Pledged Property under their respective
Notes Guarantees. The Company has agreed to obtain certain title insurance
policies in connection with the mortgaging of the Pledged Properties. If all
such title insurance policies are not obtained by June 1, 1998, pursuant to the
Purchase Agreement, the interest rate on the Notes will increase by 0.50% and
any additional interest resulting from such increase will be payable on the
interest payment dates set forth herein. Such additional interest will cease to
accrue on the first to occur of the (i) the date on which a title insurance
policy for the last of the Pledged Properties is delivered to the Initial
Purchasers and (ii) the date on which the last of the Pledged Properties has
been sold. The proceeds of any sale of the Pledged Properties following an Event
of Default under the Indenture would not be sufficient to repay the Notes in
full. No appraisals on the Pledged Properties were obtained in connection with
the Note Offering or the Exchange Offer. As of January 25, 1998, the real
property comprising the Pledged Properties had an aggregate book value of
approximately $46.1 million. Inventory has been sold from the Pledged Properties
since such date. No assurances can be given that the property subject to the
Mortgages could be sold for such amount in the event of a foreclosure or other
comparable proceeding realizing on the Mortgages or that the property will not
decline in value. Pursuant to the terms of the Indenture and the Mortgages, the
Notes Trustee shall be required to release the lien of the Mortgages with
respect to the sale of any property covered thereby unless an Event of Default
shall have occurred and be continuing. Absent such an Event of Default the Notes
Trustee shall not have a lien on the proceeds from a sale of the Pledged
Properties. Consequently, the value of the collateral covered by the Mortgages
will diminish over time as Pledged Properties are sold. Lots are currently being
sold at each of the Pledged Properties. Although no assurances can be given and
the Pledged Properties may be sold more quickly, the Company currently estimates
based on historical sales that the Pledged Properties will be sold-out over a
one to three year period. Except for the Mortgages on the Pledged Properties,
neither the Company nor any of its subsidiaries including the Subsidiary
Guarantors has provided or is required to provide any security for its
obligations under the Notes or the Note Guarantees, as applicable. See "Risk
Factors -- Risk of Inability to Realize Upon Mortgages; Insufficient
Collateral."
NOTE GUARANTEES
Each Subsidiary Guarantor has unconditionally guaranteed, jointly and
severally, to each holder and the Notes Trustee, as primary obligor and not as a
surety, the full and prompt payment of principal of and interest on the Notes,
and the performance of all other obligations of the Company under the Indenture
and the Notes. The initial Subsidiary Guarantors are substantially all of the
Company's currently active Subsidiaries other than BG Aruba, Resort Title
Agency, Inc. and any Receivables Subsidiary and certain other subsidiaries which
do not have material assets. In addition to the initial Subsidiary Guarantors,
the Company will cause each Subsidiary of the Company that becomes a Restricted
Subsidiary after the date of the Indenture to execute and deliver a supplement
to the Indenture pursuant to which such Restricted Subsidiary will guarantee the
payment of the Notes on the same terms and conditions as the Note Guarantees by
the initial Subsidiary Guarantors.
The Outstanding Guarantees are and the Exchange Guarantees will be senior
obligations (i.e., not contractually subordinated to other obligations) of each
respective Subsidiary Guarantor. The Outstanding Guarantees rank and the
Exchange Guarantees will rank pari passu in right of payment with all future and
existing Senior Indebtedness of such Subsidiary Guarantor, and senior in right
of payment to all future and existing Subordinated Obligations of such
Subsidiary Guarantor. As stated above, the Note Guarantees of certain Subsidiary
Guarantors will be secured by a first Mortgage on the Pledged Properties. Except
for such
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secured Note Guarantees, the Note Guarantees of each Subsidiary Guarantor will
be effectively subordinated to Secured Indebtedness of such Subsidiary Guarantor
to the extent of the assets serving as security therefor. As described below,
the Indenture allows the Subsidiaries to incur Permitted Liens. At December 28,
1997, on a pro forma basis after giving effect to the Note Offering and the
application of the net proceeds therefrom, the Subsidiary Guarantors had $14.9
million of Senior Indebtedness outstanding, other than the Note Guarantees.
The obligations of each Subsidiary Guarantor are limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor (and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Note Guarantee or pursuant to its contribution obligations under the
Indenture) result in the obligations of such Subsidiary Guarantor under the Note
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
any federal or state law. Each Subsidiary Guarantor that makes a payment or
distribution under a Note Guarantee shall be entitled to contribution from each
other Subsidiary Guarantor in pro rata amount based on the Adjusted Net Assets
of each Subsidiary Guarantor.
Each Subsidiary Guarantor may consolidate with or merge into or sell its
assets to the Company or another Subsidiary Guarantor without limitation.
Subject to certain conditions, each Subsidiary Guarantor may also consolidate
with or merge into or sell all or substantially all its assets to a corporation,
partnership or trust other than the Company or another Subsidiary Guarantor
(whether or not affiliated with the Subsidiary Guarantor). Upon the sale or
disposition of a Subsidiary Guarantor (or all or substantially all of its
assets) to a Person (whether or not an Affiliate of the Subsidiary Guarantor)
which is not a Subsidiary of the Company, which sale or disposition is otherwise
in compliance with the Indenture (including the covenant described under
"-- Certain Covenants -- Limitation on Sales of Assets and Subsidiary Stock"),
such Subsidiary Guarantor shall be deemed released from all of its obligations
under the Indenture and its Note Guarantee and such Note Guarantee shall
terminate; provided, however, that any such termination shall occur only to the
extent that all obligations of such Subsidiary Guarantor under and all of its
guarantees of, and under all of its pledges of assets or other security
interests which secure, any other Indebtedness of the Company shall also
terminate upon such release, sale or transfer.
CHANGE OF CONTROL
Upon the occurrence of any of the following events (each a "Change of
Control"), each holder will have the right to require the Company to repurchase
all or any part of such holder's Notes at a purchase price in cash equal to 101%
of the principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date): (i)
any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company
and its Subsidiaries; or (ii) a majority of the Board of Directors of the
Company shall consist of Persons who are not Continuing Directors of the
Company; or (iii) the acquisition by any Person or Group of the power, directly
or indirectly, to vote or direct the voting of securities having more than 50%
of the total voting power for the election of directors of the Company or of any
direct or indirect holding company thereof.
Within 30 days following any Change of Control, unless the Company has
mailed a redemption notice with respect to all the outstanding Notes in
connection with such Change of Control, the Company shall mail a notice to each
holder with a copy to the Notes Trustee stating: (1) that a Change of Control
has occurred and that such holder has the right to require the Company to
purchase such holder's Notes at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on a record date to
receive interest on the relevant Interest Payment Date); (2) the repurchase date
(which shall be no earlier than 30 days nor later than 60 days from the date
such notice is mailed); and (3) the procedures determined by the Company,
consistent with the Indenture, that a holder must follow in order to have its
Notes purchased. To exercise the repurchase right, holders must comply with
certain procedures set forth in the Indenture.
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Rule 13e-4 under the Exchange Act requires the dissemination of certain
information to security holders in the event of an issuer tender offer and may
apply in the event that the repurchase option becomes available to the holders
of the Notes. The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to the
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of the Indenture, the Company will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in the Indenture by virtue thereof.
The definition of "Change of Control" includes, among other transactions, a
disposition of all or substantially all of the property and assets of the
Company and its Subsidiaries. With respect to the disposition of property or
assets, the phrase "all or substantially all" as used in the Indenture varies
according to the facts and circumstances of the subject transaction, has no
clearly established meaning under New York law (which is the law which governs
the Indenture) and is subject to judicial interpretation. Accordingly, in
certain circumstances there may be a degree of uncertainty in ascertaining
whether a particular transaction would involve a disposition of "all or
substantially all" of the property or assets of a Person, and therefore it may
be unclear as to whether a Change of Control has occurred and whether the
Company is required to make an offer to repurchase the Notes as described above.
Current and future Senior Indebtedness of the Company and its Subsidiaries
may contain prohibitions of certain events that would constitute a Change of
Control or require such Senior Indebtedness to be repurchased upon a Change of
Control. Moreover, the exercise by the holders of their right to require the
Company to repurchase the Notes could cause a default under such Senior
Indebtedness, even if the Change of Control itself does not, due to the
financial effect of such repurchase on the Company. Finally, the Company's
ability to pay cash to the holders upon a repurchase may be limited by the
Company's then existing financial resources. There can be no assurance that
sufficient funds will be available when necessary to make any required
repurchases. See "Risk Factors -- Limitation on Repurchase of Notes Upon a
Change of Control."
CERTAIN COVENANTS
The Indenture contains certain covenants including, among others, the
following:
Limitation on Indebtedness. (a) The Company shall not, and shall not
permit any of its Restricted Subsidiaries to, Incur any Indebtedness; provided,
however, that the Company and its Restricted Subsidiaries may Incur Indebtedness
if no Default or Event of Default shall have occurred and be continuing at the
time of such Incurrence or would occur as a consequence of such Incurrence and
the Consolidated Coverage Ratio would be equal to at least (x) 2.00 to 1.00 if
such Indebtedness is Incurred prior to April 1, 2000, (y) 2.25 to 1.00 if such
Indebtedness is Incurred after April 1, 2000 but prior to March 31, 2002 and (z)
2.50 to 1.00 after March 31, 2002.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur any or all of the following Indebtedness:
(i) Indebtedness Incurred under any Credit Agreements and/or pursuant
to seller financing in connection with the acquisition of inventory;
provided, however, after giving effect to such Incurrence, the aggregate
principal amount of such Indebtedness then outstanding does not exceed
$30.0 million;
(ii) Indebtedness represented by Capitalized Lease Obligations,
mortgage financing or purchase money obligations in addition to that
specified in clause (i) above, in each case Incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of property used in a Permitted Business or Incurred to
refinance any such purchase price or cost of construction or improvement,
in each case Incurred no later than 365 days after the date of such
acquisition or the date of completion of such construction or improvement;
provided, however, that the principal amount of any Indebtedness Incurred
pursuant to this clause (ii) shall not exceed $2.0 million at any time
outstanding;
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(iii) Indebtedness outstanding pursuant to the Convertible Debentures,
the Convertible Notes and the RDI Note and other Existing Indebtedness
outstanding as of the Issue Date after the application of the net proceeds
of the Note Offering;
(iv) Indebtedness of the Company owing to and held by any Wholly-Owned
Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by
the Company or any Wholly-Owned Subsidiary; provided, however, that (A) if
the Company is the obligor on such Indebtedness, such Indebtedness is
expressly subordinate to the payment in full of all Obligations with
respect to the Notes and (B) any subsequent issuance or transfer of any
Capital Stock or any other event which results in any such Wholly-Owned
Subsidiary ceasing to be a Wholly-Owned Subsidiary or any subsequent
transfer of any such Indebtedness (except to the Company or any
Wholly-Owned Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the issuer thereof;
(v) Indebtedness represented by (A) the Outstanding Notes and any
Exchange Notes issued in exchange for the Outstanding Notes of any equal
principal amount, (B) the Note Guarantees, and (C) any Refinancing
Indebtedness Incurred in respect of any Indebtedness described in clauses
(i) through (iii) or this clause (v) or Incurred pursuant to paragraph (a)
above;
(vi) (A) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on the date on which such Restricted Subsidiary was acquired by
the Company (other than Indebtedness Incurred in anticipation of, or to
provide all or any portion of the funds or credit support utilized to
consummate the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Subsidiary or was otherwise
acquired by the Company); provided, however that, at the time such
Restricted Subsidiary is acquired by the Company, the Company would have
been able to Incur $1.00 of additional Indebtedness pursuant to paragraph
(a) above after giving effect to the Incurrence of such Indebtedness
pursuant to this clause (vi) and (B) Refinancing Indebtedness Incurred by a
Restricted Subsidiary in respect of Indebtedness incurred by such
Restricted Subsidiary pursuant to this clause (vi);
(vii) Indebtedness (A) in respect of performance bonds, completion and
maintenance bonds, bankers' acceptances, letters of credit and surety or
appeal bonds provided by the Company or any of its Restricted Subsidiaries
to their customers in the ordinary course of their business, (B) in respect
of performance bonds or similar obligations of the Company or any of its
Restricted Subsidiaries for or in connection with pledges, deposits or
payments made or given in the ordinary course of business in connection
with or to secure statutory, regulatory or similar obligations, including
obligations under health, safety or environmental obligations and (C)
arising from Guarantees to suppliers, lessors, licensees, contractors,
franchises or customers of obligations (other than Indebtedness) incurred
in the ordinary course of business;
(viii) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or
from Guarantees or letters of credits, surety bonds or performance bonds
securing any obligations of the Company or any of its Restricted
Subsidiaries pursuant to such agreements, in each case Incurred in
connection with the disposition of any business assets or Restricted
Subsidiary of the Company (other than Guarantees of Indebtedness or other
obligations Incurred by any Person acquiring all or any portion of such
business assets or Restricted Subsidiary of the Company for the purpose of
financing such acquisition) not to exceed the gross proceeds actually
received by the Company or any of its Restricted Subsidiaries in connection
with such disposition; provided, however, that the principal amount of any
Indebtedness Incurred pursuant to this clause (viii) when taken together
with all Indebtedness Incurred pursuant to this clause (viii) and then
outstanding, shall not exceed $2.0 million;
(ix) Indebtedness under Currency Agreements and Interest Rate
Agreements; provided, however, that in the case of Currency Agreements and
Interest Rate Agreements such Currency Agreements and Interest Rate
Agreements are entered into for bona fide hedging purposes of the Company
or its Restricted Subsidiaries (as determined in good faith by the Board of
Directors of the Company) and correspond in terms of notional amount,
duration, currencies and interest rates as applicable, to Indebtedness of
the Company or its Restricted Subsidiaries Incurred without violation of
the Indenture
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or to business transactions of the Company or its Restricted Subsidiaries
on customary terms entered into in the ordinary course of business;
(x) Indebtedness consisting of (A) Guarantees by the Company (so long
as the Company could have Incurred such Indebtedness directly without
violation of the Indenture) and (B) Guarantees by a Restricted Subsidiary
of Senior Indebtedness Incurred by the Company without violation of the
Indenture (so long as such Restricted Subsidiary could have Incurred such
Indebtedness directly without violation of the Indenture);
(xi) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument issued by the
Company or its Subsidiaries drawn against insufficient funds in the
ordinary course of business in an amount not to exceed $250,000 at any
time, provided that such Indebtedness is extinguished within two business
days of its incurrence; and
(xii) Indebtedness (other than Indebtedness described in clauses
(i)-(xi)) in a principal amount which, when taken together with the
principal amount of all other Indebtedness Incurred pursuant to this clause
(xii) and then outstanding, will not exceed $10.0 million.
For purposes of determining compliance with this "Limitation on
Indebtedness" covenant, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in the above
clauses at the time of incurrence, the Company shall, in its sole discretion,
classify such item of Indebtedness and only be required to include the amount
and type of such Indebtedness in the applicable clause(s) so selected by the
Company. No fluctuation in currency exchange rates or interest rates following
the incurrence of any Indebtedness shall result in a Default hereunder if the
Indebtedness itself was incurred in compliance with the Indenture at the time of
incurrence.
(c) Neither the Company nor any Restricted Subsidiary shall Incur any
Indebtedness under paragraph (b) above if the proceeds thereof are used,
directly or indirectly, to refinance any Subordinated Obligations of the Company
unless such Indebtedness shall be subordinated to the Notes to at least the same
extent as such Subordinated Obligations. No Restricted Subsidiary shall Incur
any Indebtedness under paragraph (b) above if the proceeds thereof are used,
directly or indirectly, to refinance any Guarantor Subordinated Obligation of
such Subsidiary Guarantor unless such Indebtedness shall be subordinated to the
obligations of such Subsidiary Guarantor under the Note Guarantee to at least
the same extent as such Guarantor Subordinated Obligation.
(d) The Company will not permit any Unrestricted Subsidiary to Incur any
Indebtedness other than Non-Recourse Debt.
Limitation on Restricted Payments. (a) The Company shall not, and shall
not permit any of its Restricted Subsidiaries, directly or indirectly, to (i)
declare or pay any dividend or make any distribution on or in respect of its
Capital Stock (including any payment in connection with any merger or
consolidation involving the Company or any of its Restricted Subsidiaries)
except (A) dividends or distributions payable in its Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to purchase such
Capital Stock (other than Disqualified Stock) and (B) dividends or distributions
payable to the Company or a Restricted Subsidiary of the Company which holds any
equity interest in the paying Restricted Subsidiary, (ii) purchase, redeem,
retire or otherwise acquire for value any Capital Stock of the Company held by
Persons other than a Wholly-Owned Subsidiary of the Company or any Capital Stock
of a Restricted Subsidiary of the Company held by any Person, other than a
Wholly-Owned Subsidiary (in either case, other than in exchange for its Capital
Stock (other than Disqualified Stock)), (iii) purchase, repurchase, redeem,
defease or otherwise acquire or retire for value, any Subordinated Obligations
or (iv) make any Investment (other than a Permitted Investment) in any Person
(any such dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition, retirement or Investment as described in preceding clauses
(i) through (iv) being referred to as a "Restricted Payment"), if at the time
the Company or such Restricted Subsidiary makes such Restricted Payment and
immediately after giving pro forma effect to such Restricted Payment: (1) a
Default shall have occurred and be continuing (or would result therefrom); or
(2) the Company is not able to incur an additional $1.00 of Indebtedness
pursuant to paragraph (a) under "Limitation on
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Indebtedness"; or (3) the aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made subsequent to the Issue Date would
exceed the sum, without duplication, of (A) 50% of the Consolidated Net Income
accrued during the period (treated as one accounting period) from the first day
of the first fiscal quarter beginning on or after the Issue Date to the end of
the most recent fiscal quarter ending prior to the date of such Restricted
Payment as to which financial results are available (but in no event ending more
than 135 days prior to the date of such Restricted Payment) (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such deficit); (B) the
aggregate Net Cash Proceeds received by the Company from the issue or sale of
its Capital Stock subsequent to the Issue Date (other than Disqualified Stock
and other than Net Cash Proceeds received from an issuance or sale of such
Capital Stock to a Subsidiary of the Company); (C) the amount by which
Indebtedness of the Company is reduced on the Company's balance sheet upon the
conversion or exchange (other than by a Restricted Subsidiary of the Company)
subsequent to the Issue Date of any Indebtedness of the Company convertible or
exchangeable for Capital Stock of the Company (less the amount of any cash, or
other property, distributed by the Company upon such conversion or exchange);
(D) the amount equal to the net reduction in Investments (other than Permitted
Investments) made after the Issue Date by the Company or any of its Restricted
Subsidiaries in any Person resulting from (i) repurchases or redemptions of such
Investments by such Person, proceeds realized upon the sale of such Investment
to an unaffiliated purchaser, repayments of loans or advances or other transfers
of assets by such Person to the Company or any Restricted Subsidiary of the
Company or (ii) the redesignation of Unrestricted Subsidiaries to Restricted
Subsidiaries (valued in each case as provided in the definition of "Investment")
not to exceed, in the case of any Unrestricted Subsidiary, the amount of
Investments previously included in the calculation of the amount of Restricted
Payments; provided, however, that no amount shall be included under this Clause
(D) to the extent it is already included in Consolidated Net Income; and (E) $5
million.
(b) The provisions of paragraph (a) shall not prohibit: (i) any purchase or
redemption of Capital Stock or Subordinated Obligations of the Company made by
exchange for, conversion into or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary); provided, however,
that (A) such purchase or redemption shall be excluded in the calculation of the
amount of Restricted Payments and (B) the Net Cash Proceeds (to the extent used
for such purchase or redemption) from such sale shall be excluded from clause
(3) (B) of paragraph (a); (ii) any purchase or redemption of Subordinated
Obligations of the Company made by exchange for, conversion into or out of the
proceeds of the substantially concurrent sale of, Subordinated Obligations
constituting Refinancing Indebtedness of the Company in compliance with the
"Limitation on Indebtedness" covenant; provided, further, that such purchase or
redemption shall be excluded in the calculation of the amount of Restricted
Payments; (iii) any purchase or redemption of Subordinated Obligations as a
result of a Change of Control (provided that the covenant described in
"Limitation on Repayments upon a Change of Control" is complied with); (iv) any
purchase or redemption of Subordinated Obligations from Net Available Cash to
the extent permitted under "Limitation on Sales of Assets and Subsidiary Stock"
below; provided, further, that such purchase or redemption shall be excluded in
the calculation of the amount of Restricted Payments; (v) payment by the Company
of any scheduled sinking fund payments under the Public Debentures; provided
that the Company reduces its required sinking fund payments to the maximum
amount permitted under the Indenture pursuant to which such Public Debentures
were issued; (vi) repayment of the Convertible Notes upon stated maturity,
provided, however, that the amount of such payment shall be included in the
calculation of the amount of permitted Restricted Payments subsequent to the
date of such payment; (vii) dividends paid within 60 days after the date of
declaration if at such date of declaration such dividend would have complied
with this provision; provided, however, that such dividend shall be included in
the calculation of the amount of Restricted Payments; and (viii) repurchases of
Capital Stock deemed to occur upon the exercise of stock options (other than
options relating to Disqualified Stock) if such Capital Stock represents a
portion of the exercise price of such options; provided, however, that in the
case of clauses (i), (ii), (iii), (iv) and (v) no Default or Event of Default
shall have occurred or be continuing at the time of such payment or as a result
thereof. As discussed below under "Description of Other Indebtedness," an Event
of Default under the Indenture may not prevent payment on the Public Debentures
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or the Convertible Notes for more than 90 days unless the Company's obligations
under the Notes have been and remain accelerated. See "Description of Other
Indebtedness."
(c) For purposes of determining compliance with the foregoing covenant,
Restricted Payments may be made with cash or non-cash assets, provided that any
Restricted Payment made other than in cash shall be valued at the fair market
value (determined, subject to the additional requirements of the immediately
succeeding proviso, in good faith by the Board of Directors) of the assets so
utilized in making such Restricted Payment, provided, however that (i) in the
case of any Restricted Payment made with Capital Stock or Indebtedness, such
Restricted Payment shall be deemed to be made in an amount equal to the greater
of the fair market value thereof and the liquidation preference (if any) or
principal amount of the Capital Stock or Indebtedness, as the case may be, so
utilized, (ii) in the case of any Restricted Payment made other than in cash in
an aggregate amount in excess of $2.0 million but less than $4.0 million, the
fairness of the valuation thereof (as determined by the Company) for purposes of
determining compliance with the "Limitation on Restricted Payments" covenant in
the Indenture shall be approved by a majority of the disinterested members of
the Board of Directors of the Company and (iii) in the case of any Restricted
Payment made other than in cash in an aggregate amount of $4.0 million or more,
a written opinion as to the fairness of the valuation thereof (as determined by
the Company) for purposes of determining compliance with the "Limitation on
Restricted Payments" covenant in the Indenture shall be issued by an independent
investment banking, accounting or qualified appraisal firm of national standing.
(d) Not later than the date of making any Restricted Payment, the Company
shall deliver to the Notes Trustee an Officer's Certificate stating that such
Restricted Payment complies with the Indenture and setting forth in reasonable
detail the basis upon which the required calculations were computed, which
calculations may be based upon the Company's latest available quarterly
financial statements, and a copy of any required investment banker's,
accountant's or appraiser's opinion.
Limitation on Liens. The Indenture provides that the Company will not and
will not permit any Restricted Subsidiary to, directly or indirectly, create or
permit to exist any Liens except for Permitted Liens.
Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create or permit to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any such Restricted
Subsidiary to (a) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligation owed to the Company, (b) make
any loans or advances to the Company, (c) transfer any of its property or assets
to the Company, or (d) guarantee the Notes, except: (i) any encumbrance or
restriction pursuant to an agreement in effect at or entered into on the Issue
Date, including, without limitation, the Indenture, the Notes and the Credit
Agreements, if any; (ii) any encumbrance or restriction with respect to such a
Restricted Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Subsidiary which was entered into on or prior to the
date on which such Restricted Subsidiary was acquired by the Company and
outstanding on such date (other than Indebtedness Incurred in anticipation of,
or to provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary of the Company or was
acquired by the Company) provided that such encumbrance or restriction is not
applicable to any properties or assets other than of the types owned or held by
such Restricted Subsidiary at the time it became a Restricted Subsidiary; (iii)
any encumbrance or restriction with respect to such a Restricted Subsidiary
effecting a refinancing of Indebtedness issued pursuant to an agreement referred
to in clauses (i) or (ii) or this clause (iii) or contained in any amendment to
an agreement referred to in clauses (i) or (ii) or this clause (iii) (or
effecting a Refinancing of such Refinancing Indebtedness pursuant to this clause
(iii) or contained in any amendment, modification, restatement, renewal or
supplement to an agreement referred to in clause (i) or (ii) or this clause
(iii)); provided, however, that the encumbrances and restrictions with respect
to such Restricted Subsidiary contained in any of such agreement, refinancing
agreement or amendment, taken as a whole, are no less favorable to the holders
of the Notes in any material respect, as determined in good faith by the Board
of Directors of the Company, than encumbrances and restrictions with respect to
such Restricted Subsidiary contained in agreements in effect at, or entered into
on, the Issue Date; (iv) in the case of clause (c), any encumbrance or
restriction (A) that restricts in a customary manner the subletting, assignment
or
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transfer of any property or asset that is a lease, license, conveyance or
contract or similar property or asset, (B) by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any property
or assets of the Company or any Restricted Subsidiary not otherwise prohibited
by the Indenture or (C) that is included in a licensing agreement to the extent
such restrictions limit the transfer of the property subject to such licensing
agreement; (v) in the case of clause (c) above, restrictions contained in
security agreements, mortgages or similar documents securing Indebtedness
(including purchase money Indebtedness) of a Restricted Subsidiary to the extent
such restrictions restrict the transfer of the property subject to such security
agreements, mortgages or similar documents; (vi) any restriction with respect to
such a Restricted Subsidiary imposed pursuant to an agreement entered into for
the sale or disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary pending the closing of such sale or disposition;
(vii) encumbrances or restrictions arising or existing by reason of applicable
law; (viii) any encumbrance or restriction pursuant to Indebtedness of
Restricted Subsidiaries that is permitted to be Incurred subsequent to the Issue
Date pursuant to the provisions of the covenant described under "-- Limitation
on Indebtedness"; and (ix) restrictions on cash or other deposits imposed by
customers under contracts incurred in the ordinary course of business consistent
with past practices.
Limitation on Sales of Assets and Subsidiary Stock. (a) The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, make any Asset
Disposition unless (i) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the fair
market value, as determined in good faith by the Company's Board of Directors
(including as to the value of all non-cash consideration), of the shares and
assets subject to such Asset Disposition, (ii) at least 75% of the consideration
thereof received by the Company or such Restricted Subsidiary is in the form of
cash or Cash Equivalents and (iii) an amount equal to 100% of the Net Available
Cash from such Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be) (A) first, to the extent the Company or any
Restricted Subsidiary elects (or is required by the terms of any Secured
Indebtedness), (x) to prepay, repay or purchase Secured Indebtedness or (y) to
the investment in or acquisition of Additional Assets within 360 days from the
later of the date of such Asset Disposition or the receipt of such Net Available
Cash; (B) second, within 360 days from the receipt of such Net Available Cash,
to the extent of the balance of such Net Available Cash after application in
accordance with clause (A), to make an offer to purchase Notes at 100% of their
principal amount plus accrued and unpaid interest, if any, thereon; and (C)
third, to the extent of the balance of such Net Available Cash after application
in accordance with clauses (A) and (B) (w) to the investment in or acquisition
of Additional Assets, (x) the making of Temporary Cash Investments or (y) any
other purpose otherwise permitted under the Indenture, in each case within the
later of 45 days after the application of Net Available Cash in accordance with
clauses (A) and (B) or the date that is one year from the receipt of such Net
Available Cash; provided, however, that, in connection with any prepayment,
repayment or purchase of Indebtedness pursuant to clause (A) or (B) above, the
Company or such Restricted Subsidiary shall retire such Indebtedness and shall
cause the related loan commitment (if any) to be permanently reduced in an
amount equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions, the Company and its Restricted
Subsidiaries shall not be required to apply any Net Available Cash in accordance
herewith except to the extent that the aggregate Net Available Cash from all
Asset Dispositions which are not applied in accordance with this covenant at any
time exceeds $10.0 million. The Company shall not be required to make an offer
for Notes pursuant to this covenant if the Net Available Cash available therefor
(after application of the proceeds as provided in clause (A)) is less than $10.0
million for any particular Asset Disposition (which lesser amounts shall be
carried forward for purposes of determining whether an offer is required with
respect to the Net Available Cash from any subsequent Asset Disposition).
For the purposes of this covenant, the following will be deemed to be cash:
(x) the assumption by the transferee of Senior Indebtedness of the Company or
Senior Indebtedness of any Restricted Subsidiary of the Company and the release
of the Company or such Restricted Subsidiary pursuant to a customary novation
agreement from all liability on such Senior Indebtedness in connection with such
Asset Disposition (in which case the Company shall, without further action, be
deemed to have applied such assumed Indebtedness in accordance with clause (A)
of the preceding paragraph) and (y) securities received by the Company or any
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Restricted Subsidiary of the Company from the transferee that are promptly (and
in any event within 90 days) converted by the Company or such Restricted
Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the purchase of
Notes pursuant to clause (a) (iii) (B), the Company will be required to purchase
Notes tendered pursuant to an offer by the Company for the Notes at a purchase
price of 100% of their principal amount plus accrued and unpaid interest, if
any, to the purchase date in accordance with the procedures (including prorating
in the event of oversubscription) set forth in the Indenture. If the aggregate
purchase price of the Notes tendered pursuant to the offer is less than the Net
Available Cash allotted to the purchase of the Notes, the Company will apply the
remaining Net Available Cash in accordance with clause (a)(iii)(C) above.
Limitation on Affiliate Transactions. (a) The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly, enter
into or conduct any transaction or series of related transactions (including the
purchase, sale, lease or exchange of any property, employee compensation
arrangement or the rendering of any service) with or for the benefit of any
Affiliate of the Company, other than the Company or a Wholly-Owned Subsidiary
(an "Affiliate Transaction") unless: (i) the terms of such Affiliate Transaction
are no less favorable to the Company or such Restricted Subsidiary, as the case
may be, than those that could be obtained at the time of such transaction in
arm's length dealings with a Person who is not such an Affiliate; (ii) in the
event such Affiliate Transaction involves an aggregate amount in excess of $1.0
million or is a loan, advance or other Indebtedness, the terms of such
transaction have been approved by a majority of the disinterested members of
such Board, if any (and such majority determines that such Affiliate Transaction
satisfies the criteria in clause (i) above); and (iii) in the event such
Affiliate Transaction involves an aggregate amount in excess of $2.0 million,
the Company has received a written opinion from an independent investment
banking, accounting or appraisal firm of nationally recognized standing that
such Affiliate Transaction is fair to the Company or such Restricted Subsidiary,
as the case may be, from a financial point of view.
(b) The foregoing paragraph (a) shall not apply to (i) the Company's
employee compensation and other benefit arrangements (including without
limitation any option grants or other equity based awards), (ii) loans or
advances to employees in the ordinary course of business of the Company or any
of its Restricted Subsidiaries in aggregate amount outstanding not to exceed
$250,000 to any employee or $500,000 in the aggregate at any time, (iii) the
payment of reasonable and customary fees to directors of the Company who are not
employees of the Company (including without limitation the grant of stock
options), (iv) indemnification agreements with, and the payment of fees and
indemnities to, directors, officers and employees of the Company and its
Restricted Subsidiaries, in each case in the ordinary course of business, (v)
transactions pursuant to agreements in existence on the Issue Date which are (x)
described in the Prospectus or (y) otherwise, in the aggregate, immaterial to
the Company and its Restricted Subsidiaries taken as a whole, and, in either
case, are effected pursuant to the terms of such agreements as in effect on the
Issue Date, and (vi) transactions with respect to the acquisition of Accounts
Receivable and/or direct sales of Accounts Receivable to financial institutions
or sales of Accounts Receivable in connection with securitization transactions,
in each case in the ordinary course of business.
Limitation on Issuances of Capital Stock of Restricted Subsidiaries. The
Company will not permit any of its Restricted Subsidiaries to issue any Capital
Stock to any Person (other than to the Company or a Wholly-Owned Subsidiary of
the Company) or permit any Person (other than the Company or a Wholly-Owned
Subsidiary of the Company and other than directors' qualifying shares and, to
the extent required by local ownership laws in foreign countries, shares owned
by foreign shareholders) to own any Capital Stock of a Restricted Subsidiary of
the Company; provided, however, that this provision shall not prohibit (a) the
Company or any of its Restricted Subsidiaries from selling, leasing or otherwise
disposing of all of the Capital Stock of any Restricted Subsidiary, provided
that the net cash proceeds from such sale, lease or other disposition are
applied in accordance with the covenant described under the caption
"-- Limitation on Sales of Assets and Subsidiary Stock" or (b) the designation
of a Restricted Subsidiary as an Unrestricted Subsidiary in compliance with the
Indenture.
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Limitation on Repayment upon a Change of Control. The Company will not
make an offer to repurchase any Subordinated Obligations if it is required to do
so pursuant to a Change of Control until at least 60 days after the occurrence
of such Change of Control and shall not purchase any Subordinated Obligations
for 30 days following the time the Company is required to make purchases of the
Notes under the Indenture following such Change of Control.
Limitation on Sale/Leaseback Transactions. The Company will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, enter into,
Guarantee or otherwise become liable with respect to any Sale/Leaseback
Transaction with respect to any property or assets unless (a) the Company or
such Restricted Subsidiary, as the case may be, would be entitled pursuant to
the Indenture to Incur Indebtedness secured by a Permitted Lien on such property
or assets in an amount equal to the Attributable Indebtedness with respect to
such Sale/Leaseback Transaction, (b) the Net Cash Proceeds from such
Sale/Leaseback Transaction are at least equal to the fair market value of the
property or assets subject to such Sale/Leaseback Transaction (such fair market
value determined, in the event such property or assets have a fair market value
in excess of $1.0 million, no more than 30 days prior to the effective date of
such Sale/Leaseback Transaction, by the Board of Directors of the Company as
evidenced by a resolution of such Board) and (c) the net cash proceeds of such
Sale/Leaseback Transaction are applied in accordance with the provisions
described under "-- Limitation on Sales of Assets and Subsidiary Stock."
SEC Reports. The Company will file with the Notes Trustee and provide to
the holders of the Notes (upon request), within 15 days after it files them with
the Commission, copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) which the Company files with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act. In the event
that the Company is not required to file such reports with the Commission
pursuant to the Exchange Act, the Company will nevertheless deliver such
Exchange Act information to the holders of the Notes within 15 days after it
would have been required to file it with the Commission.
Limitation on Designations of Unrestricted Subsidiaries. The Company may
designate any Subsidiary of the Company (other than a Subsidiary of the Company
which owns Capital Stock of a Restricted Subsidiary) as an "Unrestricted
Subsidiary" under the Indenture (a "Designation") only if:
(a) no Default shall have occurred and be continuing at the time of or
after giving effect to such Designation; and
(b) except in the case of a newly organized Subsidiary in which the
Company and the Restricted Subsidiaries have made aggregate investments of
$10,000 or less, the Company would be permitted under the Indenture to make
an Investment at the time of Designation (assuming the effectiveness of
such Designation) in an amount (the "Designation Amount") equal to the sum
of (i) fair market value of the Capital Stock of such Subsidiary owned by
the Company and the Restricted Subsidiaries on such date and (ii) the
aggregate amount of other Investments of the Company and the Restricted
Subsidiaries in such Subsidiary on such date; and
(c) the Company would be permitted to incur $1.00 of additional
Indebtedness (other than permitted Indebtedness) pursuant to the covenant
described under "-- Limitation on Indebtedness" at the time of Designation
(assuming the effectiveness of such Designation).
In the event of any such Designation, the Company shall be deemed to have made
an Investment constituting a Restricted Payment pursuant to the covenant
described under "-- Limitation on Restricted Payments" for all purposes of the
Indenture in the Designation Amount. The Indenture will further provide that the
Company shall not, and shall not permit any Restricted Subsidiary to, at any
time (i) provide direct or indirect credit support for or a guarantee of any
Indebtedness of any Unrestricted Subsidiary (including of any undertaking,
agreement or instrument evidencing such Indebtedness), (ii) be directly or
indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (iii)
be directly or indirectly liable for any Indebtedness which provides that the
holder thereof may (upon notice, lapse of time or both) declare a default
thereon or cause the payment thereof to be accelerated or payable prior to its
final scheduled maturity upon the
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occurrence of a default with respect to any Indebtedness of any Unrestricted
Subsidiary (including any right to take enforcement action against such
Unrestricted Subsidiary), except, in the case of clause (i) or (ii), to the
extent permitted under the covenant described under "-- Limitation on Restricted
Payments."
The Indenture further provides that the Company may revoke any Designation
of a Subsidiary as an Unrestricted Subsidiary (a "Revocation"), whereupon such
Subsidiary shall then constitute a Restricted Subsidiary, if:
(a) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at
such time, have been permitted to be Incurred for all purposes of the
Indenture.
All Designations and Revocations must be evidenced by Board Resolutions of
the Company delivered to the Notes Trustee certifying compliance with the
foregoing provisions.
Taxes. The Company will, and will cause its Restricted Subsidiaries to,
pay and discharge when due and payable all taxes, levies, imposts, duties or
other governmental charges ("Taxes") imposed on it or on its income or profits
or on any of its properties except such Taxes which are being contested in good
faith in appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP.
Merger and Consolidation. The Company shall not consolidate with or merge
with or into, or convey, transfer or lease all or substantially all of its
assets to, any Person, unless: (a) the resulting, surviving or transferee Person
(the "Successor Company") shall be a corporation organized and existing under
the laws of the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Company) shall expressly assume,
by supplemental indenture, executed and delivered to the Notes Trustee, in form
satisfactory to the Notes Trustee, all the obligations of the Company under the
Notes and the Indenture; (b) immediately after giving effect to such transaction
(and treating any Indebtedness that becomes an obligation of the Successor
Company or any Subsidiary of the Successor Company as a result of such
transaction as having been incurred by the Successor Company or such Restricted
Subsidiary at the time of such transaction), no Default or Event of Default
shall have occurred and be continuing; (c) immediately after giving effect to
such transaction, the Successor Company (i) shall have a Consolidated Net Worth
equal or greater to the Consolidated Net Worth of the Company immediately prior
to such transaction and (ii) shall be able to Incur at least an additional $1.00
of Indebtedness pursuant to paragraph (a) of "-- Limitation on Indebtedness";
(d) the Company shall have delivered to the Notes Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with the
Indenture; and (e) there has been delivered to the Notes Trustee an Opinion of
Counsel to the effect that holders of the Notes will not recognize income, gain
or loss for U.S. Federal income tax purposes as a result of such consolidation,
merger, conveyance, transfer or lease and will be subject to U.S. Federal income
tax on the same amount and in the same manner and at the same times as would
have been the case if such consolidation, merger, conveyance, transfer or lease
had not occurred.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under the Indenture, but, in the
case of a lease of all or substantially all its assets, the Company will not be
released from the obligation to pay the principal of and interest on the Notes.
Notwithstanding the foregoing clauses (b) and (c), any Restricted
Subsidiary of the Company may consolidate with, merge into or transfer all or
part of its properties and assets to the Company or any other Restricted
Subsidiary.
EVENTS OF DEFAULT
Each of the following constitutes an Event of Default under the Indenture:
(a) a default in any payment of interest on any Note when due, continued for 30
days, (b) a default in the payment of principal of any Note when due at its
Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or
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otherwise, (c) the failure by the Company to comply with its obligations under
the "Merger and Consolidation" covenant described under "Certain Covenants"
above, (d) the failure by the Company to comply for 30 days after notice by the
Trustee or holders of not less than 25% aggregate principal amount of Notes then
outstanding with any of its obligations under the covenants described under
"Change of Control" above or under covenants described under "Certain Covenants"
above (in each case, other than a failure to purchase Notes which shall
constitute an Event of Default under clause (b) above), other than "Merger and
Consolidation," (e) the failure by the Company or any Subsidiary Guarantor to
comply for 60 days after notice with its other agreements contained in the
Indenture, (f) Indebtedness of the Company or any Restricted Subsidiary is not
paid within any applicable grace period after final maturity or is accelerated
by the holders thereof because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds $2.0 million and such default shall
not have been cured or such acceleration rescinded after a 20-day period, (g)
certain events of bankruptcy, insolvency or reorganization of the Company or a
Significant Subsidiary (the "bankruptcy provisions"), (h) any judgment or decree
for the payment of money in excess of $2.0 million (to the extent not covered by
insurance) is rendered against the Company or a Significant Subsidiary and such
judgment or decree shall remain undischarged or unstayed for a period of 60 days
after such judgment becomes final and non-appealable (the "judgment default
provision"), (i) any Note Guarantee by a Significant Subsidiary ceases to be in
full force and effect (except as contemplated by the terms of the Indenture) or
any Subsidiary Guarantor that is a Significant Subsidiary denies or disaffirms
its obligations under the Indenture or its Note Guarantee and such Default
continues for 10 days, or (j) an event of default under, or if none is specified
therein, a failure to comply with any provision of any Mortgage and the
continuance of such event of default or failure to comply, as the case may be,
for a period of 30 days after written notice is given by the Notes Trustee to
the Company or to the Company and the Notes Trustee by the holders of at least
25% in aggregate principal amount of the Notes outstanding. However, a default
under clause (d) or (e) will not constitute an Event of Default until the Notes
Trustee or the holders of 25% in principal amount of the outstanding Notes
notify the Company of the default and the Company does not cure such default
within the time specified in clause (d) or (e) after receipt of such notice.
If an Event of Default occurs and is continuing, the Notes Trustee or the
holders of at least 25% in principal amount of the outstanding Notes by notice
to the Company may declare the principal of and accrued and unpaid interest, if
any, on all the Notes to be due and payable. Upon such a declaration, such
principal and accrued and unpaid interest shall be due and payable immediately.
If an Event of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs, the principal of and accrued and unpaid
interest on all the Notes will become and be immediately due and payable without
any declaration or other act on the part of the Notes Trustee or any holders.
Under certain circumstances, the holders of a majority in principal amount of
the outstanding Notes may rescind any such acceleration with respect to the
Notes and its consequences.
Subject to the provisions of the Indenture relating to the duties of the
Notes Trustee, if an Event of Default occurs and is continuing, the Notes
Trustee will be under no obligation to exercise any of the rights or powers
under the Indenture at the request or direction of any of the holders unless
such holders have offered to the Notes Trustee reasonable indemnity or security
against any loss, liability or expense. Except to enforce the right to receive
payment of principal, premium (if any) or interest when due, no holder may
pursue any remedy with respect to the Indenture or the Notes unless (i) such
holder has previously given the Notes Trustee notice that an Event of Default is
continuing, (ii) holders of at least 25% in principal amount of the outstanding
Notes have requested the Notes Trustee to pursue the remedy, (iii) such holders
have offered the Notes Trustee reasonable security or indemnity against any
loss, liability or expense, (iv) the Notes Trustee has not complied with such
request within 60 days after the receipt of the request and the offer of
security or indemnity and (v) the holders of a majority in principal amount of
the outstanding Notes have not given the Notes Trustee a direction that, in the
opinion of the Notes Trustee, is inconsistent with such request within such
60-day period. Subject to certain restrictions, the holders of a majority in
principal amount of the outstanding Notes are given the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Notes Trustee or of exercising any trust or power conferred on the Notes
Trustee. The Notes Trustee, however, may refuse to follow any direction that
conflicts with law or the Indenture or that the Notes Trustee determines is
unduly prejudicial to the rights of any other holder or that would involve the
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Notes Trustee in personal liability. Prior to taking any action under the
Indenture, the Notes Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by taking or
not taking such action.
The Indenture provides that if a Default occurs and is continuing and is
known to the Notes Trustee, the Notes Trustee must mail to each holder notice of
the Default within 90 days after it occurs. Except in the case of a Default in
the payment of principal of, premium (if any) or interest on any Note, the Notes
Trustee may withhold notice if and so long as its board of directors, a
committee of its board of directors or a committee of its Trust officers in good
faith determines that withholding notice is in the interests of the holders of
the Notes. In addition, the Company is required to deliver to the Notes Trustee,
within 90 days after the end of each fiscal year, a certificate indicating
whether the signers thereof know of any Default that occurred during the
previous year. The Company also is required to deliver to the Notes Trustee,
within 30 days after the occurrence thereof, written notice of any events which
would constitute certain Defaults.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, the Indenture may be amended with the
consent of the holders of a majority in principal amount of the Notes then
outstanding and any past default or compliance with any provisions may be waived
with the consent of the holders of a majority in principal amount of the Notes
then outstanding. However, without the consent of each holder of an outstanding
Note affected, no amendment may, among other things, (a) reduce the amount of
Notes whose holders must consent to an amendment, (b) reduce the stated rate of
or extend the stated time for payment of interest on any Note, (c) reduce the
principal of or extend the Stated Maturity of any Note, (d) reduce the premium
payable upon the redemption or repurchase of any Note or change the time at
which any Note may be redeemed as described under "-- Optional Redemption"
above, (e) make any Note payable in money other than that stated in the Note,
(f) impair the right of any holder to receive payment of principal of and
interest on such holder's Notes on or after the due dates therefor or to
institute suit for the enforcement of any payment on or with respect to such
holder's Notes or (g) make any change in the amendment provisions which require
each holder's consent or in the waiver provisions.
Without the consent of any holder, the Company and the Notes Trustee may
amend the Indenture to cure any ambiguity, omission, defect or inconsistency, to
provide for the assumption by a Successor Company of the obligations of the
Company under the Indenture, to add further Guarantees with respect to the
Notes, to add further security for the Notes, to add to the covenants of the
Company for the benefit of the holders or to surrender any right or power
conferred upon the Company, to make any change that does not adversely affect
the rights of any holder or to comply with any requirement of the Commission in
connection with the qualification of the Indenture under the Trust Indenture
Act.
The consent of the holders is not necessary under the Indenture to approve
the particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, the Company is
required to mail to the holders a notice briefly describing such amendment.
However, the failure to give such notice to all the holders, or any defect
therein, will not impair or affect the validity of the amendment.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND SHAREHOLDERS
No director, officer or employee of the Company or any Subsidiary or
shareholder of the Company, as such, shall have any personal liability for any
obligations of the Company or any Subsidiary under the Notes, the Indenture, the
Note Guarantees, the Mortgages or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes and the Note Guarantees and the grant of
the Mortgages. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
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DEFEASANCE
The Company at its option may at any time terminate all its obligations
under the Notes and the Indenture ("legal defeasance"), except for certain
obligations, including those respecting the defeasance trust and obligations to
register the transfer or exchange of the Notes, to replace mutilated, destroyed,
lost or stolen Notes and to maintain a registrar and paying agent in respect of
the Notes. In addition, the Company at its option may at any time terminate its
obligations under covenants described under "Certain Covenants" (other than
"Merger and Consolidation"), the operation of the cross acceleration provision,
the bankruptcy provisions with respect to Significant Subsidiaries, the judgment
default provision and the Note Guarantee provision described under "Events of
Default" above and the limitations contained in clauses (c) and (d) under
"Certain Covenants -- Merger and Consolidation" above ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, payment of the Notes may not be accelerated because of
an Event of Default with respect thereto. If the Company exercises its covenant
defeasance option, payment of the Notes may not be accelerated because of an
Event of Default specified in clause (d, (f), (g) (with respect only to
Significant Subsidiaries), (h) or (i) under "Events of Default" above or because
of the failure of the Company to comply with clause (c) or (d) under "Certain
Covenants -- Merger and Consolidation" above.
In order to exercise either defeasance option, the Company must irrevocably
deposit in trust (the "defeasance trust") with the Notes Trustee money or U.S.
Government Obligations for the payment of principal, premium (if any) and
interest on the Notes to redemption or maturity, as the case may be, and must
comply with certain other conditions, including delivery to the Notes Trustee of
an Opinion of Counsel to the effect that holders of the Notes will not recognize
income, gain or loss for Federal income tax purposes as a result of such deposit
and defeasance and will be subject to Federal income tax on the same amount and
in the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred (and, in the case of legal defeasance
only, such Opinion of Counsel must be based on a private or public ruling of the
Internal Revenue Service or other change in applicable Federal income tax law).
SATISFACTION AND DISCHARGE OF THE INDENTURE
The Indenture will cease to be of further effect (except as otherwise
expressly provided for in the Indenture) when either (a) all outstanding Notes
have been delivered (other than lost, stolen or destroyed Notes which have been
replaced) to the Notes Trustee for cancellation or (b) all outstanding Notes
have become due and payable, whether at maturity or as a result of the mailing
of a notice of redemption pursuant to the terms of the Indenture and the Company
has irrevocably deposited with the Notes Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Notes, including interest thereon
(other than lost, stolen, mutilated or destroyed Notes which have been
replaced), and, in either case, the Company has paid all other sums payable
under the Indenture. The Notes Trustee is required to acknowledge satisfaction
and discharge of the Indenture on demand of the Company accompanied by an
Officer's Certificate and an Opinion of Counsel at the cost and expense of the
Company.
TRANSFER AND EXCHANGE
Subject to the transfer restrictions described in this Prospectus, holders
may transfer or exchange their Notes in accordance with the Indenture. See
"Transfer Restrictions on the Notes." Upon any transfer of a Note, the registrar
may require a holder, among other things, to furnish appropriate endorsements
and transfer documents, and to pay any taxes and fees required by law or
permitted by the Indenture. The registrar is not required to transfer or
exchange any Notes selected for redemption nor is the registrar required to
transfer or exchange any Notes for a period of 15 days before a selection of
Notes to be redeemed. The registered holder of a Note may be treated as the
owner of it for all purposes.
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CONCERNING THE NOTES TRUSTEE
SunTrust is the Notes Trustee under the Indenture and has been appointed by
the Company as registrar and paying agent with regard to the Notes. The Notes
Trustee's current address is 225 East Robinson Street, Suite 250, Orlando,
Florida 32801.
The Indenture contains certain limitations on the rights of the Notes
Trustee, should it become a creditor of the Company, to obtain payment of claims
in certain cases, or to realize on certain property received in respect of any
such claim a security or otherwise. The Notes Trustee will be permitted to
engage in other transactions; however, if it acquires any conflicting interest
(as defined) it must eliminate such conflict or resign.
The holders of a majority in aggregate principal amount of the then
outstanding Notes issued under the Indenture will have the right to direct the
time, method and place of conducting any proceeding for exercising any remedy
available to the Notes Trustee. The Indenture provides that in case an Event of
Default shall occur (which shall not be cured) the Notes Trustee will be
required, in the exercise of its power, to use the degree of care of a prudent
man in the conduct of his own affairs. Subject to such provisions, the Notes
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request of any of the holders of the Notes issued
thereunder unless they shall have offered to the Notes Trustee security and
indemnity satisfactory to it.
GOVERNING LAW
The Indenture provides that it and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to applicable principles of conflicts of law to the extent that the
application of the law of another jurisdiction would be required thereby.
CERTAIN DEFINITIONS
"Accounts Receivable" means collectively Mortgages Receivable and Timeshare
Interests Receivable.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Permitted Business; (ii) the Capital Stock
of a Person that becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or a Restricted Subsidiary of the Company;
(iii) Capital Stock constituting a minority interest in any Person that at such
time is a Restricted Subsidiary of the Company; or (iv) Permitted Investments of
the type and in the amounts described in clause (vii) of the definition thereof;
provided, however, that, in the case of clauses (ii) and (iii), such Restricted
Subsidiary is primarily engaged in a Permitted Business.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
lesser of the amount by which (i) the fair value of the property of such
Subsidiary Guarantor exceeds the total amount of liabilities, including, without
limitation, the probable liability of such Subsidiary Guarantor with respect to
its contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Note Guarantees, of such Subsidiary Guarantor at such date
and (ii) the present fair salable value of the assets of such Subsidiary
Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Subsidiary Guarantor on its debts (after giving
effect to all other fixed and contingent liabilities incurred or assumed on such
date and after giving effect to any collection from any Subsidiary by such
Subsidiary Guarantor in respect of the obligations of such Subsidiary under the
Note Guarantees), excluding debt in respect of the Note Guarantees, as they
become absolute and matured.
"Affiliate" of any specified person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
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"Asset Disposition" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan) of shares of Capital Stock of (or
any other equity interests in) a Restricted Subsidiary (other than directors'
qualifying shares and, to the extent required by local ownership laws in foreign
countries, shares owned by foreign shareholders) or of any other property or
other assets (each referred to for the purposes of this definition as a
"disposition") by the Company or any of its Restricted Subsidiaries (including
any disposition by means of a merger, consolidation or similar transaction)
other than (i) a disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Wholly-Owned Subsidiary, (ii) sales or
other transfers in the ordinary course of business (including, without
limitation, bulk sales in the ordinary course of business consistent with past
practices), of Timeshare Interests, points in a points-based vacation club
system, Accounts Receivable (including, without limitation, direct sales to
financial institutions and sales or transfers in connection with securitization
transactions in the ordinary course of business) or Residential Lots or other
real property (including, without limitation, bulk sales in the ordinary course
of business consistent with past practices), (iii) a disposition of obsolete or
worn out equipment or equipment that is no longer useful in the conduct of the
business of the Company and its Restricted Subsidiaries and that is disposed of
in each case in the ordinary course of business, (iv) dispositions of property
for net proceeds which, when taken collectively with the net proceeds of any
other such dispositions under this clause (iv) that were consummated since the
beginning of the calendar year in which such disposition is consummated, do not
exceed $1.0 million, (v) transactions permitted under "Certain
Covenants -- Merger and Consolidation" above and (vi) Permitted Investments.
Notwithstanding anything to the contrary contained above, a Restricted Payment
made in compliance with the "Limitation on Restricted Payments" covenant shall
not constitute an Asset Disposition (except for purposes of determinations of
the Consolidated Coverage Ratio) to the extent that such Restricted Payment as
of the date made together with all other Restricted Payments not constituting
Asset Dispositions pursuant to this sentence made subsequent to the Issue Date
do not exceed, as of such date, 50% of the amount calculated in accordance with
clause (a)(3) set forth under "-- Certain Covenants -- Limitation on Restricted
Payments."
"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate per annum equal to the discount rate which would be applicable to
a Capitalized Lease Obligation with a like term in accordance with GAAP) of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (i) the sum of the product of
the numbers of years (rounded upwards to the nearest month) from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption multiplied by the amount of such payment by (ii)
the sum of all such payments.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP, and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date such lease may be terminated without penalty.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof, (iii) certificates of deposit, time
deposits and eurodollar time deposits with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year and overnight bank deposits, in each case with any commercial bank having
capital and surplus in excess of $500 million, (iv) repurchase obligations for
underlying securities of the types described in clauses (ii) and (iii) entered
into with any financial institution meeting the qualifications specified in
clause (iii) above, (v) commercial
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paper rated A-1 or the equivalent thereof by Moody's Investors Service, Inc.
("Moody's") or Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. ("S&P") and in each case maturing within one year
after the date of acquisition, (vi) investment funds investing 95% of their
assets in securities of the types described in clauses (i)(v) above, and (vii)
readily marketable direct obligations issued by any state of the United States
of America or any political subdivision thereof having one of the two highest
rating categories obtainable form either Moody's or S&P.
"Consolidated Cash Flow" for any period means the Consolidated Net Income
for such period, plus, without duplication, the following to the extent deducted
in calculating such Consolidated Net Income: (i) income tax expense, (ii)
Consolidated Interest Expense, (iii) depreciation expense, (iv) amortization
expense, and (v) all other non-cash items reducing Consolidated Net Income
(excluding any non-cash item to the extent it represents an accrual of or
reserve for cash disbursements for any subsequent period prior to the stated
maturity of the Notes) and less, (x) the aggregate amount of contingent and
"earnout" payments in respect of any Permitted Business acquired by the Company
or any Restricted Subsidiary that are paid in cash during such period and (y) to
the extent added in calculating Consolidated Net Income, non-cash items
(excluding such non-cash items to the extent they represent an accrual for cash
receipts reasonably expected to be received prior to the Stated Maturity of the
Notes), in each case for such period. Notwithstanding the foregoing, the income
tax expense, depreciation expense and amortization expense of a Subsidiary of
the Company shall be included in Consolidated Cash Flow only to the extent (and
in the same proportion) that the net income of such Subsidiary was included in
calculating Consolidated Net Income.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of Consolidated Cash Flow for the period of
the most recent four consecutive fiscal quarters ending prior to the date of
such determination and as to which financial statements are available to (ii)
Consolidated Interest Expense for such four fiscal quarters; provided, however,
that (A) if the Company or any of its Restricted Subsidiaries has Incurred any
Indebtedness since the beginning of such period and through the date of
determination of the Consolidated Coverage Ratio that remains outstanding or if
the transaction giving rise to the need to calculate Consolidated Coverage Ratio
is an Incurrence of Indebtedness, or both, Consolidated Cash Flow and
Consolidated Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to (l) such Indebtedness as if such Indebtedness had
been Incurred on the first day of such period (provided that if such
Indebtedness is incurred under a revolving credit facility (or similar
arrangement or under any predecessor revolving credit or similar arrangement)
only that portion of such Indebtedness that constitutes the one year projected
average daily balance of such Indebtedness (as determined in good faith by the
Board of Directors of the Company) shall be deemed outstanding for purposes of
this calculation), and (2) the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such period,
(B) if since the beginning of such period any Indebtedness of the Company or any
of its Restricted Subsidiaries has been repaid, repurchased, defeased or
otherwise discharged (other than Indebtedness under a revolving credit or
similar arrangement unless such revolving credit Indebtedness has been
permanently repaid and the underlying commitment terminated and has not been
replaced), Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto as if such Indebtedness had been repaid,
repurchased, defeased or otherwise discharged on the first day of such period,
(C) if since the beginning of such period the Company or any of its Restricted
Subsidiaries shall have made any Asset Disposition or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an Asset
Disposition, Consolidated Cash Flow for such period shall be reduced by an
amount equal to the Consolidated Cash Flow (if positive) attributable to the
assets which are the subject of all such Asset Dispositions for such period or
increased by an amount equal to the Consolidated Cash Flow (if negative)
attributable thereto for such period, and Consolidated Interest Expense for such
period shall be (i) reduced by an amount equal to the Consolidated Interest
Expense attributable to any Indebtedness of the Company or any of its Restricted
Subsidiaries repaid, repurchased, defeased or otherwise discharged with respect
to the Company and its continuing Restricted Subsidiaries in connection with all
such Asset Dispositions for such period (or, if the Capital Stock of any
Restricted Subsidiary of the Company is sold, the Consolidated Interest Expense
for such period directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent the Company and its continuing Restricted Subsidiaries
are no longer liable for such Indebtedness after such sale) and
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(ii) increased by interest income attributable to the assets which are the
subject of all such Asset Dispositions during such period, (D) if since the
beginning of such period the Company or any of its Restricted Subsidiaries (by
merger or otherwise) shall have made an Investment in any Restricted Subsidiary
of the Company (or any Person which becomes a Restricted Subsidiary of the
Company as a result thereof) or an acquisition of assets occurring in connection
with a transaction causing a calculation to be made hereunder which constitutes
all or substantially all of an operating unit of a business, Consolidated Cash
Flow and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the incurrence of any Indebtedness)
as if such Investment or acquisition occurred on the first day of such period
and (E) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary of the Company or was merged with or into the
Company or any Restricted Subsidiary of the Company since the beginning of such
period) shall have repaid, repurchased, defeased or otherwise discharged
Indebtedness or made any Asset Disposition, Investment or acquisition of assets
that would have required an adjustment pursuant to clause (B), (C) or (D) above
if made by the Company or a Restricted Subsidiary of the Company during such
period, Consolidated Cash Flow and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest expense on such Indebtedness shall be calculated as
if the rate in effect on the date of determination had been the applicable rate
for the entire period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its Restricted Subsidiaries determined in accordance
with GAAP, plus, to the extent not included in such interest expense and to the
extent Incurred by the Company or its Restricted Subsidiaries (i) interest
expense attributable to Capitalized Lease Obligations, (ii) capitalized
interest, (iii) amortization of debt discount, (iv) non-cash interest expense,
(v) commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, (vi) interest actually paid
by the Company or any such Restricted Subsidiary under any guarantee of
Indebtedness or other obligation of any other Person, (vii) net payments
(whether positive or negative) pursuant to Interest Rate Agreements, (viii) the
cash contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than the Company) in connection with Indebtedness Incurred
by such plan or trust and (ix) cash and Disqualified Stock dividends in respect
of all Preferred Stock of Subsidiaries and Disqualified Stock of the Company
held by Persons other than the Company or a Wholly-Owned Subsidiary and less (a)
to the extent included in such interest expense, the amortization of capitalized
debt issuance costs and (b) interest income. Notwithstanding the foregoing, the
Consolidated Interest Expense with respect to any Restricted Subsidiary of the
Company, that was not a Wholly-Owned Subsidiary, shall be included only to the
extent (and in the same proportion) that the net income of such Restricted
Subsidiary was included in calculating Consolidated Net Income.
"Consolidated Net Income" means, for any period, the net income (loss) of
the Company and its consolidated Subsidiaries determined in accordance with
GAAP; provided, however, that there shall not be included in such Consolidated
Net Income: (i) any net income (loss) of any Person acquired by the Company or
any of its Restricted Subsidiaries in a pooling of interests transaction for any
period prior to the date of such acquisition, (ii) any net income of any
Restricted Subsidiary of the Company if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making
of distributions by such Restricted Subsidiary, directly or indirectly, to the
Company to the extent of such restriction (other than restrictions in effect on
the Issue Date with respect to a Restricted Subsidiary of the Company and other
than restrictions that are created or exist in compliance with the "Limitation
on Restrictions on Distributions from Restricted Subsidiaries" covenant), (iii)
any gain or loss realized upon the sale or other disposition of any assets of
the Company or its consolidated Restricted Subsidiaries (including pursuant to
any Sale/Leaseback
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Transaction) which are not sold or otherwise disposed of in the ordinary course
of business (it being understood that direct sales of Accounts Receivable to a
financial institution or sales of Accounts Receivable in connection with
securitization transactions shall be deemed to be in the ordinary course of
business) and any gain or loss realized upon the sale or other disposition of
any Capital Stock of any Person, (iv) any extraordinary gain or loss, (v) the
cumulative effect of a change in accounting principles, (vi) the net income of
any Person, other than a Restricted Subsidiary, except to the extent of the
lesser of (A) cash dividends or distributions actually paid to the Company or
any of its Restricted Subsidiaries by such Person and (B) the net income of such
Person (but in no event less than zero), and the net loss of such Person (other
than an Unrestricted Subsidiary) shall be included only to the extent of the
aggregate Investment of the Company or any of its Restricted Subsidiaries in
such Person and (vii) any non-cash expenses attributable to grants or exercises
of employee stock options. Notwithstanding the foregoing, for the purpose of the
covenant described under "Certain Covenants -- Limitation on Restricted
Payments" only, there shall be excluded from Consolidated Net Income any
dividends, repayments of loans or advances or other transfers of assets from
Unrestricted Subsidiaries to the Company or a Restricted Subsidiary to the
extent such dividends, repayments or transfers increase the amount of Restricted
Payments permitted under such covenant pursuant to clause (a)(3)(D) thereof.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP, as of the end of the
most recent fiscal quarter of the Company ending prior to the taking of any
action for the purpose of which the determination is being made and for which
financial statements are available (but in no event ending more than 135 days
prior to the taking of such action), as (i) the par or stated value of all
outstanding Capital Stock of the Company plus (ii) paid in capital or capital
surplus relating to such Capital Stock plus (iii) any retained earnings or
earned surplus less (A) any accumulated deficit and (B) any amounts attributable
to Disqualified Stock.
"Continuing Director" of any Person means, as of the date of determination,
any Person who (i) was a member of the Board of Directors of such Person on the
date of the Indenture or (ii) was nominated for election or elected to the Board
of Directors of such Person with the affirmative vote of a majority of the
Continuing Directors of such Person who were members of such Board of Directors
at the time of such nomination or election.
"Convertible Debentures" means the Company's 8.25% Convertible Subordinated
Debentures due May 15, 2012 issued pursuant to that certain Indenture dated as
of May 15, 1987 between The Patten Corporation and Shawmut Bank, N.A., as
trustee.
"Convertible Notes" means the Company's 8% Convertible Notes due September
11, 2002 in the aggregate principal amount of $6,000,000 orginally issued to
Joseph C. Abeles and Grace Brothers, Ltd.
"Credit Agreements" means any credit agreement or similar facility or any
other agreement governing Indebtedness entered into by the Company or any
Restricted Subsidiary, as any of the same may be amended, waived, modified,
refinanced with Refinancing Indebtedness or replaced from time to time (except
to the extent any such amendment, waiver, modification, replacement or
refinancing would be prohibited by the terms of the Indenture).
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Disqualified Stock" means any Capital Stock which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (other than an event which
would constitute a Change of Control), (i) matures (excluding any maturity as
the result of an optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final Stated Maturity of the Notes, or (ii) is convertible into or exchangeable
(unless at the sole option of the issuer
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thereof) for (a) debt securities or (b) any Capital Stock referred to in (i)
above, in each case at any time prior to the final Stated Maturity of the Notes.
"Equity Offering" means an offering for cash by the Company of its common
stock, or options, warrants or rights with respect to its common stock, which in
any case is registered with the Securities and Exchange Commission under the
Securities Act of 1933.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"Existing Indebtedness" means Indebtedness of the Company or its Restricted
Subsidiaries in existence on the Issue Date, plus interest accrued, thereon,
after application of the net proceeds of the Notes as described in the
Prospectus.
"fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Company delivered to the Notes Trustee.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the date of the Indenture, including those set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession All ratios and computations based on GAAP contained in the
Indenture shall be computed in conformity with GAAP.
"Group" shall mean any "group" for purposes of Section 13(d) of the
Exchange Act.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Incur" means issue, assume, Guarantee, incur or otherwise become liable
for; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Restricted Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be incurred
by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary;
provided that a change in GAAP that results in an obligation of such Person that
exists at such time becoming Indebtedness shall not be deemed an incurrence of
such Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of indebtedness of such Person for borrowed money, (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto) (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in clauses (i), (ii) and (v)) entered into in the ordinary
course of business of such Person to the extent that such letters of credit are
not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed
no later than the third business day following receipt by such Person of a
demand for reimbursement following payment on the letter of credit), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services (except trade payables and other accrued expenses incurred
in the ordinary course of business), which purchase price is due more than six
months after the date of placing such property in
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service or taking delivery and title thereto or the completion of such services,
(v) all Capitalized Lease Obligations and all Attributable Indebtedness of such
Person, (vi) all Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that if such obligations have not been assumed, the amount of
such Indebtedness shall be deemed to be the lesser of the principal amount of
the obligations or the fair market value of the pledged property or assets,
(vii) all Indebtedness of other Persons to the extent Guaranteed by such Person,
(viii) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or, with
respect to any Restricted Subsidiary of the Company, any Preferred Stock of such
Restricted Subsidiary to the extent such obligation arises on or before the
Stated Maturity of the Notes (but excluding, in each case, accrued dividends)
with the amount of Indebtedness represented by such Disqualified Stock or
Preferred Stock, as the case may be, being equal to the greater of its voluntary
or involuntary liquidation preference and its maximum fixed repurchase price;
provided that, for purposes hereof the "maximum fixed repurchase price" of any
Disqualified Stock or Preferred Stock, as the case may be, which does not have a
fixed repurchase price shall be calculated in accordance with the terms of such
Disqualified Stock or Preferred Stock, as the case may be, as if such
Disqualified Stock or Preferred Stock, as the case may be, were purchased on any
date on which Indebtedness shall be required to be determined pursuant to the
Indenture, and if such price is based on the fair market value of such
Disqualified Stock or Preferred Stock, as the case may be, such fair market
value shall be determined in good faith by the Board of Directors of the Company
and (ix) to the extent not otherwise included in this definition, obligations
under Currency Agreements and Interest Rate Agreements. Unless specifically set
forth above, the amount of Indebtedness of any Person at any date shall be the
outstanding principal amount of all unconditional obligations as described
above, as such amount would be reflected on a balance sheet prepared in
accordance with GAAP, and the maximum liability of such Person, upon the
occurrence of the contingency giving rise to the obligation, of any contingent
obligations described above at such date.
"Interest Rate Agreement" means with respect to any Person any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement as to which such Person is party or a beneficiary.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts payable on the balance sheet of such Person) or other
extension of credit (including by way of Guarantee or similar arrangement, but
excluding any debt or extension of credit represented by a bank deposit other
than a time deposit) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such Person. For purposes of
the "Limitation on Restricted Payments" covenant and the definition of
"Unrestricted Subsidiary", (i) "Investment" shall include the portion
(proportionate to the Company's equity interest in a Restricted Subsidiary to be
designated as an Unrestricted Subsidiary) of the fair market value of the net
assets of such Restricted Subsidiary of the Company at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time that such Subsidiary is so redesignated a Restricted
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors and
evidenced by a resolution of such Board of Directors certified in an Officers'
Certificate to the Notes Trustee. Notwithstanding the foregoing, in no event
shall the issuance of Capital Stock (other than Disqualified Stock) of the
Company in exchange for Capital Stock, property or assets of another Person
constitute an Investment by the Company in such other Person.
"Issue Date" means the date on which the Outstanding Notes were originally
issued.
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"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Mortgages Receivable" means the receivables of the Company and its
Restricted Subsidiaries arising from sales by the Company and its Restricted
Subsidiaries of Residential Lots or otherwise acquired by the Company or a
Restricted Subsidiary determined on a consolidated basis in accordance with
GAAP.
"Net Available Cash" from an Asset Disposition means cash payments received
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to the properties or assets subject to such Asset Disposition) therefrom in each
case net of (i) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state, foreign and local
taxes required to be paid or accrued as a liability under GAAP, as a consequence
of such Asset Disposition, (ii) all distributions and other payments required to
be made to any Person owning a beneficial interest in assets subject to sale or
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition, (iii) the deduction of appropriate amounts to be provided by
the seller as a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition, provided
however, that upon any reduction in such reserves (other than to the extent
resulting from payments of the respective reserved liabilities), Net Available
Cash shall be increased by the amount of such reduction to reserves, and
retained by the Company or any Restricted Subsidiary of the Company after such
Asset Disposition and (iv) any portion of the purchase price from an Asset
Disposition placed in escrow (whether as a reserve for adjustment of the
purchase price, for satisfaction of indemnities in respect of such Asset
Disposition or otherwise in connection with such Asset Disposition) provided,
however, that upon the termination of such escrow, Net Available Cash shall be
increased by any portion of funds therein released to the Company or any
Restricted Subsidiary.
"Net Cash Proceeds," with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Company
nor any Restricted Subsidiary (a) provides any guarantee or credit support of
any kind (including any undertaking, Guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) or (b) is directly or indirectly
liable (as a guarantor, general partner or otherwise) and (ii) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity.
"Officer" means the Chairman of the Board, the Vice-Chairman of the Board,
the Chief Executive Officer, the Chief Financial Officer, the President, any
Vice-President, the Treasurer or the Secretary of the Company.
"Note Guarantee" means the Guarantee of the Notes by a Subsidiary
Guarantor.
"Officer's Certificate" shall mean a certificate signed by two Officers of
the Company, at least one of whom shall be the principal executive, financial or
accounting officer of the Company.
"Opinion of Counsel" means a written opinion, in form and substance
acceptable to the Notes Trustee, from legal counsel acceptable to the Notes
Trustee.
"Permitted Business" means any business which is the same as, or related,
ancillary or complementary to, any of the businesses of the Company and its
Restricted Subsidiaries on the date of the Indenture, as reasonably determined
by the Company's Board of Directors.
"Permitted Investment" means an Investment by the Company or any of its
Restricted Subsidiaries in (i) the Company or a Wholly-Owned Subsidiary of the
Company; provided, however, that the primary business of such Wholly-Owned
Subsidiary is a Permitted Business; (ii) another Person if as a result of such
Investment such other Person becomes a Wholly-Owned Subsidiary of the Company or
is merged or
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consolidated with or into, or transfers or conveys all or substantially all its
assets to, the Company or a Wholly-Owned Subsidiary of the Company; provided,
however, that in each case such Person's primary business is a Permitted
Business; (iii) Temporary Cash Investments; (iv) a Receivables Subsidiary or
originations, purchases or acquisitions of Accounts Receivable by the Company or
any Restricted Subsidiary created or acquired in the ordinary course of
business; (v) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of business; (vi)
stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any of its Restricted
Subsidiaries or in satisfaction of judgments or claims; (vii) a Person engaged
in a Permitted Business or a loan or advance by the Company the proceeds of
which are used solely to make an investment in a Person engaged in a Permitted
Business or a Guarantee by the Company of Indebtedness of any Person in which
such Investment has been made provided, however, that no Permitted Investments
may be made pursuant to this clause (vii) to the extent the amount thereof
would, when taken together with all other Permitted Investments made pursuant to
this clause (vii), exceed $3.0 million in the aggregate (plus, to the extent not
previously reinvested, any return of capital realized on Permitted Investments
made pursuant to this clause (vii), or any release or other cancellation of any
Guarantee constituting such Permitted Investment); (viii) Persons to the extent
such Investment is received by the Company or any Restricted Subsidiary as
consideration for asset dispositions effected in compliance with the covenant
described under "Limitations on Sales of Assets and Subsidiary Stock"; (ix)
prepayments and other credits to suppliers made in the ordinary course of
business consistent with the past practices of the Company and its Restricted
Subsidiaries; (x) Investments in connection with pledges, deposits, payments or
performance bonds made or given in the ordinary course of business in connection
with or to secure statutory, regulatory or similar obligations, including
obligations under health, safety or environmental obligations; (xi) Investments
in Currency Agreements and Interest Rate Protection Agreements permitted by the
covenant described under "-- Certain Covenants -- Limitation on Indebtedness";
and (xii) any Investment acquired by the Company or any of its Restricted
Subsidiaries (A) in exchange for any other Investment or accounts receivable
held by the Company or any such Restricted Subsidiary in connection with or as a
result of a bankruptcy, workout, reorganization or recapitalization of the
issuer of such other Investment or accounts receivable or (B) as a result of a
foreclosure (or deed in lieu of) by the Company or any of its Restricted
Subsidiaries with respect to any secured Investment or other transfer of title
with respect to any secured Investment in default;
"Permitted Liens" means: (i) Liens granted by the Company and the
Subsidiary Guarantors which secure Indebtedness to the extent the Indebtedness
is incurred pursuant to paragraph (a) or clause (i) of paragraph (b) under the
"Limitation on Incurrence of Indebtedness" covenant and Liens granted to the
Trustee or the Pledged Properties securing the obligations of certain Subsidiary
Guarantors under their respective Note Guarantees; (ii) Liens in favor of the
Company or any Subsidiary Guarantor; (iii) Liens existing on the Issue Date;
(iv) Liens on property of a Person existing at the time such Person is acquired
by or merged into or consolidated with the Company or any Restricted Subsidiary
thereof; provided that such Liens were in existence prior to the contemplation
of such acquisition and do not extend to any assets of the Company or its
Restricted Subsidiaries other than those acquired in connection with such merger
or consolidation; (v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vi) Liens in respect of
extensions, renewals, refundings or refinancings of any Indebtedness secured by
the Liens referred to in clauses (i), (ii) and (iii) above and (vii) below;
provided that the Liens in connection with such renewal, extensions, renewals,
refundings or refinancing shall be limited to all or part of the specific
property which was subject to the original Lien; (vii) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided that any reserve or other
appropriate provisions as shall be required in conformity with GAAP shall have
been made therefor; (viii) any Lien securing purchase money obligations incurred
in compliance with paragraph (b)(ii) of the "Limitation on Indebtedness"
covenant, provided that such Liens do not extend to any property (other than the
property so purchased) owned by the Company or its Restricted Subsidiaries and
is not incurred more than 30 days after the incurrence of such Indebtedness
secured by such Lien; (ix) Liens to secure Capitalized Lease Obligations (except
in respect of
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Sale/Leaseback Transactions) on real or personal property of the Company to the
extent consummated in compliance with paragraph (b)(ii) of the "Limitation on
Indebtedness" covenant, provided that such Liens do not extend to or cover any
property of the Company or any of its Subsidiaries other than the property
subject to such Capitalized Lease Obligation; (x) Liens incurred in the ordinary
course of business of the Company or any Restricted Subsidiary thereof with
respect to obligations that do not exceed $1.0 million at any one time
outstanding and that (A) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (B) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of the business by the Company or such Restricted Subsidiary; (xi)
Liens on property or assets at the time the Company or any Restricted Subsidiary
acquired such assets, including any acquisition by means of a merger or
consolidation with or into the Company or such Restricted Subsidiary,
provided,however, that (A) if any such Lien is incurred in anticipation of such
transaction, such property or assets subject to such Lien will have a fair
market value at the date of the acquisition thereof not in excess of the lesser
of (1) the aggregate purchase price paid or owed by the Company or such
Restricted Subsidiary in connection with the acquisition thereof and of any
other property and assets acquired simultaneously therewith and (2) the fair
market value of all such property and assets acquired by the Company or such
Restricted Subsidiary and (B) any such Lien will not extend to any other
property or assets owned by the Company or any Restricted Subsidiary; (xii)
Liens on property or assets of the Company securing Interest Rate Agreements and
Currency Agreements so long as the related Indebtedness is permitted under
"-- Certain Covenants -- Limitation on Indebtedness" and is secured by a Lien on
the same property securing the relevant Interest Rate Agreement or Currency
Agreement; (xiii) survey exceptions, encumbrances, easements or, reservations
of, or rights of others for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes or zoning or other
restrictions as to the use of real property of the Company or such Restricted
Subsidiary incidental to the ordinary course of conduct of the business of the
Company or such Restricted Subsidiary or as to the ownership of properties of
the Company or any Restricted Subsidiary, which, in either case, were not
incurred in connection with Indebtedness and which do not in the aggregate
materially adversely affect the value of said properties or materially impair
their use in the operation of the business of the Company or any Restricted
Subsidiary; (xiv) judgment Liens with respect to judgments that do not cause an
Event of Default under clause (h) of the provision of the Indenture described
under "-- Events of Default"; (xv) Liens with respect to a purchase and sale
agreement or other option or right to acquire property entered into in the
ordinary course of business consistent with past practices prior to the closing
date of such purchase; (xvi) Liens with respect to deposits made by the Company
or any Restricted Subsidiary in connection with the acquisition of inventory in
the ordinary course of business consistent with past practices; and (xvii) Liens
with respect to mineral rights associated with any real property of the Company
or any Restricted Subsidiary.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision hereof or any
other entity.
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"RDI Note" means the Promissory Note in the aggregate principal amount of
$1,500,000 issued in the RDI Acquisition to the RDI Stockholders.
"Receivables and Related Assets" means Accounts Receivable and instruments,
chattel paper, obligations, general intangibles, mortgages, deeds, records and
other similar assets, in each case relating to such Accounts Receivable.
"Receivables Subsidiary" means a Subsidiary which is established and
continues to operate for the limited purpose of acquiring, selling and financing
Receivables and Related Assets in connection with receivables securitization or
financing transactions.
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"Refinancing Indebtedness" means Indebtedness that refunds, refinances,
replaces, renews, repays prepays, reduces, defeases, retires or extends
(including pursuant to any defeasance or discharge mechanism) (collectively,
"refinances," and "refinanced" shall have a correlative meaning) any
Indebtedness existing on the date of the Indenture or Incurred in compliance
with the Indenture (including Indebtedness of the Company that refinances
Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted
Subsidiary that refinances Indebtedness of another Restricted Subsidiary)
including Indebtedness that refinances Refinancing Indebtedness; provided,
however, that (i) the Refinancing Indebtedness has a Stated Maturity no earlier
than the earlier of (A) the first anniversary of the Stated Maturity of the
Notes and (B) Stated Maturity of the Indebtedness being refinanced, (ii) the
Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the lesser of (A) the
Average Life of the Notes and (B) the Average Life of the Indebtedness being
refinanced and, (iii) the Refinancing Indebtedness is in an aggregate principal
amount (or if issued with original issue discount, an aggregate issue price)
that is equal to (or 101% of, in the case of a refinancing of the Notes in
connection with a Change of Control) or less than the sum of the aggregate
principal amount (or if issued with original issue discount, the aggregate
accreted value) then outstanding of the Indebtedness being refinanced (plus the
amount of any premium required to be paid in connection therewith and reasonable
fees and expenses therewith); provided, further, that Refinancing Indebtedness
shall not include Indebtedness of a Subsidiary which refinances Indebtedness of
the Company.
"Residential Lots" means the parcels of real property sold by the Company
and its Restricted Subsidiaries in the ordinary course of their residential land
business.
"Restricted Subsidiary" means any Subsidiary of the Company other an
Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Subsidiary leases it
from such Person.
"Secured Indebtedness" means any Senior Indebtedness of the Company or a
Subsidiary Guarantor secured by a Lien.
"Senior Indebtedness" means Indebtedness that is not by its terms expressly
subordinate or junior in right of payment to any other Indebtedness of the
Company or the Note Guarantee of a Subsidiary Guarantor.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision, but excluding any provisions providing for the repurchase, redemption
or repayment of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred.
"Subordinated Obligations" means Indebtedness that is expressly subordinate
or junior in right of payment to any other Indebtedness of the Company or the
Note Guarantee of a Subsidiary Guarantor.
"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership interests)
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person, (ii) such Person and one
or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such
Person. Unless otherwise specified herein, each reference to a Subsidiary shall
refer to a Subsidiary of the Company.
"Subsidiary Guarantor" means each Subsidiary of the Company in existence on
the Issue Date and each Subsidiary (other than Unrestricted Subsidiaries)
created or acquired by the Company after the Issue Date, other than BG Aruba,
Resort Title Agency, Inc., any Receivables Subsidiary and any Subsidiary which
is established and continues to operate for the limited purpose of holding a
real estate broker's license and acting
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as a broker for the benefit of the Company and its Subsidiaries in connection
with the sale of real estate or Timeshare Interests and certain other
Subsidiaries which have individually less than $50,000 of assets.
"Temporary Cash Investments" means any of the following: (i) any Investment
in direct obligations of the United States of America or any agency thereof or
obligations Guaranteed by the United States of America or any agency thereof;
(ii) Investments in time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by
the United States of America having capital surplus and undivided profits
aggregating in excess of $250 million (or the foreign currency equivalent
thereof) and whose long-term debt, or whose parent holding company's long-term
debt, is rated "A" (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule 436
under the Securities Act); (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in clause
(ii) above; (iv) Investments in commercial paper, maturing not more than 180
days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America with a rating at the time as of which any investment therein is made
of "P-l" (or higher) according to Moody's or "A-1 (or higher) according to S&P;
(v) Investments in securities with maturities of six months or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least "A" by S&P or "A" by Moody's; and
(vi) Investments in mutual funds whose investment guidelines restrict such
funds' investments to those satisfying the provisions of clauses (i) through (v)
above.
"Timeshare Interests" means the right to use (whether arising by virtue of
a club membership or a deeded interest in real property or otherwise) a
fully-furnished vacation residence for a specified period each year or
otherwise, sold by the Company and its Restricted Subsidiaries in the ordinary
course of their resorts business.
"Timeshare Interests Receivable" means the receivables of the Company and
its Restricted Subsidiaries arising from sales by the Company and its Restricted
Subsidiaries of Timeshare Interests or otherwise acquired by the Company or a
Restricted Subsidiary (but excluding any receivables for service or other fees
in respect of such Timeshare Interests) determined on a consolidated basis in
accordance with GAAP.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any Restricted Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; provided
however, that each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of such designation, and does not thereafter create, Incur,
issue, assume, Guarantee or otherwise becomes liable with respect to any
Indebtedness other than Non-Recourse Debt and either (A) the Subsidiary to be so
designated has total consolidated assets of $10,000 or less or (B) if such
Subsidiary has consolidated assets greater than $10,000, then such designation
would be permitted under "Limitation on Restricted Payments." The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary subject to the limitations contained in "Limitation on Designations
of Unrestricted Subsidiaries."
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
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"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the Company, all
of the Capital Stock of which (other than directors' qualifying shares) is owned
by the Company or another Wholly-Owned Subsidiary.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Outstanding Notes were originally sold by the Company on April 1, 1998
to the Initial Purchasers pursuant to the Purchase Agreement among the Company,
the Subsidiary Guarantors and the Initial Purchasers. The Initial Purchasers
subsequently resold the Outstanding Notes to qualified institutional buyers
pursuant to Rule 144A under the Securities Act. Pursuant to the Purchase
Agreement, the Company entered into the Registration Rights Agreement, pursuant
to which the Company has agreed, for the benefit of the holders of the
Outstanding Notes, at the Company's cost, to use its reasonable efforts to (i)
file a registration statement with the Commission within 75 days after the Issue
Date of the Outstanding Notes with respect to the Exchange Offer for the
Outstanding Notes, and (ii) cause the registration statement to be declared
effective under the Securities Act within 135 days after the Issue Date. Upon
the registration statement being declared effective, the Company will offer the
Exchange Notes in exchange for the Outstanding Notes. The Company will keep the
Exchange Offer open for no less than 30 days (or longer if required by
applicable law) after the date on which notice of the Exchange Offer is mailed
to the holders of the Outstanding Notes.
For each Outstanding Note properly tendered and accepted pursuant to the
Exchange Offer, the holder of such Outstanding Note will receive an Exchange
Note having a principal amount equal to that of the Outstanding Note tendered.
Interest on each Exchange Note will accrue from the last respective interest
date on which interest was paid on the Outstanding Note tendered in exchange
therefor or, if no interest has been paid on such Outstanding Note, from the
Issue Date. Holders whose Outstanding Notes are accepted for exchange will be
deemed to have waived the right to receive any interest accrued on the
Outstanding Notes.
Each holder of the Outstanding Notes who wishes to exchange the Outstanding
Notes for Exchange Notes in the Exchange Offer will be required to represent in
the Letter of Transmittal that (i) it is not an affiliate of the Company or the
Subsidiary Guarantors, (ii) the Exchange Notes to be received by it were
acquired in the ordinary course of its business and (iii) at the time of
commencement of the Exchange Offer, it has no arrangement with any person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Notes and that it is not acting on behalf of a person who could not
truthfully make the foregoing representations.
If the holder is not a broker-dealer, it will be required to represent that
it is not engaged in, and does not intend to engage in, the distribution of the
Exchange Notes. If the holder is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Outstanding Notes that were acquired
as a result of market making activities or other trading activities, it will be
required to acknowledge that it will deliver a prospectus in connection with any
resale of the Exchange Notes.
In the event that applicable interpretations of the staff of the Commission
do not permit the Company to effect the Exchange Offer, or if for any other
reason the Exchange Offer is not consummated within 165 days after the Issue
Date, or, under certain circumstances, if the Initial Purchasers or any holder
of Outstanding Notes (other than the Initial Purchasers) who is not eligible to
participate in the Exchange Offer shall so request (each a "Shelf Request"), the
Company will at its cost, (a) within 75 days of such Shelf Request, file a shelf
registration statement covering resales of the Outstanding Notes (a "Shelf
Registration Statement"), (b) use its reasonable efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act no
later than 135 days following a Shelf Request and (c) use its reasonable efforts
to keep effective such Shelf Registration Statement until the earlier of one
year after the Issue Date and such time as all of the applicable Outstanding
Notes have been sold thereunder. The Company will, in the event of the filing of
a Shelf Registration Statement, provide to each holder of the Outstanding Notes
copies of the prospectus which is a part of such Shelf Registration Statement,
notify each such holder when such Shelf Registration Statement has become
effective and take certain other actions as are required to permit unrestricted
resales of the Outstanding Notes. A holder that sells its Outstanding Notes
pursuant to a Shelf Registration Statement generally will be required to be
named as a selling securityholder in the related prospectus and to deliver a
prospectus to purchasers, will be subject to certain of the civil liability
provisions
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under the Securities Act in connection with such sales and will be bound by the
provisions of the Registration Rights Agreement which are applicable to such
holder (including certain indemnification obligations).
If the Company or the Subsidiary Guarantors fail to comply with the above
provisions or if such Shelf Registration Statement fails to become effective,
then, as liquidated damages, additional interest (the "Additional Interest")
shall become payable with respect to the Outstanding Notes as follows:
(i) if the registration statement for the Exchange Offer is not filed
within 75 days after the Issue Date or the Shelf Registration Statement is
not filed within 75 days following the Shelf Request, Additional Interest
shall accrue on the Outstanding Notes over and above the stated interest
percentage at a rate of 0.50% per annum for the first 30 days commencing on
the 76th day after the Issue Date or the Shelf Request, respectively, such
Additional Interest rate increasing by an additional 0.50% per annum at the
beginning of each subsequent 30-day period;
(ii) if the registration statement for the Exchange Offer or the Shelf
Registration Statement is not declared effective within, in the case of the
Exchange Offer registration statement, 135 days following the Issue Date
or, in the case of the Shelf Registration Statement, 135 days following a
Shelf Request, the Additional Interest shall accrue on the Outstanding
Notes over and above the stated interest percentage at a rate of 0.50% per
annum for the first 30 days commencing on the 135th day after the Issue
Date or the Shelf Request, respectively, such Additional Interest rate
increasing by an additional 0.50% per annum at the beginning of each
subsequent 30-day period; or
(iii) if (A) the Company has not exchanged all Outstanding Notes
validly tendered in accordance with the terms of the Exchange Offer on or
prior to 165 days after the Issue Date or (B) the registration statement
for the Exchange Offer ceases to be effective at any time prior to the time
that the Exchange Offer is consummated or (C) if applicable, the Shelf
Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the
first anniversary of the Issue Date (unless all the Outstanding Notes have
been sold thereunder or as otherwise provided herein), then the Additional
Interest shall accrue on the Outstanding Notes over and above the stated
interest at a rate of 0.50% per annum for the first 30 days commencing on
(x) the 165th day after the Issue Date with respect to the Outstanding
Notes validly tendered and not exchanged by the Company, in the case of (A)
above, or (y) the day of the registration statement for the Exchange Offer
ceases to be effective or usable for its intended purpose in the case of
(B) above, or (z) the day the Shelf Registration Statement ceases to be
effective in the case of (C) above, the rate of such Additional Interest
increasing by an additional 0.50% per annum at the beginning of each
subsequent 30-day period; provided, however, that the Additional Interest
rate payable on the Outstanding Notes may not exceed in the aggregate 1.5%
per annum; and provided further, that (1) upon the filing of the
registration statement for the Exchange Offer or the Shelf Registration
Statement (in the case of clause (i) above), (2) upon the effectiveness of
such registration statement for the Exchange Offer or the Shelf
Registration Statement (in the case of (ii) above), or (3) upon the
exchange of Exchange Notes for all Outstanding Notes tendered (in the case
of clause (iii)(A) above), or upon the effectiveness of the registration
statement which had ceased to remain effective in the case of clause
(iii)(B) above, or upon the effectiveness of the Shelf Registration
Statement which had ceased to remain effective (in the case of clause
(iii)(C) above), the Additional Interest accruing on the Outstanding Notes
as a result of such clause (or the relevant subclause thereof) shall cease
to accrue.
Any Additional Interest due pursuant to clauses (i), (ii) or (iii) above
will be payable in cash, on the same original interest payment dates as interest
on the Outstanding Notes. The amount of Additional Interest will be determined
by multiplying the applicable rate of such Additional Interest by the principal
amount of the Outstanding Notes multiplied by a fraction, the numerator of which
is the number of days such Additional Interest was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day months),
and the denominator of which is 360.
The summary herein of all material provisions of the Registration Rights
Agreement does not purport to be exhaustive and is subject to, and is qualified
in its entirety by, all the provisions of the Registration Rights Agreement, a
copy of which is available upon request to the Company. See "Available
Information."
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Following the consummation of the Exchange Offer, holders of the
Outstanding Notes who were eligible to participate in the Exchange Offer but who
did not tender their Outstanding Notes will not have any further exchange or
registration rights and such Outstanding Notes will continue to be subject to
certain restrictions on transfer. Accordingly, the liquidity of the market for
such Outstanding Notes could be adversely affected. See "Risk
Factors -- Consequences of Failure to Exchange."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all
Outstanding Notes validly tendered and not withdrawn prior to 5:00 p.m., New
York City time, on the Expiration Date. The Company will issue $1,000 principal
amount of Exchange Notes in exchange for each $1,000 principal amount of
Outstanding Notes accepted in the Exchange Offer. Holders may tender some or all
of their Outstanding Notes pursuant to the Exchange Offer. However, Outstanding
Notes may be tendered only in integral multiples of $1,000.
The form and terms of the Exchange Notes are the same as the form and terms
of the Outstanding Notes except that (i) the Exchange Notes will bear a Series B
designation and will have been registered under the Securities Act and,
therefore, will not bear legends restricting the transfer thereof and will not
contain certain provisions relating to an increase in the interest rate which
were included in the terms of the Outstanding Notes in certain circumstances
relating to the timing of the Exchange Offer and (ii) holders of the Exchange
Notes will not be entitled to certain rights of the holders of the Outstanding
Notes under the Registration Rights Agreement, which rights shall terminate upon
the consummation of the Exchange Offer. The Exchange Notes will evidence the
same debt as the Outstanding Notes (which they replace) and will be issued under
and entitled to the benefits of the Indenture. The Outstanding Notes and the
Exchange Notes will constitute a single class of debt securities under the
Indenture.
As of the date of this Prospectus $110,000,000 aggregate principal amount
of Outstanding Notes are outstanding. The Company has fixed the close of
business , 1998 as the record date for the Exchange Offer for purposes
of determining the person to whom this Prospectus and the Letter of Transmittal
will be mailed initially.
Holders of the Outstanding Notes do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. The Company intends to conduct the
Exchange Offer in accordance with the applicable requirements of the Exchange
Act and the rules and regulations of the Commission thereunder.
The Company shall be deemed to have accepted validly tendered Outstanding
Notes when, as and if the Company has given oral or written notice thereof to
the Exchange Agent. The Exchange Agent will act as agent for the tendering
holders for the purpose of receiving the Outstanding Notes from the Company.
If any tendered Outstanding Notes are not accepted for exchange because of
an invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Outstanding Notes will be
returned, without expense, to the tendering holder thereof as promptly as
practicable after the Expiration Date.
Holders who tender Outstanding Notes in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions of
the Letter of Transmittal, transfer taxes with respect to the exchange of
Outstanding Notes pursuant to the Exchange Offer. The Company will pay all
charges and expenses, other than the transfer taxes in certain circumstances, in
connection with the Exchange Offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
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In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice and will mail to the registered
holders an announcement thereof, each prior to 9:00 a.m., New York City time, on
the next business day after the previously scheduled expiration date. The
Company reserves the right, (i) to delay accepting any Outstanding Notes, to
extend the Exchange Offer or to terminate the Exchange Offer if any of the
conditions set forth below under "-- Conditions" shall not have been satisfied,
by giving oral or written notice of such delay, extension or termination to the
Exchange Agent or (ii) to amend the terms of the Exchange Offer in any manner.
Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to the
registered holders.
PROCEDURES FOR TENDERING
The tender of Outstanding Notes pursuant to any of the procedures set forth
in this Prospectus and in the Letter of Transmittal will constitute a binding
agreement between the Tendering Holder and the Company in accordance with the
terms and subject to the conditions set forth herein and in the Letter of
Transmittal. The tender of Outstanding Notes will constitute an agreement to
deliver good and marketable title to all tendered Outstanding Notes prior to the
Expiration Date free and clear of all liens, charges, claims, encumbrances,
interests and restrictions of any kind. Holders must follow the procedures set
forth in this Prospectus in order to properly and effectively tender Outstanding
Notes.
EXCEPT AS PROVIDED IN "-- GUARANTEED DELIVERY PROCEDURES," UNLESS THE
OUTSTANDING NOTES BEING TENDERED ARE DEPOSITED BY THE HOLDER WITH THE EXCHANGE
AGENT PRIOR TO THE EXPIRATION DATE (ACCOMPANIED BY A PROPERLY COMPLETED AND DULY
EXECUTED LETTER OF TRANSMITTAL), THE COMPANY MAY, AT ITS OPTION, REJECT SUCH
TENDER. ISSUANCE OF OUTSTANDING NOTES WILL BE MADE ONLY AGAINST DEPOSIT OF
TENDERED OUTSTANDING NOTES AND DELIVERY OF ALL OTHER REQUIRED DOCUMENTS.
NOTWITHSTANDING THE FOREGOING, DTC PARTICIPANTS TENDERING THROUGH ATOP WILL BE
DEEMED TO HAVE MADE VALID DELIVERY WHERE THE EXCHANGE AGENT RECEIVES AN AGENT'S
MESSAGE (DEFINED BELOW) PRIOR TO THE EXPIRATION DATE.
Outstanding Notes held through DTC. Each Beneficial Owner holding
Outstanding Notes through a DTC Participant must instruct such DTC Participant
to cause its Outstanding Notes to be tendered in accordance with the procedures
set forth in this Prospectus.
Pursuant to an authorization given by DTC to the DTC Participants, each DTC
Participant holding Outstanding Notes through DTC must (i) electronically
transmit its acceptance through ATOP, and DTC will then verify the acceptance,
execute a book-entry delivery to the Exchange Agent's account at DTC and send an
Agent's Message to the Exchange Agent for its acceptance, or (ii) comply with
the guaranteed delivery procedures set forth below and in the Notice of
Guaranteed Delivery. See "-- Guaranteed Delivery Procedures."
The Exchange Agent will (promptly after the date of this Prospectus)
establish accounts at DTC for purposes of the Exchange Offer with respect to
Outstanding Notes held through DTC, and any financial institution that is a DTC
Participant may make book-entry delivery of interests in Outstanding Notes into
the Exchange Agent's account through ATOP. However, although delivery of
interests in the Outstanding Notes may be effected through book-entry transfer
into the Exchange Agent's account through ATOP, an Agent's Message in connection
with such book-entry transfer, and any other required documents, must be
transmitted to and received by the Exchange Agent at its address set forth under
"-- Exchange Agent," or the guaranteed delivery procedures set forth below must
be complied with, in each case, prior to the Expiration Date. Delivery of
documents to DTC does not constitute delivery to the Exchange Agent. The
confirmation of a book-entry transfer into the Exchange Agent's account at DTC
as described above is referred to herein as a "Book-Entry Confirmation."
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Exchange Agent and forming a part of the Book-Entry
Confirmation, which states that DTC has received an express
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acknowledgment from each DTC Participant tendering through ATOP that such DTC
Participants have received a Letter of Transmittal and agree to be bound by the
terms of the Letter of Transmittal and that the Company may enforce such
agreement against such DTC Participants.
Cede & Co., as the Holder of the global certificates representing the
Outstanding Notes (a "Global Security"), will tender a portion of each Global
Security equal to the aggregate principal amount due at the stated maturity or
number of shares for which instructions to tender are given by DTC Participants.
Outstanding Notes held by Holders. Each Holder must (i) complete and sign
and mail or deliver the accompanying Letter of Transmittal, and any other
documents required by the Letter of Transmittal, together with certificate(s)
representing all tendered Outstanding Notes, to the Exchange Agent at its
address set forth under "-- Exchange Agent," or (ii) comply with the guaranteed
delivery procedures set forth below and in the Notice of Guaranteed Delivery.
See "-- Guaranteed Delivery Procedures."
All signatures on a Letter of Transmittal must be guaranteed by any member
firm of a registered national securities exchange or of the National Association
of Securities Dealers, Inc., a commercial bank or trust company having an office
or correspondent in the United States or an "eligible guarantor" institution
within the meaning of Rule 17Ad-15 under the Exchange Act (each an "Eligible
Institution"); provided, however, that signatures on a Letter of Transmittal
need not be guaranteed if such Outstanding Notes are tendered for the account of
an Eligible Institution including (as such terms are defined in Rule 17Ad-15):
(i) a bank; (ii) a broker, dealer, municipal securities dealer, municipal
securities broker, government securities dealer or government securities broker;
(iii) a credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings institution that is a
participant in a Securities Transfer Association recognized program.
If a Letter of Transmittal or any Outstanding Note is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, agent, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person must so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
Holders should indicate in the applicable box in the Letter of Transmittal
the name and address to which substitute certificates evidencing Outstanding
Notes for amounts not tendered are to be issued or sent, if different from the
name and address of the person signing the Letter of Transmittal. In the case of
issuance in a different name, the employer identification or social security
number of the person named must also be indicated. If no instructions are given,
such Outstanding Notes not tendered, as the case may be, will be returned to the
person signing the Letter of Transmittal.
By tendering, each Holder and each DTC Participant will make to the Company
the representations set forth in the third paragraph under the heading
"-- Purpose and Effect of the Exchange Offer."
No alternative, conditional, irregular or contingent tenders will be
accepted (unless waived). By executing a Letter of Transmittal or transmitting
an acceptance through ATOP, as the case may be, each Tendering Holder waives any
right to receive any notice of the acceptance for purchase of its Outstanding
Notes.
All questions as to the validity, form, eligibility (including time of
receipt), and acceptance and withdrawal of tendered Outstanding Notes will be
resolved by the Company in its sole discretion, whose determination will be
final and binding. The Company reserves the absolute right to reject any or all
tenders that are not in proper form or the acceptance of which may, in the
opinion of counsel for the Company, be unlawful. The Company also reserves the
absolute right to waive any condition to the Exchange Offer and any
irregularities or conditions of tender as to particular Outstanding Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letter of Transmittal) will be final and
binding. Unless waived, any irregularities in connection with tenders must be
cured within such time as the Company shall determine. The Company and the
Exchange Agent shall not be under any duty to give notification of defects in
such tenders and shall not incur liabilities for failure to give such
notification. Tenders of Outstanding Notes will not be deemed to have been made
until such irregularities have been cured or waived. Any Outstanding Notes
received by the Exchange Agent that are not properly tendered and as to which
the irregularities have not been cured or waived will be returned by the
Exchange Agent to the
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tendering Holder, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the Expiration Date.
LETTERS OF TRANSMITTAL AND OUTSTANDING NOTES MUST BE SENT ONLY TO THE
EXCHANGE AGENT. DO NOT SEND LETTERS OF TRANSMITTAL OR OUTSTANDING NOTES TO THE
COMPANY OR DTC.
The method of delivery of Outstanding Notes and Letters of Transmittal, any
required signature guarantees and all other required documents, including
delivery through DTC and any acceptance through ATOP, is at the election and
risk of the persons tendering and delivering acceptances or Letters of
Transmittal and, except as otherwise provided in the applicable Letter of
Transmittal, delivery will be deemed made only when actually received by the
Exchange Agent. If delivery is by mail, it is suggested that the Holder use
properly insured, registered mail with return receipt requested, and that the
mailing be made sufficiently in advance of the Expiration Date to permit
delivery to the Exchange Agent prior to the Expiration Date.
GUARANTEED DELIVERY PROCEDURES
Outstanding Notes held through DTC. DTC Participants holding Outstanding
Notes through DTC who wish to cause their Outstanding Notes to be tendered, but
who cannot transmit their acceptances through ATOP prior to the Expiration Date,
may cause a tender to be effected if:
(a) guaranteed delivery is made by or through an Eligible Institution;
(b) prior to 5:00 p.m., New York City time on the Expiration Date, the
Exchange Agent receives from such Eligible Institution a properly completed
and duly executed Notice of Guaranteed Delivery (by mail, hand delivery,
facsimile transmission or overnight courier) substantially in the form
provided by the Company herewith; and
(c) Book-Entry Confirmation and an Agent's Message in connection
therewith (as described above) are received by the Exchange Agent within
three New York Stock Exchange ("NYSE") trading days after the date of the
execution of the Notice of Guaranteed Delivery.
Outstanding Notes held by Holders. Holders who wish to tender their
Outstanding Notes and (i) whose Outstanding Notes are not immediately available,
(ii) who cannot deliver their Outstanding Notes, the Letter of Transmittal or
any other required documents to the Exchange Agent or (iii) who cannot complete
the procedures for book-entry transfer, prior to the Expiration Date, may effect
a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to 5:00 p.m., New York City time on the Expiration Date, the
Exchange Agent receives from such Eligible Institution a properly completed
and duly executed Notice of Guaranteed Delivery (by facsimile transmission,
mail or hand delivery) setting forth the name and address of the holder,
the certificate number(s) of such Outstanding Notes and the principal
amount of Outstanding Notes tendered, stating that the tender is being made
thereby and guaranteeing that, within three NYSE trading days after the
Expiration Date, the Letter of Transmittal (or facsimile thereof) together
with the certificate(s) representing the Outstanding Notes (or a
confirmation of book-entry transfer of such Outstanding Notes into the
Exchange Agent's account at the Book-Entry Transfer Facility), and any
other documents required by the Letter of Transmittal will be deposited by
the Eligible Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all tendered
Outstanding Notes in proper form for transfer (or a confirmation or
book-entry transfer of such Outstanding Notes into the Exchange Agent's
account at the Book-Entry Transfer Facility), and all other documents
required by the Letter of Transmittal are received by the Exchange Agent
upon three NYSE trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Outstanding Notes according to the
guaranteed delivery procedures set forth above.
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WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Outstanding Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
Outstanding Notes held through DTC. DTC Participants holding Outstanding
Notes who have transmitted their acceptances through ATOP may, prior to 5:00
p.m., New York City time, on the Expiration Date, withdraw the instruction given
thereby by delivering to the Exchange Agent, at its address set forth under
"-- Exchange Agent," a written, telegraphic or facsimile notice of withdrawal of
such instruction. Such notice of withdrawal must contain the name and number of
the DTC Participant, the principal amount due at the Stated Maturity date of the
Outstanding Notes to which such withdrawal related and the signature of the DTC
Participant. Withdrawal of such an instruction will be effective upon receipt of
such written notice of withdrawal by the Exchange Agent.
Outstanding Notes held by Holders. Holders may withdraw a tender of
Outstanding Notes in the Exchange Offer, by a telegram, telex, letter or
facsimile transmission notice of withdrawal received by the Exchange Agent at
its address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date. Any such notice of withdrawal must (i) specify the name of the
person having deposited the Outstanding Notes to be withdrawn (the "Depositor"),
(ii) identify the Outstanding Notes to be withdrawn (including the certificate
number(s) and principal amount due at the Stated Maturity of such Outstanding
Notes, or, in the case of Outstanding Notes transferred by book-entry transfer,
the name and number of the account at the Book-Entry Transfer Facility to be
credited), (iii) be signed by the holder in the same manner as the original
signature on the Letter of Transmittal by which such Outstanding Notes were
tendered (including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the Trustee with respect to the
Outstanding Notes register the transfer of such Outstanding Notes into the name
of the person withdrawing the tender and (iv) specify the name in which any such
Outstanding Notes are to be registered, if different from that of the Depositor.
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by the Company, whose determination
shall be final and binding on all parties. Any Outstanding Notes so withdrawn
will be deemed not to have been validly tendered for purposes of the Exchange
Offer and no Exchange Notes will be issued with respect thereto unless the
Outstanding Notes so withdrawn are validly retendered. Any Outstanding Notes
which have been tendered but which are not accepted for exchange will be
returned to the holder thereof without cost to such holder as soon as
practicable after withdrawal, rejection of tender or termination of the Exchange
Offer. Properly withdrawn Outstanding Notes may be retendered by following one
of the procedures described above under "-- Procedures for Tendering" at any
time prior to the Expiration Date.
All signatures on a notice of withdrawal must be guaranteed by an Eligible
Institution; provided, however, that signatures on the notice of withdrawal need
not be guaranteed if the Outstanding Notes being withdrawn are held for the
account of an Eligible Institution.
A withdrawal of an instruction or a withdrawal of a tender must be executed
by a DTC Participant or a Holder, as the case may be, in the same manner as the
person's name appears on its transmission through ATOP or Letter of Transmittal,
as the case may be, to which such withdrawal relates. If a notice of withdrawal
is signed by a trustee, partner, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person must so indicate when signing
and must submit with the revocation appropriate evidence of authority to execute
the notice of withdrawal. A DTC Participant or a Holder may withdraw an
instruction or a tender, as the case may be, only if such withdrawal complies
with the provisions of this Prospectus.
A withdrawal of a tender of Outstanding Notes by a DTC Participant or a
Holder, as the case may be, may be rescinded only by a new transmission of an
acceptance through ATOP or execution and delivery of a new Letter of
Transmittal, as the case may be, in accordance with the procedures described
herein.
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CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or exchange securities for, any Outstanding
Notes, and may terminate or amend the Exchange Offer as provided herein before
the acceptance of such Outstanding Notes, if:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the Exchange Offer
which, in the judgment of the Company upon written advice of counsel, could
reasonably be expected to materially impair the ability of the Company to
proceed with the Exchange Offer or any material adverse development has
occurred in any existing action or proceeding with respect to the Company
or any of the subsidiaries; or
(b) any law, statute, rule, regulation or interpretation by the staff
of the Commission is proposed, adopted or enacted, which, in the judgment
of the company and based on written advice of counsel, could reasonably be
expected to materially impair the ability of the Company to proceed with
the Exchange Offer or materially impair the contemplated benefits of the
Exchange Offer to the Company; or
(c) any governmental approval has not been obtained, which approval
the Company shall, in its discretion and based on written advice of
counsel, deem necessary for the consummation of the Exchange Offer as
contemplated hereby.
If any of the conditions are not satisfied, the Company may (i) refuse to
accept any Outstanding Notes and return all tendered Outstanding Notes to the
tendering holders, (ii) extend the Exchange Offer and retain all Outstanding
Notes tendered prior to the expiration of the Exchange Offer, subject, however,
to the rights of holders to withdraw such Outstanding Notes (see "-- Withdrawal
of Tenders") or (iii) waive such unsatisfied conditions with respect to the
Exchange Offer and accept all properly tendered Outstanding Notes which have not
been withdrawn.
EXCHANGE AGENT
SunTrust Bank, Central Florida, National Association has been appointed as
Exchange Agent for the Exchange Offer. Questions and requests for assistance,
requests for additional copies of this Prospectus or of the Letter of
Transmittal and requests for Notice of Guaranteed Delivery should be directed to
the Exchange Agent addressed as follows:
By Facsimile Transmission:
SunTrust Bank, Central Florida, NA
225 East Robinson Street
Suite 250
Orlando, Florida 32801
(407) 237-5299
Attn: Lisa Derryberry
Confirm by Telephone:
Lisa Derryberry
(407) 237-4791
By Mail or Overnight Courier:
SunTrust Bank, Central Florida, NA
c/o First Chicago Trust Company of New York
Corporate Trust
8th Floor
14 Wall Street
New York, New York 10005
Delivery to an address other than as set forth above, or transmission of
instructions via a facsimile number other than the one set forth above, will not
constitute a valid delivery.
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FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telecopy, telephone or in person by officers and
regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers, or others
soliciting acceptances of the Exchange Offer. The Company will pay the Exchange
Agent reasonable and customary fees for its services and will reimburse it for
its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees and printing costs, among others.
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the
Outstanding Notes, as reflected in the Company's accounting records on the date
of exchange. Accordingly, no gain or loss for accounting purposes will be
recognized by the Company.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Outstanding Notes that are not exchanged for Exchange Notes pursuant to
the Exchange Offer will remain restricted securities. Accordingly, such
Outstanding Notes may be resold only (i) to the Company (upon redemption thereof
or otherwise), (ii) so long as the Outstanding Notes are eligible for resale
pursuant to Rule 144A, to a person inside the United States whom the seller
reasonably believes is a qualified institutional buyer within the meaning of
Rule 144A under the Securities Act in a transaction meeting the requirements of
Rule 144A, in accordance with Rule 144 under the Securities Act, or pursuant to
another exemption from the registration requirements of the Securities Act (and
based upon an opinion of counsel reasonably acceptable to the Company), (iii)
outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act, or (iv) pursuant to an
effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States. See "Risk Factors -- Consequences of Failure to Exchange."
RESALE OF THE EXCHANGE NOTES
With respect to resales of Exchange Notes, based on interpretations by the
staff of the Commission set forth in no-action letters issued to third parties,
the Company believes that a holder or other person who receives Exchange Notes
in the ordinary course of business, whether or not such person is the holder
(other than (i) a broker-dealer who purchases such Exchange Notes from the
Company to resell pursuant to Rule 144A or any other available exemption under
the Securities Act or (ii) a person that is an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act) who receives Exchange Notes in
exchange for Outstanding Notes, and who is not participating, does not intend to
participate, and has no arrangement or understanding with person to participate,
in the distribution of the Exchange Notes, will be allowed to resell the
Exchange Notes to the public without further registration under the Securities
Act and without delivering to the purchasers of the Exchange Notes a prospectus
that satisfies the requirements of Section 10 of the Securities Act. However, if
any holder acquires Exchange Notes in the Exchange Offer for the purpose of
distributing or participating in a distribution of the Exchange Notes, such
holder cannot rely on the position of the staff of the Commission enunciated in
such no-action letters or any similar interpretive letters, and must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction, unless an exemption from registration is
otherwise available. Further, each Participating Broker-Dealer that receives
Exchange Notes for its own account in exchange for Exchange Notes, where such
Securities were acquired by such Participating Broker-Dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange Notes.
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As contemplated by these no-action letters and the Registration Rights
Agreement, each holder accepting the Exchange Offer is required to represent to
the Company in the Letter of Transmittal that (i) the Exchange Notes are to be
acquired by the holder or the person receiving such Exchange Notes, whether or
not such person is the holder, in the ordinary course of business, (ii) the
holder or any such other person (other than a broker-dealer referred to in the
next sentence) is not engaging and does not intend to engage, in the
distribution of the Exchange Notes, (iii) the holder or any such other person
has no arrangement or understanding with any person to participate in the
distribution of the Exchange Notes, (iv) neither the holder nor any such other
person is an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act, and (v) the holder or any such other person acknowledges that if
such holder or other person participates in the Exchange Offer for the purpose
of distributing the Exchange Notes it must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale of the Exchange Notes and cannot rely on those no-action letters. As
indicated above, each Participating Broker-Dealer that receives Exchange Notes
for its own account in exchange for Outstanding Notes must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange Notes.
For a description of the procedures for such resales by Participating
Broker-Dealers, see "Plan of Distribution."
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DESCRIPTION OF OTHER INDEBTEDNESS
The following discussion describes certain indebtedness, other than the
Notes, that will be outstanding as of the date of this Prospectus.
CONVERTIBLE SUBORDINATED DEBENTURES
In May 1987, the Company sold $46.0 million principal amount of its 8 1/4%
Convertible Subordinated Debentures due 2012 (the "Public Debentures"), of which
$34.7 million were outstanding at December 28, 1997. The Public Debentures are
convertible at any time prior to maturity, unless previously redeemed, into
Common Stock at a current conversion price of $8.24 per share, subject to
adjustment under certain conditions. The Public Debentures are redeemable at any
time, at the Company's option, in whole or in part, at a redemption price equal
to 100% of the face amount, plus accrued interest, if any. The Company is
obligated to redeem annually, commencing May 15, 2003, 10% of the original
principal amount of the Public Debentures at 100% of the face amount, plus
accrued interest, if any. The Company may reduce the principal amount of Public
Debentures to be redeemed by subtracting 100% of the principal amount of any
Public Debentures that the Company has delivered for cancellation upon
repurchase (other than pursuant to an Offer (defined below)) or following a
conversion or redemption (other than a mandatory redemption). Through December
28, 1997, the Company had repurchased (other than pursuant to an Offer) Public
Debentures in the aggregate principal amount of $11.3 million. Such redemptions
are calculated to retire 90% of the principal amount of the Public Debentures
prior to maturity. Interest is payable semi-annually on May 15 and November 15.
The Public Debentures are unsecured and subordinated to all existing and
future senior indebtedness of the Company. No payment on account of principal or
interest on the Public Debentures may be made unless, (i) at the time proposed
for any such payment, full payment of amounts then due in respect of senior
indebtedness shall have been made or duly provided for and (ii) at the time for,
or immediately after giving effect to, any such payment, there shall not exist
or be created under any senior indebtedness, any default which shall not have
been cured or waived, provided that no such event of default will prevent
payment on the Public Debentures for more than 90 days unless the maturity of
such senior indebtedness has been and remains accelerated. Consequently, if an
Event of Default were to occur and be continuing under the Notes, absent an
acceleration of the Notes the Notes Trustees and/or the holders of the Notes
will only be able to block payments on the Public Debentures for 90 days.
Under financial covenants contained in the Indenture pursuant to which the
Public Debentures were issued, the Company is required to maintain a net worth
of not less than $29.0 million. Should the Company's net worth fall below $29.0
million for two consecutive quarters, the Company is required to make an offer
to purchase 20% of the outstanding Public Debentures at par, plus accrued
interest.
CONVERTIBLE NOTES
The Company borrowed an aggregate $6,000,000 from Joseph Abeles, a director
of the Company, and Grace Brothers, Ltd., an affiliate of Bradford T. Whitmore,
a director of the Company, pursuant to a Note Purchase Agreement dated as of
September 11, 1997 (the "Note Agreement"), which amount was used to fund a
portion of the purchase price in connection with the RDI Acquisition. Pursuant
to the Note Agreement, the Company executed the Convertible Notes in the
aggregate principal amount of $6,000,000. The Convertible Notes have a maturity
date of September 11, 2002, and the outstanding balances of the Convertible
Notes are convertible into Common Stock at a conversion price of $3.92 per
share, subject to adjustment. Interest is payable quarterly in arrears on
December 11, March 11, June 11 and September 11 of each year. The Convertible
Notes may not be prepaid without the consent of the holders thereof. The
Convertible Notes are subordinated to the Notes to the same extent the Public
Debentures are subordinated to the Notes (described above); the Convertible
Notes are not contractually subordinated to any other indebtedness of the
Company. In December 1997, Stuart A. Shikiar purchased $200,000 of Convertible
Notes from Mr. Abeles in a private transaction.
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<PAGE> 128
RDI NOTE
In connection with the RDI Acquisition, the Company and a wholly-owned
subsidiary of the Company issued a 9% promissory note in the principal amount of
$1,500,000 to the former stockholders of RDI (the "RDI Note"). The principal
amount of the RDI Note is payable as follows: $250,000 on March 29, 1998,
$250,000 on September 29, 1998, and $1,000,000 on September 29, 1999. Interest
is payable in arrears when principal payments are required to be made. The
Company may at any time prepay all or a portion of the RDI Note. Amounts payable
under the RDI Note may be set off by the Company against any amounts payable to
the Company under its indemnification rights contained in the Stock Purchase
Agreement by and among the Company and the RDI Stockholders.
ARUBA DEBT
In connection with the acquisition by BG Aruba, an Aruban limited liability
company in which the Company owns a fifty percent equity interest, of the unsold
Timeshare Interest inventory of the Aruba Resort, BG Aruba assumed approximately
$16.6 million of the indebtedness (the "Aruba Debt") owed by the seller to
Interbank Aruba N.V. (the "Bank"). The Aruba Debt is not guaranteed by Bluegreen
or any of its wholly-owned subsidiaries. An affiliate of the seller is
responsible for payment of all interest on the Aruba Debt; BG Aruba is not
responsible for any such interest payments and the Aruba Debt shall not be
declared in default for any failure of the seller to make an interest payment.
Under the Aruba Debt, BG Aruba must make minimum monthly payments of
approximately $278,000. The Aruba Debt is secured by the unsold Timeshare
Interest inventory of the Aruba resort. Upon payment to the Bank of 31.48% of
the purchase price of each Timeshare Interest sold, the Bank will release from
collateral such interest.
The cash portion of the purchase price for the Timeshare Interests at the
Aruba Resort was financed through $3.0 million loaned to BG Aruba by the Company
and $3.0 loaned to BG Aruba by an affiliate of the individual who owns the
remaining equity interest in BG Aruba, pursuant to promissory notes due December
15, 2000 and bearing interest at the prime rate plus 1%.
CREDIT FACILITIES
The Company has an existing $20.0 million revolving credit facility with a
financial institution for the pledge of Residential Land Division Receivables.
The Company uses the facility as a temporary warehouse until it accumulates a
sufficient quantity of residential land receivables to sell under private
placement REMIC transactions. Under the terms of this facility, the Company is
entitled to advances secured by Residential Land Division receivables up to 90%
of the outstanding principal balance of eligible pledged Residential Land
Division receivables. In addition, up to $8.0 million of the facility can be
used for land acquisition and development purposes. The interest rate charged on
outstanding borrowings ranges from prime plus 0.5% to 1.5%. At December 28,
1997, the outstanding principal balance under the facility was $4.7 million. All
principal and interest payments received on pledged Receivables are applied to
principal and interest due under the facility. The ability to borrow under the
facility expires in September 2000. Any outstanding indebtedness, is due in
September 2002. The Company retained this facility following the Note Offering.
The Company is currently negotiating with another financial institution for
a $35.0 million revolving credit facility. The Company expects to use this
facility to finance the acquisition and development of residential land projects
and to finance land receivables. The facility is expected to be secured by the
real property (and personal property related thereto) with respect to which
borrowings are made, with the lender to advance up to a specified percentage of
the value of the mortgaged property and eligible pledged receivables, provided
that the maximum outstanding amount secured by pledged receivables may not
exceed $20.0 million. The interest charged on outstanding borrowings is expected
to be approximately prime plus 1.5%.
The Company has obtained from a financial institution a $135 million
combined timeshare warehouse financing and receivables purchase facility. The
$35 million warehouse facility and the $100 million receivable purchase facility
will bear interest at LIBOR plus 2.35% and a fixed rate equal to the weighted
average term Treasury rate plus 1.40%, respectively. Should the Company fail to
sell to such financial institution during the
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<PAGE> 129
term of the purchase facility notes receivable with cumulative present value of
at least $100 million, the interest rate will increase by .05% for each $10
million shortfall, to a maximum applicable margin of 1.60%. Under the facility,
eligible notes receivable would periodically move from the warehouse facility to
the purchase facility. Both the warehouse and the purchase facility will have
detailed requirements with respect to the eligibility of notes receivable for
inclusion and other conditions to funding. The borrowing base under the
warehouse facility will be 95% of the outstanding principal balance of eligible
notes arising from the sale of completed Timeshare Interests. Under the purchase
facility, the Company is required to maintain a specified overcollateralization
level and a cash reserve account. Loans sold under this facility are without
recourse to the Company except for breaches of representations and warranties
made at the time of sale. Fundings under the facility will terminate upon the
occurrence of specified trigger events. The Company will act as servicer under
the purchase facility and will be required to make advances to the financial
institution to the extent it believes such advances will be recoverable. If
obtained, the combined facility will expire two years from the closing date of
the Note Offering. In addition to other customary fees and expenses, the Company
anticipates that it will pay a fee equal to $575,000, $250,000 at the closing of
this facility and $325,000 within 12 months of closing. In addition, the Company
anticipates that it will pay an annual utilization fee equal to 1% of the
incremental amount by which outstanding indebtedness under the facility is below
$10 million. The facility includes various conditions to funding, eligibility
requirements for collateral, affirmative, negative and financial covenants, and
events of default, to be negotiated.
In addition, the Company is currently negotiating with the same financial
institution referred to in the preceding paragraph to provide the Company with a
$25 million acquisition and development facility for its timeshare inventories.
The facility would include a two-year draw down period and have a term of seven
years. Principal would be repaid through agreed-upon release prices as Timeshare
Interests are sold at the financed resort, subject to minimum required
amortizations. It is anticipated that the indebtedness under the facility would
bear interest at the three-month LIBOR plus 3.0%. With respect to any inventory
financed under the facility, the Company will be required to have provided
equity of at least 15% of the approved project costs. The facility will include
certain minimum financial covenants for the Company. In connection with the
facility, the Company will also be required to pay certain fees and expenses to
the financial institution. The Company anticipates that it will pay a commitment
fee equal to $250,000, $100,000 at the closing of this facility and the
remainder paid through a 1% fee on each draw until the total commitment fee is
paid.
The Company's credit facilities include, and its proposed facilities will
include, among other things, customary representations and warranties,
provisions with respect to the payment of customary fees and expenses,
conditions to funding, eligibility requirements and advance rates for
collateral, events of default and certain financial and other affirmative and
negative covenants, including, among others, limits on the incurrence of
indebtedness, covenants concerning net worth and fixed charge coverage
requirements and debt to equity ratios.
No assurances can be given that the proposed credit facilities described
above will be entered into or that funding will be provided on the terms
discussed herein, if at all, or that the Company will be able to obtain
sufficient external sources of liquidity on attractive terms, or at all. See
"Risk Factors -- Leverage; Ability to Service Debt and Liquidity and Finance
Requirements."
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<PAGE> 130
BOOK-ENTRY, DELIVERY AND FORM
Except as described in the next paragraph, each of the Exchange Notes
initially will be represented by a single permanent global certificate in
definitive, fully registered form (the "Global Securities"). The Global
Securities will be deposited upon issuance with the Notes Trustee as custodian
for the Depository Trust Company ("DTC") and registered in the name of a nominee
of DTC for credit to an account of a direct or indirect participant as described
below.
The Outstanding Notes were offered and sold by the Initial Purchasers
solely to qualified institutional buyers in reliance on Rule 144A.
Global Securities. The Company expects that pursuant to procedures
established by DTC (i) upon the issuance of the Global Securities, DTC or its
custodian will credit, on its internal system, the principal amount of Notes of
the individual beneficial interest represented by such Global Security to the
respective accounts for persons who have accounts with DTC and (ii) ownership of
beneficial interests in the Global Securities will be shown on, and the transfer
of such ownership will be effected only through, records maintained by DTC or
its nominee (with respect to interests of persons who have accounts with DTC
("participants")) and the records of participants (with respect to interests of
persons other than participants).
So long as DTC, or its nominee, is the registered owner or holder of the
Global Securities, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Notes represented by the Global Securities for
all purposes under the Indenture. No beneficial owner of an interest in any of
the Global Securities will be able to transfer that interest except in
accordance with DTC's procedures.
Payments on the Global Securities will be made to DTC or its nominee, as
the case may be, as the registered owner thereof. None of the Company, the Notes
Trustee or any Paying Agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interest.
The Company expects that DTC or its nominee, upon receipt of any payment in
respect of a Global Security, will credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
applicable Global Security as shown on the records of DTC or its nominee. The
Company also expects that payments by participants to owners of beneficial
interests in the Global Securities held through such participants will be
governed by standing instructions and customary practice, as is now the case
with securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
participants.
Transfers between participants in DTC will be effective in the ordinary way
in accordance with DTC rules and will be settled in clearinghouse funds. If a
holder requires physical delivery of a Certificated Security for any reason,
including to sell such security to persons in states which require physical
delivery of Certificated Securities, or to pledge such securities, such holder
must transfer its interest in the applicable Global Security, in accordance with
the normal procedures of DTC and with the procedures set forth in the Indenture.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Global Securities only at the direction of one or more
participants to whose account the DTC interests in the Global Securities are
credited and only in respect of such portion of the securities as to which such
participant or participants has or have given such direction. However, if there
is an Event of Default under the Indenture DTC will exchange the Global
Securities representing Notes for Certificated Securities, which it will
distribute to its participants.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants and facilitate the clearance and settlement of
securities transactions between participants through electronic book-entry
changes
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<PAGE> 131
in accounts of its participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers,
banks, trust companies and clearing corporations and certain other
organizations. Indirect access to the DTC system is available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly
("indirect participants").
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Securities among participants of DTC, it is
under no obligation to perform such procedures, and such procedures may be
discontinued at any time. None of the Company, the Notes Trustee or the Transfer
Agent will have any responsibility for the performance by DTC or its
participants or indirect participants of their respect obligations under the
rules and procedures governing their operations.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
EXCHANGE OF BOOK-ENTRY NOTES FOR CERTIFICATED NOTES
The Global Note is exchangeable for definitive Notes in registered
uncertificated form if (i) DTC (x) notifies the Company that it is unwilling or
unable to continue as depositary for the Global Note and the Company thereupon
fails to appoint a successor depositary or (y) has ceased to be a clearing
agency registered under the Exchange Act; (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of the
Notes in certificated form; or (iii) there shall have occurred and be continuing
a Default or an Event of Default with respect to the Notes. In all cases,
certificated Notes delivered in exchange for the Global Note or beneficial
interests therein will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the depositary (in accordance with
its customary procedures).
CERTAIN U. S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is based upon current provisions of the Internal
Revenue Code of 1986, as amended, applicable Treasury regulations, judicial
authority and administrative rulings and practice. There can be no assurance
that the Internal Revenue Service (the "IRS") will not take a contrary view, and
no ruling from the IRS has been or will be sought. Legislative, judicial or
administrative changes or interpretations may be forthcoming that could alter or
modify the statements and conditions set forth herein. Any such changes or
interpretations may or may not be retroactive and could affect the tax
consequences to holders. Certain holders (including insurance companies,
tax-exempt organizations, financial institutions, broker-dealers, foreign
corporations and persons who are not citizens or residents of the United States)
may be subject to special rules not discussed below.
THE COMPANY RECOMMENDS THAT EACH HOLDER CONSULT SUCH HOLDER'S OWN TAX
ADVISER AS TO THE PARTICULAR TAX CONSEQUENCES OF EXCHANGING SUCH HOLDER'S OLD
NOTES FOR NEW NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL
OR FOREIGN TAX LAWS.
The Company believes that the exchange of Outstanding Notes for Exchange
Notes pursuant to the Exchange Offer will not be treated as an "exchange" for
federal income tax purposes because the Exchange Notes will not be considered to
differ materially in kind or extent from the Outstanding Notes. Rather, the
Exchange Notes received by a holder will be treated as a continuation of the
Outstanding Notes in the hands of such holder. As a result, there will be no
federal income tax consequences to holders exchanging Outstanding Notes for
Exchange Notes pursuant to the Exchange Offer.
PLAN OF DISTRIBUTION
Based on interpretations of the staff of the Division of Corporation
Finance of the Commission set forth in no-action letters issued to third
parties, the Company believes that, except as described below, Exchange
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<PAGE> 132
Notes issued pursuant to the Exchange Offer may be offered for resale, resold
and otherwise transferred by the respective holders thereof without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that (i) such Exchange Notes are acquired in the
ordinary course of such holder's business and (ii) such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution of the Exchange Notes. A holder of Outstanding
Notes that is an "affiliate" of the Company within the meaning of Rule 405 under
the Securities Act or that is a broker-dealer that purchased Outstanding Notes
from the Company to resell pursuant to an exemption from registration under the
Securities Act (a) cannot rely on such interpretations by the staff of the
Division of Corporation Finance of the Commission, (b) will not be permitted or
entitled to tender such Outstanding Notes in the Exchange Offer and (c) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any sale or other transfer of such Outstanding
Notes unless such sale or transfer is made pursuant to an exemption from such
requirements. In addition, any holder who tenders Outstanding Notes in the
Exchange Offer with the intention or for the purpose of participating in a
distribution of the Exchange Notes cannot rely on such interpretations by the
staff of the Division of Corporation Finance of the Commission and must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with the secondary resale transaction. Unless an exemption from
registration is otherwise available, any such resale transaction should be
covered by an effective registration statement containing selling security
holders information required by Item 507 of Regulation S-K under the Securities
Act. To date, the staff of the Division of Corporation Finance of the Commission
has taken the position that a broker-dealer that has acquired securities in
exchange for securities that were acquired by such broker-dealer as a result of
market-making activities or other trading activities may fulfill the prospectus
delivery requirements with the prospectus contained in an exchange offer
registration statement.
Each holder of Outstanding Notes who wishes to exchange its Outstanding
Notes for Exchange Notes in the Exchange Offer will be required to make certain
representations to the Company set forth in "The Exchange Offer -- Purpose and
Effect of the Exchange Offer."
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Notes. This Prospectus may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Outstanding
Notes where such Outstanding Notes were acquired as a result of market-making
activities or other trading activities. Subject to certain provisions set forth
in the Registration Rights Agreement, the Company has agreed that, for a period
of up to 180 days after the consummation of the Exchange Offer, it will make
this Prospectus available to any broker-dealer for use in connection with any
such resale. See "Risk Factors -- Absence of Public Market" and "The Exchange
Offer -- Resale of the Exchange Notes."
The Company will not receive any proceeds from any sale of Exchange Notes
by broker-dealers. Exchange Notes received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Notes. Any
broker-dealer that resells Exchange Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit from any
such resale of Exchange Notes and any commissions or concessions received by any
such person may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act. A broker-dealer
may nonetheless be deemed to be an "underwriter" under the Securities Act
notwithstanding such disclaimer.
Subject to certain provisions set forth in the Registration Rights
Agreement, for a period of 180 days after the date the Exchange Offer is
consummated, the Company will promptly send additional copies of this
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<PAGE> 133
Prospectus and any amendment or supplement to this Prospectus to any
Participating Broker-Dealer that requests such documents in the Letter of
Transmittal. The Company has agreed to pay the expenses incident to the Exchange
Offer, other than any discounts or commissions incurred upon the sale of the
Exchange Notes.
LEGAL MATTERS
The validity of the issuance of the Exchange Notes will be passed upon for
the Company by Choate, Hall & Stewart (a partnership including professional
corporations), Boston, Massachusetts.
EXPERTS
The consolidated financial statements of Bluegreen Corporation at March 30,
1997 and March 31, 1996, and for each of the three years in the period ended
March 30, 1997, appearing in this Prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent certified public accountants, as
set forth in their report thereon appearing elsewhere herein, and are included
in reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
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<PAGE> 134
BLUEGREEN CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Consolidated Financial Statements as of March 31, 1996 and
March 30, 1997 and for the Fiscal Years Ended April 2,
1995; March 31, 1996; and March 30, 1997:
Report of Independent Certified Public Accountants........ F-2
Consolidated Balance Sheets............................... F-3
Consolidated Statements of Operations..................... F-4
Consolidated Statements of Shareholders' Equity........... F-5
Consolidated Statements of Cash Flows..................... F-6
Notes to Consolidated Financial Statements................ F-8
Unaudited Condensed Consolidated Financial Statements as of
December 28, 1997 and for the Nine Months Ended December
29, 1996 and December 28, 1997:
Unaudited Condensed Consolidated Balance Sheet............ F-29
Unaudited Condensed Consolidated Statements of
Operations............................................. F-30
Unaudited Condensed Consolidated Statements of Cash
Flows.................................................. F-31
Notes to Unaudited Condensed Consolidated Financial
Statements............................................. F-32
</TABLE>
F-1
<PAGE> 135
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Shareholders
Bluegreen Corporation
We have audited the accompanying consolidated balance sheets of Bluegreen
Corporation as of March 30, 1997 and March 31, 1996, and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the three years in the period ended March 30, 1997. 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 financial statements referred to above, present fairly,
in all material respects, the consolidated financial position of Bluegreen
Corporation at March 30, 1997 and March 31, 1996, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended March 30, 1997, in conformity with generally accepted accounting
principles.
West Palm Beach, Florida
May 2, 1997, except for Note 14 as to
which the date is February 17, 1998
F-2
<PAGE> 136
BLUEGREEN CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, MARCH 30,
1996 1997
------------ ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents (including restricted cash of
approximately $7.7 million and $8.0 million at March 31,
1996 and March 30, 1997, respectively).................... $ 11,389,141 $ 11,597,147
Contracts receivable, net................................... 12,451,207 14,308,424
Notes receivable, net....................................... 37,013,802 34,619,325
Investment in securities.................................... 9,699,435 11,066,693
Inventory, net.............................................. 73,595,014 86,660,559
Property and equipment, net................................. 5,239,100 4,948,554
Debt issuance costs, net.................................... 1,288,933 1,063,755
Other assets................................................ 4,286,401 5,362,572
------------ ------------
TOTAL ASSETS...................................... $154,963,033 $169,627,029
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable............................................ $ 2,557,797 $ 1,917,907
Deferred revenue............................................ 746,955 3,791,924
Accrued liabilities and other............................... 9,142,108 10,118,268
Lines-of-credit and notes payable........................... 17,287,767 35,905,552
Deferred income taxes....................................... 6,067,814 2,855,946
Receivable-backed notes payable............................. 19,723,466 21,055,002
8.25% convertible subordinated debentures................... 34,739,000 34,739,000
------------ ------------
TOTAL LIABILITIES................................. 90,264,907 110,383,599
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value, 1,000,000 shares
authorized; none issued................................... -- --
Common stock, $.01 par value, 90,000,000 shares authorized;
20,533,410 and 20,601,871 shares outstanding at March 31,
1996 and March 30, 1997, respectively..................... 205,334 206,019
Capital-in-excess of par value.............................. 71,296,158 71,410,755
Accumulated deficit......................................... (6,803,366) (11,162,923)
Treasury stock, 443,000 common shares at March 30, 1997 at
cost...................................................... -- (1,369,772)
Net unrealized gains on investments available-for-sale, net
of income taxes........................................... -- 159,351
------------ ------------
Total shareholders' equity.................................. 64,698,126 59,243,430
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........ $154,963,033 $169,627,029
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE> 137
BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED
-----------------------------------------
APRIL 2, MARCH 31, MARCH 30,
1995 1996 1997
----------- ------------ ------------
<S> <C> <C> <C>
REVENUES:
Sales of real estate................................ $91,921,990 $113,422,228 $109,721,561
Interest income and other........................... 7,263,759 7,388,095 6,158,909
----------- ------------ ------------
99,185,749 120,810,323 115,880,470
COST AND EXPENSES:
Cost of real estate sold............................ 45,105,841 59,393,392 57,090,546
Selling, general and administrative expenses........ 36,520,817 43,734,724 51,441,301
Interest expense.................................... 6,737,687 6,276,187 5,458,919
Provisions for losses............................... 792,000 611,979 9,539,081
----------- ------------ ------------
89,156,345 110,016,282 123,529,847
----------- ------------ ------------
Income (loss) from operations......................... 10,029,404 10,794,041 (7,649,377)
Other income.......................................... 372,443 121,884 260,299
----------- ------------ ------------
Income (loss) before income taxes..................... 10,401,847 10,915,925 (7,389,078)
Provision (benefit) for income taxes.................. 4,264,758 4,449,069 (3,029,521)
----------- ------------ ------------
NET INCOME (LOSS)..................................... $ 6,137,089 $ 6,466,856 $ (4,359,557)
=========== ============ ============
EARNINGS (LOSS) PER COMMON SHARE:
Basic............................................... $ .30 $ .32 $ (.21)
=========== ============ ============
Diluted............................................. $ .29 $ .30 $ (.21)
=========== ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON
EQUIVALENT SHARES:
Basic............................................... 20,415,856 20,508,037 20,318,509
=========== ============ ============
Diluted............................................. 21,476,638 21,775,291 20,318,509
=========== ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 138
BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED APRIL 2, 1995, MARCH 31, 1996 AND MARCH 30, 1997
<TABLE>
<CAPTION>
NET
UNREALIZED
GAINS ON
INVESTMENTS
COMMON AVAILABLE-
COMMON STOCK CAPITAL IN TREASURY FOR-
SHARES $.01 PAR EXCESS OF ACCUMULATED STOCK AT SALE, NET OF
ISSUED VALUE PAR VALUE DEFICIT COST INCOME TAXES TOTAL
---------- -------- ----------- ------------ ----------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at March 27, 1994...... 17,795,974 $177,960 $61,099,625 $ (9,423,926) $ -- $ -- $51,853,659
4% stock dividend.............. 711,076 7,111 2,570,540 (2,577,651) -- -- --
5% stock dividend.............. 925,751 9,257 3,115,152 (3,124,409) -- -- --
Cash payment for dividends in
lieu of fractional shares.... -- -- -- (5,432) -- -- (5,432)
Shares issued to employees upon
exercise of qualified stock
options...................... 37,933 379 54,282 -- -- -- 54,661
Net income..................... -- -- -- 6,137,089 -- -- 6,137,089
---------- -------- ----------- ------------ ----------- -------- -----------
Balance at April 2, 1995....... 19,470,734 194,707 66,839,599 (8,994,329) -- -- 58,039,977
5% stock dividend.............. 976,418 9,764 4,262,236 (4,272,000) -- -- --
Cash payment for dividends in
lieu of fractional shares.... -- -- -- (3,893) -- -- (3,893)
Shares issued to employees upon
exercise of qualified stock
options...................... 86,258 863 194,323 -- -- -- 195,186
Net income..................... -- -- -- 6,466,856 -- -- 6,466,856
---------- -------- ----------- ------------ ----------- -------- -----------
Balance at March 31, 1996...... 20,533,410 205,334 71,296,158 (6,803,366) -- -- 64,698,126
Net unrealized gains on
investments
available-for-sale, net of
income taxes................. -- -- -- -- -- 159,351 159,351
Shares issued to employees upon
exercise of qualified stock
options...................... 68,461 685 114,597 -- -- -- 115,282
Shares repurchased............. -- -- -- -- (1,369,772) -- (1,369,772)
Net loss....................... -- -- -- (4,359,557) -- -- (4,359,557)
---------- -------- ----------- ------------ ----------- -------- -----------
Balance at March 30, 1997...... 20,601,871 $206,019 $71,410,755 $(11,162,923) $(1,369,772) $159,351 $59,243,430
========== ======== =========== ============ =========== ======== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 139
BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------
APRIL 2, MARCH 31, MARCH 30,
1995 1996 1997
------------ ------------ ------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Cash received from customers including net cash
collected as servicer of notes receivable to be
remitted to investors........................... $ 78,667,484 $ 94,939,565 $ 88,471,780
Interest received.................................. 5,409,259 6,220,829 5,247,636
Cash paid for land acquisitions and real estate
development..................................... (48,374,125) (61,236,096) (64,860,397)
Cash paid to suppliers, employees and sales
representatives................................. (33,337,031) (44,567,809) (48,688,033)
Interest paid, net of capitalized interest......... (6,287,133) (5,918,887) (4,964,170)
Income taxes paid, net of refunds.................. (3,097,292) (3,316,235) (1,677,762)
Proceeds from borrowings collateralized by notes
receivable...................................... 8,587,550 19,438,016 18,157,349
Payments on borrowings collateralized by notes
receivable...................................... (14,845,131) (19,229,268) (16,825,813)
Net proceeds from REMIC transactions............... 22,706,101 28,688,041 16,934,571
------------ ------------ ------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES..... 9,429,682 15,018,156 (8,204,839)
------------ ------------ ------------
INVESTING ACTIVITIES:
Purchases of property and equipment................ (1,769,077) (1,895,510) (1,041,769)
Sales of property and equipment.................... 452,822 789,433 843,445
Cash received from investment in securities........ -- 275,816 1,699,032
Additions to other long-term assets................ (259,109) (410,814) (180,505)
------------ ------------ ------------
NET CASH FLOW (USED) PROVIDED BY INVESTING
ACTIVITIES......................................... (1,575,364) (1,241,075) 1,320,203
------------ ------------ ------------
FINANCING ACTIVITIES:
Borrowings under line-of-credit facilities......... 3,916,436 5,795,604 16,887,870
Borrowings under secured credit facility........... -- -- 3,800,000
Payments under line-of-credit facilities........... -- (4,053,615) (5,484,517)
Payments on other long-term debt................... (13,539,555) (11,909,697) (6,856,221)
Proceeds from exercise of employee stock options... 54,661 195,186 115,282
Cash paid for repurchase of common shares.......... -- -- (1,369,772)
Payment for stock dividends in lieu of fractional
shares.......................................... (5,432) (3,893) --
------------ ------------ ------------
NET CASH FLOW (USED) PROVIDED BY FINANCING
ACTIVITIES......................................... (9,573,890) (9,976,415) 7,092,642
------------ ------------ ------------
Net (decrease) increase in cash and cash
equivalents........................................ (1,719,572) 3,800,666 208,006
Cash and cash equivalents at beginning of year....... 9,308,047 7,588,475 11,389,141
------------ ------------ ------------
Cash and cash equivalents at end of year............. 7,588,475 11,389,141 11,597,147
Restricted cash and cash equivalents end of year..... (5,164,650) (7,683,901) (7,978,256)
------------ ------------ ------------
Unrestricted cash and cash equivalents at
end of year......................................... $ 2,423,825 $ 3,705,240 $ 3,618,891
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE> 140
BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
<TABLE>
<CAPTION>
YEARS ENDED
------------------------------------------
APRIL 2, MARCH 31, MARCH 30,
1995 1996 1997
------------ ------------ ------------
<S> <C> <C> <C>
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH FLOW
PROVIDED (USED) BY OPERATING ACTIVITIES:
Net income (loss).................................. $ 6,137,089 $ 6,466,856 $ (4,359,557)
Adjustments to reconcile net income (loss) to net
cash flow provided (used) by operating
activities:
Depreciation and amortization................... 1,301,125 1,636,933 1,065,794
Loss (gain) on REMIC transactions............... 411,000 (1,119,572) 96,211
(Gain) loss on sale of property and equipment... (54,519) 48,561 (82,310)
Provisions for losses........................... 792,000 611,979 9,539,081
Interest accretion on investment in
securities.................................... (2,222,724) (1,170,367) (996,531)
Proceeds from borrowings collateralized by notes
receivable.................................... 8,587,550 19,438,016 18,157,349
Payments on borrowings collateralized by notes
receivable.................................... (14,845,131) (19,229,268) (16,825,813)
Provision (benefit) for deferred income taxes... 1,326,791 998,095 (3,419,109)
(INCREASE) DECREASE IN OPERATING ASSETS:
Contracts receivable............................ (3,122,652) 600,047 (1,857,217)
Inventory....................................... (4,452,058) (2,003,195) (9,125,901)
Other assets.................................... 1,264,688 274,414 (1,076,176)
Notes receivable and investment in securities... 11,864,101 10,446,396 (2,798,395)
INCREASE (DECREASE) IN OPERATING LIABILITIES:
Accounts payable, accrued liabilities and
other......................................... 2,442,422 (1,980,739) 3,477,735
------------ ------------ ------------
NET CASH FLOW PROVIDED (USED) BY OPERATING
ACTIVITIES......................................... $ 9,429,682 $ 15,018,156 $ (8,204,839)
============ ============ ============
SUPPLEMENTAL SCHEDULE OF NON-CASH OPERATING AND
FINANCING ACTIVITIES
Inventory acquired through financing
transactions ................................. $ 17,680,680 $ 6,595,450 $ 10,030,647
============ ============ ============
Inventory acquired through foreclosure or
deedback in lieu of foreclosure............... $ 1,139,993 $ 1,609,697 $ 1,957,916
============ ============ ============
Investment in securities retained in connection
with REMIC transactions....................... $ 2,674,370 $ 2,044,029 $ 1,774,319
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-7
<PAGE> 141
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Organization
Bluegreen Corporation (the "Company") is a national leisure product company
operating predominantly in the Southeastern, Southwestern and Midwestern United
States. The Company's primary business is (i) the acquisition, development and
sale of residential land and (ii) the acquisition and development of timeshare
properties which are sold in weekly intervals. The Company offers financing to
its land and timeshare purchasers.
Land and timeshare products are typically located in scenic areas or
popular vacation destinations throughout the United States. The Company's
products are primarily sold to middle-class individuals with ages ranging from
forty to fifty-five. The Company changed its name, effective March 8, 1996, from
Patten Corporation.
Principles of Consolidation
The financial statements include the accounts of Bluegreen Corporation and
all wholly owned subsidiaries. All significant intercompany transactions are
eliminated.
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company invests cash in excess of immediate operating requirements in
short-term time deposits and money market instruments generally with original
maturities of three months or less. The Company maintains cash and cash
equivalents with various financial institutions. These financial institutions
are located throughout the country and Company policy is designed to limit
exposure to any one institution. However, a significant portion of the Company's
unrestricted cash is maintained with a single bank and, accordingly, the Company
is subject to credit risk. Periodic evaluations of the relative credit standing
of financial institutions maintaining Company deposits are performed to evaluate
and mitigate, if necessary, credit risk.
Restricted cash consists of funds collected as servicer under
receivable-backed note agreements, along with customer deposits on real estate
maintained in escrow accounts.
Contracts Receivable and Revenue Recognition
In accordance with the requirements of Statement of Financial Accounting
Standards ("SFAS") No. 66, the Company recognizes revenue on retail land sales
and timeshare sales when a minimum of 10% of the sales price has been received
in cash, the refund period has expired, collectibility of the receivable
representing the remainder of the sales price is reasonably assured and the
Company has completed substantially all of its obligations with respect to any
development related to the real estate sold. In cases where all development has
not been completed, the Company recognizes revenue in accordance with the
percentage of completion method of accounting.
Sales which do not meet the criteria for revenue recognition described
above are deferred using the deposit method. Under the deposit method, cash
received from customers is classified as a refundable deposit in the liability
section of the Consolidated Balance Sheet and profit recognition is deferred
until the requirements of SFAS No. 66 are met.
F-8
<PAGE> 142
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Contracts receivable is net of an allowance for cancellations amounting to
$451,000 and $112,000 at March 30, 1997 and March 31, 1996, respectively.
Notes Receivable
Notes receivable are carried at amortized cost. Interest income is
suspended on all notes receivable when principal or interest payments are more
than three months contractually past due and not resumed until such loans become
contractually current.
Impact of Recently Issued Accounting Standards
From time to time certain receivables have been securitized and sold to
investors through Real Estate Mortgage Investment Conduits (REMICs). See Note 3.
To date, the servicing rights to securitized receivables have been retained by
the Company. SFAS No. 122, "Accounting for Mortgage Servicing Rights", requires
that a separate asset be recognized for rights to service mortgage loans for
others. Servicing rights retained by the Company have not been material to date.
SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" establishes new criteria for determining whether
a transfer of financial assets occurring after December 31, 1997 in exchange for
cash or other consideration should be accounted for as a sale or as a pledge of
collateral in a secured borrowing. It also establishes new accounting
requirements for pledged collateral and new criteria for the extinguishment of
liabilities. The Company does not believe the adoption of SFAS No. 125 in 1998
will have a material affect on the Company's operations or financial condition.
Investment in Securities
The Company's investment in securities are considered available-for-sale
and are carried at fair value in accordance with SFAS No. 115 "Accounting for
Certain Investments in Debt and Equity Securities". Accordingly, unrealized
holding gains or losses on available-for-sale investments are recorded as
adjustments to common shareholders' equity, net of income taxes. Declines in
fair value deemed other than temporary are charged to operations.
Interest on the Company's securities is accreted at effective yield rates
which reflect interest at pass-through rates, the arbitrage resulting from rate
differentials between the notes in the REMIC pool and pass-through rates, along
with the effect of estimated prepayments and foreclosure losses. See Note 3.
Inventory
Inventory consists of real estate acquired for sale and is carried at the
lower of cost, including costs of improvements and amenities incurred subsequent
to acquisition or estimated fair value, net of costs to dispose. Real estate
reacquired through foreclosure or deedback in lieu of foreclosure is recorded at
the lower of fair value, net of costs to dispose, or the carrying value of the
loan. The Company adopted SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed Of " in April, 1996. The
initial adoption of this Statement did not have a material impact on the
Company's financial condition or results of operations.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed on the
straight-line method based on the estimated useful lives of the related assets.
F-9
<PAGE> 143
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Debt Issuance Costs
Costs associated with obtaining financing have been capitalized and are
amortized under an accelerated method (which approximates the interest method)
over the terms of the related debt.
Treasury Stock
The Company accounts for repurchases of common stock using the cost method
with common stock in treasury classified in the balance sheets as a reduction of
common shareholders' equity.
Advertising Expense
The Company expenses advertising costs the first time the advertising takes
place, which is within one year, except for direct-response advertising, which
is capitalized and amortized over its expected period of future benefit. The
Company uses direct-response advertising for its timeshare products and the
advertising consists of direct mail with a response card confirming the
prospective customer's pre-determined site-visit.
At March 30, 1997, $517,000 of advertising was reported in other assets.
Comparable amounts were not material at March 31, 1996. Advertising expense was
$7.1 million, $10.0 million and $13.9 million for the years ended April 2, 1995,
March 31, 1996 and March 30, 1997, respectively.
Income Taxes
The Company and its subsidiaries file a consolidated federal income tax
return. Income taxes have been provided using the liability method in accordance
with SFAS No. 109, "Accounting for Income Taxes".
Stock Based Compensation
The Company grants stock options for a fixed number of shares to employees
with an exercise price equal to the fair value of the shares at the date of
grant. The Company has elected to account for stock option grants in accordance
with APB Opinion No. 25, "Accounting for Stock Issued to Employees", and,
accordingly, recognizes no compensation expense in connection with stock option
grants. See Note 11 for pro forma information regarding net earnings and
earnings per share as required by SFAS 123 when adopted.
Earnings (Loss) Per Common Share
In February, 1997, the Financial Accounting Standards Board (FASB) issued
SFAS No. 128, "Earnings Per Share", which became effective for the Company's
quarter ended December 28, 1997. Basic earnings (loss) per common share is
computed by dividing net income (loss) by the weighted average number of common
shares outstanding. Diluted earnings (loss) per common share is computed in the
same manner as basic earnings per share, but also gives effect to all dilutive
stock options using the treasury stock method. The Company's 8.25% convertible
subordinated debentures were not assumed to be converted into common stock for
the purposes of this computation, as the impact would be antidilutive for all
years presented. The earnings (loss) per common share and weighted average
number of common and common equivalent shares for each of the three years in the
period ended March 30, 1997 have been restated in accordance with SFAS No. 128.
F-10
<PAGE> 144
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table sets forth the computation of basic and diluted
earnings (loss) per share:
<TABLE>
<CAPTION>
YEAR ENDED
------------------------------------------
APRIL 2, MARCH 31, MARCH 30,
1995 1996 1997
------------ ------------ ------------
<S> <C> <C> <C>
Numerator:
Numerator for basic and diluted earnings (loss) per
share -- net income (loss) $ 6,137,089 $ 6,466,856 $ (4,359,557)
============ ============ ============
Denominator:
Denominator for basic earnings (loss) per share --
weighted-average shares 20,415,856 20,508,037 20,318,509
Effect of dilutive securities:
Stock options 1,060,782 1,267,254 --
------------ ------------ ------------
Denominator for diluted earnings (loss) per share --
adjusted weighted-average shares 21,476,638 21,775,291 20,318,509
============ ============ ============
Basic earnings (loss) per share $ .30 $ .32 $ (.21)
============ ============ ============
Diluted earnings (loss) per share $ .29 $ .30 $ (.21)
============ ============ ============
</TABLE>
Reclassifications
Certain reclassifications of prior period amounts have been made to conform
to the current year presentation.
2. NOTES RECEIVABLE
The weighted average interest rate on notes receivable was 13.3% and 12.4%
at March 30, 1997 and March 31, 1996, respectively. The table below sets forth
additional information relating to the Company's notes receivable.
<TABLE>
<CAPTION>
MARCH 31, 1996 MARCH 30, 1997
-------------- --------------
<S> <C> <C>
Notes receivable secured by land............................ $26,243,222 $12,334,283
Notes receivable secured by timeshare intervals............. 11,667,049 23,501,163
----------- -----------
Notes receivable, gross..................................... 37,910,271 35,835,446
Reserve for loan losses..................................... (896,469) (1,216,121)
----------- -----------
Notes receivable, net....................................... $37,013,802 $34,619,325
=========== ===========
</TABLE>
Approximately 69% of the Company's notes receivable secured by land bear
interest at variable rates, while approximately 31% bear interest at fixed
rates. The average interest rate charged on loans secured by land was 12.0% at
March 30, 1997. All of the Company's timeshare loans bear interest at fixed
rates. The average interest rate charged on loans secured by timeshare intervals
was 15.7% at March 30, 1997.
The Company's timeshare receivables are secured by property located in
Tennessee and South Carolina. No concentrations of credit exist for the
Company's notes receivable secured by land.
F-11
<PAGE> 145
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The table below sets forth activity in the reserve for estimated loan
losses.
<TABLE>
<S> <C>
Reserve for loan losses, April 2, 1995...................... $1,089,652
Provision for losses........................................ 344,718
Charge-offs................................................. (537,901)
----------
Reserve for loan losses, March 31, 1996..................... 896,469
Provision for losses........................................ 1,008,271
Charge-offs................................................. (688,619)
----------
Reserve for loan losses, March 30, 1997..................... $1,216,121
==========
</TABLE>
Installments due on notes receivable held by the Company during each of the
five fiscal years subsequent to 1997, and thereafter, are set forth below.
<TABLE>
<S> <C>
1998........................................................ $ 4,626,469
1999........................................................ 4,456,082
2000........................................................ 5,167,790
2001........................................................ 5,424,765
2002........................................................ 5,440,360
Thereafter.................................................. 10,719,980
-----------
Total............................................. $35,835,446
===========
</TABLE>
3. INVESTMENT IN SECURITIES
The Company's investment in securities and associated unrealized gains and
losses are set forth below.
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED
AVAILABLE-FOR-SALE SECURITIES COST GAIN LOSS FAIR VALUE
- ----------------------------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
1994 REMIC debt securities........... $ 3,892,575 $ -- $22,659 $ 3,869,916
1995 REMIC debt securities........... 4,999,733 198,705 -- 5,198,438
1996 REMIC debt securities........... 1,904,299 94,040 -- 1,998,339
----------- -------- ------- -----------
Total...................... $10,796,607 $292,745 $22,659 $11,066,693
=========== ======== ======= ===========
</TABLE>
Contractual maturities and yield of investments are set forth below. See
also Note 13.
<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE SECURITIES FAIR VALUE EFFECTIVE YIELD
- ----------------------------- ----------- ----------------
<S> <C> <C>
After one year but within five.......................... $ 3,869,916 11.91%
After five years but within ten......................... 7,196,777 7.44%
-----------
Total......................................... $11,066,693
===========
</TABLE>
F-12
<PAGE> 146
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
4. INVENTORY
The Company's net inventory holdings as of March 30, 1997 and March 31,
1996, summarized by division, are set forth below. Interest capitalized during
fiscal 1997 and fiscal 1996 totaled $3.0 million and $1.9 million, respectively.
Interest expense in the Consolidated Statements of Operations is net of
capitalized interest.
<TABLE>
<CAPTION>
MARCH 30, 1997
--------------------------------------------------------
GEOGRAPHIC REGION LAND RESORTS(1) COMMUNITIES(2) TOTAL
- ----------------- ----------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Southeast.............................. $ 7,997,611 $15,028,592 $ 5,685,074 $28,711,277
Midwest................................ 8,050,969 12,495,034 -- 20,546,003
Southwest.............................. 19,959,473 -- -- 19,959,473
Rocky Mountains........................ 7,533,939 -- -- 7,533,939
West................................... 5,511,879 -- -- 5,511,879
Mid-Atlantic........................... 4,015,647 -- -- 4,015,647
Northeast.............................. 382,341 -- -- 382,341
----------- ----------- ----------- -----------
Totals....................... $53,451,859 $27,523,626 $ 5,685,074 $86,660,559
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------------------------------------------------
GEOGRAPHIC REGION LAND RESORTS(1) COMMUNITIES(2) TOTAL
- ----------------- ----------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Southeast.............................. $ 2,252,239 $ 5,189,815 $13,983,521 $21,425,575
Midwest................................ 6,293,008 10,839,389 -- 17,132,397
Southwest.............................. 15,118,191 -- 142,790 15,260,981
Rocky Mountains........................ 9,299,344 -- 50,800 9,350,144
West................................... 5,923,972 -- -- 5,923,972
Mid-Atlantic........................... 2,490,025 -- -- 2,490,025
Northeast.............................. 1,982,895 -- -- 1,982,895
Canada................................. 29,025 -- -- 29,025
----------- ----------- ----------- -----------
Totals....................... $43,388,699 $16,029,204 $14,177,111 $73,595,014
=========== =========== =========== ===========
</TABLE>
- ---------------
(1) Resorts Division inventory as of March 30, 1997, consists of land inventory
of 5.4 million and $22.1 million of unit construction-in-progress. Resorts
Division inventory as of March 31, 1996, consists of land inventory of $6.1
million and $9.9 million of unit construction-in-progress.
(2) Communities Division inventory as of March 30, 1997, consists of land
inventory of $1.5 million and $4.2 million of housing unit
construction-in-progress. Communities Division inventory as of March 31,
1996, consists of land inventory of $10.5 million and $3.7 million of
housing unit construction-in-progress.
During the first quarter of fiscal 1997, management changed its focus for
marketing certain of its inventories in an effort to expedite sales absorption,
and use the proceeds from such sales for its more profitable land and timeshare
projects. Based on the Company's exit-plans, management determined that
inventories with a carrying value of $23.2 million should be written-down by
$8.2 million to reflect their estimated fair value, less costs to sell. A
substantial portion of the write-down ($4.8 million) related to inventories
managed under the Communities Division. Home-building and other efforts under
the Communities Division will cease upon sell-out of the existing inventories.
The other inventories that were subject to write-down are managed under the Land
Division and are located in areas of the country where the Company does not plan
to continue operations beyond liquidating the existing properties. All such
inventories are being liquidated through a combination of bulk sales and retail
sales at reduced prices. Approximately 50% of the properties subject to
write-down had been sold by March 30, 1997. No substantial gains or losses were
F-13
<PAGE> 147
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
recognized in connection with the sale of these inventories. Although no
assurances can be given, the remaining inventories subject to write-down are
expected to be fully liquidated in 12-18 months.
5. PROPERTY AND EQUIPMENT
The table below sets forth the property and equipment held by the Company
at the period end indicated.
<TABLE>
<CAPTION>
USEFUL MARCH 31, MARCH 30,
LIFE 1996 1997
--------- ----------- -----------
<S> <C> <C> <C>
Land, buildings and building improvements................. 30 years $ 3,837,382 $ 3,161,601
Office equipment, furniture and fixtures.................. 3-5 years 4,466,821 4,126,990
Aircraft.................................................. 3-5 years 1,375,001 1,153,968
Vehicles and equipment.................................... 3-5 years 451,202 435,274
----------- -----------
10,130,406 8,877,833
Accumulated depreciation.................................. (4,891,306) (3,929,279)
----------- -----------
Total........................................... $ 5,239,100 $ 4,948,554
=========== ===========
</TABLE>
Depreciation expense included in the Consolidated Statements of Operations
totaled $811,000, $1.0 million and $1.1 million for fiscal 1997, 1996 and 1995,
respectively.
6. LINES-OF-CREDIT AND NOTES PAYABLE
The Company has outstanding borrowings with various financial institutions
and other lenders which have been used to finance the acquisition and
development of inventory and to fund operations. Significant financial data
related to the Company's borrowing facilities is set forth below.
<TABLE>
<CAPTION>
MARCH 31, MARCH 30,
1996 1997
----------- -----------
<S> <C> <C>
Lines-of-credit secured by land and timeshare inventory with
interest rates ranging from 10.25% to 10.75% at March 30,
1997 and 10.50% to 10.75% at March 31, 1996. Maturities
range from 1997 to 1999................................... $ 6,394,245 $17,797,600
Notes and mortgage notes secured by certain inventory and
property and equipment with interest rates ranging from
7.5% to 11.25% at March 30, 1997 and 6.2% to 11.0% at
March 31, 1996. Maturities range from 1997 to 2019........ 10,700,245 17,960,558
Lease obligations with a weighted average interest rate of
11% at March 30, 1997. Maturities range from 1998 to
2001...................................................... 193,277 147,394
----------- -----------
Total............................................. $17,287,767 $35,905,552
=========== ===========
</TABLE>
F-14
<PAGE> 148
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
At March 30, 1997, $5.0 million remained available under lines-of-credit.
The table below sets forth the contractual minimum principal payments required
on the Company's lines-of-credit and notes payable for each of the five fiscal
years subsequent to 1997, and thereafter. Such minimum contractual payments may
differ from actual payments due to the effect of principal payments required on
a lot or timeshare interval release basis for certain of the above obligations.
<TABLE>
<S> <C>
1998........................................................ $21,020,491
1999........................................................ 5,702,848
2000........................................................ 5,974,495
2001........................................................ 590,039
2002........................................................ 235,052
Thereafter.................................................. 2,382,627
-----------
Total............................................. $35,905,552
===========
</TABLE>
The Company is required to comply with certain covenants under several of
its debt agreements discussed above, including, without limitation, requirements
to (i) maintain net worth of at least $42.0 million, (ii) maintain certain
minimum leverage ratios, (iii) limit S,G&A expenses to 50% of revenues, and (iv)
comply with various other restrictive covenants. The Company was in compliance
with such covenants at March 30, 1997, and for each reporting period during
fiscal 1996 and 1995.
7. CONVERTIBLE SUBORDINATED DEBENTURES
The Company has $34.7 million of its 8.25% Convertible Subordinated
Debentures (the "Debentures") outstanding at March 30, 1997 and March 31, 1996.
The Debentures are convertible at any time prior to maturity (2012), unless
previously redeemed, into common stock of the Company at a current conversion
price of $8.24 per share, subject to adjustment under certain conditions. The
Debentures are redeemable at any time, at the Company's option, in whole or in
part. On May 15, 1997, the redemption price was 100% of the face amount. The
Company is obligated to redeem annually 10% of the principal amount of the
Debentures originally issued, commencing May 15, 2003. Such redemptions are
calculated to retire 90% of the principal amount of the Debentures prior to
maturity. The Debentures are unsecured and subordinated to all senior
indebtedness of the Company. Interest is payable semi-annually on May 15 and
November 15.
Under financial covenants of the Indenture pursuant to which the Debentures
were issued, the Company is required to maintain net worth of not less than
$29.0 million. Should net worth fall below $29.0 million for two consecutive
quarters, the Company is required to make an offer to purchase 20% of the
outstanding Debentures at par, plus accrued interest.
8. RECEIVABLE-BACKED NOTES PAYABLE
The Company has various credit facilities for the pledge of land and
timeshare receivables. The interest rate charged under one agreement is the
three-month London Interbank Offered Rate plus 4.25%, while the other agreements
call for interest at prime plus 2%. At March 30, 1997, the $21.1 million in
receivable-backed notes payable was collateralized by $27.1 million in
receivables. At March 31, 1996, the $19.7 million in receivable-backed notes
payable was secured by $27.0 million in receivables. Payments received on the
receivables are applied to reduce principal and pay interest monthly. At March
30, 1997, $27.2 million remained available under credit facilities.
F-15
<PAGE> 149
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Installments due on receivable-backed notes payable based upon principal
payments due on receivables in each of the four fiscal years subsequent to 1997
is set forth below.
<TABLE>
<S> <C>
1998........................................................ $ 4,890,941
1999........................................................ 5,363,014
2000........................................................ 5,954,346
2001........................................................ 4,846,701
-----------
Total............................................. $21,055,002
===========
</TABLE>
9. INCOME TAXES
The (benefit) provision for income taxes consists of the following:
<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------------
APRIL 2, MARCH 31, MARCH 30,
1995 1996 1997
---------- ---------- -----------
<S> <C> <C> <C>
Federal:
Current........................................ $2,307,313 $2,590,910 $ 269,960
Deferred....................................... 380,195 1,207,941 (3,192,841)
---------- ---------- -----------
2,687,508 3,798,851 (2,922,881)
State:
Current........................................ 630,654 860,064 119,628
Deferred....................................... 946,596 (209,846) (226,268)
---------- ---------- -----------
1,577,250 650,218 (106,640)
---------- ---------- -----------
Total.................................. $4,264,758 $4,449,069 $(3,029,521)
========== ========== ===========
</TABLE>
(Loss) income before income taxes (excluding Canadian operations) was
$(7.4) million in fiscal 1997, $10.9 million in fiscal 1996 and $10.4 million in
fiscal 1995.
The reasons for the difference between the provision for income taxes and
the amount which results from applying the federal statutory tax rate in fiscal
1997, 1996 and 1995 to income before income taxes are as follows:
<TABLE>
<CAPTION>
YEARS ENDED
-------------------------------------
APRIL 2, MARCH 31, MARCH 30,
1995 1996 1997
---------- ---------- -----------
<S> <C> <C> <C>
Income tax (benefit) expense at statutory rate... $3,536,628 $3,720,573 $(2,512,286)
Effect of state taxes, net of federal tax
benefit........................................ 728,130 728,496 (517,235)
---------- ---------- -----------
$4,264,758 $4,449,069 $(3,029,521)
========== ========== ===========
</TABLE>
F-16
<PAGE> 150
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
At March 30, 1997 and March 31, 1996, deferred income taxes consist of the
following components:
<TABLE>
<CAPTION>
MARCH 31, MARCH 30,
1996 1997
----------- -----------
<S> <C> <C>
Deferred federal and state tax (assets) liabilities:
Installment sales treatment of notes........................ $ 8,473,340 $ 8,931,920
Deferred foreign tax liability due to installment sale
treatment of notes........................................ 185,000 --
Deferred federal and state loss carryforwards/AMT credits... (1,990,365) (5,125,584)
Other....................................................... (600,161) (950,390)
----------- -----------
Deferred income taxes....................................... $ 6,067,814 $ 2,855,946
=========== ===========
</TABLE>
As of March 30, 1997, the Company had $2.1 million of AMT credit
carryforwards which have no expiration period and approximately $7.5 million of
federal net operating loss ("NOL") that may be offset against future taxable
income through 2012.
10. COMMITMENTS AND CONTINGENCIES
At March 30, 1997, estimated cost to complete development work in
subdivisions from which lots have been sold totaled $48.9 million. Development
is estimated to be completed within the next five years as follows:
1998 -- $24.0 million; 1999 -- $11.8 million; 2000 -- $4.4 million; 2001 -- $4.4
million and 2002 -- $4.3 million.
The Company is party to certain ordinary course litigation. Although no
assurances can be given, in the opinion of management, based on the advice of
counsel, the potential outcome is not expected to have a materially adverse
effect on the operations or financial condition of the Company.
11. STOCK OPTION PLANS AND EMPLOYEE RETIREMENT SAVINGS PLAN
The Employee's Stock Option Plan expired in September, 1995. The Company
received shareholder approval for a new employee stock option plan (the 1995
Stock Incentive Plan) at a meeting held on July 20, 1995. As of March 30, 1997,
there were 453 individuals eligible to participate in the 1995 Stock Incentive
Plan. Options under each plan expire ten years from the date of grant. A summary
of stock option activity for each plan is presented below.
Employee Stock Option Plan
<TABLE>
<CAPTION>
NUMBER NUMBER
OF SHARES OPTION PRICE OF SHARES
RESERVED OPTIONS PER SHARE EXERCISABLE
--------- --------- -------------- -----------
<S> <C> <C> <C> <C>
Balance at April 2, 1995...................... 1,839,317 962,422 $1.25 - $12.26 286,529
Granted....................................... -- 250,000 $4.51
Forfeited..................................... -- (96,550) $1.25 - $12.26
Exercised..................................... (82,258) (82,258) $1.25 - $ 3.28
Expiration of plan............................ (723,445) --
Stock dividends............................... 52,268 52,268
--------- ---------
Balance at March 31, 1996..................... 1,085,882 1,085,882 $1.25 - $11.64 381,528
Forfeited..................................... (97,551) (97,551) $1.25 - $11.64
Exercised..................................... (44,612) (44,612) $1.25 - $ 4.16
--------- ---------
Balance at March 30, 1997..................... 943,719 943,719 $1.25 - $11.64 566,388
========= =========
</TABLE>
F-17
<PAGE> 151
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
1995 Stock Incentive Plan
<TABLE>
<CAPTION>
NUMBER NUMBER
OF SHARES OPTION PRICE OF SHARES
RESERVED OPTIONS PER SHARE EXERCISABLE
--------- --------- --------------- -----------
<S> <C> <C> <C> <C>
Balance at March 31, 1996.................... 1,000,000 -- -- --
Granted...................................... -- 75,000 $4.25 --
--------- ---------
Balance at March 30, 1997.................... 1,000,000 75,000 $4.25 --
========= =========
</TABLE>
Outside Directors Plan
In fiscal 1988, the Company's shareholders adopted a stock option plan
covering the Company's non-employee Directors (the "Director Plan"). The
Director Plan provided for the grant to the Company's non-employee directors
(the "Outside Directors") of non-qualified stock options to purchase up to an
aggregate of 150,000 shares of common stock at a price not less than the fair
market value at the date of grant. The Director Plan was amended in September,
1991, to increase the number of issuable shares from 150,000 to 300,000 and
again in July, 1995, to increase the number of issuable shares by an additional
200,000. Options expire ten years from the date of grant. A summary of stock
option activity related to the Company's Director Plan is presented below.
<TABLE>
<CAPTION>
NUMBER NUMBER
OF SHARES OPTION PRICE OF SHARES
RESERVED OPTIONS PER SHARE EXERCISABLE
--------- --------- ------------ -----------
<S> <C> <C> <C> <C>
Balance at April 2, 1995....................... 340,704 337,335 $.83 - $4.78 186,474
Additional shares issuable..................... 200,000 --
Granted........................................ -- 75,000 $3.80
Stock dividends................................ 17,035 20,617
--------- ---------
Balance at March 31, 1996...................... 557,739 432,952 $.83 - $4.78 276,134
Granted........................................ -- 75,000 $3.13
Exercised...................................... -- (23,849) $.83 - $1.46
--------- ---------
Balance at March 30, 1997...................... 557,739 484,103 $.83 - $4.78 328,227
========= =========
</TABLE>
Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, and has been determined as if the Company had
accounted for its employee stock options under the fair value method of that
Statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted average
assumptions for fiscal 1995, 1996 and 1997: risk free investment rates of 5%,
dividend yields of 1%, a volatility factor of the expected market price of the
Company's common stock of .369; and a weighted average life of the options of 10
years.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows.
<TABLE>
<CAPTION>
1995 1996 1997
----------- ---------- -----------
<S> <C> <C> <C>
Pro forma net income (loss)...................... $ 6,087,609 $6,338,928 $(4,562,126)
=========== ========== ===========
Pro forma earnings (loss) per share:
Basic.......................................... $ .30 $ .31 $ (.22)
Diluted........................................ .28 .29 (.22)
</TABLE>
F-18
<PAGE> 152
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Employee Retirement Savings Plan
The Company's Employee Retirement Plan is a code section 401(k) Retirement
Savings Plan (the "Plan"). All employees at least 21 years of age with one year
of employment with the Company are eligible to participate in the Plan. Employer
contributions to the Plan are at the sole discretion of the Company and were not
material to the operations of the Company for fiscal 1995, 1996 and 1997.
12. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Summarized quarterly financial information for the years ended March 31,
1996 and March 30, 1997 is presented below (in 000's except for per share
information). (Loss) earnings per common share has been restated in accordance
with SFAS No. 128 (See Note 1).
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------------------
JULY 2, OCTOBER 1, DECEMBER 31, MARCH 31,
1995 1995 1995 1996
-------- ------------- ------------ ---------
<S> <C> <C> <C> <C>
Sales of real estate...................... $24,641 $33,258 $23,935 $31,588
Gross profit.............................. 12,449 16,035 10,805 14,740
Net income................................ 1,588 2,319 985 1,575
Earnings per common share:
Basic................................... .08 .11 .05 .08
Diluted................................. .07 .11 .05 .07
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------------------------------
JUNE 30, SEPTEMBER 29, DECEMBER 29, MARCH 30,
1996 1996 1996 1997
-------- ------------- ------------ ---------
<S> <C> <C> <C> <C>
Sales of real estate...................... $28,782 $26,451 $26,478 $28,010
Gross profit.............................. 14,329 13,252 12,747 12,303
Net (loss) income......................... (4,124) 576 20 (832)
(Loss) earnings per common share:
Basic................................... (.20) .03 .00 (.04)
Diluted................................. (.20) .03 .00 (.04)
</TABLE>
13. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Company in
estimating the fair values of its financial instruments:
Cash and cash equivalents: The amounts reported in the balance sheets for
cash and cash equivalents approximates fair value.
Contracts receivable: The amounts reported in the balance sheets for
contracts receivable approximates fair value. Contracts receivable are
non-interest bearing and generally convert into cash or an interest bearing
mortgage note receivable within thirty days.
Notes receivable: The carrying amounts reported in the balance sheets for
notes receivable approximates fair value based on (i) prices established by loan
pricing services and (ii) discounted future cash flows using current rates at
which similar loans with similar maturities would be made to borrowers with
similar credit risk.
Investment in securities: Investment in securities are carried at fair
value based on estimates from dealers.
F-19
<PAGE> 153
BLUEGREEN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Lines-of-credit, notes payable and receivable-backed notes payable: The
carrying amounts reported in the balance sheets approximate their fair value
based upon short-term maturities of the indebtedness which provide for variable
interest rates.
8.25% convertible subordinated debentures: The fair value of the Company's
8.25% convertible subordinated debentures is based on the quoted market price as
reported on the New York Stock Exchange.
<TABLE>
<CAPTION>
MARCH 31, 1996 MARCH 30, 1997
------------------------- -------------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Cash and cash equivalents................... $11,389,141 $11,389,141 $11,597,147 $11,597,147
Contracts receivable........................ 12,451,207 12,451,207 14,308,424 14,308,424
Notes receivable............................ 37,013,802 37,013,802 34,619,325 34,619,325
Investment in securities.................... 9,699,435 9,699,435 11,066,693 11,066,693
Lines-of-credit, notes payable and
receivable-backed notes payable........... 37,011,233 37,011,233 56,960,554 56,960,554
8.25% convertible subordinated debentures... 34,739,000 30,570,320 34,739,000 29,832,116
</TABLE>
14. SUPPLEMENTAL GUARANTOR INFORMATION
Under the terms of the Note Offering, all of the Company's subsidiaries,
with the exception of the Non-Guarantor Subsidiaries, as defined below, will
fully and unconditionally guarantee, jointly and severally, the full and prompt
payment of principal and interest on the Company's $110 million Senior Secured
Notes due 2008 (the Notes), and the performance of all other obligations of the
Company under the Notes and related indenture. The Non-Guarantor Subsidiaries
are:
Patten Receivables Finance Corporation III
Patten Receivables Finance Corporation VI
Bluegreen Land and Realty, Inc.
Patten Receivables Finance Corporation VII
Patten Receivables Finance Corporation VIII
CDP Realty, Inc.
Patten Receivables Finance Corporation IX
Patten Receivables Finance Corporation X
Bluegreen Receivables Finance Corporation I
BXG Realty Tenn, Inc.
Bluegreen Properties N.V.
Resort Title Agency, Inc.
Blue Ridge Public Service Company
RDI Vacation Club, Inc.
Vacation Trust, Inc.
Management has determined that separate, full financial statements are not
required and, accordingly, are not provided. Supplemental financial information
for Bluegreen Corporation, its combined non-guarantor subsidiaries and its
combined guarantor subsidiaries is presented below:
F-20
<PAGE> 154
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET AT MARCH 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents............ $ 4,303 $ 3,103 $ 3,984 $ -- $ 11,390
Contracts receivable, net............ 836 -- 11,615 -- 12,451
Notes receivable, net................ -- 8,127 28,887 -- 37,014
Investment in securities............. -- 9,699 -- -- 9,699
Inventory, net....................... 21,872 -- 51,723 -- 73,595
Property and equipment, net.......... 2,312 -- 2,927 -- 5,239
Investments in subsidiaries.......... -- -- -- -- --
Debt issuance costs, net............. 936 6 347 -- 1,289
Intercompany receivable.............. 20,630 3,232 -- (23,862) --
Other assets......................... 975 291 3,020 -- 4,286
-------- ------- -------- -------- --------
Total assets............... $ 51,864 $24,458 $102,503 $(23,862) $154,963
======== ======= ======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accounts payable..................... $ 2,377 $ -- $ 181 $ -- $ 2,558
Intercompany payable................. -- -- 23,862 (23,862) --
Deferred revenue..................... 117 -- 630 -- 747
Accrued liabilities and other........ 3,271 2,985 2,887 -- 9,143
Lines-of-credit and notes payable.... 3,425 -- 13,862 -- 17,287
Deferred income taxes................ 6,068 -- -- -- 6,068
Receivable-backed notes payable...... -- 6,271 13,452 -- 19,723
8.25% convertible subordinated
debentures......................... 34,739 -- -- -- 34,739
-------- ------- -------- -------- --------
Total liabilities.......... 49,997 9,256 54,874 (23,862) 90,265
SHAREHOLDERS' EQUITY
Preferred stock...................... -- -- -- -- --
Common stock......................... 205 -- -- -- 205
Capital-in-excess of par value....... 71,296 -- -- -- 71,296
Accumulated deficit.................. (69,634) 15,202 47,629 -- (6,803)
-------- ------- -------- -------- --------
Total shareholders'
equity................... 1,867 15,202 47,629 -- 64,698
-------- ------- -------- -------- --------
Total liabilities and
shareholders' equity..... $ 51,864 $24,458 $102,503 $(23,862) $154,963
======== ======= ======== ======== ========
</TABLE>
F-21
<PAGE> 155
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET AT MARCH 30, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents............ $ 3,353 $ 3,442 $ 4,802 $ -- $ 11,597
Contracts receivable, net............ 1,185 -- 13,123 -- 14,308
Notes receivable, net................ -- 5,588 29,031 -- 34,619
Investment in securities............. -- 11,067 -- -- 11,067
Inventory, net....................... 14,566 -- 72,095 -- 86,661
Property and equipment, net.......... 2,418 -- 2,531 -- 4,949
Investments in subsidiaries.......... -- -- -- -- --
Debt issuance costs, net............. 854 -- 210 -- 1,064
Intercompany receivable.............. 17,045 1,882 -- (18,927) --
Other assets......................... 2,024 395 2,943 -- 5,362
-------- ------- -------- -------- --------
Total assets............... $ 41,445 $22,374 $124,735 $(18,927) $169,627
======== ======= ======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accounts payable..................... $ 1,478 $ -- $ 440 $ -- $ 1,918
Intercompany payable................. -- -- 18,927 (18,927) --
Deferred revenue..................... 46 -- 3,746 -- 3,792
Accrued liabilities and other........ 6,376 3,304 438 -- 10,118
Lines-of-credit and notes payable.... 1,928 -- 33,977 -- 35,905
Deferred income taxes................ 2,843 -- 13 -- 2,856
Receivable-backed notes payable...... -- 3,514 17,541 -- 21,055
8.25% convertible subordinated
debentures......................... 34,739 -- -- -- 34,739
-------- ------- -------- -------- --------
Total liabilities.......... 47,410 6,818 75,082 (18,927) 110,383
SHAREHOLDERS' EQUITY:
Preferred stock...................... -- -- -- -- --
Common stock......................... 206 -- -- -- 206
Capital-in-excess of par value....... 71,411 -- -- -- 71,411
Accumulated deficit.................. (76,212) 15,397 49,653 -- (11,162)
Treasury stock....................... (1,370) -- -- -- (1,370)
Net unrealized gains................. -- 159 -- -- 159
-------- ------- -------- -------- --------
Total shareholders'
equity................... (5,965) 15,556 49,653 -- 59,244
-------- ------- -------- -------- --------
Total liabilities and
shareholders' equity..... $ 41,445 $22,374 $124,735 $(18,927) $169,627
======== ======= ======== ======== ========
</TABLE>
F-22
<PAGE> 156
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED APRIL 2, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES:
Sales of real estate............... $15,073 $ -- $76,849 $ -- $91,922
Management fee revenue............. 7,132 -- -- (7,132) --
Interest income and other.......... 533 2,104 4,626 -- 7,263
------- ------ ------- ------- -------
22,738 2,104 81,475 (7,132) 99,185
------- ------ ------- ------- -------
COST AND EXPENSES:
Cost of real estate sold........... 10,357 -- 34,749 -- 45,106
Selling, general and administrative
expense......................... 12,492 130 31,030 (7,132) 36,520
Interest expense................... 3,095 -- 3,643 -- 6,738
Provisions for losses.............. -- -- 792 -- 792
------- ------ ------- ------- -------
25,944 130 70,214 (7,132) 89,156
------- ------ ------- ------- -------
Income (loss) from operations........ (3,206) 1,974 11,261 -- 10,029
Other income......................... 269 -- 104 -- 373
------- ------ ------- ------- -------
Income (loss) before income taxes.... (2,937) 1,974 11,365 -- 10,402
Provision (benefit) for income
taxes.............................. (1,204) 809 4,660 -- 4,265
------- ------ ------- ------- -------
Net income (loss).......... $(1,733) $1,165 $ 6,705 $ -- $ 6,137
======= ====== ======= ======= =======
</TABLE>
F-23
<PAGE> 157
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES:
Sales of real estate............... $25,586 $ -- $87,836 $ -- $113,422
Management fee revenue............. 8,253 -- -- (8,253) --
Interest income and other.......... 1,740 2,367 3,281 -- 7,388
------- ------ ------- ------- --------
35,579 2,367 91,117 (8,253) 120,810
------- ------ ------- ------- --------
COST AND EXPENSES:
Cost of real estate sold........... 16,413 -- 42,981 -- 59,394
Selling, general and administrative
expense......................... 18,078 240 33,669 (8,253) 43,734
Interest expense................... 2,344 1,489 2,443 -- 6,276
Provisions for losses.............. -- -- 612 -- 612
------- ------ ------- ------- --------
36,835 1,729 79,705 (8,253) 110,016
------- ------ ------- ------- --------
Income (loss) from operations........ (1,256) 638 11,412 -- 10,794
Other income......................... 96 -- 26 -- 122
------- ------ ------- ------- --------
Income (loss) before income taxes.... (1,160) 638 11,438 -- 10,916
Provision (benefit) for income
taxes.............................. (473) 260 4,662 -- 4,449
------- ------ ------- ------- --------
Net income (loss).......... $ (687) $ 378 $ 6,776 $ -- $ 6,467
======= ====== ======= ======= ========
</TABLE>
F-24
<PAGE> 158
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
YEAR ENDED MARCH 30, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES:
Sales of real estate............... $ 28,148 $ -- $81,573 $ -- $109,721
Management fee revenue............. 8,297 -- -- (8,297) --
Interest income and other.......... 2,378 1,029 2,752 -- 6,159
-------- ------ ------- ------- --------
38,823 1,029 84,325 (8,297) 115,880
-------- ------ ------- ------- --------
COST AND EXPENSES:
Cost of real estate sold........... 20,616 -- 36,475 -- 57,091
Selling, general and administrative
expense......................... 22,298 100 37,341 (8,297) 51,442
Interest expense................... 2,886 600 1,973 -- 5,459
Provisions for losses.............. 4,425 -- 5,113 -- 9,538
-------- ------ ------- ------- --------
50,225 700 80,902 (8,297) 123,530
-------- ------ ------- ------- --------
Income (loss) from operations........ (11,402) 329 3,423 -- (7,650)
Other income......................... 253 -- 7 -- 260
-------- ------ ------- ------- --------
Income (loss) before income taxes.... (11,149) 329 3,430 -- (7,390)
Provision (benefit) for income
taxes.............................. (4,571) 135 1,406 -- (3,030)
-------- ------ ------- ------- --------
Net income (loss).......... $ (6,578) $ 194 $ 2,024 $ -- $ (4,360)
======== ====== ======= ======= ========
</TABLE>
F-25
<PAGE> 159
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED APRIL 2, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES CONSOLIDATED
----------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)............................. $(1,733) $ 1,165 $ 6,705 $ 6,137
Depreciation and amortization................. 658 (605) 1,249 1,302
Loss on REMIC transaction..................... -- 410 -- 410
Gain on sale of property and equipment........ -- -- (55) (55)
Provisions for losses......................... -- -- 792 792
Interest accretion on investment in
securities................................. -- (2,223) -- (2,223)
Proceeds from borrowings collateralized by
notes...................................... -- -- 8,588 8,588
Payments on borrowings collateralized by
notes...................................... -- -- (14,845) (14,845)
Provision for deferred income taxes........... 1,327 -- -- 1,327
(Increase) decrease in operating assets:
Contracts receivable.......................... 281 -- (3,403) (3,122)
Inventory..................................... (6,447) -- 1,995 (4,452)
Other assets.................................. 392 (104) 976 1,264
Intercompany receivable/payable............... 1,575 (3,076) 1,501 --
Notes receivable and investments in
securities................................. -- 3,404 8,460 11,864
Increase in operating liabilities:
Accounts payable, accrued liabilities and
other...................................... 870 505 1,067 2,442
------- -------- -------- --------
Net cash (used) provided by operating
activities................................. (3,077) (524) 13,030 9,429
------- -------- -------- --------
INVESTING ACTIVITIES:
Purchases of property and equipment........... (1,037) -- (732) (1,769)
Sales of property and equipment............... -- -- 453 453
Additions to other long-term assets........... -- -- (259) (259)
------- -------- -------- --------
Net cash used in investing activities........... (1,037) -- (538) (1,575)
------- -------- -------- --------
FINANCING ACTIVITIES:
Proceeds from borrowings under line-of-credit
facilities and other notes payable......... 1,985 -- 1,932 3,917
Payments under line-of-credit facilities and
other notes payable........................ -- -- (13,540) (13,540)
Payments for stock dividends in lieu of
fractional shares.......................... (5) -- -- (5)
Proceeds from exercise of employee stock
options.................................... 54 -- -- 54
------- -------- -------- --------
Net cash flow (used) provided by financing
activities................................. 2,034 -- (11,608) (9,574)
------- -------- -------- --------
Net (decrease) increase in cash and cash
equivalents................................ (2,080) (524) 884 (1,720)
Cash and cash equivalents at beginning of
year....................................... 3,484 2,914 2,910 9,308
------- -------- -------- --------
Cash and cash equivalents at end of year...... 1,404 2,390 3,794 7,588
Restricted cash and cash equivalents at end of
year....................................... (177) (2,390) (2,597) (5,164)
------- -------- -------- --------
Unrestricted cash and cash equivalents at end
of year.................................... $ 1,227 $ -- $ 1,197 $ 2,424
======= ======== ======== ========
</TABLE>
F-26
<PAGE> 160
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED MARCH 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES CONSOLIDATED
----------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)............................. $ (687) $ 378 $ 6,776 $ 6,467
Depreciation and amortization................. 588 599 450 1,637
Gain on REMIC transaction..................... -- (1,120) -- (1,120)
Loss on sale of property and equipment........ -- -- 49 49
Provisions for losses......................... -- -- 612 612
Interest accretion on investment in
securities................................. -- (1,170) -- (1,170)
Proceeds from borrowings collateralized by
notes...................................... -- -- 19,438 19,438
Payments on borrowings collateralized by
notes...................................... -- (8,195) (11,035) (19,230)
Provision for deferred income taxes........... 998 -- -- 998
(Increase) decrease in operating assets:
Contracts receivable.......................... 137 -- 463 600
Inventory..................................... (4,567) -- 2,564 (2,003)
Other assets.................................. (42) (185) 501 274
Intercompany receivable/payable............... 9,552 (13,942) 4,390 --
Notes receivable and investment in
securities................................. -- 23,532 (13,086) 10,446
Increase (decrease) in operating liabilities:
Accounts payable, accrued liabilities and
other...................................... (1,736) 540 (784) (1,980)
------- -------- -------- --------
Net cash provided by operating activities..... 4,243 437 10,338 15,018
------- -------- -------- --------
INVESTING ACTIVITIES:
Purchases of property and equipment........... (974) -- (921) (1,895)
Sales of property and equipment............... -- -- 789 789
Cash received from investment in securities... -- 276 -- 276
Additions to other long-term assets........... -- -- (411) (411)
------- -------- -------- --------
Net cash flow (used) provided by investing
activities.................................... (974) 276 (543) (1,241)
------- -------- -------- --------
FINANCING ACTIVITIES:
Proceeds from borrowings under line-of-credit
facilities and other notes payable......... -- -- 5,796 5,796
Payments under line-of-credit facilities and
other notes payable........................ (562) -- (15,401) (15,963)
Payments for stock dividends in lieu of
fractional shares.......................... (4) -- -- (4)
Proceeds from exercise of employee stock
options.................................... 195 -- -- 195
------- -------- -------- --------
Net cash flow used by financing activities.... (371) -- (9,605) (9,976)
------- -------- -------- --------
Net increase in cash and cash equivalents..... 2,898 713 190 3,801
Cash and cash equivalents at beginning of
year....................................... 1,405 2,390 3,794 7,589
------- -------- -------- --------
Cash and cash equivalents at end of year...... 4,303 3,103 3,984 11,390
Restricted cash and cash equivalents at end of
year....................................... (759) (3,103) (3,822) (7,684)
------- -------- -------- --------
Unrestricted cash and cash equivalents at end
of year.................................... $ 3,544 $ -- $ 162 $ 3,706
======= ======== ======== ========
</TABLE>
F-27
<PAGE> 161
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED MARCH 30, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES CONSOLIDATED
----------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)............................. $(6,578) $ 194 $ 2,024 $ (4,360)
Depreciation and amortization................. 590 6 470 1,066
Loss on REMIC transaction..................... -- 96 -- 96
Gain on sale of property and equipment........ -- -- (82) (82)
Provisions for losses......................... 4,426 -- 5,113 9,539
Interest accretion on investment in
securities................................. -- (997) -- (997)
Proceeds from borrowings collateralized by
notes...................................... -- -- 18,157 18,157
Payments on borrowings collateralized by
notes...................................... -- (2,757) (14,069) (16,826)
Benefit for deferred income taxes............. (3,225) -- (194) (3,419)
(Increase) decrease in operating assets:
Contracts receivable.......................... (348) -- (1,509) (1,857)
Inventory..................................... 2,880 -- (12,005) (9,125)
Other assets.................................. (1,049) (104) 77 (1,076)
Intercompany receivable/payable............... 3,585 1,351 (4,936) --
Notes receivable.............................. -- 638 (3,436) (2,798)
Increase in operating liabilities:
Accounts payable, accrued liabilities and
other...................................... 2,135 213 1,130 3,478
------- ------- -------- --------
Net cash (used) provided by operating
activities................................. 2,416 (1,360) (9,260) (8,204)
------- ------- -------- --------
INVESTING ACTIVITIES:
Purchases of property and equipment........... (614) -- (428) (1,042)
Sales of property and equipment............... -- -- 843 843
Other long term assets........................ -- -- -- --
Cash received from investment in securities... -- 1,699 -- 1,699
Additions to other long-term assets........... -- -- (181) (181)
------- ------- -------- --------
Net cash flow (used) provided by investing
activities.................................... (614) 1,699 415 1,500
------- ------- -------- --------
FINANCING ACTIVITIES:
Proceeds from borrowings under line-of-credit
facilities and other notes payable......... 606 -- 20,082 20,688
Payments under line-of-credit facilities and
other notes payable........................ (2,103) -- (10,238) (12,341)
Payments for treasury stock................... (1,370) -- -- (1,370)
Proceeds from exercise of employee stock
options.................................... 115 -- -- 115
------- ------- -------- --------
Net cash flow (used) provided by financing
activities................................. (2,752) -- 9,663 6,911
------- ------- -------- --------
Net (decrease) increase in cash and cash
equivalents................................ (950) 339 818 207
Cash and cash equivalents at beginning of
year....................................... 4,303 3,103 3,984 11,390
------- ------- -------- --------
Cash and cash equivalents at end of year...... 3,353 3,442 4,802 11,597
Restricted cash and cash equivalents at end of
year....................................... (1,932) (3,442) (2,604) (7,978)
------- ------- -------- --------
Unrestricted cash and cash equivalents at end
of year.................................... $ 1,421 $ -- $ 2,198 $ 3,619
======= ======= ======== ========
</TABLE>
F-28
<PAGE> 162
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 28, 1997
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Cash and cash equivalents (including restricted cash of
approximately $13,300 at December 28, 1997)............... $ 25,124
Contracts receivable, net................................... 12,646
Notes receivable, net....................................... 73,115
Investment in securities.................................... 10,600
Inventory, net.............................................. 112,297
Property and equipment, net................................. 11,147
Debt issuance costs, net.................................... 1,783
Other assets................................................ 8,096
--------
TOTAL ASSETS...................................... $254,808
========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable............................................ $ 4,591
Deferred income............................................. 8,322
Accrued liabilities and other............................... 14,101
Lines-of-credit and notes payable........................... 61,909
Deferred income taxes....................................... 6,712
Receivable-backed notes payable............................. 51,535
8.00% convertible subordinated notes payable to related
parties................................................... 6,000
8.25% convertible subordinated debentures................... 34,739
--------
TOTAL LIABILITIES................................. 187,909
Minority interest........................................... 250
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value, 1,000 shares authorized;
none issued............................................... --
Common stock, $.01 par value, 90,000 shares authorized;
20,743 shares issued at December 28, 1997................. 208
Capital-in-excess of par value.............................. 71,844
Accumulated deficit......................................... (4,179)
Treasury stock, 450 common shares at cost at December 28,
1997...................................................... (1,389)
Net unrealized gains on investments available-for-sale, net
of income taxes........................................... 165
--------
TOTAL SHAREHOLDERS' EQUITY........................ 66,649
--------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........ $254,808
========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
F-29
<PAGE> 163
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
---------------------------
DECEMBER 29, DECEMBER 28,
1996 1997
------------ ------------
<S> <C> <C>
REVENUES:
Sales of real estate...................................... $ 81,712 $122,902
Other resort services revenue............................. -- 1,585
Interest income and other................................. 4,577 7,324
-------- --------
86,289 131,811
COST AND EXPENSES:
Cost of real estate sold.................................. 41,384 55,277
Cost of other resort services............................. -- 1,509
Selling, general and administrative expense............... 38,051 55,526
Interest expense.......................................... 3,916 6,512
Provisions for losses..................................... 9,101 1,349
-------- --------
92,452 120,173
-------- --------
Income (loss) from operations............................... (6,163) 11,638
Other income................................................ 184 120
-------- --------
Income (loss) before income taxes........................... (5,979) 11,758
Provision (benefit) for income taxes........................ (2,451) 4,774
-------- --------
Net income (loss)........................................... $ (3,528) $ 6,984
======== ========
EARNINGS (LOSS) PER COMMON SHARE:
Basic....................................................... $ (.17) $ .35
======== ========
Diluted..................................................... $ (.17) $ .33
======== ========
WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT
SHARES:
Basic....................................................... 20,372 20,193
======== ========
Diluted..................................................... 20,372 25,467
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
F-30
<PAGE> 164
BLUEGREEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
---------------------------
DECEMBER 29, DECEMBER 28,
1996 1997
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)......................................... $(3,528) $ 6,984
Adjustments to reconcile net income (loss) to net cash
flow provided by operating activities, net of effects of
acquisition:
Depreciation and amortization........................... 807 1,345
Loss on REMIC transaction............................... 96 --
Gain on sale of property and equipment.................. (44) --
Provisions for losses................................... 9,101 1,349
Interest accretion on investment in securities.......... (745) (1,047)
Proceeds from borrowings collateralized by notes
Receivable............................................. 14,004 26,495
Payments on borrowings collateralized by notes
Receivable............................................. (14,060) (11,440)
Provision (benefit) for deferred income taxes........... (2,451) 4,774
(INCREASE) DECREASE IN OPERATING ASSETS:
Contracts receivable.................................... 4,310 1,662
Inventory............................................... (3,442) 3,944
Other assets............................................ (574) (2,062)
Notes receivable........................................ 855 (22,437)
INCREASE (DECREASE) IN OPERATING LIABILITIES:
Accounts payable, accrued liabilities and other......... (3,437) 4,531
------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES................... 892 14,098
------- --------
INVESTING ACTIVITIES:
Acquisition of RDI Group, Inc. and Resort Title Agency,
Inc., net of cash acquired.............................. -- (2,421)
Purchases of property and equipment....................... (998) (2,909)
Sales of property and equipment........................... 586 225
Cash received from investment in securities............... 1,114 1,524
------- --------
NET CASH FLOW (USED) PROVIDED BY INVESTING ACTIVITIES....... 702 (3,581)
------- --------
FINANCING ACTIVITIES:
Proceeds from issuance of 8% convertible subordinated
notes payable........................................... -- 6,000
Proceeds from borrowings under line-of-credit facilities
and other notes payable................................. 11,946 36,136
Payments under line-of-credit facilities and other notes
payable ................................................ (8,877) (38,531)
Payment of debt issuance costs............................ (206) (900)
Payments for treasury stock............................... (1,245) (19)
Proceeds from exercise of employee stock options.......... 115 324
------- --------
NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES.............. 1,733 3,010
------- --------
Net increase in cash and cash equivalents................... 3,327 13,527
Cash and cash equivalents at beginning of period............ 11,389 11,597
------- --------
Cash and cash equivalents at end of period.................. 14,716 25,124
Restricted cash and cash equivalents at end of period....... (8,617) (13,300)
------- --------
Unrestricted cash and cash equivalents at end of period..... $ 6,099 $ 11,824
======= ========
SUPPLEMENTAL SCHEDULE OF NON-CASH OPERATING, INVESTING AND
FINANCING ACTIVITIES
Inventory acquired through financing...................... $10,630 $ 22,974
======= ========
Inventory acquired through foreclosure or Deedback in lieu
of foreclosure.......................................... $ 1,490 $ 2,497
======= ========
Property and equipment acquired through financing....... $ -- $ 812
======= ========
Investment in securities retained in Connection with REMIC
transactions............................................ $ 1,774 $ --
======= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
F-31
<PAGE> 165
BLUEGREEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 28, 1997
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
The financial information furnished herein reflects all adjustments
consisting of normal recurring accruals that, in the opinion of management, are
necessary for a fair presentation of the results for the interim period. The
results of operations for the nine-month period ended December 28, 1997 are not
necessarily indicative of the results to be expected for the fiscal year ending
March 29, 1998. For further information, refer to the consolidated financial
statements and notes thereto included in Bluegreen Corporation's (the Company's)
Annual Report to Shareholders for the fiscal year ended March 30, 1997.
Organization
The Company is a national leisure and lifestyle product company operating
predominantly in the southeastern, southwestern and midwestern United States.
The Company's primary business is (i) the acquisition and development of
timeshare properties which are sold in weekly intervals (Resorts Division) and
(ii) the acquisition, development and sale of residential land (Land Division)
or residential home/lot packages (Communities Division). The Company offers
financing to its Resort, Land and Communities product purchasers.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the
Company, all of its wholly-owned subsidiaries and entities in which the Company
holds a controlling financial interest. All significant intercompany
transactions are eliminated.
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Earnings (Loss) Per Common Share
In February, 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share", which became effective for the Company's quarter ended December 28,
1997. Basic earnings (loss) per common share is computed by dividing net income
(loss) by the weighted average number of common shares outstanding. Diluted
earnings (loss) per common share is computed in the same manner as basic
earnings per share, but also gives effect to all dilutive stock options using
the treasury stock method and includes an adjustment, if dilutive, to both net
income and shares outstanding as if the Company's 8.00% convertible subordinated
notes payable and 8.25% convertible subordinated debentures were converted into
common stock at the beginning of the earliest period reported or the date of
issuance, if later. The earnings (loss) per common share and weighted average
number of common and common equivalent shares for the nine-month period ended
December 29, 1996 have been restated in accordance with SFAS No. 128.
F-32
<PAGE> 166
BLUEGREEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table sets forth the computation of basic and diluted
earnings (loss) per share:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
---------------------------
DECEMBER 29, DECEMBER 28,
1996 1997
------------ ------------
<S> <C> <C>
Numerator:
Numerator for basic earnings (loss) per share -- net
income (loss).......................................... $(3,528) $ 6,984
Effect of dilutive securities (net of tax effects):
8.25% convertible subordinated debentures.............. -- 1,277
8.00% convertible subordinated notes payable........... -- 85
------- -------
-- 1,362
------- -------
Numerator for diluted earnings (loss) per share -- net
income (loss) after assumed conversions................ $(3,528) $ 8,346
======= =======
Denominator:
Denominator for basic earnings (loss) per
share -- weighted-average shares....................... 20,372 20,193
Effect of dilutive securities:
Stock options.......................................... -- 360
8.25% convertible subordinated debentures.............. -- 4,216
8.00% convertible subordinated notes payable........... -- 698
------- -------
Dilutive potential common shares.......................... -- 5,274
------- -------
Denominator for diluted earnings (loss) per
share -- adjusted weighted-average shares and assumed
conversions............................................ 20,372 25,467
======= =======
Basic earnings (loss) per share........................... $ (0.17) $ 0.35
======= =======
Diluted earnings (loss) per share......................... $ (0.17) $ 0.33
======= =======
</TABLE>
New Pronouncements
In June 1997, the FASB issued SFAS No. 130 "Reporting Comprehensive Income"
and SFAS No. 131 "Disclosure about Segments of an Enterprise and Related
Information" which are effective for fiscal years beginning after December 15,
1997. Accordingly, the Company plans to adopt SFAS No. 130 and SFAS No. 131 with
the fiscal year beginning March 30, 1998. SFAS No. 130 and SFAS No. 131 do not
have any impact on the financial results or financial condition of the Company,
but will result in the disclosure of the components of comprehensive income and
in certain changes in required disclosures of segment information.
Reclassifications
Certain prior period amounts have been reclassified to conform to the
current period presentation
2. ACQUISITION
Effective September 30, 1997, a wholly-owned subsidiary of the Company
acquired all of the issued and outstanding common stock of RDI Group Inc. and
Resort Title Agency, Inc. (collectively "RDI") for a purchase price of $7.5
million consisting of $6 million cash and a $1.5 million, 9% promissory note due
October 3, 1999. The acquisition was accounted for using the purchase method of
accounting and, accordingly, the results of operations of RDI have been included
in the Company's condensed consolidated
F-33
<PAGE> 167
BLUEGREEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
financial statements from September 30, 1997. As the net assets acquired from
RDI equaled the purchase price, no goodwill was recognized in connection with
the acquisition of RDI.
The Company financed the cash portion of the purchase price pursuant to the
issuance of two, 8% convertible promissory notes in the aggregate principal
amount of $6 million (the Notes) to a member of the Board of Directors of the
Company (the Board) and an affiliate of a Board member. The Notes, which were
executed on September 11, 1997, are due on September 11, 2002, and are
convertible into the Company's common stock at a conversion price of $3.92 per
share, subject to adjustment. Pursuant to a Subordination Agreement executed by
each of the holders of the Notes, the rights of the holders of the Notes are
subordinated to the Senior Secured Notes due 2008 of the Company to the same
extent that the Public Debentures are subordinated to such Senior Secured Notes.
Headquartered in Fort Myers, Florida, RDI was privately-held and presently
owns timeshare resorts in Orlando, Florida and Wisconsin Dells, Wisconsin, as
well as a points-based vacation club. In addition, RDI manages approximately 30
vacation ownership resorts, located in the southeastern sun-belt states, with a
member base of approximately 60,000.
The following pro forma financial information presents the combined results
of operations of the Company and RDI as if the acquisition had occurred on April
1, 1996, after giving effect to certain adjustments, including increased
interest expense on debt related to the acquisition, and related income tax
effects. The pro forma financial information does not necessarily reflect the
results of operations that would have occurred had the Company and RDI
constituted a single entity during such periods.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------------------
DECEMBER 29, 1996 DECEMBER 28, 1997
----------------- -----------------
(UNAUDITED -- AMOUNTS IN THOUSANDS,
EXCEPT PER SHARE DATA)
<S> <C> <C>
Net revenues.................................. $102,859 $146,380
======== ========
Net income (loss)............................. (4,311) 8,686
======== ========
Earnings (loss) per share:
Basic....................................... $ (0.21) $ 0.43
======== ========
Diluted..................................... $ (0.21) $ 0.39
======== ========
</TABLE>
3. JOINT VENTURE
On December 15, 1997, the Company invested $250,000 of capital in Bluegreen
Properties N.V. (BPNV), an entity organized in Aruba that previously had no
operations, in exchange for a 50% ownership interest. Concurrently, the Company
and an affiliate of the other 50% owner of BPNV (who is not an affiliate of the
Company), each loaned BPNV $3 million pursuant to promissory notes due on
December 15, 2000 and bearing interest at the prime rate plus 1%. BPNV then
acquired from a third party approximately 8,000 unsold timeshare intervals at
the La Cabana All-Suite Beach Resort, a fully developed timeshare resort in
Oranjestad, Aruba in exchange for $6 million cash and the assumption of
approximately $16.6 million of interest-free debt from a bank in Aruba. The debt
was recorded by BPNV at approximately $12.5 million, which reflects a discount
based on an imputed interest rate of 12%. The debt is to be repaid over five
years through release-prices as intervals are sold, subject to minimum monthly
payments of approximately $278,000.
In addition to its 50% ownership interest, the Company will receive a
quarterly management fee from BPNV equal to 7% of BPNV's net sales in exchange
for the Company's involvement in the day-to-day operations of BPNV. The Company
also has majority control of BPNV's board of directors and has a controlling
financial interest in BPNV. Therefore, the accounts of BPNV are included in the
Company's
F-34
<PAGE> 168
BLUEGREEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
condensed consolidated financial statements as of December 28, 1997. The
operations of BPNV for the 13 days ended December 28, 1997 were not significant.
4. INVENTORY
The Company's inventories by geographic region, which consist of real
estate acquired for sale, are summarized below (amounts in thousands).
<TABLE>
<CAPTION>
DECEMBER 28, 1997
------------------------------------------
GEOGRAPHIC REGION LAND RESORTS COMMUNITIES TOTAL
- ----------------- ------- ------- ----------- --------
<S> <C> <C> <C> <C>
Southeast........................................... $12,520 $20,403 $3,588 $ 36,511
Southwest........................................... 24,902 -- -- 24,902
Midwest............................................. 4,548 18,118 -- 22,666
Caribbean........................................... -- 18,447 -- 18,447
Rocky Mountains..................................... 3,575 -- -- 3,575
Mid-Atlantic........................................ 3,327 -- -- 3,327
West................................................ 2,420 -- -- 2,420
Northeast........................................... 397 -- -- 397
Canada.............................................. 52 -- -- 52
------- ------- ------ --------
Totals.................................... $51,741 $56,968 $3,588 $112,297
======= ======= ====== ========
</TABLE>
During 1996 management changed its focus for marketing certain of the
Company's inventories in conjunction with a plan to accelerate the sale of
properties managed under the Communities Division and certain properties managed
under the Land Division. This decision was largely the result of management's
focus on expansion of the Company's Resorts Division and Land Division in
certain locations. Because of the strategy to accelerate sales, management
determined that inventories with a carrying value of $23.2 million should be
written-down by $8.2 million during the nine months ended December 29, 1996. The
$8.2 million in provisions included $4.8 million for certain Communities
Division inventories and $3.4 million for certain Land Division inventories.
Management adopted a plan to aggressively pursue opportunities for the bulk sale
of a portion of the written-down assets and has reduced retail prices on others
to increase sales activity. The Company's Communities Division primarily
consists of three North Carolina properties acquired in 1988. The Company began
marketing home/lot packages in 1995 to accelerate sales at the properties.
However, the projects had been slow moving and yielded low gross profits and
little to no operating profits. A majority of the Land Division parcels subject
to write-down were scattered lots acquired through foreclosure or deedback in
lieu of foreclosure, odd lots from former projects and properties located in
parts of the country where the Company has no plans for expansion. As of
December 28, 1997, approximately 73% (measured by historical cost basis) of the
inventories subject to write-down had been sold.
5. CREDIT FACILITY
On December 15, 1997, the Company entered into a short term credit
facility. The credit facility bears interest at the greater of 10% or the prime
rate plus 2.75% and is due no later than 150 days from the first advance on the
line (December 18, 1997). The Company is required to pay a commitment fee equal
to 1% of each advance. Through December 28, 1997, the Company had borrowed $8
million under the credit facility.
6. QUARTERLY FINANCIAL INFORMATION
Summarized quarterly financial information for the three quarters in the
period ended December 31, 1997 is presented below (in 000's, except for per
share information).
F-35
<PAGE> 169
BLUEGREEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------------------
JUNE 29, SEPTEMBER 28, DECEMBER 28,
1997 1997 1997
-------- ------------- ------------
<S> <C> <C> <C>
Sales of real estate.................................... $33,091 $45,321 $44,490
Gross profit............................................ 17,935 23,903 25,787
Net income.............................................. 1,739 2,770 2,475
Earnings per common share:
Basic................................................. 0.09 0.14 0.12
Diluted............................................... 0.08 0.13 0.11
</TABLE>
7. LITIGATION
The Company is party to certain ordinary course litigation. Although no
assurances can be given, in the opinion of management, based on the advice of
counsel, the potential outcome is not expected to have a materially adverse
effect on the operations or financial condition of the Company.
On November 26, 1997, an action was filed in the U.S. District Court for
the Eastern District of Tennessee against the Company. The complaint purports to
be brought on behalf of a class of current and former timeshare sales
representative employees of the Company. It asserts claims for violations of the
minimum wage and overtime provisions of the Fair Labor Standards Act. The
Company is in the early stages of evaluating this litigation's potential impact,
if any, on the Company, and accordingly cannot predict the outcome with any
degree of certainty. Although no assurances can be given, the Company does not
believe that any likely outcome will have a material adverse effect on the
Company.
8. SUPPLEMENTAL GUARANTOR INFORMATION
Under the terms of the Note Offering, all of the Company's subsidiaries,
with the exception of the Non-Guarantor Subsidiaries, as defined below, will
fully and unconditionally guarantee, jointly and severally, the full and prompt
payment of principal and interest on the Company's $110 million Senior Secured
Notes due 2008 (the Notes), and the performance of all other obligations of the
Company under the Notes and related indenture. The Non-Guarantor Subsidiaries
are:
Patten Receivables Finance Corporation III
Patten Receivables Finance Corporation VI
Bluegreen Land and Realty, Inc.
Patten Receivables Finance Corporation VII
Patten Receivables Finance Corporation VIII
CDP Realty, Inc.
Patten Receivables Finance Corporation IX
Patten Receivables Finance Corporation X
Bluegreen Receivables Finance Corporation I
BXG Realty Tenn, Inc.
Bluegreen Properties N.V.
Resort Title Agency, Inc.
Blue Ridge Public Service Company
RDI Vacation Club, Inc.
Vacation Trust, Inc.
Management has determined that separate, full financial statements are not
required and, accordingly, are not provided. Supplemental financial information
for Bluegreen Corporation, its combined non-guarantor subsidiaries and its
combined guarantor subsidiaries is presented below:
F-36
<PAGE> 170
BLUEGREEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING BALANCE SHEET AT DECEMBER 28, 1997
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents............ $ 11,490 $ 3,915 $ 9,719 $ -- $ 25,124
Contracts receivable, net............ 296 -- 12,350 -- 12,646
Notes receivable, net................ -- 4,211 68,904 -- 73,115
Investment in securities............. -- 10,590 10 -- 10,600
Inventory, net....................... 14,315 18,447 79,535 -- 112,297
Property and equipment, net.......... 2,726 77 8,344 -- 11,147
Investments in subsidiaries.......... 7,947 -- -- (7,947) --
Debt issuance costs, net............. 859 4 920 -- 1,783
Intercompany receivable.............. 2,875 5,953 -- (8,828) --
Other assets......................... 4,084 1,703 5,467 (3,158) 8,096
-------- ------- -------- -------- --------
Total assets............... $ 44,592 $44,900 $185,249 $(19,933) $254,808
======== ======= ======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
LIABILITIES:
Accounts payable..................... $ 2,117 $ 85 $ 2,546 $ (157) $ 4,591
Intercompany payable................. -- -- 8,828 (8,828) --
Deferred income...................... 240 -- 8,082 -- 8,322
Accrued liabilities and other........ 1,082 3,584 9,435 -- 14,101
Lines-of-credit and notes payable.... 4,848 18,476 41,585 (3,000) 61,909
Deferred income taxes................ 8,242 -- (1,530) -- 6,712
Receivable-backed notes payable...... -- 3,536 47,999 -- 51,535
8.00% convertible notes payable to
related parties.................... 6,000 -- -- -- 6,000
8.25% convertible subordinated
debentures......................... 34,739 -- -- -- 34,739
-------- ------- -------- -------- --------
Total liabilities.......... 57,268 25,681 116,945 (11,985) 187,909
Minority interest.................... -- -- -- 250 250
SHAREHOLDERS' EQUITY (DEFICIT)
Preferred stock...................... -- -- -- -- --
Common stock......................... 208 6 3 (9) 208
Capital-in-excess of par value....... 71,844 495 8,001 (8,496) 71,844
Retained earnings (accumulated
deficit)........................... (83,339) 18,553 60,300 307 (4,179)
Treasury stock....................... (1,389) -- -- -- (1,389)
Net unrealized gains................. -- 165 -- -- 165
-------- ------- -------- -------- --------
Total shareholders' equity
(deficit)................ (12,676) 19,219 68,304 (8,198) 66,649
-------- ------- -------- -------- --------
Total liabilities and
shareholders' equity
(deficit)................ $ 44,592 $44,900 $185,249 $(19,933) $254,808
======== ======= ======== ======== ========
</TABLE>
F-37
<PAGE> 171
BLUEGREEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED DECEMBER 29, 1996
------------------------------------------------------------------------
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES:
Sales of real estate................. $21,983 $ -- $59,729 $ -- $81,712
Management fee revenue............... 6,431 -- -- (6,431) --
Other resort services revenue........ -- -- -- -- --
Interest income and other............ 5 955 3,617 -- 4,577
------- ---- ------- ------- -------
28,419 955 63,346 (6,431) 86,289
------- ---- ------- ------- -------
COST AND EXPENSES:
Cost of real estate sold........... 11,394 -- 29,990 -- 41,384
Cost of other resort services...... -- -- -- -- --
Management fees.................... -- 96 6,335 (6,431) --
Selling, general and administrative
expense......................... 16,583 -- 21,468 -- 38,051
Interest expense................... 243 410 3,263 -- 3,916
Provisions for losses.............. 4,426 -- 4,675 -- 9,101
------- ---- ------- ------- -------
32,646 506 65,731 (6,431) 92,452
------- ---- ------- ------- -------
Income (loss) from operations........ (4,227) 449 (2,385) -- (6,163)
Other income (expense)............... 9 404 (229) -- 184
------- ---- ------- ------- -------
Income (loss) before income taxes.... (4,218) 853 (2,614) -- (5,979)
Provision (benefit) for income
taxes.............................. (1,687) 341 (1,105) -- (2,451)
------- ---- ------- ------- -------
Net income (loss).......... $(2,531) $512 $(1,509) $ -- $(3,528)
======= ==== ======= ======= =======
</TABLE>
F-38
<PAGE> 172
BLUEGREEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED DECEMBER 28, 1997
------------------------------------------------------------------------
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES:
Sales of real estate............... $21,391 $ -- $101,511 $ -- $122,902
Management fee revenue............. 10,978 -- -- (10,978) --
Other resort services revenue...... -- 202 1,383 -- 1,585
Interest income and other.......... 356 1,513 5,455 -- 7,324
------- ------ -------- -------- --------
32,725 1,715 108,349 (10,878) 131,811
COST AND EXPENSES:
Cost of real estate sold........... 10,599 -- 44,678 -- 55,277
Cost of other resort services...... -- 120 1,389 -- 1,509
Management fees.................... -- 171 10,807 (10,978) --
Selling, general and administrative
expense......................... 18,883 -- 36,643 -- 55,526
Interest expense................... 2,730 331 3,451 -- 6,512
Provision for losses............... -- -- 1,349 -- 1,349
------- ------ -------- -------- --------
32,212 622 98,317 (10,978) 120,173
------- ------ -------- -------- --------
Income from operations............. 513 1,093 10,032 -- 11,638
Other income (expense)............. 120 9 (9) -- 120
------- ------ -------- -------- --------
Income before income taxes......... 633 1,102 10,023 -- 11,758
Provision for income taxes......... 253 441 4,080 -- 4,774
------- ------ -------- -------- --------
Net income................. $ 380 $ 661 $ 5,943 $ -- $ 6,984
======= ====== ======== ======== ========
</TABLE>
F-39
<PAGE> 173
BLUEGREEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED DECEMBER 29, 1996
---------------------------------------------------------
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES CONSOLIDATED
----------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)............................. $(2,531) $ 512 $ (1,509) $ (3,528)
Depreciation and amortization................. 429 4 374 807
Loss on REMIC transaction..................... -- 96 -- 96
Gain on sale of property and equipment........ -- -- (44) (44)
Provisions for losses......................... 4,426 -- 4,675 9,101
Interest accretion on investment in
securities................................. -- (745) -- (745)
Proceeds from borrowings collateralized by
notes...................................... -- -- 14,004 14,004
Payments on borrowings collateralized by
notes...................................... -- (2,132) (11,928) (14,060)
Benefit for deferred income taxes............. (1,687) 341 (1,105) (2,451)
(Increase) decrease in operating assets:
Contracts receivable.......................... 387 -- 3,923 4,310
Inventory..................................... (872) -- (2,570) (3,442)
Other assets.................................. (72) (98) (404) (574)
Intercompany receivable/payable............... 10,383 1,045 (11,428) --
Notes receivable.............................. -- 18 837 855
Increase (decrease) in operating liabilities:
Accounts payable, accrued liabilities and
other...................................... (4,858) 193 1,228 (3,437)
------- ------- -------- --------
Net cash provided (used) by operating
activities................................. 5,605 (766) (3,947) 892
------- ------- -------- --------
INVESTING ACTIVITIES:
Purchases of property and equipment........... (548) -- (450) (998)
Sales of property and equipment............... -- -- 586 586
Cash received from investment in securities... -- 1,114 -- 1,114
------- ------- -------- --------
Net cash flow (used) provided by investing
activities.................................... (548) 1,114 136 702
------- ------- -------- --------
FINANCING ACTIVITIES:
Proceeds from issuance of 8% convertible notes
payable.................................... -- -- -- --
Proceeds from borrowings under line-of-credit
facilities and other notes payable......... 606 -- 11,340 11,946
Payments under line-of-credit facilities and
other notes payable........................ (1,874) -- (7,003) (8,877)
Payment of debt issuance costs................ -- -- (206) (206)
Payments for treasury stock................... (1,245) -- -- (1,245)
Proceeds from exercise of employee stock
options.................................... 115 -- -- 115
------- ------- -------- --------
Net cash flow (used) provided by financing
activities................................. (2,398) -- 4,131 1,733
------- ------- -------- --------
Net increase in cash and cash equivalents..... 2,659 348 320 3,327
Cash and cash equivalents at beginning of
period..................................... 4,302 3,103 3,984 11,389
------- ------- -------- --------
Cash and cash equivalents at end of period.... 6,961 3,451 4,304 14,716
Restricted cash and cash equivalents at end of
period..................................... (1,137) (3,451) (4,029) (8,617)
------- ------- -------- --------
Unrestricted cash and cash equivalents at end
of period.................................. $ 5,824 $ -- $ 275 $ 6,099
======= ======= ======== ========
</TABLE>
F-40
<PAGE> 174
BLUEGREEN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED DECEMBER 28, 1997
---------------------------------------------------------
COMBINED COMBINED
BLUEGREEN NON-GUARANTOR GUARANTOR
CORPORATION SUBSIDIARIES SUBSIDIARIES CONSOLIDATED
----------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income.................................... $ 380 $ 661 $ 5,943 $ 6,984
Depreciation and amortization................. 520 -- 825 1,345
Loss on REMIC transaction..................... -- -- -- --
Gain on sale of property and equipment........ -- -- -- --
Provisions for losses......................... -- -- 1,349 1,349
Interest accretion on investment in
securities................................. -- (1,047) -- (1,047)
Proceeds from borrowings collateralized by
notes...................................... -- 1,471 25,024 26,495
Payments on borrowings collateralized by
notes...................................... -- (1,449) (9,991) (11,440)
Provision (benefit) for deferred income
taxes...................................... 5,399 -- (625) 4,774
(Increase) decrease in operating assets:
Contracts receivable.......................... 888 -- 774 1,662
Inventory..................................... 251 (6,000) 9,693 3,944
Other assets.................................. (2,059) (1,299) 1,296 (2,062)
Intercompany receivable/payable............... 10,597 (1,545) (9,052) --
Notes receivable.............................. -- 1,377 (23,814) (22,437)
Increase (decrease) in operating liabilities:
Accounts payable, accrued liabilities and
other...................................... (8,534) 361 12,704 4,531
Net cash provided (used) by operating
activities................................. 7,442 (7,470) 14,126 14,098
INVESTING ACTIVITIES:
Acquisition of RDI Group, Inc. and Resort
Title Agency, Inc., net of cash acquired... (6,197) -- 3,776 (2,421)
Purchase of property and equipment............ (771) (77) (2,061) (2,909)
Sales of property and equipment............... -- -- 225 225
Cash received from investment in securities... -- 1,524 -- 1,524
------- ------- -------- --------
Net cash flow (used) provided by investing
activities.................................... (6,968) 1,447 1,940 (3,581)
------- ------- -------- --------
FINANCING ACTIVITIES:
Proceeds from issuance of 8% convertible notes
payable.................................... 6,000 -- -- 6,000
Proceeds from borrowings under line-of-credit
facilities and other notes payable......... 6,998 6,000 23,138 36,136
Payments under line-of-credit facilities and
other notes payable........................ (5,578) -- (32,953) (38,531)
Payment of debt issuance costs................ (62) (4) (834) (900)
Payments for treasury stock................... (19) 500 (500) (19)
Proceeds from exercise of employee stock
options.................................... 324 -- -- 324
------- ------- -------- --------
Net cash flow provided (used) by financing
activities................................. 7,663 6,496 (11,149) 3,010
------- ------- -------- --------
Net increase in cash and cash equivalents..... 8,137 473 4,917 13,527
Cash and cash equivalents at beginning of
period..................................... 3,353 3,442 4,802 11,597
------- ------- -------- --------
Cash and cash equivalents at end of period.... 11,490 3,915 9,719 25,124
Restricted cash and cash equivalents at end of
period..................................... (210) (3,902) (9,188) (13,300)
------- ------- -------- --------
Unrestricted cash and cash equivalents at end
of period.................................. $11,280 $ 13 $ 531 $ 11,824
======= ======= ======== ========
</TABLE>
F-41
<PAGE> 175
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION
WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE NOTES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................... iii
Incorporation of Certain Documents by
Reference............................... iv
Prospectus Summary........................ 1
Risk Factors.............................. 15
Use of Proceeds........................... 27
Capitalization............................ 28
Pro Forma Financial Information........... 30
Selected Consolidated Financial Data...... 33
Management's Discussion and Analysis of
Results of Operations and Financial
Condition............................... 35
Business.................................. 49
Management................................ 73
Certain Relationships and Related
Transactions............................ 77
Principal Stockholders.................... 79
Description of Notes...................... 81
The Exchange Offer........................ 110
Description of Other Indebtedness......... 120
Book-Entry, Delivery and Form............. 123
Certain U.S. Federal Income Tax
Considerations.......................... 124
Plan of Distribution...................... 124
Legal Matters............................. 126
Experts................................... 126
Index to Consolidated Financial
Statements.............................. F-1
</TABLE>
======================================================
======================================================
$110,000,000
(BLUEGREEN CORPORATION LOGO)
10 1/2% SENIOR SECURED
NOTES DUE 2008, SERIES B
--------------------
PROSPECTUS
--------------------
OFFER TO EXCHANGE UP TO $110,000,000 OF 10 1/2% SENIOR SECURED NOTES DUE 2008,
SERIES B WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, FOR ANY AND ALL OF ITS OUTSTANDING 10 1/2% SENIOR SECURED NOTES DUE
2008, OF WHICH $110,000,000 IN PRINCIPAL AMOUNT IS OUTSTANDING ON THE DATE
HEREOF.
======================================================
<PAGE> 176
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Bluegreen Corporation is a Massachusetts corporation. Section 67 of Chapter
156B of the Massachusetts General Laws provides that a corporation may indemnify
its directors and officers to the extent specified in or authorized by (i) the
articles of organization, (ii) a by-law adopted by the stockholders, or (iii) a
vote adopted by the holders of a majority of the shares of stock entitled to
vote on the election of directors. In all instances, the extent to which a
corporation provides indemnification to its directors and officers under Section
67 is optional. In its Restated Articles of Organization, Bluegreen Corporation
has elected to commit to provide indemnification to its directors and officers
in specified circumstances. Generally, the Articles of Organization provide that
Bluegreen Corporation shall indemnify directors and officers of Bluegreen
Corporation against liabilities and expenses arising out of legal proceedings
brought against them by reason of their status as directors or officers or by
reason of their agreeing to serve, at the request of Bluegreen Corporation, as a
director or officer with another organization. Under this provision, a director
or officer of Bluegreen Corporation shall be indemnified by Bluegreen
Corporation for all costs and expenses (including attorneys' fees), judgments,
liabilities and amounts paid in settlement of such proceedings, even if he is
not successful on the merits, if he acted in good faith in the reasonable belief
that his action was in the best interests of Bluegreen Corporation. The Board of
Directors of Bluegreen Corporation may authorize advancing litigation expenses
to a director or officer at his request upon receipt of an undertaking by any
such director or officer to repay such expenses if it is ultimately determined
that he is not entitled to indemnification for such expenses.
Article VI of Bluegreen Corporation's Restated Articles of Organization
eliminates the personal liability of Bluegreen Corporation's directors to
Bluegreen Corporation or its stockholders for monetary damages for breach of a
director's fiduciary duty, except to the extent Chapter 156B of the
Massachusetts General Laws prohibits the elimination or limitation of such
liability.
Certain of the Registrants (Bluegreen Resorts Management, Inc.; Bluegreen
Resorts, Inc.; Bluegreen Holding Corporation (Texas); Properties of the
Southwest One, Inc.; Bluegreen Asset Management Corporation; Bluegreen Carolina
Land, Inc.; Bluegreen Corporation of Tennessee; Bluegreen Corporation of the
Rockies; Bluegreen Properties of Virginia, Inc.; Bluegreen Communities, Inc. and
BG/RDI Acquisition Corporation are Delaware corporations. Section 145 of the
Delaware General Corporation Law provides that a corporation may indemnify a
director, officer, employee or agent against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he 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 provides that he shall not have been
adjudged to be liable to the corporation, and with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.
The Certificates of Incorporation for Bluegreen Corporation of Tennessee,
Bluegreen Asset Management Corporation and BG/RDI Acquisition Corp. provide that
no director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit.
II-1
<PAGE> 177
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
1.1 -- Purchase Agreement dated as of March 26, 1998 by and among
the Registrant and the Initial Purchasers named therein
relating to the 10 1/2% Senior Secured Notes due 2008.+
3.1 -- Restated Articles of Organization, as amended (incorporated
by reference to exhibit of same designation to Annual Report
on Form 10-K for the year ended March 31, 1996).
3.2 -- Restated and amended By-laws of the Registrant (incorporated
by reference to Exhibit 3.3 to Annual Report on Form 10-K
for the fiscal year ended April 2, 1995).
3.3 -- Certificate of Incorporation of BG/RDI Acquisition Corp.+
3.4 -- By-laws of BG/RDI Acquisition Corp.+
3.5 -- Articles of Incorporation of Bluegreen Corporation of
Montana+
3.6 -- By-laws of Bluegreen Corporation of Montana+
3.7 -- Certificate of Incorporation of Bluegreen Asset Management
Corporation+
3.8 -- By-laws of Bluegreen Asset Management Corporation+
3.9 -- Certificate of Incorporation of Bluegreen Carolina Land,
Inc.+
3.10 -- By-laws of Bluegreen Carolina Land, Inc.+
3.11 -- Certificate of Incorporation of Bluegreen Communities, Inc.+
3.12 -- By-laws of Bluegreen Communities, Inc.+
3.13 -- Certificate of Incorporation of Bluegreen Corporation of
Tennessee+
3.14 -- By-laws of Bluegreen Corporation of Tennessee+
3.15 -- Certificate of Incorporation of Bluegreen Corporation of the
Rockies+
3.16 -- By-laws of Bluegreen Corporation of the Rockies+
3.17 -- Certificate of Incorporation of Bluegreen Holding
Corporation (Texas)+
3.18 -- By-laws of Bluegreen Holding Corporation (Texas)+
3.19 -- Certificate of Incorporation of Bluegreen Properties of
Virginia, Inc.+
3.20 -- By-laws of Bluegreen Properties of Virginia, Inc.+
3.21 -- Certificate of Incorporation of Bluegreen Resorts
International, Inc.+
3.22 -- By-laws of Bluegreen Resorts International, Inc.+
3.23 -- Certificate of Incorporation of Bluegreen Resorts
Management, Inc.+
3.24 -- By-laws of Bluegreen Resorts Management, Inc.+
3.25 -- Certificate of Incorporation of Bluegreen Resorts, Inc.+
3.26 -- By-laws of Bluegreen Resorts, Inc.+
3.27 -- Articles of Incorporation of Carolina National Golf Club,
Inc.+
3.28 -- By-laws of Carolina National Golf Club, Inc.+
3.29 -- Articles of Incorporation of Leisure Capital Corp.+
3.30 -- By-laws of Leisure Capital Corp.+
3.31 -- Certificate of Incorporation of Properties of the Southwest
One, Inc.+
3.32 -- By-laws of Properties of the Southwest One, Inc.+
3.33 -- Certificate of Incorporation of Properties of the West,
Inc.+
3.34 -- By-laws of Properties of the West, Inc.+
3.35 -- Articles of Incorporation of Dellona Enterprise, Inc.+
</TABLE>
II-2
<PAGE> 178
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
3.36 -- By-laws of Dellona Enterprise, Inc.+
3.37 -- Articles of Incorporation of RDI Group, Inc.+
3.38 -- By-laws of RDI Group, Inc.+
3.39 -- Articles of Incorporation of RDI Resort Services
Corporation+
3.40 -- By-laws of RDI Resort Services Corporation+
3.41 -- Articles of Incorporation of RDI Resources, Inc.+
3.42 -- By-laws of RDI Resources, Inc.+
3.43 -- Articles of Incorporation of Resort Development
International, Inc.+
3.44 -- By-laws of Resort Development International, Inc.+
3.45 -- Certificate of Limited Partnership of Properties of the
Southwest, L.P.+
4.4 -- Specimen of Common Stock Certificate (incorporated by
reference to exhibit of same designation to Registration
Statement on Form S-1, File No. 33-13076).
4.6 -- Form of Indenture dated as of May 15, 1987 relating to the
Company's 8.25% Convertible Subordinated Debentures Due
2012, including Form of Debenture (incorporated by reference
to exhibit of same designation to Registration Statement on
Form S-1, File No. 33-13753).
4.7 -- Indenture dated as of April 1, 1998 by and among the
Registrant, certain subsidiaries of the Registrant, and
SunTrust Bank, Central Florida, National Association, as
trustee, for the 10 1/2% Senior Secured Notes due 2008.+
5.1 -- Opinion of Choate, Hall & Stewart.+
10.24 -- Form of Agreement dated June 27, 1989 between the Registrant
and Peoples Heritage Savings Bank relating to sale of
mortgage notes receivable (incorporated by reference to
exhibit of same designation to Annual Report on Form 10-K
for the fiscal year ended April 2, 1989).
10.47 -- Amended and Restated Loan and Security Agreement entered
into as of January 9, 1990 by Patten Receivables Finance
Corporation VI, Finova Capital Corporation (fka Greyhound
Real Estate Finance Corporation) and the Registrant as
Guarantor (incorporated by reference to exhibit of same
designation to Annual Report on Form 10-K for the fiscal
year ended April 1, 1990).
10.53 -- Modification dated July 16, 1990 of Amended and Restated
Loan and Security Agreement entered into as of January 9,
1990 by Patten Receivables Finance Corporation VI, Finova
Capital Corporation (fka Greyhound Real Estate Finance
Corporation) and the Registrant as Guarantor (incorporated
by reference to exhibit of same designation to Annual Report
on Form 190K for the fiscal year ended April 1, 1990).
10.58 -- Amendment No. 2 dated March 23, 1991 to the Amended and
Restated Loan and Security Agreement entered into as of
January 9, 1990, by Patten Receivables Finance Corporation
VI, Finova Capital Corporation (fka Greyhound Real Estate
Finance Corporation) and The Registrant as Guarantor
(incorporated by reference to exhibit of same designation to
Annual Report on Form 10-K for the fiscal year ended March
31, 1991).
10.59 -- Amendment No. 3 dated November 21, 1991 to Amended and
Restated Loan and Security Agreement entered into as of
January 9, 1990 by Patten Receivables Finance Corporation
VI, Finova Capital Corporation (fka Greyhound Real Estate
Finance Corporation) and the Registrant as Guarantor
(incorporated by reference to exhibit 10.100 to Annual
Report on Form 10-K for the year ended March 31, 1996).
</TABLE>
II-3
<PAGE> 179
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
10.60 -- Amendment No. 4 dated January 30, 1992 to Amended and
Restated Loan and Security Agreement entered into as of
January 9, 1990 by Patten Receivables Finance Corporation
VI, Finova Capital Corporation (fka Greyhound Real Estate
Finance Corporation) and the Registrant as Guarantor
(incorporated by reference to Exhibit 10.101 to Annual
Report on Form 10-K for the year ended March 31, 1996).
10.61 -- Amendment No. 5 dated October, 1992 to Amended and Restated
Loan and Security Agreement entered into as of January 9,
1990 by Patten Receivables Finance Corporation VI, Finova
Capital Corporation (fka Greyhound Real Estate Finance
Corporation) and the Registrant as Guarantor (incorporated
by reference to Exhibit 10.102 to Annual Report on Form 10-K
for the year ended March 31, 1996).
10.62 -- Amendment No. 6 dated May 12, 1993 to Amended and Restated
Loan and Security Agreement entered into as of January 9,
1990 by Patten Receivables Finance Corporation VI, Finova
Capital Corporation (fka Greyhound Real Estate Finance
Corporation) and the Registrant as Guarantor (incorporated
by reference to Exhibit 10.88 to Annual Report on Form 10-K
for the fiscal year ended March 27, 1994).
10.63 -- Amendment No. 7 dated February 18, 1994 to Amended and
Restated Loan and Security Agreement entered into as of
January 9, 1990 by Patten Receivables Finance Corporation
VI, Finova Capital Corporation (fka Greyhound Real Estate
Finance Corporation) and the Registrant as Guarantor
(incorporated by reference to Exhibit 10.89 to Annual Report
on Form 10-K for the Fiscal year ended March 27, 1994).
10.64 -- Amendment No. 8 dated March 25, 1994 to Amended and Restated
Loan and Security Agreement entered into as of January 9,
1990 by Patten Receivables Finance Corporation VI, Finova
Capital Corporation (fka Greyhound Real Estate Finance
Corporation) and the Registrant as Guarantor (incorporated
by reference to Exhibit 10.103 to Annual Report on Form 10-K
for the year ended March 31, 1996).
10.65 -- Amendment No. 9 dated June 29, 1994 to Amended and Restated
Loan and Security Agreement entered into as of January 9,
1990 by Patten Receivables Finance Corporation VI, Finova
Capital Corporation (fka Greyhound Real Estate Finance
Corporation) and the Registrant as Guarantor (incorporated
by reference to Exhibit 10.91 to Quarterly Report on Form
10-Q for the period ended September 25, 1994).
10.66 -- Amendment No. 10 dated December 14, 1994 to Amended and
Restated Loan and Security Agreement entered into as of
January 9, 1990 by Patten Receivables Finance Corporation
VI, Finova Capital Corporation (fka Greyhound Real Estate
Finance Corporation) and the Registrant as Guarantor
(incorporated by reference to Exhibit 10.94 to Annual Report
on Form 10-K for the fiscal year ended April 2, 1995).
10.67 -- Amendment No. 11 dated October 31, 1995 to Amended and
Restated Loan and Security Agreement entered into as of
January 9, 1990 by Patten Receivables Finance Corporation
VI, Finova Capital Corporation (fka Greyhound Real Estate
Finance Corporation) and the Registrant as Guarantor
(incorporated by reference to Exhibit 10.104 to Annual
Report on Form 10-K for the year ended March 31, 1996).
10.68 -- Amendment No. 12 dated May 1, 1996 to Amended and Restated
Loan and Security Agreement entered into as of January 9,
1990 by Patten receivables Finance Corporation VI, Finova
Capital Corporation (fka Greyhound Real Estate Finance
Corporation) and the Registrant as Guarantor (incorporated
by reference to Exhibit 10.104 to Annual Report on Form 10-K
for the year ended March 31, 1996).
10.77 -- Registrant's Amended 1988 Outside Directors Stock Option
Plan (incorporated by reference to exhibit of same
designation to Annual Report on Form 10-K for the fiscal
year ended March 29, 1992).
</TABLE>
II-4
<PAGE> 180
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
10.78 -- Registrant's 1988 Amended Outside Director's Stock Option
Plan (incorporated by reference to exhibit to Registration
Statement on Form S-1, File No. 33-61687).
10.79 -- Registrant's 1995 Stock Incentive Plan (incorporated by
reference to Exhibit to Registration Statement on Form S-1,
File No. 33-61687).
10.80 -- Registrant's Retirement Savings Plan (incorporated by
reference to Registration Statement on Form S-8, File No.
33-48075).
10.85 -- Loan and Security Agreement by and between the Registrant
and Foothill Capital Corporation dated as of October 29,
1993 (incorporated by reference to exhibit of same
designation to Annual Report on Form 10-K for the fiscal
year ended March 27, 1994).
10.93 -- Stock Purchase Agreement dated as of November 22, 1994 by
and among Harry S. Patten and the Purchasers named therein
(incorporated by reference to exhibit of same designation to
Current Report on Form 8-K dated November 22, 1994).
10.97 -- Pooling and Servicing Agreement dated as of April 15, 1994,
among Patten Receivables Financial Corporation IX, the
Registrant, Patten Corporation REMIC Trust, Series 1994-1
and First Trust National Association, as Trustee
(incorporated by reference to Exhibit 10.84 to Annual Report
on Form 10-K for the fiscal year ended March 27, 1994).
10.98 -- Pooling and Servicing Agreement dated as of June 15, 1995,
among Patten Receivables Finance Corporation X, the
Registrant, Patten Corporation REMIC Trust, Series 1995-1
and First Trust National Association, as Trustee
(incorporated by reference to exhibit to Current Report on
Form 8-K dated July 12, 1995).
10.99 -- Pooling and Servicing Agreement dated as of April 15, 1996,
among Bluegreen Receivables Finance Corporation I, the
Registrant, Bluegreen Corporation REMIC Trust, Series 1996-1
and First Trust National Association, as Trustee
(incorporated by reference to exhibit to Current Report on
Form 8-K dated May 15, 1996).
10.100 -- Pooling and Servicing Agreement dated as of November 15,
1996, among Bluegreen Receivables Finance Corporation II,
the Registrant, Bluegreen Corporation REMIC Trust, Series
1996-2 and First Trust National Association, as Trustee
(incorporated by reference to exhibit to Current Report on
Form 8-K dated December 11, 1996).
10.107 -- Loan and Security Agreement by and between Heller Financial,
Inc. and Bluegreen Resorts, Inc. (fka Patten Resorts, Inc.)
dated February 28, 1996 (incorporated by reference to
exhibit of same designation to Annual Report on Form 10-K
for the year ended March 31, 1996).
10.108 -- First amendment dated February 27, 1997 to Loan and Security
Agreement by and between Heller Financial, Inc. and
Bluegreen Resorts, Inc. (fka Patten Resorts, Inc.) dated
February 28, 1996 (incorporated by reference to exhibit of
same designation to Annual Report on Form 10-K for the year
ended March 31, 1996).
10.123 -- Exchange and Registration Rights Agreement dated April 1,
1998, by and among the Registrant and the persons named
therein, relating to the 10 1/2% Senior Secured Notes due
2008.+
10.124 -- Employment Agreement between George F. Donovan and the
Company dated March, 1998.+
10.125 -- Employment Agreement between John F. Chiste and the Company
dated March, 1998.+
10.126 -- Employment Agreement between Nicolas Gray and the Company
dated March, 1998.+
10.127 -- Employment Agreement between Daniel C. Koscher and the
Company dated March, 1998.+
10.128 -- Employment Agreement between Patrick E. Rondeau and the
Company dated March, 1998.+
10.129 -- Amended and Restated Credit Facility Agreement entered into
as of April 16, 1998 between Finova Capital Corporation and
the Registrant.+
10.130 -- Amended and Restated Loan and Security Agreement dated as of
September 23, 1997 between Foothill Capital Corporation and
the Registrant.+
</TABLE>
II-5
<PAGE> 181
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <C> <S>
12.1 -- Statement Re: Computation of Ratio of Earnings to Fixed
Charges.*
21.1 -- List of Subsidiaries*
23.1 -- Consent of Ernst & Young LLP.+
23.2 -- Consent of Choate, Hall & Stewart (included as part of
Exhibit 5.1).
24.1 -- Powers of Attorney (included in signature pages to
Registration Statement).
25.1 -- Statement of eligibility of SunTrust Bank Central Florida,
National Association, as trustee.+
99.1 -- Letter of Transmittal with respect to the Exchange Offer.*
99.2 -- Notice of Guaranteed Delivery with respect to the Exchange
Offer.*
99.3 -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*
</TABLE>
- ---------------
* Previously filed.
+ Filed herewith.
ITEM 22. UNDERTAKINGS
(a) Each of the undersigned registrants hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act of 1993, as
amended ("the Act"), may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
such Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim of
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or the registrant in the successful defense of
any action, suit paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, such Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(b) Each of the undersigned registrants hereby undertakes to respond to
requests for information that is incorporated by reference into this prospectus
pursuant to Item 4, 10(b), 11, or 13 of this Form, within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
(c) Each of the undersigned registrants hereby undertakes to supply by
means of a post-effective amendment all information concerning in a transaction,
and the company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(d) Each of the undersigned registrants hereby undertakes:
(1) To file, during any period which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1993;
(ii) To reflect in the prospectus and facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) of the Securities Act of
1933
II-6
<PAGE> 182
if, in the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-7
<PAGE> 183
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Corporation has duly caused this Amendment No. 1 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boca Raton,
State of Florida, on June 11, 1998.
BLUEGREEN CORPORATION
By:
------------------------------------
George F. Donovan
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Chief Executive June 11, 1998
- ----------------------------------------------------- Officer and Director
George F. Donovan (Principal Executive Officer)
JOHN F. CHISTE* Chief Financial Officer and June 11, 1998
- ----------------------------------------------------- Treasurer (Principal Financial
John F. Chiste Officer)
ANTHONY M. PULEO* Chief Accounting Officer June 11, 1998
- ----------------------------------------------------- (Principal Accounting Officer)
Anthony M. Puleo
JOSEPH C. ABELES* Director June 11, 1998
- -----------------------------------------------------
Joseph C. Abeles
RALPH A. FOOTE* Director June 11, 1998
- -----------------------------------------------------
Ralph A. Foote
Director June 11, 1998
- -----------------------------------------------------
Frederick M. Myers
J. LARRY RUTHERFORD* Director June 11, 1998
- -----------------------------------------------------
J. Larry Rutherford
STUART A. SHIKIAR* Director June 11, 1998
- -----------------------------------------------------
Stuart A. Shikiar
BRADFORD T. WHITMORE* Director June 11, 1998
- -----------------------------------------------------
Bradford T. Whitmore
*By:
-------------------------------------------------
George F. Donovan
Attorney-in-Fact
</TABLE>
II-8
<PAGE> 184
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Resorts Management, Inc. has duly caused this Amendment No. 1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boca Raton, State of Florida, on June 11, 1998.
BLUEGREEN RESORTS MANAGEMENT, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
L. NICOLAS GRAY* Director June 11, 1998
- -----------------------------------------------------
L. Nicolas Gray
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-9
<PAGE> 185
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Resorts, Inc. has duly caused this Amendment No. 1 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boca Raton,
State of Florida, on June 11, 1998.
BLUEGREEN RESORTS, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
L. NICOLAS GRAY* Director June 11, 1998
- -----------------------------------------------------
L. Nicolas Gray
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-10
<PAGE> 186
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Holding Corporation (Texas) has duly caused this Amendment No. 1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boca Raton, State of Florida, on June 11, 1998.
BLUEGREEN HOLDING CORPORATION (TEXAS)
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer and June 11, 1998
- ----------------------------------------------------- Director
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer and June 11, 1998
- ----------------------------------------------------- Director
Anthony M. Puleo
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-11
<PAGE> 187
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Properties of the Southwest One, Inc. has duly caused this Amendment No. 1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boca Raton, State of Florida, on June 11, 1998.
PROPERTIES OF THE SOUTHWEST ONE, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
DANIEL C. KOSCHER* Director June 11, 1998
- -----------------------------------------------------
Daniel C. Koscher
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-12
<PAGE> 188
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Asset Management Corporation has duly caused this Amendment No. 1 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Boca Raton, State of Florida, on June 11, 1998.
BLUEGREEN ASSET MANAGEMENT
CORPORATION
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
DANIEL C. KOSCHER* Director June 11, 1998
- -----------------------------------------------------
Daniel C. Koscher
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-13
<PAGE> 189
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Carolina Land, Inc. has duly caused this Amendment No. 1 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Boca
Raton, State of Florida, on June 11, 1998.
BLUEGREEN CAROLINA LAND, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
DANIEL C. KOSCHER* Director June 11, 1998
- -----------------------------------------------------
Daniel C. Koscher
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-14
<PAGE> 190
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Corporation of Montana has duly caused this Amendment No. 1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boca Raton, State of Florida, on June 11, 1998.
BLUEGREEN CORPORATION OF MONTANA
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
DANIEL C. KOSCHER* Director June 11, 1998
- -----------------------------------------------------
Daniel C. Koscher
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-15
<PAGE> 191
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Corporation of Tennessee has duly caused this Amendment No. 1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boca Raton, State of Florida, on June 11, 1998.
BLUEGREEN CORPORATION OF TENNESSEE
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
DANIEL C. KOSCHER* Director June 11, 1998
- -----------------------------------------------------
Daniel C. Koscher
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-16
<PAGE> 192
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Corporation of the Rockies has duly caused this Amendment No. 1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boca Raton, State of Florida, on June 11, 1998.
BLUEGREEN CORPORATION
OF THE ROCKIES
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
DANIEL C. KOSCHER* Director June 11, 1998
- -----------------------------------------------------
Daniel C. Koscher
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-17
<PAGE> 193
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Properties of Virginia, Inc. has duly caused this Amendment No. 1 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Boca Raton, State of Florida, on June 11, 1998.
BLUEGREEN PROPERTIES
OF VIRGINIA, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
DANIEL C. KOSCHER* Director June 11, 1998
- -----------------------------------------------------
Daniel C. Koscher
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-18
<PAGE> 194
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Communities, Inc. has duly caused this Amendment No. 1 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Boca
Raton, State of Florida, on June 11, 1998.
BLUEGREEN COMMUNITIES, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
DANIEL C. KOSCHER* Director June 11, 1998
- -----------------------------------------------------
Daniel C. Koscher
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-19
<PAGE> 195
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Bluegreen Resorts International, Inc. has duly caused this Amendment No. 1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boca Raton, State of Florida, on June 11, 1998.
BLUEGREEN RESORTS
INTERNATIONAL, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
L. NICHOLAS GRAY* Director June 11, 1998
- -----------------------------------------------------
L. Nicholas Gray
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-20
<PAGE> 196
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Carolina National Golf Club, Inc. has duly caused this Amendment No. 1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boca Raton, State of Florida, on June 11, 1998.
CAROLINA NATIONAL GOLF CLUB, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
DANIEL C. KOSCHER* Director June 11, 1998
- -----------------------------------------------------
Daniel C. Koscher
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-21
<PAGE> 197
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Leisure Capital Corporation has duly caused this Amendment No. 1 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Boca
Raton, State of Florida, on June 11, 1998.
LEISURE CAPITAL CORPORATION
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
L. NICOLAS GRAY* Director June 11, 1998
- -----------------------------------------------------
L. Nicolas Gray
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-22
<PAGE> 198
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Properties of the West, Inc. has duly caused this Amendment No. 1 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Boca
Raton, State of Florida, on June 11, 1998.
PROPERTIES OF THE WEST, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
DANIEL C. KOSCHER* Director June 11, 1998
- -----------------------------------------------------
Daniel C. Koscher
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-23
<PAGE> 199
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
BG/RDI Acquisition Corporation has duly caused this Amendment No. 1 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Boca
Raton, State of Florida, on June 11, 1998.
BG/RDI ACQUISITION CORPORATION
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and Director June 11, 1998
- ----------------------------------------------------- (Chief Executive Officer)
Patrick E. Rondeau
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
L. NICOLAS GRAY* Director June 11, 1998
- -----------------------------------------------------
L. Nicolas Gray
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-24
<PAGE> 200
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Dellona Enterprises, Inc. has duly caused this Amendment No. 1 to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Boca
Raton, State of Florida, on June 11, 1998.
DELLONA ENTERPRISES, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
L. NICOLAS GRAY* Director June 11, 1998
- -----------------------------------------------------
L. Nicolas Gray
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-25
<PAGE> 201
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Resorts Development International, Inc. has duly caused this Amendment No. 1 to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Boca Raton, State of Florida, on June 11, 1998.
RESORTS DEVELOPMENT
INTERNATIONAL, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and Director June 11, 1998
- ----------------------------------------------------- (Chief Executive Officer)
Patrick E. Rondeau
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
L. NICOLAS GRAY* Director June 11, 1998
- -----------------------------------------------------
L. Nicolas Gray
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-26
<PAGE> 202
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, RDI
Resorts Services Corporation has duly caused this Amendment No. 1 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Boca
Raton, State of Florida, on June 11, 1998.
RDI RESORTS SERVICES CORPORATION
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director (Chief Executive
Patrick E. Rondeau Officer)
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
L. NICOLAS GRAY* Director June 11, 1998
- -----------------------------------------------------
L. Nicolas Gray
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-27
<PAGE> 203
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, RDI
Resources, Inc. has duly caused this Amendment No. 1 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Boca Raton, State
of Florida, on June 11, 1998.
RDI RESOURCES, INC.
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and Director June 11, 1998
- ----------------------------------------------------- (Chief Executive Officer)
Patrick E. Rondeau
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
L. NICOLAS GRAY* Director June 11, 1998
- -----------------------------------------------------
L. Nicolas Gray
DANNY L. FERGUSON* Director June 11, 1998
- -----------------------------------------------------
Danny L. Ferguson
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-28
<PAGE> 204
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Properties of the Southwest, L.P. has duly caused this Amendment No. 1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boca Raton, State of Florida, on June 11, 1998.
PROPERTIES OF THE SOUTHWEST, L.P.
By Properties of the Southwest One,
Inc., its General Partner
By:
------------------------------------
Patrick E. Rondeau
President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Secretary and June 11, 1998
- ----------------------------------------------------- Director of Properties of the
Patrick E. Rondeau Southwest One, Inc., the
General Partner of Properties
of the Southwest, L.P.
JOHN F. CHISTE* Principal Financial Officer June 11, 1998
- -----------------------------------------------------
John F. Chiste
ANTHONY M. PULEO* Principal Accounting Officer June 11, 1998
- -----------------------------------------------------
Anthony M. Puleo
DANIEL C. KOSCHER* Director of Properties of the June 11, 1998
- ----------------------------------------------------- Southwest One, Inc., the
Daniel C. Koscher General Partner of Properties
of the Southwest, L.P
DANNY L. FERGUSON* Director of Properties of the June 11, 1998
- ----------------------------------------------------- Southwest One, Inc., the
Danny L. Ferguson General Partner of Properties
of the Southwest, L.P.
*
- ----------------------------------------------------
Patrick E. Rondeau
Attorney-in-Fact
</TABLE>
II-29
<PAGE> 1
EXHIBIT 1.1
BLUEGREEN CORPORATION
$110,000,000
10-1/2% Senior Secured Notes due 2008
PURCHASE AGREEMENT
March 26, 1998
NatWest Capital Markets Limited
McDonald & Company Securities, Inc.
c/o NatWest Capital Markets Limited
135 Bishopgate
London, EC2M 3XT
United Kingdom
Ladies and Gentlemen:
Each of the undersigned hereby confirms its agreement with you
(the "Initial Purchasers"), as set forth below.
1. THE NOTES. Subject to the terms and conditions herein
contained, Bluegreen Corporation, a Massachusetts corporation (the "Company"),
proposes to issue and sell to the Initial Purchasers $110,000,000 aggregate
principal amount of its 10-1/2% Senior Secured Notes due 2008 (the "Notes"). The
Notes are to be issued under an indenture (the "Indenture") to be dated as of
April 1, 1998 between the Company, each subsidiary of the Company that is a
signatory hereto, as subsidiary guarantors (each a "Guarantor Subsidiary" and
collectively, the "Guarantor Subsidiaries") and SunTrust Bank, Central Florida,
National Association, as trustee (the "Trustee").
The Notes will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Act"), in reliance on exemptions therefrom. Pursuant to the terms of the Notes
and the Indenture, the Notes may only be sold by the Initial Purchasers to a
"qualified institutional buyer" as defined in Rule 144A under the Act ("QIB").
The Notes will be covered by guarantees (each a "Note Guarantee" and
collectively, the "Note Guarantees") from each of the Guarantor Subsidiaries.
The Note Guarantees will be senior obligations of each of the Guarantor
Subsidiaries and will rank PARI PASSU in right of payment with all existing and
future Senior Indebtedness of each of the Guarantor Subsidiaries and senior in
right of payment with all existing and future Subordinated Obligations of each
of the Subsidiaries. The Note Guarantees of certain of the Guarantor
Subsidiaries are secured by a Mortgage (as defined herein) or similar instrument
on certain real property owned by such Guarantor Subsidiaries.
In connection with the sale of the Notes, the Company has
prepared a preliminary offering memorandum dated March 6, 1998 (together with
all the documents incorporated by
<PAGE> 2
reference therein, the "Preliminary Memorandum") and will prepare a final
offering memorandum dated March 27, 1998 (together with all the documents
incorporated by reference therein, the "Final Memorandum"; the Preliminary
Memorandum and the Final Memorandum each herein being referred to as a
"Memorandum") setting forth or including a description of the terms of the
Notes, the terms of the offering of the Notes and a description of the Company
and the Subsidiaries.
The Company and the Initial Purchasers will enter into a
Registration Rights Agreement (the "Registration Rights Agreement") prior to or
concurrently with the issuance of the Notes. Pursuant to the Registration Rights
Agreement, under the circumstances and the terms set forth therein, the Company
will agree to file with the Securities and Exchange Commission (the
"Commission"): (i) a registration statement on Form S-4 (the "Exchange Offer
Registration Statement") relating to a registered Exchange Offer (as defined in
the Registration Rights Agreement) for the Notes under the Act to offer to the
holders of the Notes the opportunity to exchange their Notes for an issue of
notes substantially identical to the Notes that would be registered under the
Act (the "Exchange Notes") (except that (a) interest thereon will accrue from
the last date on which interest was paid on the Notes, or if no such interest
has been paid, from the date of original issuance of the Notes, (b) such
Exchange Notes will not contain restrictions on transfer, and (c) such Exchange
Notes will not contain provisions relating to an increase in their interest rate
under certain circumstances); or (ii) alternatively, in the event that
applicable interpretations of the Commission do not permit the Company to effect
the Exchange Offer or do not permit any holder of the Notes to participate in
the Exchange Offer, a shelf registration statement (the "Shelf Registration
Statement") to cover resales of Notes by such holders who satisfy certain
conditions, including providing certain information in connection with the Shelf
Registration Statement.
As used herein, the term "Significant Subsidiary" shall mean
those subsidiaries of the Company set forth on Annex I hereto.
2. REPRESENTATIONS AND WARRANTIES. The Company and each
Guarantor Subsidiary represent and warrant to, and agree with, the Initial
Purchasers that:
(a) Neither the Preliminary Memorandum as of the date
thereof nor the Final Memorandum nor any amendment or supplement
thereto as of the date thereof and, in the case of the Final Memorandum
and any amendment or supplement thereto, at all times subsequent
thereto up to the Closing Date (as defined in Section 3 below)
contained or shall contain any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties set forth in this Section 2(a) do not apply to statements or
omissions made in reliance upon and in conformity with information
furnished to the Company in writing by the Initial Purchasers expressly
for use in the Preliminary Memorandum, the Final Memorandum or any
amendment or supplement thereto.
(b) As of the Closing Date, (i) the Company will have
the authorized and issued capital stock set forth in the Final
Memorandum; (ii) (A) the Guarantor
2
<PAGE> 3
Subsidiaries, (B) each subsidiary of the Company that constitutes a
Receivables Subsidiary (as defined in the Final Memorandum); (C)
Bluegreen Aruba N.V., (D) Resort Title Agency, Inc. and (E) each
subsidiary of the Company which is established and continues to operate
for the limited purpose of holding a real estate broker's license and
acting as a broker for the Company and its subsidiaries in connection
with the sale of real estate or timeshare interests (collectively, the
"Subsidiaries"), constitute all of the subsidiaries of the Company;
(iii) the Company will own, directly or indirectly, the percentage of
the issued and outstanding stock (or other equity securities) of each
of the Subsidiaries as listed on Schedule 2 hereto; (iv) all of the
outstanding shares of capital stock of the Company and the Subsidiaries
as of the Closing Date will be duly authorized and validly issued, will
be fully paid and nonassessable and will not have been issued in
violation of any preemptive or similar rights; (v) except as set forth
in the Final Memorandum, there are no (x) options, warrants or other
rights to purchase from the Company and the Subsidiaries, (y)
agreements or other obligations of the Company or any of the
Subsidiaries to issue or (z) other rights to convert any obligation
into, or exchange any securities for, shares of capital stock of, or
other equity securities in, the Company or any of the Subsidiaries
outstanding. Except as disclosed on Schedule 2, the Company does not
own, directly or indirectly, any capital stock or any other equity or
long-term debt securities or have any equity interests in any firm,
partnership, joint venture, limited liability company or other entity.
(c) The Company and each of the Subsidiaries has been
duly organized, is validly existing and is in good standing as a
corporation, limited partnership or limited liability company, as the
case may be, under the laws of its jurisdiction of incorporation or
formation, with all requisite corporate or partnership power and
authority to own its properties and conduct its business as now
conducted, and as described in the Final Memorandum; each of the
Company and the Subsidiaries is duly qualified to do business as a
foreign corporation, limited partnership or limited liability company
in good standing in all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
general affairs, management, business, condition (financial or
otherwise), prospects or results of operations of the Company and the
Subsidiaries, taken as a whole (any such event, a "Material Adverse
Effect").
(d) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Notes. The Notes, when issued, will be in the form contemplated by the
Indenture. The Notes have been duly and validly authorized, executed
and delivered by the Company and, when authenticated by the Notes
Trustee in accordance with the provisions of the Indenture and when
delivered to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement, will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of
the Company, will entitle the Initial Purchasers to the benefits of the
Indenture and will be enforceable against the Company in accordance
with their terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, fraudulent transfer or
conveyance or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
3
<PAGE> 4
(e) The Company and each Guarantor Subsidiary has all
requisite corporate or partnership power and authority to execute,
deliver and perform its obligations under the Indenture. The Indenture
meets the requirements for qualification under the Trust Indenture Act
of 1939, as amended (the "TIA"). The Indenture has been duly and
validly authorized, executed and delivered by the Company and each
Guarantor Subsidiary and will constitute a valid and legally binding
agreement of the Company and each Guarantor Subsidiary, enforceable
against the Company and each Guarantor Subsidiaries in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer or
conveyance or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
(f) The Exchange Notes and the Private Exchange Notes
(as defined in the Registration Rights Agreement) have been duly and
validly authorized by the Company, and when the Exchange Notes have
been duly executed and delivered by the Company and authenticated by
the Notes Trustee in accordance with the terms of the Registration
Rights Agreement and the Indenture, will constitute the valid and
legally binding obligations of the Company, entitled to the benefits of
the Indenture, and will be enforceable against the Company in
accordance with their terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, fraudulent
transfer or conveyance or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
(g) The Company and each Guarantor Subsidiary has all
requisite corporate or partnership power and authority to execute,
deliver and perform its obligations under the Registration Rights
Agreement. The Registration Rights Agreement has been duly and validly
authorized, executed and delivered by the Company and each Guarantor
Subsidiary and constitutes a valid and legally binding agreement of the
Company and each Guarantor Subsidiary enforceable against the Company
and each Guarantor Subsidiary in accordance with its terms, except (A)
as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer or conveyance or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether the issue of enforceability
is considered in a proceeding in equity or at law), and (B) that any
rights to indemnity or contribution thereunder may be limited by
federal or state securities laws or public policy considerations.
(h) Each of the Guarantor Subsidiaries has all
requisite corporate or partnership power and authority to execute,
deliver and perform its obligations under the Note Guarantee executed
by it. Each Note Guarantee has been duly and validly authorized,
executed and delivered by the applicable Guarantor Subsidiary and
constitutes a valid and legally binding agreement of such Guarantor
Subsidiary enforceable against such Guarantor Subsidiary in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer or
conveyance or other similar laws affecting the enforcement of
creditors' rights generally
4
<PAGE> 5
and by general equitable principles (regardless of whether the issue
of enforceability is considered in a proceeding in equity or at law).
(i) Each of the Significant Subsidiaries which owns
Pledged Properties (as defined in the Indenture) has marketable fee
simple title to such Pledged Properties identified in Schedule P to the
Indenture as being owned by it; no person or entity has any right,
option, or first refusal to purchase or lease all or any part of the
Pledged Properties except for bona fide purchasers of Residential Lots
(as defined in the Indenture); there are no parties in possession of
any of the Pledged Properties other than the Significant Subsidiary
identified in Schedule P to the Indenture as being the owner thereof;
there is no litigation pending, or to the best of the knowledge of the
Company and each Significant Subsidiary, threatened against or
affecting any of the Pledged Properties that would have a material
adverse effect upon the Company, any Significant Subsidiary, or any of
the Pledged Properties; each of the Pledged Properties is in compliance
with all governmental laws, rules, and regulations, including those
pertaining to the environment, except where non-compliance could not
have a material adverse effect on the value of such Pledged Property;
and each of the Pledged Properties is free and clear of all liens
(including mechanics' liens, mortgages and deeds of trust) except for
the lien for taxes and assessments which are not yet due and payable.
(j) The Company and each Guarantor Subsidiary has all
requisite corporate or partnership power and authority to execute,
deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement has
been duly and validly authorized, executed and delivered by the Company
and each Guarantor Subsidiary.
(k) No consent, approval, authorization or order of
any court or governmental agency or body or third party is required for
the execution, delivery or performance of this Agreement, the Notes,
the Note Guarantees, the Mortgages, the Registration Rights Agreement
or the Indenture by the Company or the Guarantor Subsidiaries or the
consummation by the Company or any Guarantor Subsidiary of this
Agreement, the Note Guarantees, the Mortgages, the Registration Rights
Agreement and the Indenture or the consummation by the Company or any
of the Guarantor Subsidiaries of the transactions contemplated hereby
or thereby that are to be completed on or before the Closing Date,
except such as have been obtained or disclosed in the Final Memorandum
and such as may be required under state securities or "Blue Sky" laws
in connection with the purchase and resale of the Notes by the Initial
Purchasers. None of the Company or any of the Subsidiaries is (i) in
violation of its certificate of incorporation or bylaws (or similar
organizational documents), (ii) in breach or violation of any statute,
judgment, decree, order, rule or regulation applicable to any of them
or any of their respective properties or assets, or (iii) in breach of
or in default under (nor has any event occurred which, with notice or
passage of time or both, would constitute a default under)
or in violation of any of the terms or provisions of any material
indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, permit, certificate, contract or other
agreement or instrument to which any of them is a party or to which any
of them or their respective properties or assets is subject
(collectively, "Contracts") except
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<PAGE> 6
in the case of clauses (ii) and (iii) above for such violations,
breaches or defaults that would not, individually or in the aggregate,
have a Material Adverse Effect.
(l) The execution, delivery and performance by the
Company and the Guarantor Subsidiaries of this Agreement, the Notes,
the Exchange Notes, the Note Guarantees, the Mortgages, the Indenture
and the Registration Rights Agreement and the consummation by the
Company and the Subsidiaries of the transactions contemplated hereby
and thereby, will not conflict with or constitute or result in a breach
of or a default under (or an event which with notice or passage of time
or both would constitute a default under) or violation of any of (i)
the terms or provisions of any Contract except such conflicts,
breaches, defaults or violations, that would not, individually or in
the aggregate, have a Material Adverse Effect, (ii) the certificate of
incorporation or by-laws (or similar organizational document) of the
Company or any of the Subsidiaries, or (iii) any statute, judgment,
decree, order, rule or regulation applicable to the Company or any of
the Subsidiaries or any of their respective properties or assets except
such conflicts, breaches, defaults or violations that would not,
individually or in the aggregate, have a Material Adverse Effect.
(m) The audited consolidated financial statements of
the Company and its consolidated Subsidiaries included in the
Preliminary Memorandum and the Final Memorandum present fairly in all
material respects the financial condition, results of operations and
cash flows of such entities at the dates and for the periods to which
they relate and have been prepared in accordance with generally
accepted accounting principles in the United States applied on a
consistent basis except as otherwise stated therein. The summary and
selected financial and statistical data in the Preliminary Memorandum
and the Final Memorandum present fairly in all material respects the
information shown therein and have been prepared and compiled on a
basis consistent with the audited financial statements included
therein, except as otherwise stated therein. Ernst & Young LLP is an
independent public accounting firm within the meaning of the Act and
the rules and regulations promulgated thereunder.
(n) There is not pending or, to the knowledge of the
Company, threatened, any action, suit, proceeding, inquiry,
investigation or legislative mandate to which the Company or any of the
Subsidiaries is a party, or to which the property or assets of the
Company or any of the Subsidiaries are subject, before or brought by
any court, arbitrator or governmental agency or body which is
reasonably likely to, individually or in the aggregate, have a Material
Adverse Effect or which seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the
Notes to be sold hereunder or the consummation of the other
transactions described in the Preliminary Memorandum and the Final
Memorandum.
(o) Each of the Company and the Subsidiaries owns or
possesses adequate licenses or other rights to use all material
trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses now or proposed to be operated by
it as described in the Preliminary Memorandum and the Final Memorandum,
except where the failure to own or possess the same would not,
individually or in the aggregate, have a Material Adverse Effect, and
neither the Company
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<PAGE> 7
nor any of the Subsidiaries has received any notice of infringement of
or conflict with (or knows of any such infringement of or conflict
with) asserted rights of others with respect to any patents,
trademarks, service marks, trade names, copyrights or know-how which,
if such assertion of infringement or conflict were sustained, would,
individually or in the aggregate, have a Material Adverse Effect.
(p) The Company and each of the Subsidiaries
possesses all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations
and filings with, all federal, state, local, foreign and other
governmental authorities, all self-regulatory organizations and all
courts and other tribunals, presently required or necessary to own or
lease, as the case may be, and to operate its respective properties and
to carry on its respective businesses as now or proposed to be
conducted as described in the Preliminary Memorandum and the Final
Memorandum (collectively, the "Permits"), except where the failure to
obtain such Permits would not, individually or in the aggregate, have a
Material Adverse Effect; each of the Company and the Subsidiaries has
fulfilled and performed all of its obligations with respect to such
Permits and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or results
in any other material impairment of the rights of the holder of any
such Permit except where such failure or such revocation, termination
or impairment would not, individually or in the aggregate, have a
Material Adverse Effect; and none of the Company or the Subsidiaries
has received any notice of any proceeding relating to revocation or
modification of any such Permit, except as described in the Final
Memorandum and except where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect.
(q) Since the date of the most recent financial
statements appearing in the Final Memorandum, except for the
transactions contemplated by this Agreement and/or as described
therein, (i) neither the Company nor any Subsidiary has incurred any
liabilities or obligations, direct or contingent, or entered into or
agreed to enter into any transactions or contracts (written or oral)
not in the ordinary course of business which liabilities, obligations,
transactions or contracts would, individually or in the aggregate, be
material to the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the
Company and the Subsidiaries, either individually or taken as a whole
(a "Material Change"), (ii) neither the Company nor any Subsidiary has
purchased any of its outstanding capital stock, nor has the Company
declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock and (iii) other than as described in the
Final Memorandum, there shall not have been any change in the capital
stock or long-term indebtedness of the Company or the Subsidiaries
which would, individually or in the aggregate, constitute a Material
Change.
(r) There has not occurred any material adverse
change, or any development involving a prospective material adverse
change, in the general affairs, management, business, condition,
(financial or otherwise), prospects or results of operations of the
Company and the Subsidiaries, taken as a whole, from that set forth in
the Preliminary Memorandum and the Final Memorandum.
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<PAGE> 8
(s) The Company and each of the Subsidiaries have
filed all necessary federal, state, local and foreign income and
franchise tax returns, and have paid all taxes shown as due thereon;
and there is no tax deficiency that has been asserted against the
Company or any of the Subsidiaries other than tax deficiencies which
the Company or such Subsidiary is contesting in good faith and for
which the Company or such Subsidiary has provided adequate reserves.
(t) The statistical and market-related data included
in the Final Memorandum are based on or derived from sources which the
Company and the Subsidiaries believe to be reliable and accurate.
(u) None of the Company, the Subsidiaries nor any
agent acting on their behalf has taken or will take any action that
might cause this Agreement or the sale of the Notes to violate
Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System, in each case as in effect, or as the same may hereafter
be in effect, on the Closing Date.
(v) Each of the Company and the Subsidiaries has good
and marketable title to all real property and good title to all
personal property described in the Final Memorandum as being owned by
it and good and marketable title to any leasehold estate in the real
and personal property described in the Final Memorandum as being leased
by it free and clear of all liens, charges, encumbrances or
restrictions, except as described in the Final Memorandum and/or the
Permitted Liens (as defined in the Indenture).
(w) Except as would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect (A)
each of the Company and the Subsidiaries is in compliance with and not
subject to liability under applicable Environmental Laws (as defined
below), (B) each of the Company and the Subsidiaries has made all
filings and provided all notices required under any applicable
Environmental Laws, and has and is in compliance with all Permits
required under any applicable Environmental Laws and each of them is in
full force and effect, (C) there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice of
violation, investigation, proceeding, notice or demand letter or
request for information pending or, to the knowledge of the Company or
any of the Subsidiaries, threatened against the Company or any of the
Subsidiaries under any Environmental Law, (D) no lien, charge,
encumbrance or restriction has been recorded under any Environmental
Law with respect to any assets, facility or property owned, operated,
leased or controlled by the Company or any of the Subsidiaries, (E)
none of the Company or the Subsidiaries has received notice that it has
been identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA") or any comparable state law, (F) no
property or facility of the Company or any of the Subsidiaries is (i)
listed or proposed for listing on the National Priorities List under
CERCLA or is (ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List promulgated pursuant to
CERCLA, or on any comparable list maintained by any state or local
governmental authority.
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<PAGE> 9
For purposes of this Agreement, "Environmental Laws"
means the common law of any applicable jurisdiction and all applicable
federal, state, local and foreign laws or regulations, codes, orders,
decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of public or
employee health and safety or the environment, including, without
limitation, law relating to (i) emissions, discharges, releases or
threatened releases of hazardous materials, into the environment
(including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), (ii) the manufacture,
processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, and (iii)
underground and above ground storage tanks, and related piping, and
emissions, discharges, releases or threatened releases therefrom.
(x) Except as disclosed in the Final Memorandum,
there is no strike, labor dispute, slowdown or work stoppage with the
employees of the Company or any of the Subsidiaries which is pending
or, to the knowledge of the Company or any of the Subsidiaries,
threatened.
(y) Each of the Company and the Subsidiaries carries
insurance in such amounts and covering such risks as is customary for
companies engaged in similar businesses. Neither the Company nor any of
the Subsidiaries has received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance.
(z) None of the Company nor the Subsidiaries has any
material liability for any prohibited transaction (within the meaning
of Section 4975(c) of the Internal Revenue Code of 1986, as amended
(the "Code") or Part 4 of Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) (or an accumulated funding
deficiency within the meaning of Section 412 of the Code or Section 302
of ERISA) or any complete or partial withdrawal liability (within the
meaning of Section 4201 of ERISA) with respect to any pension, profit
sharing or other plan which is subject to ERISA, to which the Company
or any of the Subsidiaries makes or ever has made a contribution and in
which any employee of the Company or of any Subsidiary is or has ever
been a participant. With respect to such plans, the Company and each
Subsidiary is in compliance in all material respects with all
applicable provisions of ERISA.
(aa) The Company and each of the Subsidiaries (i)
makes and keeps accurate books and records and (ii) maintains internal
accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(bb) None of the Company nor the Subsidiaries will be
an "investment company" or "promoter" or "principal underwriter" for an
"investment company or a
9
<PAGE> 10
company controlled by an investment company within the meaning of the
Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.
(cc) The Notes, the Exchange Notes, the Note
Guarantees, the Mortgages, the Registration Rights Agreement and the
Indenture conform in all material respects to the descriptions thereof
in the Final Memorandum.
(dd) Except as described in the Final Memorandum, no
holder of securities of the Company nor any of the Subsidiaries will be
entitled to have such securities registered under the registration
statements required to be filed by the Company pursuant to the
Registration Rights Agreement other than as expressly permitted
thereby.
(ee) Immediately after the consummation of the
transactions contemplated by this Agreement, the fair value and present
fair saleable value of the assets of each of the Company and the
Subsidiaries (each on a consolidated basis) will exceed the sum of its
stated liabilities and identified contingent liabilities; none of the
Company or the Subsidiaries (each on a consolidated basis) is, nor will
any of the Company or the Subsidiaries (each on a consolidated basis)
be, after giving effect to the execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated
hereby, (i) left with unreasonably small capital with which to carry on
its business as it is currently or proposed to be conducted, (ii)
unable to pay its debts (contingent or otherwise) as they mature or
otherwise become due or (iii) otherwise insolvent.
(ff) None of the Company, the Subsidiaries or any of
their respective Affiliates (as defined in Rule 501(b) of Regulation D
under the Act) has directly, or through any agent (other than the
Initial Purchasers pursuant to this Agreement), (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of,
any "security" (as defined in the Act) which is or could be integrated
with the sale of the Notes in a manner that would require the
registration under the Act of the Notes or (ii) engaged in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the
Notes or in any manner involving a public offering within the meaning
of Section 4(2) of the Act. The Company has not distributed and will
not distribute any offering material in connection with the offering of
the Notes other than the Final Memorandum and any Preliminary
Memorandum. No securities of the same class as the Notes have been
issued and sold by the Company within the six-month period immediately
prior to the date hereof.
(gg) Assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 8 hereof, it is not
necessary in connection with the offer, sale and delivery of the Notes
to the Initial Purchasers in the manner contemplated by this Agreement
to register the Notes under the Act or to qualify the Indenture under
the TIA.
(hh) No securities of the Company or any of the
Subsidiaries are of the same class (within the meaning of Rule 144A as
promulgated under the Act ("Rule 144A")) as the Notes and listed on a
national securities exchange registered under Section
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<PAGE> 11
6 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or quoted in a U.S. automated inter-dealer quotation system.
(ii) None of the Company or the Subsidiaries has
taken, nor will any of them take, directly or indirectly, any action
designed to, or that might be reasonably expected to, cause or result
in stabilization or manipulation of the price of the Notes.
(jj) Each of the Preliminary Memorandum and the Final
Memorandum, as of its respective date, contains all of the information
that, if requested by a prospective purchaser of any of the Notes,
would be required to be provided to such prospective purchaser pursuant
to Rule 144A(d)(4) under the Act.
(kk) The Notes satisfy the eligibility requirements
of Rule 144A(d)(3) under the Act.
(ll) Neither the Company nor any of the Subsidiaries
nor, to the Company's knowledge, any officer or director purporting to
act on behalf of the Company or any of the Subsidiaries has at any
time: (i) made any contributions to any candidate for political office,
or failed to disclose fully any such contributions, in violation of
law, (ii) made any payment of funds to, or received or retained any
funds from, any state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public
duties, other than payments required or allowed by applicable law,
(iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977, (iv) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment or (v) engaged in
any transaction, maintained any bank account or used any corporate
funds except for transactions, bank accounts and funds which have been
and are reflected in the normally maintained books and records of the
Company and the Subsidiaries.
(mm) Except as disclosed in the Preliminary
Memorandum or the Final Memorandum, there are no material outstanding
loans or advances or material guarantees of indebtedness by the Company
or any of its Subsidiaries to or for the benefit of any of the officers
or directors of the Company or any of its Subsidiaries or any of the
members of the families of any of them.
(nn) Neither the Company nor any of the Subsidiaries
has engaged or retained any person, other than NatWest Capital Markets
Limited and McDonald & Company Securities, Inc. (the "Initial
Purchasers"), to act as a financial advisor, underwriter or placement
agent in connection with the issuance of any of the Notes and, except
for the fees and expenses payable in connection with the issuance of
the Notes as described in the Final Memorandum, no person other than
the Initial Purchasers has the right to receive a material amount of
financial advisory, underwriting, placement, finder's or similar fees
in connection with, or as a result of, the issuance of the Notes and
the purchase of the Notes by the Initial Purchasers or the consummation
of the other transactions contemplated hereby.
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<PAGE> 12
3. PURCHASE, SALE AND DELIVERY OF THE NOTES. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers agree, to
purchase from the Company the principal amount of Notes set forth opposite their
respective names on Schedule 1 hereto at 97.25% of their principal amount. One
or more certificates in definitive form for the Notes that the Initial
Purchasers have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as each of the Initial
Purchasers requests upon notice to the Company at least 48 hours prior to the
Closing Date, shall be delivered by or on behalf of the Company to the Initial
Purchasers, against payment by or on behalf of such Initial Purchasers of the
purchase price therefor by wire transfer of same-day funds to such account or
accounts as the Company shall specify prior to the Closing Date, or by such
means as the parties hereto shall agree prior to the Closing Date. Such delivery
of and payment for the Notes shall be made at the offices of Jones, Day, Reavis
& Pogue in New York, New York on April 1, 1998, or at such other place, time or
date as the Initial Purchasers, on the one hand, and the Company, on the other
hand, may agree upon, such time and date of delivery against payment being
herein referred to as the "Closing Date." The Company will make such certificate
or certificates for the Notes available for inspection and packaging by the
Initial Purchasers at such place as designated by the Initial Purchasers at
least 24 hours prior to the Closing Date.
4. OFFERING BY THE INITIAL PURCHASERS. Subject to the terms of
this Agreement, the Initial Purchasers propose to make an offering of the Notes
at the price and upon the terms set forth in the Final Memorandum, as soon as
practicable after this Agreement is entered into and as in the judgment of the
Initial Purchasers is advisable.
5. COVENANTS OF THE COMPANY AND THE SUBSIDIARIES. The Company
and each of the Subsidiaries covenants and agrees with the Initial Purchasers
that:
(a) The Company will not amend or supplement the
Final Memorandum or any amendment or supplement thereto of which the
Initial Purchasers shall not previously have been advised and furnished
a copy for a reasonable period of time prior to the proposed amendment
or supplement and as to which the Initial Purchasers shall not have
consented.
(b) The Company will cooperate with the Initial
Purchasers in arranging for the qualification of the Notes for offering
and sale under the securities or "Blue Sky" laws of such jurisdictions
as the Initial Purchasers may designate and will continue such
qualifications in effect for as long as may be necessary to complete
the resale of the Notes by the Initial Purchasers; provided, however,
that in connection therewith, the Company shall not be required to
qualify as a foreign corporation or as a dealer in securities or to
execute a general consent to service of process in any jurisdiction
where it is not then so subject or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is otherwise
not subject.
(c) If, at any time prior to the completion of the
distribution by the Initial Purchasers of the Notes, any event occurs
or information becomes known as a result of which the Final Memorandum
as then amended or supplemented would, in the
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<PAGE> 13
judgment of the Company or in the reasonable opinion of counsel for the
Initial Purchasers, include any untrue statement of a material fact, or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, or if for any other reason it is necessary at any time to
amend or supplement the Final Memorandum to comply with applicable law,
the Company will promptly notify the Initial Purchasers thereof and
will prepare, at the expense of the Company, an amendment or supplement
to the Final Memorandum that corrects such statement or omission or
effects such compliance.
(d) The Company will, without charge, provide to the
Initial Purchasers and to counsel for the Initial Purchasers as many
copies of the Preliminary Memorandum and the Final Memorandum or any
amendment or supplement thereto as the Initial Purchasers may
reasonably request.
(e) The Company will apply the net proceeds from the
sale of the Notes substantially as set forth under "Use of Proceeds" in
the Final Memorandum.
(f) For a period of five years after the Closing
Date, (x) the Company will furnish to the Initial Purchasers copies of
all reports and other communications (financial or otherwise) furnished
by the Company to the Notes Trustee, the holders of the Notes and, as
soon as available, copies of all annual reports, quarterly reports and
current reports filed with the Commission on Forms 10-K, 10-Q and 8-K,
or such other similar forms as may be designated by the Commission and
(y) the Company will make available, upon request, to any seller of
Notes the information specified in Rule 144A(d)(4) under the Act,
unless the Company is then subject to Section 13 or 15(d) of the
Exchange Act.
(g) [Omitted]
(h) None of the Company, the Subsidiaries or any of
their Affiliates will sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any "security" (as defined in the
Act) which could be integrated with the sale of any of the Notes in a
manner which would require the registration under the Act of any of the
Notes.
(i) None of the Company nor the Subsidiaries will
engage in any form of "general solicitation" or "general advertising"
(as those terms are used in Regulation D under the Act) in connection
with the offering of the Notes or in any manner involving a public
offering of the Notes within the meaning of Section 4(2) of the Act.
(j) For a period of 180 days from the date of the
Final Memorandum, the Company and the Subsidiaries will not offer for
sale, sell, contract to sell or otherwise dispose of, directly or
indirectly, or file a registration statement for, or announce any
offer, sale, contract for sale of or other disposition of any debt
securities issued or guaranteed by the Company or any of its
Subsidiaries that are substantially similar to the Notes (other than
the Exchange Notes) without the prior written consent of the Initial
Purchasers.
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<PAGE> 14
(k) During the period from the Closing Date until two
years after the Closing Date, without the prior written consent of the
Initial Purchasers, the Company and the Subsidiaries will not, and will
not permit any of their affiliates (as defined in Rule 144 under the
Act) to, resell any of the Notes that have been reacquired by them,
except for Notes purchased by the Company or any of its affiliates and
resold in a transaction registered under the Act.
(l) In connection with the offering of the Notes,
until the Initial Purchasers shall have notified the Company of the
completion of the resale of the Notes by them, the Company and its
Subsidiaries will not, and will cause their affiliated purchasers (as
defined in the Exchange Act) not to, either alone or with one or more
other persons, bid for or purchase, for any account in which it or any
of its affiliated purchasers has a beneficial interest, any Notes, or
attempt to induce any person to purchase any Notes; and will not, and
will cause its affiliated purchasers not to, make bids or purchase for
the purpose of creating actual, or apparent, active trading in or of
raising the price of the Notes.
(m) Except as contemplated by the Final Memorandum,
the Company and the Subsidiaries will not take any action prior to the
execution and delivery of the Indenture which, if taken after such
execution and delivery, would have violated any of the covenants
contained therein.
(n) The Company and the Subsidiaries will not take
any action prior to Closing Date which would require the Final
Memorandum to be amended or supplemented pursuant to Section 5(c).
(o) Prior to the Closing Date, the Company and the
Subsidiaries will not issue any press release or other communication
directly or indirectly or hold any press conference with respect to the
Company, its condition, financial or otherwise, or earnings, business
affairs or business prospects, without the prior written consent of the
Initial Purchasers, unless in the judgment of the Company and its
counsel, after notification to the Initial Purchasers, such press
release or communication is required by law.
(p) The Company will use its best efforts to permit
the Notes to be designated PORTAL securities in accordance with the
rules and regulations adopted by the NASD relating to trading in the
Private Offerings, Resales and Trading through Automated Linkages
market (the "Portal Market") and permit the Notes to be eligible for
clearance and settlement through the Depository Trust Company ("DTC").
(q) The Company and each of the Subsidiaries will use
their best efforts and will assist counsel for the Initial Purchasers,
to obtain title insurance policies, in each case in form and content
reasonably satisfactory to the Initial Purchasers, for each of the
Pledged Properties as soon as reasonably practicable after the Closing
Date. It is understood that such title insurance policies will reflect
customary exceptions which are acceptable to mortgage lenders generally
and that any encumbrance on a mortgaged property which existed at the
time the Company or one of its Subsidiaries acquired the property shall
be acceptable. Each policy obtained shall be in an amount not less than
the
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<PAGE> 15
cost basis of the applicable property as of January 25, 1998 (minus any
land which has been sold since that date). The Company and each of the
Subsidiaries agree that the Initial Purchasers and any subsequent
holders of the Notes will suffer damages if such title insurance
policies are not obtained for all of the Pledged Properties by the 60th
day following the Closing Date, and further agree that it would not be
feasible to ascertain the extent of such damages with precision.
Accordingly, the Company and the Subsidiaries agree to pay, as
liquidated damages and as the sole and exclusive remedy therefor,
additional interest on the Notes ("Title Insurance Additional
Interest") at the rate of 0.50% per annum commencing on the 61st day
after the Closing Date. The Title Insurance Additional Interest rate on
the Notes pursuant to clause (i) above shall be in addition to any
Notes Additional Interest (as defined in the Registration Rights
Agreement) that may be accruing pursuant to the Registration Rights
Agreement. Title Insurance Additional Interest on the Notes will cease
to accrue upon the earlier to occur of (A) date on which a title
insurance policy, in form and content reasonably satisfactory to the
Initial Purchasers, for the last of the Pledged Properties is delivered
to and received by the Initial Purchasers or (B) the date on which the
last of the Pledged Properties has been sold.
The Company shall pay any Title Insurance Additional
Interest due on the Notes by depositing with the paying agent (which
shall not be the Company for these purposes) for the Notes, in trust,
for the benefit of the holders thereof, prior to 11:00 A.M. on the next
interest payment date specified by the Indenture (or such other
indenture), sums sufficient to pay the Title Insurance Additional
Interest then due. Any amounts of Title Insurance Additional Interest
due pursuant to this clause (q) will be payable in cash, semi-annually
on each interest payment date specified by the Indenture (or such other
indenture) to the record holders entitled to receive the interest
payment to be made on such date, commencing with the first such date
occurring after any such Title Insurance Additional Interest commences
to accrue. The amount of Title Insurance Additional Interest will be
determined by multiplying the applicable Title Insurance Additional
Interest rate by the principal amount of the affected Notes of such
holders, multiplied by a fraction, the numerator of which is the number
of days such Title Insurance Additional Interest rate was applicable
during such period (determined on the basis of a 360-day year comprised
of twelve 30-day months and, in the case of a partial month, the actual
number of days elapsed), and the denominator of which is 360.
6. EXPENSES. The Company and the Subsidiaries agree, jointly
and severally, to pay all costs and expenses incident to the performance of
their obligations under this Agreement, whether or not the transactions
contemplated herein are consummated or this Agreement is terminated pursuant to
Section 11 hereof, including all costs and expenses incident to (i) the
printing, word processing or other production of documents with respect to the
transactions contemplated hereby, including any costs of printing the
Preliminary Memorandum and the Final Memorandum and any amendment or supplement
thereto, and any "Blue Sky" memoranda, (ii) all arrangements relating to the
delivery to the Initial Purchasers of copies of the foregoing documents, (iii)
the fees and disbursements of counsel, accountants and any other experts or
advisors retained by the Company, (iv) preparation (including printing),
issuance and delivery to the Initial Purchasers of the Notes, (v) the
qualification of the Notes under state securities and "Blue Sky" laws, including
filing fees and reasonable fees and disbursements of
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<PAGE> 16
counsel for the Initial Purchasers relating thereto, (vi) expenses in connection
with any meetings with prospective investors in the Notes, (vii) fees and
expenses of the Trustee (including reasonable fees and expenses of counsel),
(viii) all expenses and listing fees incurred in connection with the application
for quotation of the Notes on the PORTAL Market, (ix) all expenses incurred in
connection with the approval of the Notes for book-entry transfer by DTC, (x)
the reasonable fees and disbursements of legal counsel retained by the Initial
Purchasers, (xi) all other reasonable out-of-pocket expenses of the Initial
Purchasers (including, without limitation, all road show expenses) incurred by
the Initial Purchasers or any of their affiliates in connection with, or arising
out of, the offering and sale of the Notes and (xii) any fees charged by
investment rating agencies for the rating of the Notes. If the sale of the Notes
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 7 hereof is not satisfied,
because this Agreement is terminated pursuant to Section 11 or because of any
failure, refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on their part to be performed or
satisfied hereunder (other than solely by reason of a default by the Initial
Purchasers of their obligations hereunder after all conditions hereunder have
been satisfied in accordance herewith), the Company agrees to promptly reimburse
the Initial Purchasers upon demand for all out-of-pocket expenses (including all
reasonable fees, disbursements and charges of Jones, Day, Reavis & Pogue) that
shall have been incurred by the Initial Purchasers in connection with the
proposed purchase and sale of the Notes.
7. CONDITIONS OF THE INITIAL PURCHASERS'
OBLIGATIONS. The obligation of the Initial Purchasers to purchase and pay for
the Notes shall be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall
have received the opinion, dated as of the Closing Date and addressed
to the Initial Purchasers, of Choate, Hall & Stewart, counsel for the
Company, in form and substance reasonably satisfactory to counsel to
the Initial Purchasers, dated the Closing Date, substantially to the
effect that:
(i) The Company and each of the Significant
Subsidiaries has been duly organized, is validly existing and is in
good standing as a corporation, limited partnership or limited
liability company, as the case may be, under the laws of its
jurisdiction of incorporation or formation, with all requisite
corporate or partnership power and authority to own, lease and operate
its properties and conduct its business as, to such counsel's
knowledge, now conducted, and as described in the Final Memorandum;
each of the Company and the Significant Subsidiaries is duly qualified
to do business as a foreign corporation, limited partnership or limited
liability company in good standing in those jurisdictions set forth on
an annex to such opinion.
(ii) To such counsel's knowledge, the Company,
directly or indirectly, owns all of the outstanding capital stock or
other equity interests of the Significant Subsidiaries. The Company's
authorized capital stock is as set forth in the Offering Memorandum. To
such counsel's knowledge, all of the outstanding shares of capital
stock of the corporate Significant Subsidiaries as of the Closing Date
are duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights; except as set forth in the Final Memorandum, to the
knowledge of such counsel, there are no (i) options, warrants or other
rights to purchase
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<PAGE> 17
from the Significant Subsidiaries, (ii) agreements or other obligations
of the Significant Subsidiaries to issue or (iii) other rights to
convert any obligation into, or exchange any securities for, shares of
capital stock of, or other equity securities in, the Significant
Subsidiaries outstanding.
(iii) The Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under the
Notes. The Global Note (as such term is defined in the Indenture) is in
the form contemplated by the Indenture. The Global Note has been duly
and validly authorized, executed and delivered by the Company and, when
authenticated by the Notes Trustee in accordance with the provisions of
the Indenture and when delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will
constitute valid and legally binding obligations of the Company, will
be entitled to the benefits of the Indenture and will be enforceable
against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer or conveyance or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether the issue of enforceability
is considered in a proceeding in equity or at law).
(iv) The Company and each applicable Significant
Subsidiary has all requisite corporate or partnership power and
authority to execute, deliver and perform their obligations under the
Indenture. The Indenture meets the requirements for qualification under
the TIA. The Indenture has been duly and validly authorized, executed
and delivered by the Company and each applicable Significant Subsidiary
and constitutes a valid and legally binding agreement of the Company
and each applicable Significant Subsidiary, enforceable against the
Company and each applicable Significant Subsidiary in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer or
conveyance or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
(v) The Exchange Notes and the Private Exchange Notes
have been duly and validly authorized by the Company, and when the
Exchange Notes have been duly executed and delivered by the Company and
authenticated by the Notes Trustee in accordance with the terms of the
Registration Rights Agreement and the Indenture, will constitute the
valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture, and enforceable against the Company in
accordance with their terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, fraudulent
transfer or conveyance or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law);
(vi) The Company and each applicable Significant
Subsidiary has all requisite corporate or partnership power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized, executed and delivered by the Company
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<PAGE> 18
and each applicable Significant Subsidiary and constitutes a valid and
legally binding agreement of the Company and each applicable
Significant Subsidiary enforceable against the Company and each
applicable Significant Subsidiary in accordance with its terms, except
(A) as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer or conveyance or other
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law), and
(B) that any rights to indemnity or contribution thereunder may be
limited by federal or state securities laws or public policy
considerations.
(vii) Each applicable Significant Subsidiary has all
requisite corporate or partnership power and authority to execute,
deliver and perform its obligations under its respective Note
Guarantee. Each Note Guarantee has been duly and validly authorized,
executed and delivered by the applicable Significant Subsidiary and
constitutes a valid and legally binding agreement of such Significant
Subsidiary enforceable against such applicable Significant Subsidiary
in accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, fraudulent
transfer or conveyance or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
(viii) Each applicable Significant Subsidiary
providing security for the Notes has all requisite corporate or
partnership and authority to execute, deliver and perform its
obligations under its respective Mortgages. Each Mortgage has been duly
and validly authorized, executed and delivered by the applicable
Significant Subsidiary.
(ix) The Company and each applicable Significant
Subsidiary has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. This Agreement has
been duly and validly authorized, executed and delivered by the Company
and each applicable Significant Subsidiary.
(x) No consent, approval, authorization or order of
any court or governmental agency or body or, to the knowledge of such
counsel, third party is required for the execution, delivery or
performance by the Company or any applicable Significant Subsidiary of
this Agreement, the Notes, the Exchange Notes, the Note Guarantees, the
Mortgages, the Registration Rights Agreement or the Indenture or the
consummation by the Company or any of the applicable Significant
Subsidiaries of the transactions contemplated hereby or thereby that
are to be completed prior to or on the date hereof, except such as have
been obtained or disclosed in the Final Memorandum and such as may be
required under state securities or "Blue Sky" laws in connection with
the purchase and resale of the Notes by the Initial Purchasers and such
as may be necessary in connection with the Mortgages and any security
interests provided to the Notes Trustee for the benefit of the holders
of the Notes. Such counsel may note that the Company will be required
to make certain securities law filings following the Closing Date in
connection with the transactions contemplated hereby.
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<PAGE> 19
(xi) The execution, delivery and performance by the
Company and the applicable Significant Subsidiaries of this Agreement,
the Notes, the Exchange Notes, the Private Exchange Notes, the
Mortgages, the Note Guarantees, the Indenture and the Registration
Rights Agreement and the consummation by the Company and the applicable
Significant Subsidiaries of the transactions contemplated hereby and
thereby, and the fulfillment of the terms thereof, will not conflict
with or constitute or result in a breach of or a default under (or an
event which with notice or passage of time or both would constitute a
default under) or violation of any of (i) to the knowledge of such
counsel and assuming that the net proceeds of the Notes will be used as
set forth in the Final Memorandum and that, except as indicated in the
Final Memorandum, all credit facilities and loan agreements and related
documents of the Company and the Significant Subsidiaries will be paid
in full (including any applicable prepayment penalties), and terminated
as of the Closing Date, the terms or provisions of any Contract to
which the Company or the applicable Significant Subsidiary is a party
or to which it is bound, except such conflicts, breaches, defaults or
violations, that would not, individually or in the aggregate, have a
Material Adverse Effect, (ii) the certificate of incorporation or
by-laws (or similar organizational document) of the Company or any of
the Significant Subsidiaries, or (iii) to the knowledge of such
counsel, any statute, judgment, decree, order, rule or regulation
applicable to the Company or any of the Significant Subsidiaries or any
of their respective properties or assets except such conflicts,
breaches, defaults or violations that would not, individually or in the
aggregate, have a Material Adverse Effect.
(xii) Neither the Company nor any of the applicable
Significant Subsidiaries is or immediately after the sale of the Notes
to be sold hereunder and the application of the proceeds from such sale
(as described in the Final Memorandum under the caption "Use of
Proceeds") will be an "investment company" or a company controlled by
an investment company within the meaning of the Investment Company Act
of 1940, as amended, and the rules and regulations thereunder.
(xiii) The Notes, the Exchange Notes, the Note
Guarantees, the Mortgages, the Registration Rights Agreement and the
Indenture conform in all material respects to the descriptions thereof
in the Final Memorandum.
(xiv) To the knowledge of such counsel, no holder of
securities of the Company nor any of the Subsidiaries will be entitled
to have such securities registered under the registration statements
required to be filed by the Company pursuant to the Registration Rights
Agreement other than as expressly permitted thereby.
(xv) The Notes satisfy the eligibility requirements
of Rule 144A(d)(3) under the Act.
(xvi) No registration under the Act of the Notes and
no qualification of the Indenture under the TIA is required in
connection with the sale of the Notes to the Initial Purchasers or the
initial resale of the Notes by the Initial Purchasers in the manner
contemplated by this Agreement and the Final Memorandum, it being
understood that no opinion is expressed as to any subsequent resale of
the Notes in each case assuming (i) that the purchasers who buy such
Notes in the initial resale thereof are qualified institutional buyers
as defined in Rule 144A promulgated under the Act ("QIBs"), and
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<PAGE> 20
acquire the Notes in a transaction pursuant to Rule 144A, and (ii) the
accuracy of the representations and warranties of the Initial
Purchasers and due performance by the Initial Purchasers of the
agreements in each case as set forth in Section 8 hereof.
In rendering such opinion, such counsel may (A) state
that such counsel's opinion is limited to the federal law of the United
States and the laws of the Commonwealth of Massachusetts and the
General Corporation Law of the State of Delaware, (B) rely as to
matters involving the application of laws of the State of New York,
upon the opinion of Jones, Day, Reavis & Pogue, counsel for the Initial
Purchasers and (C) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and
public officials and the representations and warranties contained in
this Agreement. It is understood that such counsel need not express any
opinion as to the content of or effect on the Company or any
Subsidiary, or the application to this Agreement or any other agreement
contemplated hereby or the transactions contemplated hereby or thereby
of any law, statute, rule or regulation relating to the acquisition,
development, sale, financing, registration, licensing or similar matter
relating to real estate or timeshare interests. Such counsel has not
acted, and does not act, as counsel to the Company or any of its
Subsidiaries in connection with any of such matters. In addition to the
foregoing, such counsel shall state that is has participated in
conferences with executive officers and other representatives of the
Company, representatives of the Company's independent public
accountants, the Initial Purchasers and counsel for the Initial
Purchasers, at which conferences the contents of the Final Memorandum
and related matters were discussed, and although such counsel has not
independently verified and has not passed upon or assumed any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Final Memorandum, and on the basis of the
foregoing no facts have come to such counsel's attention to lead it to
believe that the Final Memorandum and any further amendments or
supplements thereto as of their respective dates and on the date of
such opinion letter contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact, necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading (it being understood that such
counsel need not express any view with respect to the financial
statements (including the notes thereto), financial statement schedules
and the other financial data included in the Final Memorandum). The
opinion of Choate, Hall & Stewart described in this Section shall be
rendered to the Initial Purchasers at the request of the Company and
shall so state therein.
(b) On the Closing Date, the Initial Purchasers shall
have received opinions, in form and substance reasonably satisfactory
to the Initial Purchasers, dated as of the Closing Date and addressed
to the Initial Purchasers:
(i) of counsel licensed in each state in which any of
the Pledged Properties are located. Such opinions shall cover such
matters as are reasonably requested by the Initial Purchasers,
including the following: (A) each Mortgage, when filed in the
appropriate recording office, will constitute a valid first lien on the
Pledged Property identified therein, subject only to the lien of taxes
and assessments not yet due and payable, and such covenants,
conditions, and restrictions of record (other than liens for the
payment of money) as existed at the time of acquisition thereof by the
Guarantor
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<PAGE> 21
Subsidiary executing the Mortgage and such other covenants, conditions,
and restrictions of record thereafter executed by, or consented to by,
the Subsidiary Guarantor executing the Mortgage which do not adversely
affect the marketability of title to, or the value of, such Pledged
Property; (B) the Mortgages in such state are the legal, valid and
binding obligations of the Subsidiary Guarantors executing the same,
enforceable in accordance with their terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent transfer or conveyance or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law); (C) execution of the
Mortgages does not violate the usury laws of the state in which the
Pledged Properties are located; (D) the execution, delivery and
performance by the Subsidiary Guarantors under the Mortgages do not
conflict with, or constitute a default, violation or breach of, any
applicable law or governmental rule or regulation, or, to the best of
counsel's knowledge, any order, injunction or decree of any court or
governmental instrumentality applicable to the Subsidiary Guarantors or
the Pledged Properties; (E) no fees, taxes or other charges, including,
without limitation, intangible, documentary, stamp, mortgage, transfer
or recording taxes or similar charges are payable to such state or to
any jurisdiction therein solely on account of the creation of the
indebtedness and obligations secured by the Mortgages, the creation of
the liens thereunder, or the filing, recording or registration of the
Mortgages, except for insubstantial filing or recording fees; (F) the
Mortgages are in proper form for filing for record with the applicable
filing office; (G) upon filing for record of the Mortgages in the real
property records of the counties in which the Pledged Properties are
located, the mortgagee thereof will have a mortgage lien upon the
Pledged Properties; (H) with respect to the opinion of Montana counsel,
that Bluegreen Corporation of Montana is duly organized, validly
existing, and in good standing under the laws of Montana, has full
power and authority to execute, deliver and perform the Mortgages, that
the execution, delivery and performance of the Mortgages have been duly
authorized and that the persons executing the Mortgages have been duly
authorized to do so; and (H) with respect to the opinion of Idaho
counsel, that Bluegreen Corporation of Montana is qualified to do
business as a foreign corporation in Idaho and is in good standing
under the laws of Idaho.
In rendering such opinions, such counsel may (A)
state that such counsel's opinion is limited to the federal law of the
United States and the laws of the states in which the Pledged
Properties are located, (B) assume (except as to any Subsidiary
Guarantor organized under the laws of such state) that the Subsidiary
Guarantor is validly existing under the laws of the state of its
organization, has full power and authority to execute, deliver and
perform the Mortgages, and that the execution, delivery, and
performance of the Mortgages has been duly authorized, and that the
persons executing the Mortgages on behalf of the Subsidiary Guarantor
has been duly authorized to do so, (C) as to matters of fact, to the
extent they deem proper, such counsel may rely upon certificates of
responsible officers of the Company and the Subsidiary Guarantors.
(ii) of Jones, Day, Reavis & Pogue counsel for the
Initial Purchasers, with respect to certain legal matters relating to
this Agreement and such other related
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<PAGE> 22
matters as the Initial Purchasers may reasonably require. In rendering
such opinion, Jones, Day, Reavis & Pogue shall have received and may
rely upon such certificates and other documents and information as they
may reasonably request to pass upon such matters.
(c) On the Closing Date, the Initial Purchasers shall
have received:
(i) long-form good standing certificates for the
Company and the Subsidiaries dated as of a date within ten (10)
business days prior to the Closing Date, and bring-down good standing
certificates dated the Closing Date;
(ii) Foreign qualification certificates for the
Company and the Subsidiaries dated as of a date within ten (10)
business days prior to the Closing Date, from the Secretary of State of
each State in which any of the Company or the Subsidiaries is required
to be qualified as a foreign corporation.
(d) On the Closing Date, the Initial Purchasers shall
have received the following documents duly authorized, executed and
delivered by each of the parties thereto, in form and substance
satisfactory for counsel to the Initial Purchasers, dated the Closing
Date:
(i) the Note Guarantees;
(ii) the Indenture;
(iii) the Registration Rights Agreement; and
(iv) the Mortgages and such affidavits,
certifications, and documentation as may be
necessary in order to record the Mortgages
in the jurisdictions in which the Pledged
Properties to which they relate are located.
(e) The Initial Purchasers shall have received from
Ernst & Young LLP comfort letters dated the date hereof and the Closing
Date, in form and substance satisfactory to counsel for the Initial
Purchasers, which describe the procedures as the Initial Purchasers may
request and Ernst & Young LLP are willing to perform and report upon.
(f) The representations and warranties of the Company
and the Subsidiaries contained in this Agreement shall be true and
correct on and as of the date hereof and on and as of the Closing Date
as if made on and as of the Closing Date; the statements of the
Company's or any Subsidiaries' officers made pursuant to any
certificate delivered in accordance with the provisions hereof shall be
true and correct on and as of the date made and on and as of the
Closing Date; the Company and the Subsidiaries shall have performed all
covenants and agreements and satisfied all conditions on their part to
be performed or satisfied hereunder at or prior to the Closing Date.
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<PAGE> 23
(g) The sale of the Notes hereunder shall not be
enjoined (temporarily or permanently) on the Closing Date.
(h) The Notes shall have been approved by the NASD
for trading in the PORTAL Market.
(i) There shall not have occurred any invalidation of
Rule 144A under the Act by any court or any withdrawal or proposed
withdrawal of any rule or regulation under the Act or the Exchange Act
by the Commission or any amendment or proposed amendment thereof by the
Commission which in the judgment of the Initial Purchasers would
materially impair the ability of the Initial Purchasers to purchase,
hold or effect resales of the Notes as contemplated hereby.
(j) There shall not have occurred any change, or any
development involving a prospective change, in the general business
affairs, condition (financial or otherwise), prospects or results of
operations, of the Company and the Subsidiaries, taken as a whole, from
that set forth in the Final Memorandum that constitutes, or is
reasonably likely to constitute, a Material Adverse Effect and that
makes it, in the Initial Purchasers' judgment, impracticable to market
the Notes on the terms and in the manner contemplated in the Final
Memorandum.
(k) Subsequent to the date of the most recent
financial statements in the Final Memorandum (exclusive of any
amendment or supplement thereto after the date hereof), the conduct of
the business and operations of the Company and the Subsidiaries shall
not have been interfered with by strike, fire, flood, hurricane,
accident or other calamity (whether or not insured) or by any court or
governmental action, order or decree, and, except as otherwise stated
therein, the properties of the Company and the Subsidiaries shall not
have sustained any loss or damage (whether or not insured) as a result
of any such occurrence, except any such interference, loss or damage
which would not, individually or in the aggregate, have a Material
Adverse Effect.
(l) No securities of the Company or any Subsidiary
shall have been downgraded or placed on any "watch list" for possible
downgrading by any nationally recognized statistical rating
organization.
(m) The Initial Purchaser shall have received a
certificate of the Company, dated the Closing Date, signed by its
President and the Chief Financial Officer, to the effect that:
(i) The representations and warranties of the Company
and the Subsidiaries contained in this Agreement are true and correct
as of the date hereof and as of the Closing Date, and the Company and
the Subsidiaries have performed all covenants and agreements and
satisfied all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or
since the date of the most recent financial statements in the Final
Memorandum (exclusive of any amendment
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<PAGE> 24
or supplement thereto after the date hereof), no event or events have
occurred, no information has become known and no condition exists that,
individually or in the aggregate, has had, or could reasonably be
expected to have, a Material Adverse Effect; and
(iii) Neither the Preliminary Memorandum as of the
date thereof nor the Final Memorandum nor any amendment or supplement
thereto as of the date thereof and, in the case of the Final Memorandum
and any amendment or supplement thereto, at all times subsequent
thereto up to the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(n) The Initial Purchasers shall have received
certificates from:
(i) the corporate clerk of the Company, dated the
Closing Date, attaching certified copies of (A) all resolutions of the
Board of Directors of the Company authorizing the transactions
contemplated by this Agreement, including, without limitation,
approving the offering of the Notes, the entering into this Agreement,
the Indenture and the Registration Rights Agreement and (B) the
articles of organization and by-laws of the Company and certifying the
incumbency, names and true signatures of the officers of the Company;
(ii) the corporate secretary or clerk of each
Guarantor Subsidiary, dated the Closing Date, attaching certified
copies of (A) all resolutions of the Board of Directors or similar
governing body of such Guarantor Subsidiary authorizing the
transactions contemplated by this Agreement, including, without
limitation, approving the execution of the Note Guarantees, the
entering into of this Agreement, the Indenture and the Registration
Rights Agreement and (B) the charter documents and by-laws of such
Guarantor Subsidiary and certifying the incumbency, names and true
signatures of the officers of such Guarantor Subsidiary.
On or before the Closing Date, the Initial Purchasers
and counsel for the Initial Purchasers shall have received such further
documents, opinions, certificates, letters and schedules or instruments relating
to the business, corporate, legal and financial affairs of the Company and the
Subsidiaries as they shall have theretofore reasonably requested from the
Company and the Subsidiaries.
All such documents, opinions, certificates, letters,
schedules or instruments delivered pursuant to this Agreement will comply with
the provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchasers and counsel for the Initial Purchasers. The
Company and the Subsidiaries shall furnish to the Initial Purchasers such
conformed copies of such documents, opinions, certificates, letters, schedules
and instruments in such quantities as the Initial Purchasers shall reasonably
request.
8. OFFERING OF NOTES; RESTRICTIONS ON TRANSFER. Each Initial
Purchaser agrees with the Company that (i) it has not and will not solicit
offers for, or offer or sell, the Notes by
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<PAGE> 25
any form of general solicitation or general advertising (as those terms are used
in Regulation D under the Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Act; (ii) it has and will solicit
offers for the Notes only from, and will offer the Notes only to persons (A)
whom such Initial Purchaser reasonably believes to be QIBs or, if any such
person is buying for one or more institutional accounts for which such person is
acting as fiduciary or agent, only when such person has represented to such
Initial Purchaser that each such account is a QIB, to whom notice has been given
that such sale or delivery is being made in reliance on Rule 144A, and, in each
case, in transactions under and in compliance with Rule 144A and (B) who
received a copy of the Preliminary Memorandum prior to March 12, 1998.
Each Initial Purchaser represents and warrants that it is an
Accredited Investor (as such term is defined in Regulation D under the Act),
with such knowledge and experience in financial and business matters as are
necessary in order to evaluate the merits and risks of an investment in the
Notes. Each Initial Purchaser acknowledges that the Notes have not been
registered under the Act and may only be sold if registered or pursuant to an
exemption. Each Initial Purchaser agrees to comply with the applicable
provisions of Rule 144A and Rule 144 under the Act. Each Initial Purchaser
hereby acknowledges that the Company and, for purposes of the opinions to be
delivered to the Initial Purchasers pursuant to Section 7(a) hereof, counsel to
the Company will rely upon the accuracy and truth of the representations
contained in this Section 8 and each Initial Purchaser hereby consents to such
reliance.
9. INDEMNIFICATION AND CONTRIBUTION. (a) Each of the Company
and the Subsidiaries agrees to indemnify and hold harmless the Initial
Purchasers and their respective affiliates, directors, officers, agents,
representatives, general partners and employees, and each other person, if any,
who controls such Initial Purchaser or its affiliates within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, to the full extent
lawful against any losses, claims, damages, expenses or liabilities (or actions
in respect thereof, including, without, limitation, shareholder derivative
actions and arbitration proceedings) to which any Initial Purchaser or such
other person may become subject under the Act, the Exchange Act or otherwise,
insofar as any such losses, claims, damages, expenses or liabilities (or actions
in respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of any material fact contained in any Memorandum or any
amendment or supplement thereto or any application or other document, or any
amendment or supplement thereto, executed by the Company or any Subsidiary or
based upon written information furnished by or on behalf of the Company or any
Subsidiary filed with any securities association or securities exchange (each an
"Application"); (ii) the omission or alleged omission to state, in any
Memorandum or any amendment or supplement thereto or any Application, a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which made, not misleading; or (iii) any breach
of any of the representations and warranties of the Company or any Subsidiary
set forth in this Agreement, the Indenture, the Registration Rights Agreement,
the Mortgages, and the Note Guarantees, and, subject to the provisions thereof,
will reimburse, as incurred, the Initial Purchasers and each such other person
for any reasonable legal or other expenses incurred by the Initial Purchasers or
such other person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, neither the Company nor any
Subsidiary will be liable in any such case to the extent that any such loss,
claim, damage, or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission
25
<PAGE> 26
made in any Memorandum or any amendment or supplement thereto or any Application
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchasers specifically for use therein.
This indemnity agreement will be in addition to any liabilities or obligations
that the Company or any Subsidiary may otherwise have to the indemnified
parties. Subject to Section 9(c), neither the Company nor any Subsidiary shall
not be liable under this Section 9 for any settlement of any claim or action
effected without their prior consent, which shall not be unreasonably withheld.
The Company and the Subsidiaries shall not, without the prior written consent of
the Initial Purchasers, effect any settlement or compromise of any pending or
threatened proceeding in respect of which the Initial Purchasers are or could
have been a party, or indemnity could have been sought hereunder by the Initial
Purchasers, unless such settlement (A) includes an unconditional written release
of the Initial Purchasers in form and substance reasonably satisfactory to the
Initial Purchasers, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of the Initial Purchasers.
(b) The Initial Purchasers severally and not jointly agree to
indemnify and hold harmless the Company, the Subsidiaries, their
directors, officers, affiliates, agents, representatives and employees
and each person, if any, who controls the Company or any Subsidiary
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act to the fullest extent lawful against any losses, claims,
damages, expenses or liabilities (or actions in respect thereof,
including, without limitation, shareholder derivative suits and
arbitration proceedings) to which the Company, any Subsidiary or any
such other person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact
contained in any Memorandum or any amendment or supplement thereto or
any Application, or (ii) the omission or the alleged omission to state
therein a material fact required to be stated in any Memorandum or any
amendment or supplement thereto or any Application, or necessary to
make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company or on
behalf of the Initial Purchasers specifically for use therein; and
subject to the limitation set forth immediately preceding this clause,
will reimburse, as incurred, any reasonable legal or other expenses
incurred by the Company, any Subsidiary, or any such other person in
connection with investigating or defending against or appearing as a
third party witness in connection with any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to
any liabilities or obligations that the Initial Purchasers may
otherwise have to the indemnified parties. Subject to Section 9(c), the
Initial Purchasers shall not be liable under this Section 9 for any
settlement of any claim or action effected without their written
consent, which shall not be unreasonably withheld. The Initial
Purchasers shall not, without the prior written consent of the Company,
effect any settlement or compromise of any pending or threatened
proceeding in respect of which the Company or the Subsidiaries are or
could have been a party, or indemnity could have been sought hereunder
by the Company or the Subsidiaries, unless such settlement (A) includes
an unconditional written release of the Company and the Subsidiaries,
in form and substance
26
<PAGE> 27
reasonably satisfactory to such person, from all liability on claims
that are the subject matter of such proceeding and (B) does not include
any statement as to an admission of fault, culpability or failure to
act by or on behalf of the Company or the Subsidiaries.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such
indemnified party is entitled to indemnification under this Section 9,
such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Section 9, notify the
indemnifying party of the commencement thereof in writing; but the
omission to so notify the indemnifying party (i) will not relieve it
from any liability under paragraph (a) or (b) above unless and to the
extent such failure results in the forfeiture by the indemnifying party
of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraphs
(a) and (b) above. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, (ii) the defendants in any
such action include both the indemnified party and the indemnifying
party and the indemnified party shall have been advised by counsel that
there may be one or more legal defenses available to it and/or other
indemnified parties that are different from or additional to those
available to the indemnifying party, or (iii) the indemnifying party
shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a
reasonable time after receipt by the indemnifying party of notice of
the institution of such action, then, in each such case, the
indemnifying party shall not have the right to direct the defense of
such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by
such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under
this Section 9 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party
in connection with the defense thereof, unless (i) the indemnified
party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood,
however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel
(in addition to local counsel) in any one action or separate but
substantially similar actions in the same jurisdiction arising out of
the same general allegations or circumstances designated by the Initial
Purchaser in the case of paragraph (a) of this Section 9 or either the
Company or any of the Subsidiaries in the case of paragraph (b) of this
Section 9, representing the indemnified parties under such paragraph
(a) or paragraph (b), as the case may be, who are parties to such
action or actions) or (ii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the
expense of the indemnifying party. After such notice from the
27
<PAGE> 28
indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the prior written
consent of the indemnifying party, unless such indemnified party waived
in writing its rights under this Section 9, in which case the
indemnified party may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 9 is unavailable to an
indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party,
in order to provide for just and equitable contribution, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i)
the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party on the other from the offering
of the Notes or (ii) if the allocation provided by the foregoing clause
(i) is not permitted by applicable law, not only such relative benefits
but also the relative fault of the indemnifying party or parties on the
one hand and the indemnified party on the other in connection with the
statements or omissions or alleged statements or omissions or breaches
that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by the
Company and the Subsidiaries on the one hand and the Initial Purchasers
on the other shall be deemed to be in the same proportion as the total
proceeds from the offering of the Notes (net of commissions and before
deducting expenses) received by the Company or any Subsidiary bears to
the total discounts and commissions received by the Initial Purchasers.
The relative fault of the parties shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or any Subsidiary
on the one hand, or the Initial Purchasers on the other, the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission or alleged statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company, the Subsidiaries and the Initial Purchasers
agree that it would not be equitable if the amount of such contribution
were determined by pro rata or per capita allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), neither
Initial Purchaser shall be obligated to make contributions hereunder
that in the aggregate exceed the total discounts, commissions and other
compensation received by such Initial Purchaser under this Agreement,
less the aggregate amount of any damages that such Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged
untrue statements or the omissions or alleged omissions to state a
material fact, and no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if
any, who controls an Initial Purchaser within the meaning of Section 15
of the Act or Section 20 of the Exchange Act shall have the same rights
to contribution as the Initial Purchasers, and each director of the
Company or any Subsidiary, each officer of the Company or any
Subsidiary and each person, if any, who controls the Company or any
Subsidiary within the meaning of Section 15 of the Act
28
<PAGE> 29
or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company and such Subsidiary.
10. SURVIVAL CLAUSE. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, the Subsidiaries, their respective officers and the Initial Purchasers
set forth in this Agreement or made by or on behalf of them pursuant to this
Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, the Subsidiaries, any of
their respective officers or directors, the Initial Purchasers or any other
person referred to in Section 9 hereof and (ii) delivery of and payment for the
Notes. The respective agreements, covenants, indemnities and other statements
set forth in Sections 6, 9 and 15 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
11. TERMINATION. (a) This Agreement may be terminated in the
sole discretion of the Initial Purchasers by notice to the Company given on or
prior to the Closing Date in the event that the Company shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder at or prior thereto or, if at or
prior to the Closing Date any of the following shall have occurred:
(i) any of the Company or the Subsidiaries shall have
sustained any loss or interference with respect to its businesses or
properties from fire, flood, earthquakes, hurricane, accident or other
calamity, whether or not covered by insurance, or from any strike,
labor dispute, slow down or work stoppage or any legal or governmental
proceeding, which loss or interference has had or could be likely to
have a Material Adverse Effect, or there shall have been, in the sole
judgment of the Initial Purchasers, any other event or development
that, individually or in the aggregate, has or could be reasonably
likely to have a Material Adverse Effect (including without limitation
a change in control of the Company or the Subsidiaries), except in each
case as described in the Final Memorandum (exclusive of any amendment
or supplement thereto);
(ii) there shall have occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business, operations or prospects of
the Company and the Subsidiaries, taken as a whole, from that set forth
in the Final Memorandum that is material and adverse and that makes it,
in the sole judgment of the Initial Purchasers, impracticable to market
the Notes on the terms and in the manner contemplated in the Final
Memorandum;
(iii) trading generally shall have been suspended or
materially limited on or by, as the case may be, either of the New York
Stock Exchange or the National Association of Securities Dealers, Inc.
or the setting of minimum prices for trading on such exchange or market
shall have occurred or trading of any securities of the Company or the
Subsidiaries shall have been suspended on any exchange or in any
over-the-counter market;
(iv) a banking moratorium shall have been declared by
New York, Massachusetts, Florida or United States authorities;
29
<PAGE> 30
(v) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign
power, (B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States, (C) any material adverse change
in the financial markets of the United States or (D) any other national
or international calamity or emergency which, in the case of (A), (B),
(C) or (D) above and in the sole judgment of the Initial Purchasers,
makes it impracticable or inadvisable to proceed with the offering or
the delivery of the Notes as contemplated by the Final Memorandum;
(vi) the taking of any action by any federal, state
or local government or agency in respect of its monetary or fiscal
affairs that has a material adverse effect on the financial markets in
the United States, and would, in the sole judgment of the Initial
Purchasers, make it impracticable or inadvisable to market the Notes;
(vii) the proposal, enactment, publication, decree,
or other promulgation of any federal or state statute, regulation, rule
order of any court or other governmental authority which, in the sole
judgment of the Initial Purchasers, would have a Material Adverse
Effect; or
(viii) any securities of the Company or any
Subsidiary shall have been downgraded or placed on any "watch list" for
possible downgrading by any nationally recognized statistical rating
organization.
(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to any other party
except as provided in this Section 11 and Section 10 hereof.
If this Agreement shall be terminated by the Initial
Purchasers because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement or any condition of the purchasers, obligations cannot be
fulfilled, the Company agrees to reimburse the Initial Purchasers for all
out-of-pocket expenses (including the reasonable fees and expenses of their
counsel) reasonably incurred by such Initial Purchasers in connection with this
Agreement or the offering contemplated hereunder; provided, however, that the
Company shall have no obligation under this Section if this Agreement is
terminated by reason of the failure of Initial Purchasers' counsel to deliver
the opinion referred to in Section 7(b). It is understood that, if this
Agreement is terminated pursuant to this Section 11, the Initial Purchasers
shall not have any right to bring a claim against the Company or any Subsidiary
for their benefit of the bargain.
12. INFORMATION SUPPLIED BY THE INITIAL PURCHASERS. The
statements set forth in the last paragraph on the cover page of the Final
Memorandum and paragraphs 5, 6 and 7 under the heading "Plan of Distribution" in
the Final Memorandum (to the extent such statements relate to the Initial
Purchasers) constitute the only information furnished by the Initial Purchasers
to the Company for the purposes of Sections 2(a) and 9 hereof.
30
<PAGE> 31
13. NOTICES. All communications hereunder shall be in writing
and, if sent to the Initial Purchasers, shall be mailed or delivered to (i)
NatWest Capital Markets Limited, 135 Bishopgate, London, EC2M 3XT, United
Kingdom, with a copy to Jones, Day, Reavis & Pogue, 901 Lakeside Avenue,
Cleveland, Ohio 44114, Attention: Christopher M. Kelly, Esq.; if sent to the
Company, shall be mailed or delivered to the Company at Bluegreen Corporation,
5295 Town Center Road, Boca Raton, Florida 33486, with a copy to Choate, Hall &
Stewart, Exchange Place, 53 State Street, Boston, Massachusetts 02109,
Attention: William P. Gelnaw, Esq.
All such notices and communications shall be deemed to have
been duly given: upon successful transmission if given via facsimile; when
delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; and one business day after
being timely delivered to a next-day air courier.
14. SUCCESSORS. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchasers, the Company, the Subsidiaries and
their respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company and the Subsidiaries contained in Section 9 of
this Agreement shall also be for the benefit of any person or persons who
control the Initial Purchasers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and the other persons set forth in Section 9 and
(ii) the indemnities of the Initial Purchasers contained in Section 9 of this
Agreement shall also be for the benefit of the directors and officers of the
Company and the Subsidiaries and any person or persons who control the Company
or any Subsidiary within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and the other persons set forth in Section 9. No purchaser of
Notes from the Initial Purchasers will be deemed a successor because of such
purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
31
<PAGE> 32
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among the
Company, the Guarantor Subsidiaries and the Initial Purchasers.
Very truly yours,
BLUEGREEN CORPORATION
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: Senior Vice President
BLUEGREEN RESORTS MANAGEMENT, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN RESORTS, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN HOLDING CORPORATION
(TEXAS)
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
PROPERTIES OF THE SOUTHWEST ONE, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: Executive Vice President
PROPERTIES OF THE SOUTHWEST, L.P.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: Executive Vice President of Its General Partner,
PROPERTIES OF THE SOUTHWEST ONE, INC.
<PAGE> 33
BLUEGREEN ASSET MANAGEMENT CORPORATION
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CAROLINA LAND, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CORPORATION OF MONTANA
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CORPORATION OF TENNESSEE
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CORPORATION OF THE ROCKIES
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
VIRGINIA LAND & FOREST CORPORATION
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
<PAGE> 34
BLUEGREEN COMMUNITIES, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN RESORTS INTERNATIONAL,
INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
CAROLINA NATIONAL GOLF CLUB, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
LEISURE CAPITAL CORPORATION
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
PROPERTIES OF THE WEST, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
BG/RDI ACQUISITION CORP.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: President
<PAGE> 35
RDI GROUP, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: Secretary
DELLONA ENTERPRISES, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: Secretary
RESORT DEVELOPMENT INTERNATIONAL, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: Secretary
RDI RESORT SERVICES CORPORATION
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: Secretary
RDI RESOURCES, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------
Name: Patrick E. Rondeau
Title: Secretary
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 36
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above
written.
NATWEST CAPITAL MARKETS LIMITED
By: /s/ ALTON IRBY
---------------------------------------
Name: Alton Irby
Title: Director
MCDONALD & COMPANY SECURITIES, INC.
By: /s/ THOMAS W. MOIR, JR.
---------------------------------------
Name: Thomas W. Moir, Jr.
Title: Senior Vice President
<PAGE> 37
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above
written.
NATWEST CAPITAL MARKETS LIMITED
By: /s/ A. Irvy
---------------------------------------
Name: A. Irvy
Title: Director
MCDONALD & COMPANY SECURITIES, INC.
By: /s/ THOMAS W. MOIR, JR.
---------------------------------------
Name: Thomas W. Moir, Jr.
Title: Senior Vice President
<PAGE> 38
SCHEDULE 1
Notes
Initial Purchaser Principal Amount
----------------- ----------------
NatWest Capital Markets Limited..................................$ 55,000,000.00
McDonald & Company Securities, Inc...............................$ 55,000,000.00
Total............................................................$110,000,000.00
<PAGE> 39
SCHEDULE 2
List of Subsidiaries
--------------------
Subsidiary Percentage Number and Type of
Ownership Shares
Bluegreen Asset Management 100% Common
Corp.
Bluegreen Carolina Land, Inc. 100% Common
Bluegreen Communities, Inc. 100% Common
Bluegreen Corporation Great 100% Common
Lakes (WI)
Bluegreen Corporation Gulf- 100% Common
Atlantic
Bluegreen Corporation Mid- 100% Common
Atlantic
Bluegreen Corporation 100% Common
Midland
Bluegreen Corporation of 100% Common
Canada
Bluegreen Corporation of 100% Common
Lake Carroll
Bluegreen Corporation of 100% Common
Michigan
Bluegreen Corporation of 100% Common
Missouri
Bluegreen Corporation of 100% Common
Montana
Bluegreen Corporation of 100% Common
Ohio
Bluegreen Corporation of the 100% Common
Rockies
Bluegreen Corporation of 100% Common
Tennessee
Bluegreen Corporation 100% Common
Southwest
<PAGE> 40
Bluegreen Georgia 100% Common
Corporation
Bluegreen Land and Realty, 100% Common
Inc.
Bluegreen Resorts, Inc. 100% Common
Bluegreen Resorts 100% Common
International, Inc.
Bluegreen Resorts 100% Common
Management, Inc.
BXG Realty Tenn, Inc. 100% Common
Carolina Costal Properties, 100% Common
Inc.
Carolina National Golf Club, 100% Common
Inc.
CDP Realty, Inc. 100% Common
Gulf Atlantic Land & Timber 100% Common
Corporation
Leisure Capital Corporation 100% Common
New England Advertising 100% Common
Corporation
Patten Corporation (DE) 100% Common
Properties of the West, Inc. 100% Common
South Florida Aviation, Inc. 100% Common
Virginia Land & Forest 100% Common
Corporation
Trading Corporation of South 100% Common
Florida
Woodland Acres, Inc. 100% Common
BG/RDI Acquisition 100% Common
Corporation
RDI Group, Inc. 100% Common
Dellona Enterprises, Inc. 100% Common
Resort Development 100% Common
International, Inc.
<PAGE> 41
RDI Realty, Inc. 100% Common
Resort Ownership, Inc. 100% Common
RDI Vacation Club, Inc. 100% Common
RDI Resources, Inc. 100% Common
RDI Vacation Shoppe Travel, 100% Common
Inc.
Properties of the Southwest 100% Common
One, Inc.
Bluegreen Holding Corp. 100% Common
(Texas)
Properties of the Southwest, 100% Partnership Interests
L.P.
Bluegreen Aruba N.V. 50% _______
Bluegreen Receivables 100% Common
Finance Corp. III
Bluegreen Receivables 100% Common
Finance Corp. VI
Bluegreen Receivables 100% Common
Finance Corp. VII
Bluegreen Receivables 100% Common
Finance Corp. VIII
Bluegreen Receivables 100% Common
Finance Corp. IX
<PAGE> 42
ANNEX I
Significant Subsidiaries of the Company
---------------------------------------
Bluegreen Carolina Land, Inc.
Bluegreen Corporation of Montana
Bluegreen Holding Corporation (Texas)
Bluegreen Resorts, Inc.
Properties of the West, Inc.
Properties of the Southwest, L.P.
Bluegreen Corporation of the Rockies
Virginia Land & Forest Corporation
<PAGE> 1
EXHIBIT 3.3
CERTIFICATE OF INCORPORATION
OF
BG/RDI ACQUISITION CORP.
THE UNDERSIGNED, for the purpose of forming a corporation pursuant to
the provisions of the General Corporation Law of the State of Delaware, does
hereby certify as follows:
FIRST: The name of the Corporation is BG/RDI Acquisition Corp.
SECOND: The address of the Corporation's registered office in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington,
County of New Castle, 19801 and the name of the Corporation's registered agent
at such address is The Corporation Trust Company.
THIRD: The purpose for which the Corporation is organized is to engage
in any lawful act or activity for which corporations may be organized under the
General Corporation law of the State of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is 3,000 shares of Common Stock, $.01 par value.
FIFTH: The name and the mailing address of the incorporator is a
follows:
NAME MAILING ADDRESS
---- ---------------
William P. Gelnaw, Jr., Esq. Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109
SIXTH: The Corporation is to have perpetual existence.
<PAGE> 2
SEVENTH: The management of the business and the conduct of the affairs
of the Corporation shall be vested in its Board of Directors. The Directors
shall have concurrent power with the stockholders to make, alter, amend, change,
add to or repeal the By-Laws of the Corporation. Election of Directors need not
be by written ballot unless the By-Laws of the Corporation so provide.
EIGHTH: The Corporation shall indemnify and hold harmless any director,
officer, employee or agent of the Corporation from and against any and all
expenses and liabilities that may be imposed upon r incurred by him in
connection with, or as a result of, any proceeding in which he may become
involved, as a party or otherwise, by reason of the fact that he is or was such
a director, officer, employee or agent of the Corporation, whether or not he
continues to be such at the time such expenses and liabilities shall have been
imposed or incurred, t the fullest extent permitted by the laws of the State of
Delaware, as they may be amended from time to time.
NINTH: No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or knowing
violation of law, (iii) under Section 174 of Title 8 of the General Corporation
Law of the State of Delaware or (iv) for any transaction from which the director
derived an improper personal benefit. If the General Corporation Law of Delaware
is amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director shall be
eliminated or limited to the fullest extent permitted by the General Corporation
Law of Delaware, as so amended from time to time.
Dated: June 9, 1997 /s/ William P. Gelnaw Jr.
--------------------------------------
William P. Gelnaw, Jr., Incorporator
<PAGE> 3
CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE
AND OF REGISTERED AGENT
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation" is
BG/RDI ACQUISITION CORP.
2. The registered office of the corporation within the State of Delaware is
hereby changed to 1013 Centre Road, City of Wilmington 19805, County of New
Castle.
3. The registered agent of the corporation within the State of Delaware is
hereby changed to Corporation Service Company, the business office of which is
identical with the registered office of the corporation as hereby changed.
4. The corporation has authorized the changes hereinbefore set forth by
resolution of its Board of Directors.
Signed on November 19, 1997.
/s/ Patrick E. Rondeau
-----------------------------------
NAME: Patrick E. Rondeau
TITLE: Secretary
<PAGE> 1
EXHIBIT 3.4
BY - LAWS
OF
BG/RDI ACQUISITION CORP.
ARTICLE I
STOCKHOLDERS
l. CERTIFICATES REPRESENTING STOCK. Every holder of stock in
the corporation shall be entitled to have a certificate signed by, or in the
name of, the corporation by the Chairman or Vice-Chairman of the Board of
Directors, if any, or by the President or a Vice-President and by the Treasurer
or an Assistant Treasurer or the Secretary or an Assistant Secretary of the
corporation certifying the number of shares owned by him in the corporation. Any
and all signatures on any such certificate may be facsimiles. In case any
officer, transfer agent, or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is issued, it may
be issued by the corporation with the same effect as if he were such officer,
transfer agent, or registrar at the date of issue.
Whenever the corporation shall be authorized to issue more
than one class of stock or more than one series of any class of stock, and
whenever the corporation shall issue any shares of its stock as partly paid
stock, the certificates representing shares of any such class or series or of
any such partly paid stock shall set forth thereon the statements prescribed by
the General Corporation Law. Any restrictions on the transfer or registration of
transfer of any shares of stock of any class or series shall be noted
conspicuously on the certificate representing such shares.
The corporation may issue a new certificate of stock in place
of any certificate theretofore issued by it, alleged to have been lost, stolen,
or destroyed, and the Board of Directors may require the owner of any lost,
stolen, or destroyed certificate, or his legal representative, to give the
corporation a bond sufficient to indemnify the corporation against any claim
that may be made against it on account of the alleged loss, theft, or
destruction of any such certificate or the issuance of any such new certificate.
<PAGE> 2
2. FRACTIONAL SHARE INTERESTS. The corporation may, but shall
not be required to, issue fractions of a share. If the corporation does not
issue fractions of a share, it shall (l) arrange for the disposition of
fractional interests by those entitled thereto, (2) pay in cash the fair value
of fractions of a share as of the time when those entitled to receive such
fractions are determined, or (3) issue scrip or warrants in registered or bearer
form which shall entitle the holder to receive a certificate for a full share
upon the surrender of such scrip or warrants aggregating a full share. A
certificate for a fractional share shall, but scrip or warrants shall not unless
otherwise provided therein, entitle the holder to exercise voting rights, to
receive dividends thereon, and to participate in any of the assets of the
corporation in the event of liquidation. The Board of Directors may cause scrip
or warrants to be issued subject to the conditions that they shall become void
if not exchanged for certificates representing full shares before a specified
date, or subject to the conditions that the shares for which scrip or warrants
are exchangeable may be sold by the corporation and the proceeds thereof
distributed to the holders of scrip or warrants, or subject to any other
conditions which the Board of Directors may impose.
3. STOCK TRANSFERS. Upon compliance with provisions
restricting the transfer or registration of transfer of shares of stock, if any,
transfers or registration of transfers of shares of stock of the corporation
shall be made only on the stock ledger of the corporation by the registered
holder thereof, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the corporation or with a transfer
agent or a registrar, if any, and on surrender of the certificate or
certificates for such shares of stock properly endorsed and the payment of all
taxes due thereon.
4. RECORD DATE FOR STOCKHOLDERS. For the purpose of
determining the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or the allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion, or exchange of stock
or for the purpose of any other lawful action, the directors may fix, in
advance, a record date, which shall not be more than sixty days nor less than
ten days before the date of such meeting, nor more than sixty days prior to any
other action. If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; the record date for determining
stockholders entitled to express consent to corporate action in writing without
a meeting, when no prior action by the Board of Directors is necessary, shall be
the day on which the first written consent is expressed; and the record date for
determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice of or to
vote at any meeting of stockholders shall apply to any adjournment of the
meeting;
<PAGE> 3
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
5. MEANING OF CERTAIN TERMS. As used herein in respect of the
right to notice of a meeting of stockholders or a waiver thereof or to
participate or vote thereat or to consent or dissent in writing in lieu of a
meeting, as the case may be, the term "share" or "shares" or "share of stock" or
"shares of stock" or "stockholder" or "stockholders" refers to an outstanding
share or shares of stock and to a holder or holders of record of outstanding
shares of stock when the corporation is authorized to issue only one class of
shares of stock, and said reference is also intended to include any outstanding
share or shares of stock and any holder or holders of record of outstanding
shares of stock of any class upon which or upon whom the certificate of
incorporation confers such rights where there are two or more classes or series
of shares of stock or upon which or upon whom the General Corporation Law
confers such right notwithstanding that the certificate of incorporation may
provide for more than one class or series of shares of stock, one or more of
which are limited or denied such rights thereunder; provided, however, that no
such right shall vest in the event of an increase or a decrease in the
authorized number of shares of stock of any class or series which is otherwise
denied voting rights under the provisions of the certificate of incorporation.
6. STOCKHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date and at
the time fixed, from time to time, by the directors, provided, that the first
annual meeting shall be held on a date within thirteen months after the
organization of the corporation, and each successive annual meeting shall be
held on a date within thirteen months after the date of the preceding annual
meeting. A special meeting shall be held on the date and at the time fixed by
the directors.
- PLACE. Annual meetings and special meetings shall be held at
such place, within or without the State of Delaware, as the directors may, from
time to time fix. Whenever the directors shall fail to fix such place, the
meeting shall be held at the registered office of the corporation in the State
of Delaware.
- CALL. Annual meetings and special meetings may be called by
the directors or by any officer instructed by the directors to call the meeting.
- NOTICE OR WAIVER OF NOTICE. Written notice of all meetings
shall be given, stating the place, date and hour of the meeting and stating the
place within the city or other municipality or community at which the list of
stockholders of the corporation may be examined. The notice of an annual meeting
shall state that the meeting is called for the election of directors and for the
transaction of other business which may properly come before the meeting, and
shall, (if any other action which could be taken at a special meeting is to be
taken at such annual meeting) state the purpose or purposes. The notice of a
special
3
<PAGE> 4
meeting shall in all instances state the purpose or purposes for which the
meeting is called. The notice of any meeting shall also include, or be
accompanied by, any additional statements, information, or documents prescribed
by the General Corporation Law. Except as otherwise provided by the General
Corporation Law, a copy of the notice of any meeting shall be given, personally
or by mail, not less than ten days nor more than sixty days before the date of
the meeting, unless the lapse of the prescribed period of time shall have been
waived, and directed to each stockholder at his record address or at such other
address which he may have furnished by request in writing to the Secretary of
the corporation. Notice by mail shall be deemed to be given when deposited, with
postage thereon prepaid, in the United States mail. If a meeting is adjourned to
another time, not more than thirty days hence, and/or to another place, and if
an announcement of the adjourned time and/or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting unless the
directors, after adjournment, fix a new record date for the adjourned meeting.
Notice need not be given to any stockholder who submits a written waiver of
notice signed by him before or after the time stated therein. Attendance of a
stockholder at a meeting of stockholders shall constitute a waiver of notice of
such meeting, except when the stockholder attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders need be specified in any written waiver of notice.
- STOCKHOLDER LIST. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city or other municipality or community
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or if not so specified, at the place where the meeting is to be
held. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list required by this
section or the books of the corporation, or to vote at any meeting of
stockholders.
- CONDUCT OF MEETING. Meetings of the stockholders shall be
presided over by one of the following officers in the order of seniority and if
present and acting - the Chairman of the Board, if any, the Vice-Chairman of the
Board, if any, the President, a Vice-President, or, if none of the foregoing is
in office and present and acting, by a chairman to be chosen by the
stockholders. The Secretary of the corporation, or in his absence, an Assistant
Secretary, shall act as secretary of every meeting, but if neither the Secretary
nor an Assistant Secretary is present the Chairman of the meeting shall appoint
a secretary of the meeting.
4
<PAGE> 5
- PROXY REPRESENTATION. Every stockholder may authorize
another person or persons to act for him by proxy in all matters in which a
stockholder is entitled to participate, whether by waiving notice of any
meeting, voting or participating at a meeting, or expressing consent or dissent
without a meeting. Every proxy must be signed by the stockholder or by his
attorney-in-fact. No proxy shall be voted or acted upon after three years from
its date unless such proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and, if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A proxy may be made irrevocable regardless of whether the
interest with which it is coupled is an interest in the stock itself or an
interest in the corporation generally.
- INSPECTORS. The directors, in advance of any meeting, may,
but need not, appoint one or more inspectors of election to act at the meeting
or any adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the directors in
advance of the meeting or at the meeting by the person presiding thereat. Each
inspector, if any, before entering upon the discharge of his duties, shall take
and sign an oath faithfully to execute the duties of inspector at such meeting
with strict impartiality and according to the best of his ability. The
inspectors, if any, shall determine the number of shares of stock outstanding
and the voting power of each, the shares of stock represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots or consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all stockholders. On request of
the person presiding at the meeting, the inspector or inspectors, if any, shall
make a report in writing of any challenge, question or matter determined by him
or them and execute a certificate of any fact found by him or them.
- QUORUM. The holders of a majority of the outstanding shares
of stock shall constitute a quorum at a meeting of stockholders for the
transaction of any business. The stockholders present may adjourn the meeting
despite the absence of a quorum.
- VOTING. Each share of stock shall entitle the holder thereof
to one vote. In the election of directors, a plurality of the votes cast shall
elect. Any other action shall be authorized by a majority of the votes cast
except where the General Corporation Law prescribes a different percentage of
votes and/or a different exercise of voting power, and except as may be
otherwise prescribed by the provisions of the certificate of incorporation and
these By-Laws. In the election of directors, and for any other action, voting
need not be by ballot.
5
<PAGE> 6
7. STOCKHOLDER ACTION WITHOUT MEETINGS. Any action required by
the General Corporation Law to be taken at any annual or special meeting of
stockholders, or any action which may be taken at any annual or special meetings
of stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE II
DIRECTORS
l. FUNCTIONS AND DEFINITION. The business and affairs of the
corporation shall be managed by or under the direction of the Board of Directors
of the corporation. The Board of Directors shall have the authority to fix the
compensation of the members thereof. The use of the phrase "whole board" herein
refers to the total number of directors which the corporation would have if
there were no vacancies.
2. QUALIFICATIONS AND NUMBER. A director need not be a
stockholder, a citizen of the United States, or a resident of the State of
Delaware. The property, affairs and business of the corporation shall be managed
by its Board of Directors. The Board of Directors shall consist of at least one
person. The number of directors may be fixed from time to time by action of the
stockholders or of the directors and may be increased or decreased by action of
the stockholders or of the directors.
3. ELECTION AND TERM. The first Board of Directors, unless the
members thereof shall have been named in the certificate of incorporation, shall
be elected by the incorporator or incorporators and shall hold office until the
first annual meeting of stockholders and until their successors are elected and
qualified or until their earlier resignation or removal. Any director may resign
at any time upon written notice to the corporation. Thereafter, directors who
are elected at an annual meeting of stockholders, and directors who are elected
in the interim to fill vacancies and newly created directorships, shall hold
office until the next annual meeting of stockholders and until their successors
are elected and qualified or until their earlier resignation or removal. In the
interim between annual meetings of stockholders or of special meetings of
stockholders called for the election of directors and/or for the removal of one
or more directors and for the filling of any vacancy in that connection, newly
created directorships and any vacancies in the Board of Directors, including
vacancies resulting from the removal of directors for cause or without cause,
may be filled by the vote of a majority of the remaining directors then in
office, although less than a quorum, or by the sole remaining director.
6
<PAGE> 7
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall
fix, except that the first meeting of a newly elected Board shall be held as
soon after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or
without the State of Delaware as shall be fixed by the Board.
- CALL. No call shall be required for regular meetings for
which the time and place have been fixed. Special meetings may be called by or
at the direction of the Chairman of the Board, if any, the Vice-Chairman of the
Board, if any, of the President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be
required for regular meetings for which the time and place have been fixed.
Written, oral, or any other mode of notice of the time and place shall be given
for special meetings at least forty-eight (48) hours before such special meeting
although a lesser notice may be permitted if sufficient for the convenient
assembly of the directors thereat. Notice need not be given to any director or
to any member of a committee of directors who submits a written waiver of notice
signed by him before or after the time stated therein. Attendance of any such
person at a meeting shall constitute a waiver of notice of such meeting, except
when he attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the directors need be specified in
any written waiver of notice.
- QUORUM AND ACTION. A majority of the whole Board shall
constitute a quorum except when a vacancy or vacancies prevents such majority,
whereupon a majority of the directors in office shall constitute a quorum,
provided, that such majority shall constitute at least one-third of the whole
Board. A majority of the directors present, whether or not a quorum is present,
may adjourn a meeting to another time and place. Except as herein otherwise
provided, and except as otherwise provided by the General Corporation Law, the
vote of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board. The quorum and voting provisions herein
stated shall not be construed as conflicting with any provisions of the General
Corporation Law and these By-Laws which govern a meeting of directors held to
fill vacancies and newly created directorships in the Board or action of
disinterested directors.
Any member or members of the Board of Directors or of any
committee designated by the Board, may participate in a meeting of the Board, or
any such committee, as the case may be, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other.
7
<PAGE> 8
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any
and if present and acting, shall preside at all meetings. Otherwise, the
Vice-Chairman of the Board, if any and if present and acting, or the President,
if present and acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Except as may otherwise be provided
by the General Corporation Law, any director or the entire Board of Directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors.
6. COMMITTEES. Whenever its number consists of three or more,
the Board of Directors may, by resolution passed by a majority of the whole
Board, designate one or more committees, each committee to consist of two or
more of the directors of the corporation. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of any such committee or committees, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absent or disqualified member. Any such committee, to the extent provided in the
resolution of the Board, shall have and may exercise the powers and authority of
the Board of Directors in the management of the business and affairs of the
corporation with the exception of any authority the delegation of which is
prohibited by Section l4l of the General Corporation Law, and may authorize the
seal of the corporation to be affixed to all papers which may require it.
7. WRITTEN ACTION. Any action required or permitted to be
taken at any meeting of the Board of Directors or any committee thereof may be
taken without a meeting if all members of the Board or committee, as the case
may be, consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board or committee.
ARTICLE III
OFFICERS
The officers of the corporation shall consist of a President,
a Secretary, a Treasurer, and, if deemed necessary, expedient, or desirable by
the Board of Directors, a Chairman of the Board, a Vice-Chairman of the Board,
an Executive Vice-President, one or more other Vice-Presidents, one or more
Assistant Secretaries, one or more Assistant Treasurers, and such other officers
with such titles as the resolution of the Board of Directors choosing them shall
designate. Except as may otherwise be provided in the resolution of the Board of
Directors choosing him, no officer other than the Chairman or
8
<PAGE> 9
Vice-Chairman of the Board, if any, need be a director. Any number of officers
may be held by the same person, as the directors may determine, except that no
person may hold the offices of President and Secretary simultaneously.
Unless otherwise provided in the resolution choosing him, each
officer shall be chosen for a term which shall continue until the meeting of the
Board of Directors following the next annual meeting of stockholders and until
his successor shall have been chosen and qualified.
All officers of the corporation shall have such authority and
perform such duties in the management and operation of the corporation as shall
be prescribed in the resolutions of the Board of Directors designating and
choosing such officers and prescribing their authority and duties, and shall
have such additional authority and duties as are incident to their office except
to the extent that such resolutions may be inconsistent therewith. The Secretary
or an Assistant Secretary of the corporation shall record all of the proceedings
of all meetings and actions in writing of stockholders, directors, and
committees of directors, and shall exercise such additional authority and
perform such additional duties as the Board shall assign to him. Any officer may
be removed, with or without cause, by the Board of Directors. Any vacancy in any
office may be filled by the Board of Directors.
ARTICLE IV
CORPORATE SEAL
The corporate seal shall be in such form as the Board of
Directors shall prescribe.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall
be subject to change, by the Board of Directors.
ARTICLE VI
CONTROL OVER BY-LAWS
Subject to the provisions of the certificate of incorporation
and the provisions of the General Corporation Law, the power to amend, alter or
repeal these By-Laws and to adopt new By-Laws may be exercised by the Board of
Directors or by the stockholders.
9
<PAGE> 10
I HEREBY CERTIFY that the foregoing is a full, true and
correct copy of the By-Laws of , a Delaware corporation,
as in effect on the date hereof.
WITNESS my hand and the seal of the corporation.
Dated: April 1, 1997
/s/ Patrick E. Rondeau
--------------------------------
Patrick E. Rondeau, Secretary of
BG/RDI Acquisition Corp.
(SEAL)
10
<PAGE> 1
EXHIBIT 3.5
ARTICLES OF AMENDMENT
OF
YELLOWSTONE BASIN PROPERTIES, INC.
To the Secretary of State
State of Montana
Pursuant to the provisions of the Montana Business Corporation
Act, the corporation hereinafter named (the "corporation") does hereby adopt the
following Articles of Amendment.
1. The name of the corporation is
YELLOWSTONE BASIN PROPERTIES, INC.
2. Article "FIRST" of the Articles of Incorporation of the
corporation is hereby amended so as henceforth to read as follows:
FIRST: The name of the corporation is Bluegreen Corporation of
Montana (the "corporation")
3. The date of adoption of the said amendment is April 17,
1996.
Executed on April 17, 1996
/s/ PATRICK E. RONDEAU
------------------------------------
PATRICK E. RONDEAU, President
Attest:
/s/ W. Randy Steinbeck
- ---------------------------------------
W. RANDY STEINBECK, Assistant Secretary
<PAGE> 2
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
YELLOWSTONE BASIN LAND & CATTLE COMPANY, INC.
YELLOWSTONE BASIN LAND & CATTLE COMPANY, INC. for the purpose of
amending its Articles of Incorporation on file with the State of Montana, and
acting pursuant to the Montana Business Corporation Act, does hereby state:
1. That the name of the corporation is Yellowstone Basin Land & Cattle
Company, Inc.
2. Pursuant to a special meeting of shareholders of the corporation
held on August 20, 1985, the name of the corporation is changed to YELLOWSTONE
BASIN PROPERTIES, INC.
3. The corporation has issued and outstanding 6,133 shares of stock;
and the shareholders holding all of the issued and outstanding shares of the
Company unanimously voted in favor of this amendment.
IN WITNESS WHEREOF these amended Articles of Incorporation have been
signed on the 22nd day of August, 1985.
/s/ Warren Van Genderen
- ----------------------------------------
WARREN VAN GENDEREN, President
/s/ Michael F. Hegg
- ----------------------------------------
MICHAEL F. HEGG, Secretary
<PAGE> 3
AMENDMENT TO
ARTICLES OF INCORPORATION
OF
YELLOWSTONE BASIN PROPERTIES, INC.
YELLOWSTONE BASIN PROPERTIES, INC., for the purpose of amending its
Articles of Incorporation on file with the State of Montana, and acting under
the Montana Business Corporation Act, does hereby state:
1. The name of the corporation is YELLOWSTONE BASIN PROPERTIES, INC.
2. Pursuant to a special meeting of shareholders of the corporation
held on the 2nd day of December, 1983, the name of the corporation is changed to
YELLOWSTONE BASIN LAND & CATTLE COMPANY, INC.
3. The corporation has issued 50,000 shares of common stock which
shares are entitled to vote on this Amendment.
4. That 33,333.34 shares, being a quorum, voted for the above
Amendment, with no shares voting against the Amendment.
IN WITNESS WHEREOF these amended Articles of Incorporation have been
executed on the 28th day of December, 1983.
/s/ Warren Van Genderen
------------------------------------------
WARREN VAN GENDEREN, President
/s/ Michael F. Hegg
------------------------------------------
MICHAEL F. HEGG, Secretary
<PAGE> 4
ARTICLES OF INCORPORATION
FOR
YELLOWSTONE BASIN PROPERTIES, INC.
----------------------------------
The undersigned incorporator, for the purpose of forming a corporation
under the Montana Business Corporation Act, does hereby adopt the following
Articles of Incorporation.
ARTICLE ONE
NAME
The name of the corporation is YELLOWSTONE BASIN PROPERTIES, INC.
ARTICLE TWO
DURATION
The period of its duration is perpetual.
ARTICLE THREE
PURPOSES
The purposes for which the corporation is organized are:
(1) To engage in the business of purchasing, acquiring,
subdividing, marketing, advertising and selling property within the State of
Montana, and the doing and performing of any and all acts or things necessary,
proper or convenient for or incidental to the furtherance or the carrying out of
the powers or purposes herein mentioned.
<PAGE> 5
(2) To own, receive, purchase, invest in, mortgage, pledge,
transfer, and in any way and all other ways, own and dispose of properties of
any kind or nature, whether real or personal.
(3) To hire and employ agents, servants and employees, and to
enter into agreements of employment, contracts for sale of corporate assets and
to act as agent, contractor, trustee, or factor otherwise either alone or in
company with others.
(4) To promote or aid in any manner, financially or otherwise,
any person, firm, association or corporation, and to guarantee contracts and
other obligations.
(5) To enter into, make, perform and carry out contracts and
arrangements of every kind and character with any person, firm, association or
corporation, or any government or authority or subdivision or agency thereof.
(6) To carry on any business whatsoever that this corporation
may deem proper or convenient in connection with any of the foregoing purposes
or otherwise, or that it may deem calculated, directly or indirectly, to improve
the interest of this corporation, and to do all things specified in the Montana
Code Annotated, and to have and to exercise all powers conferred by the laws of
the State of Montana on corporations formed under the laws pursuant to which and
under which this corporation is formed, as such laws are now in effect or may at
any time hereafter be amended, and to do any and all things hereinabove set
forth to the same extent and as fully as natural persons might or could do,
either alone or in connection with other persons, firms, associations or
corporations, and in any part of the world.
ARTICLE FOUR
CAPITAL STOCK
(1) The corporation is authorized to issue one (1) class of
stock which shall be designated as the capital stock of said corporation.
(2) The aggregate number of shares that the corporation is
authorized to issue is 50,000 shares of the capital stock, divided into but one
class, which shares shall have no par value.
-2-
<PAGE> 6
(3) Shares of stock in this corporation shall not be
transferred or sold until the sale or transfer shall have been reported to the
Board of Directors and approved by them.
(4) In all cases in which a shareholder desires to sell his
stock or is deceased, his stock must first be offered for sale to the
corporation on an installment sale basis. Such shares of stock shall be offered
to the corporation at a price equal to such shares' proportionate share of the
net worth of the corporation.
If the corporation elects not to purchase the shares,
such shares of stock shall be offered to remaining shareholders in the same
proportion as their ownership of the number of shares then outstanding, it being
the intention to give them a preference in the purchase of such shares of stock.
Such shares of stock shall be offered to the shareholders at a price equal to
such shares' proportionate share of the net worth of the corporation.
If the remaining shareholders elect not to purchase the
shares, such shares may be offered for sale to any person with no restrictions
on the sale price. A sale of stock to any person other than the corporation or
other shareholders must be unanimously approved by the existing shareholders.
(5) At any time and from time to time when authorized by
Resolution of the Board of Directors, the corporation may issue or sell any
shares of its capital stock. The corporation may receive in payment, in whole or
in part, for any shares of its stock issued or sold by it, labor done, personal
property or real property, or leases thereof, and in the absence of fraud in the
transaction, the judgment of the Directors of the corporation as to the value of
the labor, property, real estate, or lease thereof so received, shall be
conclusive. Such capital stock sold or issued shall be offered pro rata to the
shareholders in relation to their then present holding.
ARTICLE FIVE
THE ADDRESS OF THE CORPORATION
The address of the corporation's initial registered office is 1119
North Seventh Avenue, Bozeman, Montana 59715.
The name of the corporation's registered agent at such address is Bill
J. Joyner.
-3-
<PAGE> 7
ARTICLE SIX
DIRECTORS
(1) The number of directors constituting the initial Board of Directors
is three (3).
(2) The names and addresses of the persons who are to serve as
directors until the first annual meeting of shareholders or until after their
successors are elected and qualify are:
NAME ADDRESS
---- -------
LEANOLD C. HOPKINS P.O. Box 43147; Las Vegas, Nevada 89116
BILL J. JOYNER 3759 East Desert Inn Road, Las Vegas, Nevada 89121
CAROLYN F. JOYNER 3759 East Desert Inn Road, Las Vegas, Nevada 89121
ARTICLE SEVEN
SHAREHOLDERS' RIGHTS
No shareholder shall hold any preemptive rights to acquire additional
or treasury shares of the corporation.
ARTICLE EIGHT
INCORPORATOR
The name and address of the incorporator is:
NAME ADDRESS
---- -------
Bill J. Joyner 1119 North Seventh Ave., Bozeman, Montana 59715
-4-
<PAGE> 8
IN WITNESS WHEREOF, these Articles of Incorporation have been executed
in duplicate on the 10th day of December 1991.
/s/ Bill J. Joyner
------------------------------------------
BILL J. JOYNER
-5-
<PAGE> 9
STATE OF NEVADA
County of Clark: ss.
On this 10th day of December, 1981, before me, a Notary Public in and
for said State, personally appeared Bill J. Joyner known to me to be the person
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same.
/s/ Carol F. Edwards
--------------------------------------
Notary Public for State of Nevada
Residing at Las Vegas, Nevada
My Commission expires 3/31/85
-6-
<PAGE> 1
EXHIBIT 3.6
AMENDED AND RESTATED BY-LAWS
of
BLUEGREEN CORPORATION OF MONTANA
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such
form as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.7
RESTATED CERTIFICATE OF INCORPORATION
OF
BLUEGREEN ASSET MANAGEMENT CORPORATION
BLUEGREEN ASSET MANAGEMENT CORPORATION, a Delaware corporation,
HEREBY CERTIFIES AS FOLLOWS:
1. The name of the Corporation is Bluegreen Asset Management
Corporation. The date of filing of its original Certificate of Incorporation
with the Secretary of State of the State of Delaware was May 22, 1990.
2. The Certificate of Incorporation is not hereby amended but is
restated in its entirety to read as follows:
FIRST: The name of the Corporation (the "Corporation") is Bluegreen
Asset Management Corporation.
SECOND: The address of the Corporation's registered office in the State
of Delaware is 32 Loockerman Square, Suite L-100, City of Dover, County of Kent,
and the name of the Corporation's registered agent at such address is The
Prentice-Hall Corporation System, Inc.
THIRD: The purpose for which the Corporation is organized and the
nature of the business to be conducted by it is to engage in any activity and to
exercise any powers permitted to corporations under the laws of the State of
Delaware.
FOURTH: The total number of shares of capital stock which the
Corporation shall have authority to issue is 1,000 shares of common stock,
having $.01 par value per share.
FIFTH: The Board of Directors is authorized to issue the stock of the
Corporation.
SIXTH: The name and the mailing address of the incorporator is as
follows:
Name Mailing Address
---- ---------------
Boardman Lloyd Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109
SEVENTH: The Corporation is to have perpetual existence.
<PAGE> 2
EIGHTH: The management of the business and the conduct of the affairs
of the Corporation shall be vested in its Board of Directors. The Directors
shall have concurrent power with the stockholders to make, alter, amend, change,
add to or repeal the By-Laws of the Corporation. Election of Directors need not
be by written ballot unless the By-Laws of the Corporation so provide.
NINTH: The Corporation shall indemnify and hold harmless any director,
officer, employee or agent of the Corporation from and against any and all
expenses and liabilities that may be imposed upon or incurred by him in
connection with, or as a result of, any proceeding in which he may become
involved, as a party or otherwise, by reason of the fact that he is or was such
a director, officer, employee or agent of the Corporation, whether or not he
continues to be such at the time such expenses and liabilities shall have been
imposed or incurred, to the fullest extent permitted by the laws of the State of
Delaware, as they may be amended from time to time. Without limiting the
generality of the foregoing, no director of the Corporation shall be liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law (iii) under Section 174 of the Delaware General Corporation
law, or (iv) for any transaction in which the director derived an improper
personal benefit.
TENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
IN WITNESS WHEREOF, Bluegreen Asset Management Corporation has caused
this certificate to be signed by Patrick E. Rondeau, its President, this day of
May, 1998.
BLUEGREEN ASSET MANAGEMENT CORPORATION
By: /s/ Patrick E. Rondeau
-------------------------------------
Patrick E. Rondeau, President
<PAGE> 1
EXHIBIT 3.8
AMENDED AND RESTATED BY-LAWS
of
BLUEGREEN ASSET MANAGEMENT CORPORATION
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such
form as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.9
CERTIFICATE OF INCORPORATION
A STOCK CORPORATION
- --------------------------------------------------------------------------------
FIRST: The name of this Corporation is PATTEN CAROLINA LAND, INC.
SECOND: Its Registered Office in the State of Delaware is to be located at 32
Loockerman Square,
Suite L-100 Street, in the City of Dover
County of Kent Zip Code 19901 The Registered Agent in charge
thereof is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: The amount of the total authorized capital stock of this corporation is
1,000 shares of common stock at .01 per share Dollars ($ ) divided
into shares, of Dollars ($ ) each.
FIFTH: The name and mailing address of the incorporator are as follows:
Name PATRICK E. RONDEAU
Mailing Address 5295 Town Center Road
Boca Raton, FL Zip Code 33486
I, THE UNDERSIGNED, for the purpose of forming a corporation under the laws of
the State of Delaware, do make, file and record this Certificate, and do certify
that the facts herein stated are true, and I have accordingly hereunto set my
hand this 17th day of May, A.D. 1994.
/s/ Patrick E. Rondeau
-------------------------------------
Incorporator
<PAGE> 2
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
PATTEN CAROLINA LAND, INC.
It is hereby certified that:
Pursuant to Section 242 of the General Corporation Laws of Delaware
1. The name of the corporation (hereinafter called the "corporation")
is
PATTEN CAROLINA LAND, INC.
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article "FIRST" thereof and by substituting in lieu of
said Article the following new Article:
FIRST: The name of the corporation is Bluegreen
Carolina Land, Inc. (the "corporation")
The effective time of the amendment herein certified shall be May 1, 1996.
Signed and attested to on April 12, 1996.
/s/ Patrick E. Rondeau
----------------------------------
Patrick E. Rondeau, President
Attest:
/s/ Daniel C. Koscher
- --------------------------------------
Daniel C. Koscher, Assistant Secretary
<PAGE> 3
STATE OF FLORIDA )
SS:
COUNTY OF PALM BEACH )
BE IT REMEMBERED that, on April 12, 1996, before me, a Notary Public
duly authorized by law to take acknowledgment of deeds, personally came Patrick
E. Rondeau, President of Patten Carolina Land, Inc. who duly signed the
foregoing instrument before me and acknowledged that such signing is his act and
deed, that such instrument as executed is the act and deed of said corporation,
and that the facts stated therein are true.
GIVEN, under my hand on April 12, 1996.
/s/ Jeffrey C. Lorenz
--------------------------------
Notary Public
<PAGE> 1
EXHIBIT 3.10
AMENDED AND RESTATED BY-LAWS
of
BLUEGREEN CAROLINA LAND, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.11
CERTIFICATE OF INCORPORATION
A STOCK CORPORATION
- --------------------------------------------------------------------------------
FIRST: The name of this Corporation is PATTEN HOMES, INC.
SECOND: Its Registered Office in the State of Delaware is to be located at
32 Loockerman Square,
Suite L-100 Street, in the City of Dover
County of Kent Zip Code 19901 The Registered Agent in charge
thereof is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: The amount of the total authorized capital stock of this corporation is
1,000 shares of common stock at .01 per share Dollars ($ ) divided
into shares, of Dollars ($ ) each.
FIFTH: The name and mailing address of the incorporator are as follows:
Name PATRICK E. RONDEAU
Mailing Address 5295 Town Center Road
Boca Raton, FL Zip Code 33486
I, THE UNDERSIGNED, for the purpose of forming a corporation under the laws of
the State of Delaware, do make, file and record this Certificate, and do certify
that the facts herein stated are true, and I have accordingly hereunto set my
hand this 25th day of April, A.D. 1994.
/s/ Patrick E. Rondeau
-------------------------------
Incorporator
<PAGE> 2
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
PATTEN HOMES, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation")
is
PATTEN HOMES, INC.
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article "FIRST" thereof and by substituting in lieu of
said Article the following new Article:
FIRST: The name of the corporation is Patten Communities,
Inc. (the "corporation")
The effective time of the amendment herein certified shall be February 1, 1995.
Signed and attested to on January 30, 1995.
/s/ Patrick E. Rondeau
------------------------------------
Patrick E. Rondeau, President
Attest:
/s/ W. Randy Steinbeck
- --------------------------------------------
W. Randy Steinbeck, Assistant Secretary
<PAGE> 3
STATE OF FLORIDA )
SS:
COUNTY OF PALM BEACH )
BE IT REMEMBERED that, on January 30, 1995, before me, a Notary Public
duly authorized by law to take acknowledgment of deeds, personally came Patrick
E. Rondeau, Vice President of Patten Homes, Inc., who duly signed the foregoing
instrument before me and acknowledged that such signing is his act and deed,
that such instrument as executed is the act and deed of said corporation, and
that the facts stated therein are true.
GIVEN, under my hand on January 30, 1995.
/s/ Jeffrey C. Lorenz
---------------------------------
Notary Public
<PAGE> 4
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
PATTEN COMMUNITIES, INC.
It is hereby certified that:
Pursuant to Section 242 of the General Corporation Laws of Delaware
1. The name of the corporation (hereinafter called the "corporation")
is
PATTEN COMMUNITIES, INC.
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article "FIRST" thereof and by substituting in lieu of
said Article the following new Article:
FIRST: The name of the corporation is Bluegreen
Communities, Inc. (the "corporation")
The effective time of the amendment herein certified shall be May 1, 1996.
Signed and attested to on April 12, 1996.
/s/ Patrick E. Rondeau
-------------------------------
Patrick E. Rondeau, President
Attest:
/s/ W. Randy Steinbeck
- -------------------------------------------
W. Randy Steinbeck, Assistant Secretary
<PAGE> 5
STATE OF FLORIDA )
SS:
COUNTY OF PALM BEACH )
BE IT REMEMBERED that, on April 12, 1996, before me, a Notary Public
duly authorized by law to take acknowledgment of deeds, personally came Patrick
E. Rondeau, President of Patten Communities, Inc. who duly signed the foregoing
instrument before me and acknowledged that such signing is his act and deed,
that such instrument as executed is the act and deed of said corporation, and
that the facts stated therein are true.
GIVEN, under my hand on April 12, 1996.
/s/ JEFFREY C. LORENZ
-----------------------------
Notary Public
<PAGE> 1
EXHIBIT 3.12
AMENDED AND RESTATED BY-LAWS
of
BLUEGREEN COMMUNITIES, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.13
CERTIFICATE OF INCORPORATION
OF
PATTEN CORPORATION OF TENNESSEE
THE UNDERSIGNED, for the purpose of forming a corporation pursuant to
the provisions of the General Corporation Law of the State of Delaware, does
hereby certify as follows:
ARTICLE I
The name of the corporation is Patten Corporation of Tennessee (the
"Corporation").
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is 229 South State Street, City of Dover, County of Kent, and the name
of the Corporation's registered agent at such address is The Prentice-Hall
Corporation System, Inc.
ARTICLE III
The purpose for which the Corporation is organized and the nature of
the business to be conducted by it is to engage in any activity and to exercise
any powers permitted to corporations under the laws of the State of Delaware.
ARTICLE IV
The total number of shares of capital stock which the Corporation shall
have authority to issue is one thousand (1,000) shares of common stock, having
$.01 par value per share.
ARTICLE V
The Board of Directors is authorized to issue the stock of the
Corporation.
ARTICLE VI
The name and the mailing address of the incorporator are as follows:
Name Mailing Address
---- ---------------
William P. Gelnaw Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109
<PAGE> 2
ARTICLE VII
The corporation is to have perpetual existence.
ARTICLE VIII
The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The directors shall have
concurrent power with the stockholders to make, alter, amend, change, add to or
repeal the By-Laws of the Corporation. Election of Directors need not be by
written ballot unless the By-Laws of the Corporation so provide.
ARTICLE IX
The Corporation shall indemnify and hold harmless any director,
officer, employee or agent of the Corporation from and against any and all
expenses and liabilities that may be imposed upon or incurred by him in
connection with, or as a result of, any proceeding in which he may become
involved, as a party or otherwise, by reason of the fact that he is or was such
a director, officer, employee or agent of the Corporation, whether or not he
continues to be such at the time such expenses and liabilities shall have been
imposed or incurred, to the fullest extent permitted by the laws of the State of
Delaware, as they may be amended from time to time. Without limiting the
generality of the foregoing, no director of the corporation shall be liable to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
law, or (iv) for any transaction in which the director derived an improper
personal benefit.
ARTICLE X
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are a granted subject to this reservation, provided that, notwithstanding
any other provision of this Certificate of Incorporation and any provision of
law that otherwise so empowers the Corporation, the Corporation shall not,
without the prior written consent of the trustee(s) from time to time under any
indenture pursuant to which the Corporation shall issue notes or other evidences
of indebtedness, do any of the following:
(i) dissolve or liquidate, in whole or in part;
<PAGE> 3
(ii) merge or consolidate with any other corporation other than a
corporation wholly-owned, directly or indirectly, by any
person or entity owning, directly or indirectly, 100% of the
outstanding Common Stock of the Corporation and having a
certificate of incorporation containing provisions identical
to the provisions of Article III and the Article X; or
(iii) amend this Certificate of Incorporation, to alter in any
manner or delete Article III or this Article X.
THE UNDERSIGNED incorporator hereinbefore named, for the purpose of
forming a corporation pursuant to the General Corporation Law of the State of
Delaware, does make this certificate, hereby declaring and certifying that this
is his act and deed and the facts stated herein are true and accordingly has
hereunto set his hand this 12TH day of September, 1988.
/s/ William P. Gelnaw
---------------------------------
William P. Gelnaw, Incorporator
<PAGE> 4
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
PATTEN CORPORATION OF TENNESSEE
It is hereby certified that:
Pursuant to Section 242 of the General Corporation Laws of Delaware
1. The name of the corporation (hereinafter called the "corporation")
is
PATTEN CORPORATION OF TENNESSEE
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article "FIRST" thereof and by substituting in lieu of
said Article the following new Article:
FIRST: The name of the corporation is Bluegreen
Corporation of Tennessee (the "corporation")
The effective time of the amendment herein certified shall be May 1, 1996.
Signed and attested to on April 12, 1996.
/s/ Patrick E. Rondeau
-------------------------------------
Patrick E. Rondeau, President
Attest:
/s/ W. Randy Steinbeck
- ----------------------------------------
W. Randy Steinbeck, Assistant Secretary
<PAGE> 5
STATE OF FLORIDA )
SS:
COUNTY OF PALM BEACH )
BE IT REMEMBERED that, on April 12, 1996, before me a Notary Public
duly authorized by law to take acknowledgment of deeds, personally came Patrick
E. Rondeau, President of Patten Corporation of Tennessee who duly signed the
foregoing instrument before me and acknowledged that such signing is his act and
deed, that such instrument as executed is the act and deed of said corporation,
and that the facts stated therein are true.
GIVEN, under my hand on April 12, 1996.
/s/ JEFFREY C. LORENZ
---------------------------------
Notary Public
<PAGE> 1
EXHIBIT 3.14
AMENDED AND RESTATED BY-LAWS
of
BLUEGREEN CORPORATION OF TENNESSEE
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.15
CERTIFICATE OF INCORPORATION
A STOCK CORPORATION
- --------------------------------------------------------------------------------
FIRST: The name of this Corporation is SAN JUAN MOUNTAIN PROPERTIES, INC.
SECOND: Its Registered Office in the State of Delaware is to be located at 32
Loockerman Square,
Suite L-100 Street, in the City of Dover
County of Kent Zip Code 19901 The Registered Agent in charge
thereof is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: The amount of the total authorized capital stock of this corporation is
1,000 shares of common stock at .01 per share Dollars ($ ) divided
into shares, of Dollars ($ ) each.
FIFTH: The name and mailing address of the incorporator are as follows:
Name Alan L. Murray
Mailing Address 5295 Town Center Road - Suite 400
Boca Raton, FL Zip Code 33486
I, THE UNDERSIGNED, for the purpose of forming a corporation under the laws of
the State of Delaware, do make, file and record this Certificate, and do certify
that the facts herein stated are true, and I have accordingly hereunto set my
hand this 10th day of August, A.D. 1992.
/s/ ALAN L. MURRAY
----------------------------------
<PAGE> 2
PLAN AND AGREEMENT OF MERGER
OF
CONTINENTAL DIVIDE PROPERTIES OF COLORADO, INC.
(a Delaware corporation)
AND
SAN JUAN MOUNTAIN PROPERTIES, INC.
(a Delaware corporation)
PLAN AND AGREEMENT OF MERGER entered into on March 31, 1994 by
CONTINENTAL DIVIDE PROPERTIES OF COLORADO, INC., a business corporation of the
State of Delaware, and approved by resolution adopted by its Board of Directors
on said date, and entered into on March 31, 1994 by SAN JUAN MOUNTAIN
PROPERTIES, INC., a business corporation of the State of Delaware, and approved
by resolution adopted by its Board of Directors on said date.
WHEREAS CONTINENTAL DIVIDE PROPERTIES OF COLORADO, INC. is a business
corporation of the State of Delaware with its registered office therein located
at 32 Loockerman Square, Suite L-100, City of Dover, County of Kent; and
WHEREAS the total number of shares of stock which CONTINENTAL DIVIDE
PROPERTIES OF COLORADO, INC. has authority to issue is 1,000, all of which are
of one class and a par value of $.01 each; and
WHEREAS SAN JUAN MOUNTAIN PROPERTIES, INC. is a business corporation of
the State of Delaware with its registered office therein located at 32
Loockerman Square, Suite L-100, City of Dover, County of Kent; and
WHEREAS the total number of share of stock which SAN JUAN MOUNTAIN
PROPERTIES, INC. has authority to issue is 1,000, all of which are of one class
and of a par value of $.01 each; and
WHEREAS the General Corporation Law of the State of Delaware permits
the merger of a business corporation with and into another business corporation
of the State of Delaware; and
WHEREAS CONTINENTAL DIVIDE PROPERTIES OF COLORADO, INC. AND SAN JUAN
MOUNTAIN PROPERTIES, INC. and the respective Boards of Directors thereof deem it
advisable and to the advantage, welfare, and best interests of said corporations
and their respective stockholders to merge CONTINENTAL DIVIDE PROPERTIES OF
COLORADO, INC. with and into SAN JUAN MOUNTAIN PROPERTIES, INC. pursuant to the
provisions of
<PAGE> 3
the provisions of the General Corporation Law of the State of Delaware upon the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreement of the parties hereto, being thereunto duly entered into and adopted
by CONTINENTAL DIVIDE PROPERTIES OF COLORADO, INC. under the laws of the State
of Delaware and approved by a resolution adopted by its Board of Directors and
being thereunto duly entered into and adopted by SAN JUAN MOUNTAIN PROPERTIES,
INC. under the laws of the State of Delaware and approved by a resolution
adopted by its Board of Directors, the Plan and Agreement of Merger and the
terms and conditions thereof and the mode of carrying the same into effect,
together with any provisions required or permitted to be set forth therein, are
hereby determined and agreed upon as hereinafter in this Plan and Agreement set
forth.
1. CONTINENTAL DIVIDE PROPERTIES OF COLORADO, INC. and SAN JUAN
MOUNTAIN PROPERTIES, INC. shall, pursuant to the provisions of the General
Corporation Law of the State of Delaware, be merged with and into a single
corporation, to wit, SAN JUAN MOUNTAIN PROPERTIES, INC., which shall be the
surviving corporation from and after the effective time of the merger, and which
is sometimes hereinafter referred to as the "surviving corporation", and which
shall continue to exist as said surviving corporation under its present name
pursuant to the provisions of the General Corporation Law of the State of
Delaware. The separate existence of CONTINENTAL DIVIDE PROPERTIES OF COLORADO,
INC., which is sometimes hereinafter referred to as the "terminating
corporation", shall cease at said effective time in accordance with the
provisions of the General Corporation Law of the State of Delaware.
2. The Certificate of Incorporation of the surviving corporation as the
same shall be in force and effect at the effective time in the State of Delaware
of the merger herein provided for; and said Certificate of Incorporation as
therein amended and changed shall continue to be the Certificate of
Incorporation of said surviving corporation until further amended and changed
pursuant to the provisions of the General Corporation Law of the State of
Delaware.
3. The present by-laws of the surviving corporation will be the by-laws
of said surviving corporation and will continue in full force and effect until
changed, altered or amended as therein provided and in the manner prescribed by
the provisions of the General Corporation of the State of Delaware.
4. The directors and officers in office of the surviving corporation at
the effective time of the merger shall be the members of the first Board of
Directors and the first officers of the surviving corporation, all of whom shall
hold their directorships and offices until the election and qualification of
their respective successors or until their tenure is otherwise terminated in
accordance with the by-laws of the surviving corporation.
5. Each issued share of the terminating corporation shall, at the
effective time of the merger, be converted into one-hundredth of a share of the
surviving corporation. The issued
<PAGE> 4
shares of the surviving corporation shall not be converted or exchanged in any
manner, but each said share which is issued as of the effective date of the
merger shall continue to represent one issued share of the surviving
corporation.
6. In the event that this Plan and Agreement of Merger shall have been
fully approved and adopted upon behalf of the terminating corporation in
accordance with the provisions of the General Corporation Law of the State of
Delaware, the said corporations agree that they will cause to be executed and
filed and recorded any document or documents prescribed by the laws of the State
of Delaware, and that they will cause to be performed all necessary acts within
the State of Delaware and elsewhere to effectuate the merger herein provided
for.
7. The Board of Directors and the proper officers of the terminating
corporation and of the surviving corporation are hereby authorized, empowered,
and directed to do any and all acts and things, and to make, execute, deliver,
file, and record any and all instruments, papers, and documents which shall be
or become necessary, proper, or convenient to carry out or put into effect any
of the provisions of this Plan and Agreement of Merger or of the merger herein
provided for.
8. The effective time of this Plan and Agreement of Merger, and the
time at which the merger herein agreed upon shall become effective in the State
of Delaware, shall be March 31, 1994.
9. Notwithstanding the full approval and adoption of this Plan and
Agreement of Merger the said Plan and Agreement of Merger may be terminated at
any time prior to the filing thereof with the Secretary of State of the State of
Delaware in the event that the board of directors of either party to this Plan
and Agreement of Merger delivers written notice to the board of directors of the
other party to this Plan and Agreement of Merger of its intent to abandon and
withdraw from the merger described herein.
IN WITNESS WHEREOF, this Plan and Agreement of Merger is hereby
executed as an instrument under seal upon behalf of each of the constituent
corporations parties thereto.
Dated March 31, 1994.
SAN JUAN MOUNTAIN PROPERTIES, INC.
By: /s/ PATRICK E. RONDEAU
-------------------------------------
Patrick E. Rondeau,
Vice President
<PAGE> 5
Attest:
s/ Daniel C. Koscher (SEAL)
- ----------------------------
Daniel C. Koscher,
Assistant Secretary
CONTINENTAL DIVIDE PROPERTIES OF COLORADO, INC.
By: s/ Patrick E. Rondeau
-------------------------------------------
Patrick E. Rondeau
Vice President
Attest:
s/ Daniel C. Koscher
- ------------------------------
Daniel C. Koscher
Assistant Secretary
<PAGE> 6
CERTIFICATE OF ASSISTANT SECRETARY
OF SAN JUAN MOUNTAIN PROPERTIES, INC.
The undersigned, being the Assistant Secretary of SAN JUAN MOUNTAIN PROPERTIES,
INC. does hereby certify that the holders of all of the outstanding stock of
said corporation dispensed with a meeting and vote of stockholders, and all of
the stockholders entitled to vote consented in writing, pursuant to the
provisions of Section 228 of the General Corporation Law of the State of
Delaware, to the adoption of the foregoing Plan and Agreement of Merger.
Dated: April 14, 1994.
s/ Daniel C. Koscher
------------------------------------
Daniel C. Koscher
Assistant Secretary of
SAN JUAN MOUNTAIN PROPERTIES, INC.
CERTIFICATE OF ASSISTANT SECRETARY
OF CONTINENTAL DIVIDE PROPERTIES OF COLORADO, INC.
The undersigned, being the Assistant Secretary of CONTINENTAL DIVIDE PROPERTIES
OF COLORADO, INC. does hereby certify that the holders of all of the outstanding
stock of said corporation dispensed with a meeting and vote of stockholders, and
all of the stockholders entitled to vote consented in writing, pursuant to the
provisions of Section 228 of the General Corporation Law of the State of
Delaware, to the adoption of the foregoing Plan and Agreement of Merger.
Dated: April 14, 1994.
s/ Daniel C. Koscher
------------------------------------------------
Daniel C. Koscher
Assistant Secretary of
CONTINENTAL DIVIDE PROPERTIES OF COLORADO, INC.
<PAGE> 7
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
SAN JUAN MOUNTAIN PROPERTIES, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation")
is
PATTEN CORPORATION WEST
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article "FIRST" thereof and by substituting in lieu of
said Article the following new Article:
FIRST: The name of the corporation is Patten Corporation
West (the "corporation")
The effective time of the amendment herein certified shall be April 1, 1994.
Signed and attested to on March 31, 1994.
s/ Patrick E. Rondeau
-------------------------------
Patrick E. Rondeau, President
Attest:
s/ Daniel C. Koscher
- ---------------------------------------
Daniel C. Koscher, Assistant Secretary
<PAGE> 8
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
PATTEN CORPORATION WEST
It is hereby certified that:
Pursuant to Section 242 of the General Corporation Laws of Delaware
1. The name of the corporation (hereinafter called the "corporation")
is
PATTEN CORPORATION WEST
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article "FIRST" thereof and by substituting in lieu of
said Article the following new Article:
FIRST: The name of the corporation is Bluegreen
Corporation of the Rockies (the "corporation")
The effective time of the amendment herein certified shall be April 1, 1996.
Signed and attested to on March 25, 1996.
s/ Patrick E. Rondeau
------------------------------
Patrick E. Rondeau, President
Attest:
s/ W. Randy Steinbeck
- ---------------------------------------
W. Randy Steinbeck, Assistant Secretary
<PAGE> 9
STATE OF FLORIDA )
SS:
COUNTY OF PALM BEACH )
BE IT REMEMBERED that, on March 25, 1996, before me, a Notary Public
duly authorized by law to take acknowledgment of deeds, personally came Patrick
E. Rondeau, President of Bluegreen Corporation who duly signed the foregoing
instrument before me and acknowledged that such signing is his act and deed,
that such instrument as executed is the act and deed of said corporation, and
that the facts stated therein are true.
GIVEN, under my hand on March 25, 1996.
s/ Jeffrey C. Lorenz
-----------------------------
Notary Public
<PAGE> 1
EXHIBIT 3.16
AMENDED AND RESTATED BY-LAWS
of
BLUEGREEN CORPORATION OF THE ROCKIES
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.17
CERTIFICATE OF INCORPORATION
A STOCK CORPORATION
- --------------------------------------------------------------------------------
FIRST: The name of this Corporation is BLUEGREEN HOLDING CORPORATION (Texas)
SECOND: Its Registered Office in the State of Delaware is to be located at 1013
CENTRE ROAD Street, in the City of WILMINGTON
County of NEW CASTLEt Zip Code 19805
The Registered Agent in charge thereof is Corporation Service Company
THIRD: The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: The amount of the total authorized capital stock of this corporation is
Ten Dollars ($10.00 ) divided
into 1,000 shares, of One Cent Dollars ($0.01 ) each.
FIFTH: The name and mailing address of the incorporator are as follows:
Name JOHN F. CHISTE
Mailing Address 5295 Town Center Road
Boca Raton, FL Zip Code 33486
I, THE UNDERSIGNED, for the purpose of forming a corporation under the laws of
the State of Delaware, do make, file and record this Certificate, and do certify
that the facts herein stated are true, and I have accordingly hereunto set my
hand this 24th day of November, A.D. 1997.
/s/ John F. Christe
-----------------------------
John F. Christe, Incorporator
<PAGE> 1
EXHIBIT 3.18
AMENDED AND RESTATED BY-LAWS
of
BLUEGREEN HOLDING CORPORATION (TEXAS)
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled
by vote of a majority of the remaining directors or, if not yet so filled, by
the stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.19
CERTIFICATE OF INCORPORATION
A STOCK CORPORATION
FIRST: The name of this Corporation is VIRGINIA LAND & FOREST CORPORATION
SECOND: Its Registered Office in the State of Delaware is to be located at 32
Loockerman Square,
Suite L-100 Street, in the City of Dover
County of Kent, Delaware Zip Code 19901 The Registered Agent in charge
thereof is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The amount of the total authorized capital stock of this corporation is
1,000 shares of common stock at .01 per share Dollars ($ ) divided
into shares, of Dollars ($ ) each.
FIFTH: The name and mailing address of the incorporator are as follows:
Name PATRICK E. RONDEAU
Mailing Address 5295 Town Center Road
Boca Raton, FL Zip Code 33486
I, THE UNDERSIGNED, for the purpose of forming a corporation under the laws of
the State of Delaware, do make, file and record this Certificate, and do certify
that the facts herein stated are true, and I have accordingly hereunto set my
hand this 11th day of November, A.D. 1991.
s/ Patrick E. Rondeau
--------------------------------
Incorporator
<PAGE> 2
**FOR USE ON AND AFTER JANUARY 1, 1991**
ARTICLES OF AMENDMENT
Stock (for profit)
A. Name of Corporation: DELLONA ENTERPRISES, INC
------------------------------------------------
(PRIOR TO ANY CHANGE EFFECTED BY THIS AMENDMENT)
TEXT OF AMENDMENT:
Articles 4 and 5 of the Articles of Incorporation of Dellona
Enterprises, Inc. are hereby amended as follows:
(The text of the amendment is set forth on Exhibit A, attached
hereto).
B. Amendment(s) to the articles of incorporation adopted on DEC. 27, 1990
--------------
(DATE)
Indicate the method of adoption by checking the appropriate choice
below:
( ) By the Board of Directors (In accordance with sec. 180.1002, Wis.
Stats.)
OR
(X) By the Board of Directors and Shareholders (In accordance with
sec. 180.1003, Wis. Stats.)
OR
( ) By Incorporators or Board of Directors, before issuance of shares
(In accordance with sec. 180.1005, Wis. Stats.)
C. Executed on behalf of the corporation on DEC. 27, 1990
-----------------------
(DATE)
s/ Kenn Heim
-----------------------------------
(SIGNATURE)
Kenn Keim
-----------------------------------
(PRINTED NAME)
President
-----------------------------------
(TITLE)
D. This document was drafted by ATTORNEY ROBERT R. STROUD
---------------------------------------
(NAME OF INDIVIDUAL REQUIRED BY LAW)
<PAGE> 3
EXHIBIT A
"Article 4. The number of shares which the Corporation shall have authority to
issue, itemized by classes, par value of shares, and shares without par value
is:
CLASS NUMBER OF SHARES PAR VALUE PER SHARE
----- ---------------- -------------------
Common 2,000 shares are without par value
Preferred 1,000 $24,380.00
"Article 5. The preferences, limitations, designation and relative rights of
each class or series of stock are, with respect to preferred stock, the holders
thereof shall be entitled to an annual, noncumulative dividend of 8 percent per
annum prior to the payment of the dividend on the common stock of the
Corporation. In any year in which the preferred stock has been paid a dividend
of 8 percent of par value, the holders of preferred stock shall not participate
in any other distributions from the Corporation. Upon liquidation, the holders
of preferred stock shall be paid the par value of their preferred shares, prior
to any distribution to the holders of the shares of common stock of the
Corporation. The holders of preferred stock shall have no right to vote with
respect to the affairs of the Corporation, except as required by Chapter 180,
Wisconsin Statutes."
<PAGE> 1
EXHIBIT 3.20
AMENDED AND RESTATED BY-LAWS
of
BLUEGREEN PROPERTIES OF VIRGINIA, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.21
CERTIFICATE OF INCORPORATION
A STOCK CORPORATION
- --------------------------------------------------------------------------------
FIRST: The name of this Corporation is BLUEGREEN RESORTS INTERNATIONAL, INC.
SECOND: Its Registered Office in the State of Delaware is to be located at
1013 CENTRE ROAD Street, in the City of WILMINTON
County of NEW CASTLE Zip Code 19805 The Registered Agent in charge
thereof is CORPORATION SERVICE COMPANY
THIRD: The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: The amount of the total authorized capital stock of this corporation is
1,000 shares of common stock at .01 per share Dollars ($ ) divided
into shares, of Dollars ($ ) each.
FIFTH: The name and mailing address of the incorporator are as follows:
Name PATRICK E. RONDEAU
Mailing Address 5295 Town Center Road
Boca Raton, FL Zip Code 33486
I, THE UNDERSIGNED, for the purpose of forming a corporation under the laws of
the State of Delaware, do make, file and record this Certificate, and do certify
that the facts herein stated are true, and I have accordingly hereunto set my
hand this 20th day of May, A.D. 1997.
/s/ Patrick E. Rondeau
------------------------------
Incorporator
<PAGE> 1
EXHIBIT 3.22
AMENDED AND RESTATED BY-LAWS
of
BLUEGREEN RESORTS INTERNATIONAL, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.23
CERTIFICATE OF INCORPORATION
A STOCK CORPORATION
FIRST: The name of this Corporation is PATTEN RESORTS MANAGEMENT, INC.
SECOND: Its Registered Office in the State of Delaware is to be located at 32
Loockerman Square,
Suite L-100 Street, in the City of Dover
County of Kent Zip Code 19901 The Registered Agent in charge
thereof is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: The amount of the total authorized capital stock of this corporation is
1,000 shares of common stock at .01 per share Dollars ($ ) divided
into shares, of Dollars ($ ) each.
FIFTH: The name and mailing address of the incorporator are as follows:
Name PATRICK E. RONDEAU
Mailing Address 5295 Town Center Road
Boca Raton, FL Zip Code 33486
I, THE UNDERSIGNED, for the purpose of forming a corporation under the laws of
the State of Delaware, do make, file and record this Certificate, and do certify
that the facts herein stated are true, and I have accordingly hereunto set my
hand this 13th day of September, A.D. 1994.
s/ Patrick E. Rondeau
---------------------------------
Incorporator
<PAGE> 2
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
PATTEN RESORTS MANAGEMENT, INC.
It is hereby certified that:
Pursuant to Section 242 of the General Corporation Laws of Delaware
1. The name of the corporation (hereinafter called the "corporation")
is
PATTEN RESORTS MANAGEMENT, INC.
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article "FIRST" thereof and by substituting in lieu of
said Article the following new Article:
FIRST: The name of the corporation is Bluegreen
Resorts Management, Inc. (the "corporation")
The effective time of the amendment herein certified shall be May 1, 1996.
Signed and attested to on April 12, 1996.
s/ Patrick E. Rondeau
------------------------------
Patrick E. Rondeau, President
Attest:
s/ Daniel C. Koscher
- --------------------------------------
Daniel C. Koscher, Assistant Secretary
<PAGE> 3
STATE OF FLORIDA )
SS:
COUNTY OF PALM BEACH )
BE IT REMEMBERED that, on April 12, 1996, before me, a Notary Public
duly authorized by law to take acknowledgment of deeds, personally came Patrick
E. Rondeau, President of Patten Resorts Management, Inc. who duly signed the
foregoing instrument before me and acknowledged that such signing is his act and
deed, that such instrument as executed is the act and deed of said corporation,
and that the facts stated therein are true.
GIVEN, under my hand on April 12, 1996.
s/ Jeffrey C. Lorenz
---------------------------
Notary Public
<PAGE> 1
EXHIBIT 3.24
AMENDED AND RESTATED BY-LAWS
of
BLUEGREEN RESORTS MANAGEMENT, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.25
CERTIFICATE OF INCORPORATION
A STOCK CORPORATION
- --------------------------------------------------------------------------------
FIRST: The name of this Corporation is PATTEN RESORTS, INC.
SECOND: Its Registered Office in the State of Delaware is to be located at 32
Loockerman Square,
Suite L-100 Street, in the City of Dover
County of Kent Zip Code 19901 The Registered Agent in charge
thereof is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: The amount of the total authorized capital stock of this corporation is
1,000 shares of common stock at .01 per share Dollars ($ ) divided
into shares, of Dollars ($ ) each.
FIFTH: The name and mailing address of the incorporator are as follows:
Name PATRICK E. RONDEAU
Mailing Address 5295 Town Center Road
Boca Raton, FL Zip Code 33486
I, THE UNDERSIGNED, for the purpose of forming a corporation under the laws of
the State of Delaware, do make, file and record this Certificate, and do certify
that the facts herein stated are true, and I have accordingly hereunto set my
hand this 13th day of September, A.D. 1994.
s/ Patrick E. Rondeau
------------------------------
Incorporator
<PAGE> 2
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
PATTEN RESORTS, INC.
It is hereby certified that:
Pursuant to Section 242 of the General Corporation Laws of Delaware
1. The name of the corporation (hereinafter called the "corporation")
is
PATTEN RESORTS, INC.
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article "FIRST" thereof and by substituting in lieu of
said Article the following new Article:
FIRST: The name of the corporation is Bluegreen
Resorts, Inc. (the "corporation")
The effective time of the amendment herein certified shall be May 1, 1996.
Signed and attested to on April 12, 1996.
s/ Patrick E. Rondeau
---------------------------------
Patrick E. Rondeau, President
Attest:
s/ Daniel C. Koscher
- --------------------------------------
Daniel C. Koscher, Assistant Secretary
<PAGE> 3
STATE OF FLORIDA )
SS:
COUNTY OF PALM BEACH )
BE IT REMEMBERED that, on April 12, 1996, before me, a Notary Public
duly authorized by law to take acknowledgment of deeds, personally came Patrick
E. Rondeau, President of Patten Resorts, Inc. who duly signed the foregoing
instrument before me and acknowledged that such signing is his act and deed,
that such instrument as executed is the act and deed of said corporation, and
that the facts stated therein are true.
GIVEN, under my hand on April 12, 1996.
s/ Jeffrey C. Lorenz
----------------------------
Notary Public
<PAGE> 1
EXHIBIT 3.26
AMENDED AND RESTATED BY-LAWS
of
BLUEGREEN RESORTS, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.27
Prepared by: FRANK W. ERWIN
P.O. Box 7206
Jacksonville, NY 28540
ARTICLES OF INCORPORATION
OF
CAROLINA NATIONAL GOLF CLUB, INC.
Pursuant to 55-2-02 of the General Statutes of North Carolina, the
undersigned does hereby submit these Articles of Incorporation for the purpose
of forming a business corporation:
1. The name of the corporation is CAROLINA NATIONAL GOLF CLUB, INC.
2. The number of shares the corporation is authorized to issue is One
Hundred Thousand (100,000) all of one class, designated as common stock.
3. The street address and county of the initial registered office of
the corporation is 3973-A Market Street, Wilmington, New Hanover County, North
Carolina 28403.
4. The mailing address of the initial registered office is 3973-A
Market Street, Wilmington, New Hanover County, North Carolina 28403.
5. The name of the initial registered agent is DAVID L. DICKEY.
6. The street address and county of the principal office of the
corporation is: 3973- A Market Street, Wilmington, New Hanover County, North
Carolina 28403. The name of the incorporator is DAVID L. DICKEY and the address
of the incorporator is 3973-A Market Street, Wilmington, New Hanover County,
North Carolina 28403.
7. The purpose of the corporation is:
a) To undertake the construction, repair, restoration and
improvement of real property, and associated personal
property, in any and all respects, including but not limited
to golf courses and recreational facilities, new residential
homes, apartments, condominiums, commercial buildings,
shopping centers, and planned unit developments for sale,
lease, operation or investment and to undertake the
development of raw or timber land, for purposes of improvement
thereon for the sale or resale and/or construction and/or
location thereon of residential homes, apartments,
condominiums, commercial buildings, shopping centers, and
planned unit developments for sale, lease, operation or
investment.
b) To engage in any lawful act, or activity for which
corporations may be organized under the laws of the State of
North Carolina.
<PAGE> 2
8. A shareholder (his personal representative, legatee, or donee) shall
not sell, transfer, pledge, encumber, or in any manner dispose of any share of
the corporation without compliance with the following procedure, except
transfers without consideration to permitted transferees. Permitted transferees
shall include only the personal representative, spouse, descendants, or
ancestors of the shareholders, or any trust for the primary benefit of such
spouse, descendants, or ancestors. A shareholder desiring to sell, transfer,
pledge, encumber, or in any manner dispose of any shares (other than in
transfers without consideration to permitted transferees) shall obtain a bona
fide written cash offer from a third person to purchase the shares, and before
accepting this offer, shall (1) deliver to the corporation a copy of the offer
disclosing the identity of the purchaser and the price offered and (2) offer in
writing to sell the shares referred to in the offer to the corporation or its
nominee selected without regard to any preemptive right. The corporation shall
have thirty (30) days after receipt of the offer to accept it. If the
corporation accepts the offer, the shares referred to in it shall forthwith be
delivered to the corporation against the payment of the purchase price. If the
corporation does not accept the offer in the thirty (30) day period, the
shareholder may accept the offer of the third person, and the shares subject to
the offer shall thereafter be free from the restrictions and provisions of this
section. If shares are transferred to a permitted transferee, they shall remain
subject to the restrictions and provisions of this section.
9. The corporation shall indemnify all directors, officers, employees
and agents against liability and expenses in any proceeding (including without
limitation, a proceeding brought by or on behalf of the corporation itself)
arising out of their status as such or their activities in any of the foregoing
capacities. The corporation shall also, and to the same extent, indemnify any
person, who at the request of the corporation is or was serving as a director,
officer, partner, trustee, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise or as a
trustee or administration under an employee benefit plan. Such persons shall be
entitled to recovery from the corporation of reasonable costs, expenses, and
attorneys' fees in connection with the enforcement of rights to indemnification
granted herein, pursuant to NCGS 55-8-57.
10. These articles will be effective upon filing.
This the 19TH day of JULY, 1996.
/s/ David L. Dickey (SEAL)
-------------------------------
DAVID L. DICKEY, INCORPORATOR
<PAGE> 3
NORTH CAROLINA
COUNTY OF NEW HANOVER
This is to certify that on the 19TH day of JULY, 1996, before me, a
Notary Public, personally appeared DAVID L. DICKEY and after having first made
known to him contents thereof, he did acknowledge that he signed and delivered
the same as his voluntary act and deed for the uses and purposes therein
expressed.
Witness my hand and notarial seal, this the 19TH day of JULY, 1996.
/s/ Sandra Warwick
------------------------------
NOTARY PUBLIC
MY COMMISSION EXPIRES: 2/17/99
<PAGE> 1
EXHIBIT 3.28
AMENDED AND RESTATED BY-LAWS
of
CAROLINA NATIONAL GOLF CLUB, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
Exhibit 3.29
AMENDED AND RESTATED ARTICLES OF ASSOCIATION
OF
LEISURE CAPITAL CORPORATION
LEISURE CAPITAL CORPORATION, A VERMONT CORPORATION, HEREBY
CERTIFIES AS FOLLOWS:
1. The name of the Corporation is Leisure Capital Corporation. The date
of filing of its original Articles of Association with the Secretary of State of
the State of Vermont was November 19, 1990.
2. The Articles of Association are hereby amended and restated with the
approval of the Sole Stockholder and upon the recommendation of the Board of
Directors to delete any and all reference to the Corporation's authority to
issue 1,000 shares of preferred stock. No preferred stock has been issued. These
Amended and Restated Articles of Association supersede the original Articles of
Association and all amendments to them.
The name of the corporation shall be Leisure Capital Corporation.
The initial registered agent shall be Prentice Hall Corp.
with registered offices at 159 State Street, Montpelier, Vermont 05602.
The corporation shall be located at 5295 Town Center Road, Suite 400, Boca
Raton, Florida 33486.
The operating year shall be fiscal: March 31.
The period of duration shall be Perpetual.
Leisure Capital Corporation is a Vermont General Corporation (T. 11, Ch. 17).
The corporation is organized for the purpose of: Maintenance of intangible
assets, including, but not limited to, notes and other debt obligations, and the
collection and distribution of the income from such investments; to purchase,
originate, hold, service, sell or otherwise deal with receivables; to purchase,
hold, sell or otherwise deal with real estate, and real estate rights or
interest therein; and to carry on any business or other activity which may be
lawfully carried on by a corporation organized under Vermont state statutes,
whether or not related to those referred to hereinabove.
<PAGE> 2
The aggregate number of shares the corporation shall have authority to issue is
1,000 shares common, $.01 par value
The board of directors shall have three members with the following serving as
directors until their successors be elected and qualified:
/s/ Daniel C. Koscher 5295 Town Center Road, Suite 400
- ---------------------------------- Boca Raton, Florida 33486
Daniel C. Koscher
/s/ Patrick E. Rondeau 5295 Town Center Road, Suite 400
- ---------------------------------- Boca Raton, Florida 33486
Patrick E. Rondeau
/s/ Danny L. Ferguson 5295 Town Center Road, Suite 400
- ---------------------------------- Boca Raton, Florida 33486
Danny L. Ferguson
<PAGE> 1
EXHIBIT 3.30
AMENDED AND RESTATED BY-LAWS
of
LEISURE CAPITAL CORPORATION
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.31
CERTIFICATE OF INCORPORATION
OF
CENTRAL TEXAS PATTEN CORPORATION
THE UNDERSIGNED, for the purpose of forming a corporation pursuant to
the provisions of the General Corporation Law of the State of Delaware, does
hereby certify as follows:
ARTICLE I
The name of the corporation is Central Texas Patten Corporation (the
"Corporation").
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is 229 South State Street, City of Dover, County of Kent, and the name
of the Corporation's registered agent at such address is The Prentice-Hall
Corporation System, Inc.
ARTICLE III
The purpose for which the Corporation is organized and the nature of
the business to be conducted by it is to engage in any activity and to exercise
any powers permitted to corporations under the laws of the State of Delaware.
ARTICLE IV
The total number of shares of capital stock which the Corporation shall
have authority to issue is one thousand (1,000) shares of common stock, having
$.01 par value per share.
ARTICLE V
The Board of Directors is authorized to issue the stock of the
Corporation.
ARTICLE VI
The name and the mailing address of the incorporator are as follows:
<PAGE> 2
Name Mailing Address
---- ---------------
William P. Gelnaw Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109
ARTICLE VII
The Corporation is to have perpetual existence.
ARTICLE VIII
The powers of the incorporator are to terminate upon the filing of this
Certificate of Incorporation. The names and mailing addresses of the persons who
are to serve as the Corporation's directors until the first annual meeting of
the Corporation and until their respective successors have been elected and
qualified is as follows:
Name Mailing Address
---- ---------------
Richard A. Stratton c/o Patten Corporation
Main Road
Stamford, VT 05352
Donald R. Dion, Jr. c/o Patten Corporation
Main Road
Stamford, VT 05352
Jeffrey B. Lavin c/o Patten Corporation
Main Road
Stamford, VT 05352
ARTICLE IX
The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board of Directors. The directors shall have
concurrent power with the stockholders to make, alter, amend, change, add to or
repeal the By-Laws of the Corporation. Election of Directors need not be by
written ballot unless the By-Laws of the Corporation so provide.
ARTICLE X
The Corporation shall indemnify and hold harmless any director,
officer, employee or agent of the Corporation from and against any and all
expenses and liabilities that may be
<PAGE> 3
imposed upon or incurred by him in connection with, or as a result of, any
proceeding in which he may become involved, as a party or otherwise, by reason
of the fact that he is or was such a director, officer, employee or agent of the
Corporation, whether or not he continues to be such at the time such expenses
and liabilities shall have been imposed or incurred, to the fullest extent
permitted by the laws of the State of Delaware, as they may be amended from time
to time. Without limiting the generality of the foregoing, no director of the
Corporation shall be liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation law, or (iv) for any transaction in which the
director derived an improper personal benefit.
ARTICLE XI
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are a granted subject to this reservation, provided that, notwithstanding
any other provision of this Certificate of Incorporation and any provision of
law that otherwise so empowers the Corporation, the Corporation shall not,
without the prior written consent of the trustee(s) from time to time under any
indenture pursuant to which the Corporation shall issue notes or other evidence
of indebtedness, do any of the following:
(i) dissolve or liquidate, in whole or in part;
(ii) merge or consolidate with any other corporation other than a
corporation wholly-owned, directly or indirectly, by any
person or entity owning, directly or indirectly, 100% of the
outstanding Common Stock of the Corporation and having a
certificate of incorporation containing provisions identical
to the provisions of Article III and this Article XI; or
(iii) amend this Certificate of Incorporation, to alter in any
manner or delete Article III or this Article XI.
THE UNDERSIGNED incorporator hereinbefore named, for the purpose of
forming a corporation pursuant to the General Corporation Law of the State of
Delaware, does make this certificate, hereby declaring and certifying that this
is his act and deed and the facts stated herein are true and accordingly has
hereunto set his hand this 21st day of July, 1988.
/s/ William P. Gelnaw
----------------------------------
William P. Gelnaw, Incorporator
<PAGE> 4
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
CENTRAL TEXAS PATTEN CORPORATION
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"corporation") is Central Texas Patten Corporation.
2. The certificate of incorporation of the corporation
is hereby amended by striking out Article I thereof
and by substituting in lieu of said Article the
following new Article:
ARTICLE I
The name of the corporation is Texas Properties, Inc.
3. The amendment of the certificate of incorporation
herein certified has been duly adopted in accordance
with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
Signed and attested to on May 26, 1992.
/s/ Daniel C. Koscher
--------------------------------------
Daniel C. Koscher, Assistant Secretary
/s/ Gary Ufer
- ----------------------------------
Gary Ufer, Vice President
<PAGE> 5
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
TEXAS PROPERTIES, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation") is
Texas Properties, Inc.
2. The certificate of incorporation of the corporation is hereby amended
by striking out Article I thereof and by substituting in lieu of said
Article the following new Article:
ARTICLE I
The name of the corporation is Properties of the Southwest,
Inc.
3. The amendment of the certificate of incorporation herein certified has
been duly adopted in accordance with the provisions of Section 242 of
the General Corporation Law of the State of Delaware.
Signed and attested to on June 29, 1992.
/s/ Patrick E. Rondeau
---------------------------------------
Patrick E. Rondeau, Secretary
Attest:
/s/ Daniel C. Koscher
- -----------------------------------
Daniel C. Koscher
Vice President
<PAGE> 6
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
PROPERTIES OF THE SOUTHWEST, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "corporation")
is
PROPERTIES OF THE SOUTHWEST, INC.
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article "FIRST" thereof and by substituting in lieu of
said Article the following new Article:
FIRST: The name of the corporation is Properties of the Southwest One,
Inc. (the "corporation")
The effective time of the amendment herein certified shall be December 11, 1997.
Signed and attested to on December 10, 1997.
/s/ Allan J. Herz
-------------------------------------
Allan J. Herz, Vice President
Attest:
/s/ Danny L. Ferguson
- --------------------------------------
Danny L. Ferguson, Assistant Secretary
<PAGE> 7
STATE OF FLORIDA )
SS:
COUNTY OF PALM BEACH )
BE IT REMEMBERED that, on January 30, 1995, before me, a Notary Public
duly authorized by law to take acknowledgment of deeds, personally came Allan J.
Herz, Vice President of Properties of the Southwest, Inc., who duly signed the
foregoing instrument before me and acknowledged that such signing is his act and
deed, that such instrument as executed is the act and deed of said corporation,
and that the facts stated therein are true.
GIVEN, under my hand on December 10, 1997.
/s/ Jeffrey C. Lorenz
--------------------------------------
Notary Public
<PAGE> 1
EXHIBIT 3.32
AMENDED AND RESTATED BY-LAWS
of
PROPERTIES OF THE SOUTHWEST ONE, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.33
CERTIFICATE OF INCORPORATION
A STOCK CORPORATION
- --------------------------------------------------------------------------------
FIRST: The name of this Corporation is PROPERTIES OF THE WEST, INC.
SECOND: Its Registered Office in the State of Delaware is to be located at 32
Loockerman Square,
Suite L-100 Street, in the City of Dover
County of Kent Zip Code 19901 The Registered Agent in charge
thereof is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: The amount of the total authorized capital stock of this corporation is
1,000 shares of common stock at .01 per share Dollars ($ ) divided
into shares, of Dollars ($ ) each.
FIFTH: The name and mailing address of the incorporator are as follows:
Name PATRICK E. RONDEAU
Mailing Address 5295 Town Center Road
Boca Raton, FL Zip Code 33486
I, THE UNDERSIGNED, for the purpose of forming a corporation under the laws of
the State of Delaware, do make, file and record this Certificate, and do certify
that the facts herein stated are true, and I have accordingly hereunto set my
hand this 28th day of February, A.D. 1995.
/s/ Patrick E. Rondeau
---------------------------
Incorporator
<PAGE> 1
EXHIBIT 3.34
AMENDED AND RESTATED BY-LAWS
of
PROPERTIES OF THE WEST, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.35
ARTICLES OF INCORPORATION
Executed by the undersigned for the purpose of forming a Wisconsin corporation
under Chapter 180 of the Wisconsin statutes:
Article 1. The name of the corporation is Dellona Enterprises, Inc.
Article 2. The period of existence shall be perpetual
Article 3. The purposes shall be to engage in any lawful
activity within the purposes for which corporations
may be organized under the Wisconsin Business
Corporation Law, Chapter 180 of the Wisconsin
Statutes.
Article 4. The number of shares which it shall have authority to issue,
itemized by classes, par value of shares, shares without par value, and series,
if any, within a class, is:
Series Number of Par value per share or statement
Class (if any) Shares that share are without par value
Common 2000 Shares are without par value
Article 5. The preferences, limitations, designation, and relative
rights of each class or series of stock are, none
Article 6. Address of initial registered office is The
complete address, including street and number, if
assigned, and the ZIP Code, must be stated.
1015 River Road, Wisconsin Dells, Wisconsin 53965
Article 7. Name and initial registered agent at such address is
Roland G. Baryenbruch
<PAGE> 2
(2) The number of directors constituting the
board of directors shall be fixed by law but
shall not be less than three.
Article 10. (Other provisions)
Article 11. These articles may be amended in the manner authorized by
law at the time of amendment.
Article 12. The name and address of incorporator (or incorporators)
are:
NAME ADDRESS
(number, street, city and ZIP Code)
Roland G. Baryenbruch 1015 River Road, Wis. Dells, Wis. 53965
Executed in duplicate on the 4th day of September, 1969
/s/ ROLAND G. BARYENBRUCH
----------------------------------------------------------
Roland G. Baryenbruch
STATE OF WISCONSIN )
) ss.
COUNTY OF Columbia )
PERSONALLY CAME BEFORE ME THIS 4TH DAY OF SEPTEMBER A.D. 1969 THE ABOVE
NAMED ROLAND G. BARYENBRUCH TO ME KNOWN TO BE THE PERSON ... WHO EXECUTED THE
FOREGOING INSTRUMENT, AND ACKNOWLEDGED THE SAME.
(NOTARIAL SEAL.) /s/ HANS O. HELLAND
------------------------------------------
Hans O. Helland NOTARY PUBLIC
MY COMMISSION IS PERMANENT
-----------------------------
This document was drafted by
HANS O. HELLAND
------------------------------------------
(Name)
Please print or type
<PAGE> 3
The undersigned, as Register of Deeds of
(COUNTY) COLUMBIA
-----------------------------------
County, Wisconsin, certifies that on
(DATE) JUNE 10, 1976
-------------------------------------
was received and accepted for record in my office, an instrument bearing the
certificate of the Secretary of Wisconsin, and described as
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Articles of Incorporation ( ) Amendment to Articles of Incorporation ( ) Statement of Intent to Dissolve
Articles of Dissolution ( ) Articles of Merger ( ) Name reservation
Articles of Consolidation ( ) Restated Articles ( ) Change of Registered Office and/or Agent OF
</TABLE>
DELLONA ENTERPRISES, INC.
AL) Witness my hand and official seal on June 10, 1976 (DATE)
----------------------------
/s/ Mae Bell
-------------------------------
REGISTER OF DEEDS
must be recorded in both counties, and also the articles of incorporation and
must be recorded in the new county. The fee for filing the change of registered
office or agent with this department is $5. Request either change of registered
office or agent forms, or amendment forms.
6. Section 180.32 (1) of the Statutes permits a choice in the wording.
of Article 8. The number of directors may be fixed by the articles (not less
than three), or the articles may provide that the number shall be fixed by the
by-laws, but shall not be less than three. Use either (1) or (2), and strike out
the other.
7. Section 180.32 (1) also provides that the initial board of directors
MAY be named in the articles of incorporation; if you decide to do this, you
must list the names in article 9. If you do not name the initial board, strike
out article 9.
8. Article 10 is provided as a place in which to insert any desired
material such as restricting preemptive rights, stock-transfer restrictions,
quorum provisions, etc.
9. The number of incorporators is unlimited; there may be only one or
there may be as many as desired, but each person named in article 12 must sign,
and each signature must be acknowledged.
10. Articles must be executed and sent to the Secretary of State,
Madison 53702, in duplicate -- one to be filed in his office, and one which will
be certified and returned and which must be recorded in the office of the
register of deeds of the county wherein the registered office is located.
Corporate existence will commence when articles are left for record with the
register of deeds.
11. FEES. If par value stock is $40,000 or less, $40. If the par value
stock is more than $40,000, the fee is $1 per $1,000. For stock of no par value,
2000 shares or less, $40; more than 2000 shares, 2(cent) per share. If stock of
par value and stock of no par value, $1 per $1,000 on the par value stock plus
2(cent) per share on the no par stock; minimum fee, $40.
<PAGE> 4
12. Section 59.513 (3) Wisconsin Statutes provides that this document
shall not be recorded unless the name of the person who, or the governmental
agency which, drafted it is printed, typewritten, stamped or written thereof in
a legible manner.
The statement printed on this document, if completed, complies with
this provision. This must be completed on each of the duplicate originals.
<PAGE> 1
EXHIBIT 3.36
AMENDED AND RESTATED BY-LAWS
of
DELLONA ENTERPRISES, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination
of any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the stockholders
<PAGE> 4
shall be held without notice immediately after and at the same place as the
annual meeting of the stockholders or the special meeting held in lieu thereof.
If in any year a meeting of the board of directors is not held at such time and
place, any elections to be held or business to be transacted at such meeting may
be held or transacted at any later meeting of the board of directors with the
same force and effect as if held or transacted at such meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law, by the articles of organization or by these by-laws may not be so
delegated. Such committees shall serve at
<PAGE> 5
the pleasure of the board of directors. Except as the board of directors may
otherwise determine, each such committee may make rules for the conduct of its
business, but, unless otherwise determined by the board or in such rules, its
business shall be conducted as nearly as may be as is provided in these by-laws
for the conduct of the business of the board of directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in
<PAGE> 7
addition to the duties and powers specifically set forth in these by-laws, such
duties and powers as are prescribed by law, such duties and powers as are
commonly incident to his office and such duties and powers as the board of
directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any, authorized to be
issued, as set forth in the articles of organization or (ii) a statement of the
existence of such preferences, powers, qualifications and rights and a statement
that the
<PAGE> 8
corporation will furnish a copy thereof to the holder of such certificate upon
written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and
<PAGE> 9
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in the Commonwealth of Massachusetts at the principal office of the
corporation in said Commonwealth or at an office of the transfer agent or of its
clerk or of its resident agent, if any. Said copies and records need not all be
kept in the same office. They shall be available at all reasonable times to
inspection by any stockholder for any proper purpose but not if the purpose for
which such inspection is sought is to secure a list of stockholders or other
information for the purpose of selling said list or information or copies
thereof or of using the same for a purpose other than the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.37
ARTICLES OF INCORPORATION
OF
L & K ENTERPRISES, INC.
The undersigned subscribers to these Articles of Incorporation, natural
persons competent to contract, hereby form a corporation for profit under the
laws of the State of Florida.
ARTICLE I
NAME: The name of this corporation shall be L & K ENTERPRISES, INC.
ARTICLE II
NATURE OF BUSINESS: The corporation may engage in any activity or
business permitted under the laws of the United States and of this State.
ARTICLE III
CAPITAL STOCK: The maximum number of shares of stock that this
corporation is authorized to have outstanding at any one time is three hundred
(300) shares of ONE DOLLAR ($1.00) par value common stock. The consideration to
be paid for each share shall be fixed by the Board of Directors from time to
time.
ARTICLE IV
INITIAL CAPITAL: The amount of capital with which the corporation will
begin business is Five Hundred Dollars ($500.00).
ARTICLE V
TERM OF EXISTENCE: This corporation shall have perpetual existence.
<PAGE> 2
ARTICLE VI
TAXATION: It is intended that this corporation shall file for taxation
under Subchapter S provision of the Internal Revenue Code.
ARTICLE VII
SMALL BUSINESS STOCK: It is intended that this corporation shall issue
its stock under Section 1244 of the Internal Revenue Code of 1954 as amended, as
a small business corporation.
ARTICLE VIII
INITIAL REGISTERED AGENT AND OFFICE: The street address of the initial
principal office of this corporation is 12995 Cleveland Avenue, Fort Myers,
Florida 33907, and the name of the initial registered agent of this corporation
is Morton A. Goldberg, and the address of the registered agent is 2201 Main
Street, Fort Myers, Florida 33901.
ARTICLE IX
DIRECTORS: The number of Directors shall be two (2) initially. The
number of Directors may be increased or diminished from time to time by the
By-Laws adopted by the Shareholders.
ARTICLE X
INITIAL DIRECTORS: The names and addresses of the initial Directors,
who subject to the By-Laws of the Corporation shall hold office for the first
year of existence of this Corporation or until his or her successor is elected
and has qualified are:
2
<PAGE> 3
NAME AND ADDRESS
----------------
KENN R. KEIM President
LU ANNE KEIM Secretary/Treasurer
SUBSCRIBERS: The names and addresses of the subscribers to these
Articles of Incorporation are as follows:
NAME AND ADDRESS
----------------
KENN R. KEIM
12995 Cleveland Avenue
Fort Myers, Florida 33907
LU ANNE KEIM
12995 Cleveland Avenue
Fort Myers, Florida 33907
ARTICLE XI
EFFECTIVE DATE: These Articles of Incorporation shall be effective upon
approval by the Secretary of State of the State of Florida.
ARTICLE XII
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 shareholders and approved at a shareholders' meeting by
a majority of the stock entitled to vote thereon, unless all of the Directors
and all of the shareholders sign a written statement manifesting their intention
that a certain amendment to the Articles of Incorporation be made.
3
<PAGE> 4
IN WITNESS WHEREOF, I have hereunto set my hand and seal, acknowledged
and filed the foregoing Articles of Incorporation, under the laws of the State
of Florida, this 20th day of July, 1984.
s/ Deanna Hallatt s/ Kenn R. Keim (SEAL)
- ---------------------------- -------------------------------
Witness KENN R. KEIM
s/ Karen S. Eads s/ Lu Ann Keim (SEAL)
- ---------------------------- -------------------------------
Witness LU ANN KEIM
STATE OF FLORIDA
COUNTY OF LEE
I HEREBY CERTIFY that before me this day personally appeared KENN R.
KEIM AND LU ANNE KEIM, to me known to be the individuals described in and who
executed the foregoing Articles of Incorporation and acknowledged before me that
they executed the same for the purposes therein expressed.
WITNESS my hand and official seal in the County and State named, this
20th day of July, 1984.
s/ Deborah Richards
-------------------------------
Notary Public
My Commission Expires:
- -----------------------------
4
<PAGE> 5
CERTIFICATE DESIGNATING PLACE OF BUSINESS OR
DOMICILE FOR THE SERVICE OF PROCESS WITHIN THIS
STATE, NAMING AGENT UPON WHOM PROCESS MAY BE SERVED
---------------------------------------------------
In pursuance of Chapter 48.091 Florida Statues, the following is
submitted in compliance with said Act:
First -- L & K ENTERPRISES, INC., desiring to organize under the laws
of the State of Florida, with its principal office as indicated in the Articles
of Incorporation at City of Fort Myers, County of Lee, State of Florida, has
named Morton A. Goldberg located at 2201 Main Street, Fort Myers, Florida 33902,
as its agent to accept service of process within this State.
ACKNOWLEDGMENT:
Having been named to accept service of process for the above-stated
corporation at place designated in this Certificate, I hereby accept to act in
this capacity and agree to comply with the provision of said Act relative to
keeping open said office.
By: s/ Resident Agent
---------------------
Resident Agent
5
<PAGE> 6
ARTICLES OF AMENDMENT
L & K ENTERPRISES, INC.
Pursuant to Florida Statutes Section 607.1006, the Articles of
Incorporation of the above-named Corporation are hereby amended as follows:
1.
Article I is hereby amended to read as follows:
NAME: The name of this corporation shall be LRK ENTERPRISES, INC.
2.
The foregoing amendment was adopted on September 7, 1993.
3.
A roll call of shareholders was taken by the Secretary and it was
reported that all of the shares outstanding and entitled to vote at the meeting
were present in person or by proxy at the meeting and that a quorum was present.
The proposed amendment was adopted by unanimous shareholder approval.
IN WITNESS WHEREOF, we, the undersigned, have executed these Articles
of Amendment, this 13th day of September, 1993.
s/ Kenn R. Keim
-------------------------------
Kenn R. Keim, President
STATE OF FLORIDA
COUNTY OF LEE
The foregoing instrument was acknowledged before me this 13th day of
September, 1993, by Kenn R. Keim, President, of L & K Enterprises, Inc., a
Florida corporation, on behalf of the corporation.
s/ Carrie Broullere
-----------------------------------------
Notary Public, State of Florida at Large
My Commission Expires:
------------------
6
<PAGE> 7
ARTICLES OF AMENDMENT OF LRK ENTERPRISES, INC.
Pursuant to Section 607.1006, Florida Statutes, the Articles of
Incorporation of LRK Enterprises, Inc., a Florida corporation, are hereby
amended as follows:
1.
Article I is hereby amended to read as follows:
"NAME: The name of this corporation shall be RDI GROUP, INC."
2.
The foregoing amendment was adopted on February 29, 1996.
3.
A roll call of shareholders was taken by the Secretary and it was
reported that all of the shares outstanding and entitled to vote at the meeting
were present in person or by proxy at the meeting, and that a quorum was
present. The proposed Amendment was adopted by unanimous shareholder approval.
IN WITNESS WHEREOF, we, the undersigned, have executed these Articles
of Amendment, this 29th day of February, 1996.
s/ Randy L. Keim
--------------------------
RANDY L. KEIM, President
STATE OF FLORIDA )
COUNTY OF LEE )
The foregoing instrument was acknowledged before me this 29th day of
February, 1996, by RANDY L. KEIM, President, of LRK Enterprises, Inc., a Florida
corporation, on behalf of the Corporation.
s/ Karen Parsons
- --------------------------
Notary Public
My Commission Expires: JUNE 21, 1999
-------------
7
<PAGE> 1
EXHIBIT 3.38
AMENDED AND RESTATED BY-LAWS
of
RDI GROUP, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination of
any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the
<PAGE> 4
stockholders shall be held without notice immediately after and at the same
place as the annual meeting of the stockholders or the special meeting held in
lieu thereof. If in any year a meeting of the board of directors is not held at
such time and place, any elections to be held or business to be transacted at
such meeting may be held or transacted at any later meeting of the board of
directors with the same force and effect as if held or transacted at such
meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law,
<PAGE> 5
by the articles of organization or by these by-laws may not be so delegated.
Such committees shall serve at the pleasure of the board of directors. Except as
the board of directors may otherwise determine, each such committee may make
rules for the conduct of its business, but, unless otherwise determined by the
board or in such rules, its business shall be conducted as nearly as may be as
is provided in these by-laws for the conduct of the business of the board of
directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
<PAGE> 7
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in addition to the duties and powers specifically set
forth in these by-laws, such duties and powers as are prescribed by law, such
duties and powers as are commonly incident to his office and such duties and
powers as the board of directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any,
<PAGE> 8
authorized to be issued, as set forth in the articles of organization or (ii) a
statement of the existence of such preferences, powers, qualifications and
rights and a statement that the corporation will furnish a copy thereof to the
holder of such certificate upon written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
<PAGE> 9
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and the stock and transfer records, which shall
contain the names of all stockholders and the record address and the amount of
stock held by each, shall be kept in the Commonwealth of Massachusetts at the
principal office of the corporation in said Commonwealth or at an office of the
transfer agent or of its clerk or of its resident agent, if any. Said copies and
records need not all be kept in the same office. They shall be available at all
reasonable times to inspection by any stockholder for any proper purpose but not
if the purpose for which such inspection is sought is to secure a list of
stockholders or other information for the purpose of selling said list or
information or copies thereof or of using the same for a purpose other than the
interest of the applicant, as a stockholder, relative to the affairs of the
corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.39
ARTICLES OF INCORPORATION
OF
RDI RESORT SERVICES CORP.
THIS IS TO CERTIFY that we, the undersigned, for the purpose of forming
a corporation, do hereby make, subscribe, acknowledge and file these Articles of
Incorporation and we certify that:
ARTICLE I
---------
The name of the corporation is:
RDI RESORT SERVICES CORP.
ARTICLE II
----------
The general nature of the business to be transacted shall be to engage
in any and all activities or businesses permitted under the laws of the United
States and of this State.
ARTICLE III
-----------
The amount of capital stock authorized shall be 100 shares of common
stock with no par value.
ARTICLE IV
----------
The corporation shall commence business with not less than $500.00 in
cash.
ARTICLE V
---------
The corporation shall have perpetual existence.
<PAGE> 2
ARTICLE VI
----------
The street address of the initial registered office of this corporation
is 9600 South Tamiami Trail, Suite 211, Fort Myers, Florida 33907 and the name
of the initial registered agent of the corporation at that address is CAROL
MONGELLO.
ARTICLE VII
-----------
This corporation shall have three (3) directors initially. The number
of directors may be increased or diminished from time to time by the By-Laws
adopted by the shareholders.
ARTICLE VIII
------------
The name and address of the directors who shall hold office for the
first year of existence of the corporation, or until their successor(s) have
been elected and qualified are:
CAROL MONGELLO
9600 South Tamiami Trail, Suite 211
Fort Myers, Florida 33907
KENN KEIM
9600 South Tamiami Trail, Suite 211
Fort Myers, Florida 33907
GEORGE HIME
9600 South Tamiami Trail, Suite 211
Fort Myers, Florida 33907
ARTICLE IX
----------
The name and address of the subscribers of these Articles of
Incorporation are as follows:
CAROL MONGELLO
9600 South Tamiami Trail, Suite 211
Fort Myers, Florida 33907
2
<PAGE> 3
KENN KEIM
9600 South Tamiami Trail, Suite 211
Fort Myers, Florida 33907
GEORGE HIME
9600 South Tamiami Trail, Suite 211
Fort Myers, Florida 33907
ARTICLE X
---------
The private property of the stockholders, officers and directors shall
not be subject to the payment of the obligations of the corporation to any
extent.
ARTICLE XI
----------
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 shareholders and approved at a shareholders' meeting by a majority
of the stock entitled to vote thereto, unless all of the directors and all of
the shareholders sign a written statement manifesting their intention that a
certain amendment of the Articles of Incorporation be made.
IN WITNESS WHEREOF, we have hereunto set our hands and seals,
acknowledged and filed these Articles of Incorporation on this 12th day of
November, 1992.
/s/ CAROL MONGELLO
-------------------------------
CAROL MONGELLO
/s/ KENN KEIM
-------------------------------
KENN KEIM
/s/ GEORGE HIME
-------------------------------
GEORGE HIME
3
<PAGE> 4
STATE OF FLORIDA )
COUNTY OF LEE )
I HEREBY CERTIFY that on this day before me, a notary public duly
authorized to take acknowledgements, personally appeared CAROL MONGELLO, KENN
KEIM and GEORGE HIME, to me known to be the persons described in and who
executed the foregoing Articles of Incorporation.
Witness my hand and official seal this 12th day of November, 1982.
/s/ Deborah Richards
-------------------------------
Notary Public
My Commission Expires: March 3, 1984
4
<PAGE> 1
EXHIBIT 3.40
AMENDED AND RESTATED BY-LAWS
of
RDI RESORT SERVICES CORPORATION
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination of
any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the
<PAGE> 4
stockholders shall be held without notice immediately after and at the same
place as the annual meeting of the stockholders or the special meeting held in
lieu thereof. If in any year a meeting of the board of directors is not held at
such time and place, any elections to be held or business to be transacted at
such meeting may be held or transacted at any later meeting of the board of
directors with the same force and effect as if held or transacted at such
meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law,
<PAGE> 5
by the articles of organization or by these by-laws may not be so delegated.
Such committees shall serve at the pleasure of the board of directors. Except as
the board of directors may otherwise determine, each such committee may make
rules for the conduct of its business, but, unless otherwise determined by the
board or in such rules, its business shall be conducted as nearly as may be as
is provided in these by-laws for the conduct of the business of the board of
directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
<PAGE> 7
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in addition to the duties and powers specifically set
forth in these by-laws, such duties and powers as are prescribed by law, such
duties and powers as are commonly incident to his office and such duties and
powers as the board of directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any,
<PAGE> 8
authorized to be issued, as set forth in the articles of organization or (ii) a
statement of the existence of such preferences, powers, qualifications and
rights and a statement that the corporation will furnish a copy thereof to the
holder of such certificate upon written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
<PAGE> 9
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and the stock and transfer records, which shall
contain the names of all stockholders and the record address and the amount of
stock held by each, shall be kept in the Commonwealth of Massachusetts at the
principal office of the corporation in said Commonwealth or at an office of the
transfer agent or of its clerk or of its resident agent, if any. Said copies and
records need not all be kept in the same office. They shall be available at all
reasonable times to inspection by any stockholder for any proper purpose but not
if the purpose for which such inspection is sought is to secure a list of
stockholders or other information for the purpose of selling said list or
information or copies thereof or of using the same for a purpose other than the
interest of the applicant, as a stockholder, relative to the affairs of the
corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.41
ARTICLES OF INCORPORATION
OF
RDI RESOURCES, INC.
The undersigned, being an individual, does hereby act as an
incorporator in adopting the following Articles of Incorporation for the purpose
of organizing a corporation for profit, under the laws of the State of Florida,
pursuant to Chapter 607 of the Florida Statutes, and hereby certifies the
following:
ARTICLE ONE
-----------
The name of the corporation shall be RDI Resources, Inc.
ARTICLE TWO
-----------
The principal place of business and mailing address of the corporation
is 12995 Cleveland Avenue, Suite 164, Fort Myers, Florida 33907.
ARTICLE THREE
-------------
The number of shares that the corporation is authorized to issue is Ten
Thousand (10,000) shares, all of which shall have a par value of One Dollar
($1.00) per share. All shares of the corporation shall be of the same class and
shall be common shares.
ARTICLE FOUR
------------
The name of the initial registered agent of the corporation shall be
Kenn R. Keim. The street address of the initial registered office of the
corporation in the State of Florida is 12995 Cleveland Avenue, Suite 164, Fort
Myers, Florida 33907. The written acceptance of the said initial registered
agent, as required by Section 607.0501(3) of the Florida Business
<PAGE> 2
Corporation Act, is set forth following the signature of the incorporator and is
made a part of these Articles of Incorporation.
ARTICLE FIVE
------------
The name and address of the incorporator to these Articles of
Incorporation is Kenn R. Keim, 12995 Cleveland Avenue, Suite 164, Fort Myers,
Florida 33907.
ARTICLE SIX
-----------
Each share of stock of the corporation shall entitle the holder thereof
to a preemptive right, for a period of thirty (30) days, to subscribe for,
purchase, or otherwise acquire any shares of the same class of the corporation
or any equity and/or voting rights of any class of the corporation which the
corporation proposes to issue or any rights or options which the corporation
proposes to grant for the purchase of shares of the same class of the
corporation or of equity and/or voting shares of any class of the corporation or
for the purchase of any shares, bonds, securities or obligations of the
corporation which are convertible into or exchangeable for, or which carry any
rights to subscribe for, purchase or otherwise acquire unissued shares of the
same class of the corporation or equity and/or voting shares of any class of the
corporation, whether now or hereafter authorized or created, and whether any
proposed issue, reissue, or grant is for cash, property or other lawful
consideration; and after the expiration of said thirty (30) days, any and all of
such shares, rights, options, bonds, securities or obligations of the
corporation may be issued, reissued, or granted by the Board of Directors, as
the case may be, to such individuals and entities, and for such lawful
consideration, and on such terms, as the Board of Directors in its discretion
may determine. As used herein, the terms "equity shares" and
2
<PAGE> 3
"voting shares" shall mean, respectively, shares which confer unlimited dividend
rights and shares which confer unlimited voting rights in the election of one
(1) or more directors.
ARTICLE SEVEN
-------------
The corporation is organized for the purpose of carrying on any lawful
business for pecuniary gain and profit and may do all things necessary and
proper for the accomplishment of these purposes and may buy, own, design,
manufacture, distribute, lease, finance, sell, or otherwise dispose of, deal in
or with any types of property, real and personal, and in doing so may act as
principal or agent, as member of a partnership or joint venture or as licensor
or licensee, upon commission or otherwise. The corporation may enter into any
lawful business from time to time without limitation. The corporation shall have
all of the general powers granted to corporations organized under the Florida
Business Corporation Act, whether granted by specific statutory authority or by
construction of law.
ARTICLE EIGHT
-------------
The duration of the corporation shall be perpetual.
ARTICLE NINE
------------
The corporation shall, to the fullest extent permitted by the
provisions of the Florida Business Corporation Act, as the same may be amended
and supplemented from time to time, indemnify any and all persons whom it shall
have power to indemnify under said provisions from and against any and all
expenses, liabilities or other matters referred to or covered by said
provisions, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any bylaw, vote or shareholders or
3
<PAGE> 4
disinterested directors, or otherwise, both as to action in his official
capacity and as to action in any other capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Incorporation as the sole incorporator of the corporation on this 10th day of
July, 1993.
By: /s/ Kenn R. Keim
--------------------------------
Kenn R. Keim, Incorporator
HAVING BEEN NAMED AS REGISTERED AGENT AND TO ACCEPT SERVICE OF PROCESS
FOR THE ABOVE-STATED CORPORATION AT THE PLACE DESIGNATED IN THESE ARTICLES OF
INCORPORATION, I HEREBY ACCEPT THE APPOINTMENT AS REGISTERED AGENT AND AGREE TO
ACT IN THIS CAPACITY. I FURTHER AGREE TO COMPLY WITH THE PROVISIONS OF ALL
STATUTES RELATING TO THE PROPER AND COMPLETE PERFORMANCE OF MY DUTIES, AND I AM
FAMILIAR WITH AND ACCEPT THE OBLIGATIONS OF MY POSITION AS REGISTERED AGENT.
This 10th day of July, 1993.
By: /s/ Kenn R. Keim
--------------------------------
Kenn R. Keim, Incorporator
4
<PAGE> 1
EXHIBIT 3.42
AMENDED AND RESTATED BY-LAWS
of
RDI RESOURCES, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
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Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination of
any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the
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stockholders shall be held without notice immediately after and at the same
place as the annual meeting of the stockholders or the special meeting held in
lieu thereof. If in any year a meeting of the board of directors is not held at
such time and place, any elections to be held or business to be transacted at
such meeting may be held or transacted at any later meeting of the board of
directors with the same force and effect as if held or transacted at such
meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law,
<PAGE> 5
by the articles of organization or by these by-laws may not be so delegated.
Such committees shall serve at the pleasure of the board of directors. Except as
the board of directors may otherwise determine, each such committee may make
rules for the conduct of its business, but, unless otherwise determined by the
board or in such rules, its business shall be conducted as nearly as may be as
is provided in these by-laws for the conduct of the business of the board of
directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of the
board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep a
record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
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Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in addition to the duties and powers specifically set
forth in these by-laws, such duties and powers as are prescribed by law, such
duties and powers as are commonly incident to his office and such duties and
powers as the board of directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any,
<PAGE> 8
authorized to be issued, as set forth in the articles of organization or (ii) a
statement of the existence of such preferences, powers, qualifications and
rights and a statement that the corporation will furnish a copy thereof to the
holder of such certificate upon written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
<PAGE> 9
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and the stock and transfer records, which shall
contain the names of all stockholders and the record address and the amount of
stock held by each, shall be kept in the Commonwealth of Massachusetts at the
principal office of the corporation in said Commonwealth or at an office of the
transfer agent or of its clerk or of its resident agent, if any. Said copies and
records need not all be kept in the same office. They shall be available at all
reasonable times to inspection by any stockholder for any proper purpose but not
if the purpose for which such inspection is sought is to secure a list of
stockholders or other information for the purpose of selling said list or
information or copies thereof or of using the same for a purpose other than the
interest of the applicant, as a stockholder, relative to the affairs of the
corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.43
Articles of Incorporation
of
Resource Development International, Inc.
ARTICLE I
NAME AND DURATION
The name of the Corporation is Resource Development
International, Inc. The duration of the Corporation is perpetual. The effective
date upon which this Corporation shall come into existence shall be the date
these Articles are filed by the Secretary of State.
ARTICLE II
PRINCIPAL OFFICE
The address of the principal office of the Corporation in the
State of Florida is 252 Rippling Lane, in the City of Winter Park.
ARTICLE III
REGISTERED OFFICE AND AGENT
The address of the registered office in the State of Florida
is 2300 Sun Bank Center, in the City of Orlando, County of Orange. The name of
the registered agent at such address is A.G.C. Co.
ARTICLE IV
CORPORATE PURPOSES, POWERS AND RIGHTS
1. The nature of the business to be conducted or promoted and
the purposes of the Corporation are to engage in any lawful act or activity for
which corporations may be organized under the Business Corporation Act of
Florida.
<PAGE> 2
2. In furtherance of its corporate purposes, the Corporation
shall have all of the general and specific powers and rights granted to and
conferred on a corporation by the Business Corporation Act of Florida.
ARTICLE V
CAPITAL STOCK
The total number of share of capital stock which the
Corporation has the authority to issue is 10,000 shares of Common Stock ("Common
Stock") at $.10 per share.
ARTICLE VI
INCORPORATOR
The name and mailing address of the incorporator of this
Corporation is as follows:
Name Address
---- -------
A.G.C. Co. 200 S. Orange Avenue
Suite 2300
Orlando, Florida 32801
ARTICLE VII
BOARD OF DIRECTORS
1. The number of members of the Board of Directors may be
increased or diminished from time to time by the Bylaws; provided, however,
there shall never be less than one. Each director shall serve until the next
annual meeting of shareholders.
2. If any vacancy occurs in the Board of Directors during a
term, the remaining directors, by affirmative vote of a majority thereof, may
elect a director to fill the vacancy until the next annual meeting of
shareholders.
3. The names and mailing addresses of the persons who shall
serve as directors of the Corporation until the first annual meeting of the
shareholders are as follows:
-2-
<PAGE> 3
Name Address
---- -------
Joseph A. Sasek 252 Rippling Lane
Winter Park, FL 32789
Carol K. Sasek 252 Rippling Lane
Winter Park, FL 32789
Louis T. Hughes 1461 Via Tuscany
Winter Park, FL 32789
ARTICLE VIII
AMENDMENT
The Corporation reserves the right to amend, alter, change or
repeal any provision contained in these Articles of Incorporation, in the manner
now or hereafter prescribed by statute, and all rights conferred upon
shareholders herein are granted subject to this reservation.
ARTICLE IX
INDEMNIFICATION
The Corporation shall indemnify any incorporator, officer or
director, or any former incorporator, officer or director, to the full extent
permitted by law.
ARTICLE X
TRANSFER OF SHARES
If, from time to time, a shareholders' agreement among all of
the shareholders of the Corporation is in effect regarding the Subchapter S
status of the Corporation pursuant to the Internal Revenue Code of the United
States in effect from time to time, then transfers of the Corporation's Common
Stock made not in accordance with such agreement, whether by operation of law or
otherwise, are null and void AB INITIO.
The undersigned, for the purpose of forming a corporation
under the laws of the State of Florida, does make, file and record these
Articles of Incorporation, and does certify that the facts herein stated are
true; and I have accordingly hereunto set my hand and seal.
-3-
<PAGE> 4
DATED at Orlando, Florida, this 6th day of August, 1990.
A.G.C. Co.
By: /s/ David A. Webster
--------------------------------------
Vice President
STATE OF FLORIDA )
) SS.
COUNTY OF ORANGE )
Be it remembered, that on this 6th day of August, 1990,
personally appeared before me, the undersigned officer duly authorized to
administer oaths and take acknowledgments, David A. Webster on behalf of A.G.C.
Co. as its Vice President, party to the foregoing Articles of Incorporation,
known to me personally to be such, and I having first made known to him the
contents of said Articles, he did acknowledge that he signed, sealed and
delivered the same as his voluntary act and deed.
Given under hand and seal of office the day and year
aforesaid.
/s/ Barbara A. Egolf
------------------------------
Notary Public
My Commission Expires:
-4-
<PAGE> 5
REGISTERED AGENT CERTIFICATE
----------------------------
In pursuance of the Florida Business Corporation Act, the
following is submitted, in compliance with said statute:
That Resource Development International, Inc. desiring to
organize under the laws of the State of Florida, with its registered office, as
indicated in the Articles of Incorporation at the City of Orlando, County of
Orange, State of Florida, has named A.G.C. Co., located at said registered
office, as its registered agent to accept service of process and perform such
other duties as are required in the State.
ACKNOWLEDGMENT:
Having been named to accept service of process and serve as
registered agent for the above-stated Corporation, at the place designated in
this Certificate, the undersigned, by and through its duly elected officer,
hereby accepts to act in this capacity, and agrees to comply with the provision
of said statute relative in keeping open said office, and further states it is
familiar with ss. 607.0501, FLORIDA STATUTES.
A.G.C. Co.
By: /s/ D. A. Webster
---------------------------------
Vice President
DATED: August 6, 1990
-5-
<PAGE> 1
EXHIBIT 3.44
AMENDED AND RESTATED BY-LAWS
of
RESORT DEVELOPMENT INTERNATIONAL, INC.
ARTICLE I
STOCKHOLDERS
Section l. ANNUAL MEETING. The annual meeting of the stockholders shall be
held within six months after the end of the corporations fiscal year on such
date and at such place and time as may be determined each year by the board of
directors or, in the absence of action by the board, by the president. If in any
year the annual meeting is not held on said date, a special meeting in lieu
thereof may be held at a later time and any elections held or business
transacted at such meeting shall have the same force and effect as if held or
transacted at the annual meeting.
Section 2. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time by the president or by the board of directors and shall be
called by the clerk, or in case of the death, absence, incapacity or refusal of
the clerk, by any other officer, upon written application of one or more
stockholders who hold at least one tenth part in interest of the capital stock
entitled to vote thereat. Such application shall specify the purposes for which
the meeting is to be called and may designate the date, hour and place of such
meeting, provided, however, that no such application shall designate a date not
a full business day or an hour not within normal business hours as the date or
hour of such meeting without the approval of the president or the board of
directors.
Section 3. PLACE OF MEETINGS. Meetings of the stockholders may be held
anywhere within, but not without, the United States.
Section 4. NOTICE. Except as hereinafter provided, a written or printed
notice of every meeting of stockholders stating the place, date, hour and
purposes thereof shall be given by the clerk or an assistant clerk (or by any
other officer in the case of an annual meeting or by the person or persons
calling the meeting in the case of a special meeting) at least seven (7) days
before the meeting to each stockholder entitled to vote thereat and to each
stockholder who, by law, by the articles of organization or by these by-laws, is
entitled to such notice, by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, addressed to him at
his address as it appears upon the records of the corporation. No notice of the
place, date, hour or purposes of any annual or special meeting of stockholders
need be given to a stockholder if a written waiver of such notice, executed
before or after the meeting by such stockholder or his attorney thereunto
authorized, is filed with the records of the meeting.
<PAGE> 2
Section 5. ACTION AT A MEETING. Except as otherwise provided by the articles
of organization, at any meeting of the stockholders a majority of all shares of
stock then issued, outstanding and entitled to vote shall constitute a quorum
for the transaction of any business. Though less than a quorum be present, any
meeting may without further notice be adjourned to a subsequent date or until a
quorum be had, and at any such adjourned meeting any business may be transacted
which might have been transacted at the original meeting.
When a quorum is present at any meeting, the
affirmative vote of a majority of the shares of stock present or represented and
entitled to vote shall be necessary and sufficient to the determination of any
questions brought before the meeting, unless a larger vote is required by law,
by the articles of organization or by these by-laws, provided, however, that any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote in such election.
Except as otherwise provided by law or by the
articles of organization or by these by-laws, each holder of record of shares of
stock entitled to vote on any matter shall have one vote for each such share
held of record by him and a proportionate vote for any fractional shares so held
by him. Stockholders may vote either in person or by proxy. No proxy dated more
than six months before the meeting named therein shall be valid and no proxy
shall be valid after the final adjournment of such meeting. A proxy with respect
to stock held in the name of two or more persons shall be valid if executed by
any one of them unless at or prior to the exercise of the proxy the corporation
receives a specific written notice to the contrary from any one of them. A proxy
purporting to be executed by or on behalf of a stockholder shall be deemed valid
unless challenged at or prior to its exercise and the burden of proving its
invalidity shall rest on the challenger.
Any election by stockholders and the determination of
any other questions to come before a meeting of the stockholders shall be by
ballot if so requested by any stockholder entitled to vote thereon but need not
be otherwise.
Section 6. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the stockholders may be taken without a meeting if all
stockholders entitled to vote on the matter consent to the action in writing and
the written consents are filed with the records of the meetings of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE II
DIRECTORS
Section l. NUMBER AND ELECTION. There shall be a board of not less than
three directors. The number of directors for the ensuing year shall be
determined, and the number of directors so determined shall be elected, at the
annual meeting of the stockholders by such stockholders as have the right to
vote thereon, but the stockholders may, at any special meeting held for the
purpose, increase or decrease the number of directors as thus determined and
elect new directors to complete the number so determined or remove directors to
reduce the number of directors to the number so determined. The board of
directors may, by vote of a majority of the directors then in office, increase
the number of directors determined by the stockholders and elect new directors
to complete the number so determined. No director need be a stockholder.
Notwithstanding the above, if there be only two stockholders the number of
directors may be not less than two, and whenever there shall be only one
stockholder the number of directors may be not less than one.
Section 2. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the directors shall hold office until the next
annual meeting of stockholders and until their successors are chosen and
qualified.
Section 3. RESIGNATIONS. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk or if there be one, to the secretary. Such resignation shall become
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 4. REMOVAL. At any meeting of the stockholders called for the
purpose any director may be removed from office with or without cause by the
vote of a majority of the shares issued, outstanding and entitled to vote in the
election of directors. At any meeting of the board of directors any director may
be removed from office for cause by vote of a majority of the directors then in
office. A director may be removed for cause only after a reasonable notice and
opportunity to be heard before the body proposing to remove him.
Section 5. VACANCIES. Vacancies in the board of directors may be filled by
vote of a majority of the remaining directors or, if not yet so filled, by the
stockholders.
Section 6. REGULAR MEETINGS. Regular meetings of the board of directors may
be held at such times and places within or without the Commonwealth of
Massachusetts as the board of directors may fix from time to time and, when so
fixed, no notice thereof need be given. The first meeting of the board of
directors following the annual meeting of the
<PAGE> 4
stockholders shall be held without notice immediately after and at the same
place as the annual meeting of the stockholders or the special meeting held in
lieu thereof. If in any year a meeting of the board of directors is not held at
such time and place, any elections to be held or business to be transacted at
such meeting may be held or transacted at any later meeting of the board of
directors with the same force and effect as if held or transacted at such
meeting.
Section 7. SPECIAL MEETINGS. Special meetings of the board of directors may
be called at any time by the president or secretary (or, if there be no
secretary, the clerk) or by any director. Such special meetings may be held
anywhere within or without the Commonwealth of Massachusetts. A written, printed
or telegraphic notice stating the place, date and hour (but not necessarily the
purposes) of the meeting shall be given by the secretary or an assistant
secretary (or, if there be no secretary or assistant secretary, the clerk or an
assistant clerk) or by the officer or director calling the meeting at least
forty-eight (48) hours before such meeting to each director by leaving such
notice with him or at his residence or usual place of business or by mailing it,
postage prepaid, or sending it by prepaid telegram, addressed to him at his last
known address. No notice of the place, date or hour of any meeting of the board
of directors need be given to any director if a written waiver of such notice,
executed by him before or after the meeting, is filed with the records of the
meeting, or to any director who attends the meeting without protesting prior
thereto or at its commencement the lack of notice to him.
Section 8. ACTION AT A MEETING. At any meeting of the board of directors, a
majority of the directors then in office shall constitute a quorum. Though less
than a quorum be present, any meeting may without further notice be adjourned to
a subsequent date or until a quorum be had. When a quorum is present at any
meeting a majority of the directors present may take any action on behalf of the
board except to the extent that a larger number is required by law, by the
articles of organization or by these by-laws.
Section 9. ACTION WITHOUT A MEETING. Any action required or permitted to be
taken at any meeting of the directors may be taken without a meeting if all the
directors consent to the action in writing and the written consents are filed
with the records of the meetings of the directors. Such consents shall be
treated for all purposes as a vote at a meeting.
Section 10. POWERS. The board of directors shall have and may exercise all
the powers of the corporation, except such as by law, by the articles of
organization or by these by-laws are conferred upon or reserved to the
stockholders. In the event of any vacancy in the board of directors, the
remaining directors then in office, except as otherwise provided by law, shall
have and may exercise all of the powers of the board of directors until the
vacancy is filled.
Section 11. COMMITTEES. The board of directors may elect from the board an
executive committee or one or more other committees and may delegate to any such
committee or committees any or all of the powers of the board except those which
by law,
<PAGE> 5
by the articles of organization or by these by-laws may not be so delegated.
Such committees shall serve at the pleasure of the board of directors. Except as
the board of directors may otherwise determine, each such committee may make
rules for the conduct of its business, but, unless otherwise determined by the
board or in such rules, its business shall be conducted as nearly as may be as
is provided in these by-laws for the conduct of the business of the board of
directors.
Section 12. MEETING BY TELECOMMUNICATIONS. Members of the board of directors
or any committee elected thereby may participate in a meeting of such board or
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in a meeting can hear each other at
the same time and participation by such means shall constitute presence in
person at the meeting.
ARTICLE III
OFFICERS
Section l. ENUMERATION. The officers of the corporation shall consist of a
president, a treasurer and a secretary and such other officers, including
without limitation a chairman of the board of directors, clerk and one or more
vice presidents, assistant treasurers, assistant clerks and assistant
secretaries, as the board of directors may from time to time determine.
Section 2. QUALIFICATIONS. No officer need be a stockholder or a director.
The same person may hold at the same time one or more offices unless otherwise
provided by law. The clerk shall be a resident of Massachusetts unless the
corporation shall have a resident agent. Any officer may be required by the
board of directors to give a bond for the faithful performance of his duties in
such form and with such sureties as the board may determine.
Section 3. ELECTIONS. The president, treasurer and clerk shall be elected
annually by the board of directors at its first meeting following the annual
meeting of the stockholders. All other officers shall be chosen or appointed by
the board of directors.
Section 4. TERM. Except as otherwise provided by law, by the articles of
organization or by these by-laws, the president, treasurer and clerk shall hold
office until the first meeting of the board of directors following the next
annual meeting of the stockholders and until their respective successors are
chosen and qualified. All other officers shall hold office until the first
meeting of the board of directors following the next annual meeting of the
stockholders, unless a shorter time is specified in the vote choosing or
appointing such officer or officers.
<PAGE> 6
Section 5. RESIGNATIONS. Any officer may resign by delivering his written
resignation to the corporation at its principal office or to the president or
clerk, or, if there be one, to the secretary. Such resignation shall be
effective at the time or upon the happening of the condition, if any, specified
therein or, if no such time or condition is specified, upon its receipt.
Section 6. REMOVAL. Any officer may be removed from office with or without
cause by vote of a majority of the directors then in office. An officer may be
removed for cause only after a reasonable notice and opportunity to be heard
before the board of directors.
Section 7. VACANCIES. Vacancies in any office may be filled by the board of
directors.
Section 8. CERTAIN DUTIES AND POWERS. The officers designated below, subject
at all times to these by-laws and to the direction and control of the board of
directors, shall have and may exercise the respective duties and powers set
forth below:
THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of
the board of directors, if there be one, shall, when present, preside at all
meetings of the board of directors.
THE PRESIDENT. The president shall be the chief executive
officer of the corporation and shall have general operating charge of its
business. Unless otherwise prescribed by the board of directors, he shall,
when present, preside at all meetings of the stockholders, and, if a
director, at all meetings of the board of directors unless there be a
chairman of the board of directors who is present at the meeting.
THE TREASURER. The treasurer shall be the chief financial
officer of the corporation and shall cause to be kept accurate books of
account.
THE CLERK. The clerk, if there be one, shall keep a record
of all proceedings of the stockholders and, if there be no secretary, shall
also keep a record of all proceedings of the board of directors. In the
absence of the clerk from any meeting of the stockholders or, if there be no
secretary, from any meeting of the board of directors, an assistant clerk,
if there be one, otherwise a clerk pro tempore designated by the person
presiding at the meeting, shall perform the duties of the clerk at such
meeting.
THE SECRETARY. The secretary, if there be one, shall keep
a record of all proceedings of the board of directors. In the absence of the
secretary, if there be one, from any meeting of the board of directors, an
assistant secretary, if there be one, otherwise a secretary pro tempore
designated by the person presiding at the meeting, shall perform the duties
of the secretary at such meeting.
<PAGE> 7
Section 9. OTHER DUTIES AND POWERS. Each officer, subject at all times to
these by-laws and to the direction and control of the board of directors, shall
have and may exercise, in addition to the duties and powers specifically set
forth in these by-laws, such duties and powers as are prescribed by law, such
duties and powers as are commonly incident to his office and such duties and
powers as the board of directors may from time to time prescribe.
ARTICLE IV
CAPITAL STOCK
Section l. AMOUNT AND ISSUANCE. The total number of shares and the par
value, if any, of each class of stock which the corporation is authorized to
issue shall be stated in the articles of organization. The directors may at any
time issue all or from time to time any part of the unissued capital stock of
the corporation from time to time authorized under the articles of organization,
and may determine, subject to any requirements of law, the consideration for
which stock is to be issued and the manner of allocating such consideration
between capital and surplus.
Section 2. CERTIFICATES. Each stockholder shall be entitled to a certificate
or certificates stating the number and the class and the designation of the
series, if any, of the shares held by him, and otherwise in form approved by the
board of directors. Such certificate or certificates shall be signed by the
president or a vice president and by the treasurer or an assistant treasurer.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent, or by a registrar, other than a director, officer or employee of the
corporation. In case any officer who has signed or whose facsimile signature has
been placed on such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer at the time of its issue.
Every certificate issued for shares of stock at a
time when such shares are subject to any restriction on transfer pursuant to the
articles of organization, these by-laws or any agreement to which the
corporation is a party shall have the restriction noted conspicuously on the
certificate and shall also set forth on the face or back of the certificate
either (i) the full text of the restriction or (ii) a statement of the existence
of such restriction and a statement that the corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge.
Every certificate issued for shares of stock at a
time when the corporation is authorized to issue more than one class or series
of stock shall set forth on the face or back of the certificate either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series, if any,
<PAGE> 8
authorized to be issued, as set forth in the articles of organization or (ii) a
statement of the existence of such preferences, powers, qualifications and
rights and a statement that the corporation will furnish a copy thereof to the
holder of such certificate upon written request and without charge.
Section 3. TRANSFERS. The board of directors may make such rules and
regulations not inconsistent with the law, with the articles of organization or
with these by-laws as it deems expedient relative to the issue, transfer and
registration of stock certificates. The board of directors may appoint a
transfer agent and a registrar of transfers or either and require all stock
certificates to bear their signatures. Except as otherwise provided by law, by
the articles of organization or by these by-laws, the corporation shall be
entitled to treat the record holder of any shares of stock as shown on the books
of the corporation as the holder of such shares for all purposes, including the
right to receive notice of and to vote at any meeting of stockholders and the
right to receive any dividend or other distribution in respect of such shares.
Section 4. RECORD DATE. The board of directors may fix in advance a time,
which shall be not more than sixty (60) days before the date of any meeting of
stockholders or the date for the payment of any dividend or the making of any
distribution to stockholders or the last day on which the consent or dissent of
stockholders may be effectively expressed for any purpose, as the record date
for determining the stockholders having the right to notice of and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution or the right to give such consent or dissent, and in such case
only stockholders of record on such record date shall have such right,
notwithstanding any transfer of stock on the books of the corporation after the
record date; or without fixing such record date the directors may for any of
such purposes close the transfer books for all or any part of such period.
Section 5. LOST CERTIFICATES. The board of directors may, except as
otherwise provided by law, determine the conditions upon which a new certificate
of stock may be issued in place of any certificate alleged to have been lost,
mutilated or destroyed.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section l. FISCAL YEAR. The fiscal year of the corporation shall begin on
the first day of January in each year and end on the last day of December next
following.
Section 2. CORPORATE SEAL. The seal of the corporation shall be in such form
as shall be determined from time to time by the board of directors.
<PAGE> 9
Section 3. CORPORATION RECORDS. The original, or attested copies, of the
articles of organization, by-laws and records of all meetings of the
incorporators and stockholders, and the stock and transfer records, which shall
contain the names of all stockholders and the record address and the amount of
stock held by each, shall be kept in the Commonwealth of Massachusetts at the
principal office of the corporation in said Commonwealth or at an office of the
transfer agent or of its clerk or of its resident agent, if any. Said copies and
records need not all be kept in the same office. They shall be available at all
reasonable times to inspection by any stockholder for any proper purpose but not
if the purpose for which such inspection is sought is to secure a list of
stockholders or other information for the purpose of selling said list or
information or copies thereof or of using the same for a purpose other than the
interest of the applicant, as a stockholder, relative to the affairs of the
corporation.
Section 4. VOTING OF SECURITIES. Except as the board of directors may
otherwise prescribe, the president or the treasurer shall have full power and
authority in the name and on behalf of the corporation, subject to the
instructions of the board of directors, to waive notice of, to attend, act and
vote at, and to appoint any person or persons to act as proxy or attorney in
fact for this corporation (with or without power of substitution) at any meeting
of stockholders or shareholders of any other corporation or organization, the
securities of which may be held by this corporation.
ARTICLE VI
AMENDMENTS
These by-laws may be amended or repealed at any annual or special meeting of
the stockholders by the affirmative vote of a majority of the shares of capital
stock then issued, outstanding and entitled to vote provided notice of the
proposed amendment or repeal is given in the notice of the meeting. No change in
the date fixed in these by-laws for the annual meeting of the stockholders shall
be made within sixty (60) days before such date, and notice of any change in
such date shall be given to all stockholders at least twenty (20) days before
the new date fixed for such meeting.
If authorized by the articles of organization, these by-laws may also be
amended or repealed in whole or in part, or new by-laws made, by the board of
directors except with respect to any provision hereof which by law, the articles
of organization or these by-laws requires action by the stockholders. Not later
than the time of giving notice of the meeting of stockholders next following the
making, amendment or repeal by the directors of any by-laws, notice thereof
stating the substance of such change shall be given to all stockholders entitled
to vote on amending the by-laws. Any by-law to be made, amended or repealed by
the directors may be amended or repealed by the stockholders.
<PAGE> 1
EXHIBIT 3.45
CERTIFICATE OF LIMITED PARTNERSHIP
OF
Properties of the Southwest, L.P.
This Certificate of Limited Partnership of Properties of the Southwest,
L.P. (the "Limited Partnership") is being executed by the undersigned for the
purpose of forming a limited partnership pursuant to the Delaware Revised
Uniform Limited Partnership Act.
1. The name of the limited partnership is:
Properties of the Southwest, L.P.
2. The address of the registered office of the limited partnership in
Delaware is 1013 Centre Road, Wilmington, Delaware 19805. The limited
partnership's registered agent, for service of process, at that address is
Corporation Service Company.
3. The name and business address of the general partner is:
NAME ADDRESS
---- -------
Properties of the Southwest, Inc. 3860 W. Northwest Hwy., Suite 230
Dallas, TX 75220
IN WITNESS WHEREOF, the undersigned, being the sole general partner of
the partnership, has caused this Certificate of Limited Partnership to be duly
executed as of the 24th day of November, 1997.
Properties of the Southwest, Inc., General Partner
/s/ John F. Chiste
------------------------------------------------
John F. Chiste, Treasurer
<PAGE> 2
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF LIMITED PARTNERSHIP
OF
PROPERTIES OF THE SOUTHWEST, L.P.
It is hereby certified that:
FIRST: The name of the limited partnership (hereinafter called the
"partnership") is:
PROPERTIES OF THE SOUTHWEST, L.P.
SECOND: Pursuant to provisions of Section 17-202, Title 6, Delaware
Code, the Certificate of Limited Partnership is amended as follows:
The name and business address of the general partner is:
NAME ADDRESS
---- -------
Properties of the Southwest One, Inc. 3860 W. Northwest Highway
Suite 230
Dallas, Texas 75220
The undersigned, a general partner of the partnership, executed this
Certificate of Amendment on January 20, 1998.
Properties of the Southwest One, Inc. f/k/a
Properties of the Southwest, Inc.
General Partner
/s/ Patrick E. Rondeau
--------------------------------------------
Patrick E. Rondeau, Executive Vice President
<PAGE> 1
Exhibit 4.7
------------------------
BLUEGREEN CORPORATION
as Issuer,
CERTAIN OF ITS SUBSIDIARIES SPECIFIED HEREIN
as Subsidiary Guarantors
and
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION
as Notes Trustee
------------------------
$110,000,000
10 1/2% SENIOR SECURED NOTES DUE 2008
------------------------
INDENTURE
Dated as of April 1, 1998
------------------------
<PAGE> 2
CROSS-REFERENCES TO CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318 OF THE TRUST INDENTURE ACT OF 1939
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION(S)
- --------------- --------------------
<S> <C>
Section 310(a)(1)................................................................................................7.10
(a)(2)................................................................................................7.10
(a)(3).................................................................................................N/A
(a)(4).................................................................................................N/A
(a)(5)................................................................................................7.10
(b)...................................................................................................7.10
(c)....................................................................................................N/A
Section 311(a)...................................................................................................7.11
(b)...................................................................................................7.11
(c)....................................................................................................N/A
Section 312(a)...................................................................................................2.05
(b)..................................................................................................12.03
(c)..................................................................................................12.03
Section 313(a).............................................................................................7.05, 7.06
(b)...................................................................................................7.06
(c)...................................................................................................7.06
(d)...................................................................................................7.06
Section 314(a)......................................................................................4.03, 4.04, 12.05
(b)..................................................................................................11.07
(c)(1)...............................................................................................11.03
(c)(2)...............................................................................................11.03
(c)(3).................................................................................................N/A
(d)..................................................................................................11.03
(e)..................................................................................................12.05
(f)...................................................................................................4.19
Section 315(a)...................................................................................................7.02
(b)...................................................................................................7.05
(c)...................................................................................................7.01
(d)...................................................................................................7.01
(e)...................................................................................................6.11
Section 316(a)(1)..........................................................................................6.04, 6.05
(a)(2).................................................................................................N/A
(b).............................................................................................6.07, 9.02
(c)...................................................................................................2.19
Section 317(a).............................................................................................6.08, 6.09
(b)...................................................................................................2.04
</TABLE>
* This table is not, and shall not be deemed for any purpose to be, a part of
the Indenture. "N/A" means not applicable.
-i-
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
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ARTICLE 1: DEFINITIONS AND INCORPORATION BY REFERENCE....................................................1
Section 1.01. Definitions..........................................................................1
Section 1.02. Other Definitions...................................................................21
Section 1.03. Incorporation by Reference of Trust Indenture Act...................................23
Section 1.04. Rules of Construction...............................................................23
ARTICLE 2: THE NOTES....................................................................................23
Section 2.01. Form and Dating.....................................................................23
Section 2.02. Execution and Authentication........................................................24
Section 2.03. Registrar and Paying Agent..........................................................25
Section 2.04. Paying Agent to Hold Money in Trust.................................................25
Section 2.05. Noteholder Lists....................................................................26
Section 2.06. Transfer and Exchange...............................................................26
Section 2.07. Replacement Notes...................................................................27
Section 2.08. Outstanding Notes...................................................................27
Section 2.09. Treasury Notes......................................................................28
Section 2.10. Temporary Notes.....................................................................28
Section 2.11. Cancellation........................................................................28
Section 2.12. Defaulted Interest..................................................................28
Section 2.13. CUSIP Number........................................................................29
Section 2.14. Deposit of Moneys...................................................................29
Section 2.15. Restrictive Legends.................................................................29
Section 2.16. Book-Entry Provisions for Global Note...............................................31
Section 2.17. Special Transfer Provisions.........................................................32
Section 2.18. Persons Deemed Owners...............................................................34
Section 2.19. Record Date.........................................................................34
ARTICLE 3: REDEMPTION...................................................................................34
Section 3.01. Notices to Trustee..................................................................34
Section 3.02. Selection of Notes to be Redeemed...................................................35
Section 3.03. Notice of Redemption................................................................35
Section 3.04. Effect of Notice of Redemption......................................................36
Section 3.05. Deposit of Redemption Price.........................................................36
Section 3.06. Notes Redeemed in Part..............................................................37
Section 3.07. Optional Redemption.................................................................37
Section 3.08. Mandatory Redemption................................................................38
Section 3.09. Offer to Purchase by Application of Excess Proceeds.................................38
</TABLE>
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<TABLE>
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ARTICLE 4: COVENANTS....................................................................................40
Section 4.01. Payment of Notes....................................................................40
Section 4.02. Maintenance of Office or Agency.....................................................40
Section 4.03. SEC Reports.........................................................................41
Section 4.04. Compliance Certificates.............................................................42
Section 4.05. Taxes...............................................................................43
Section 4.06. Stay, Extension and Usury Laws......................................................43
Section 4.07. Limitation on Restricted Payments...................................................43
Section 4.08. Limitation on Restrictions on Distributions from Restricted
Subsidiaries......................................................................46
Section 4.09. Limitation on Indebtedness..........................................................47
Section 4.10. Limitation on Sales of Assets and Subsidiary Stock..................................51
Section 4.11. Limitation on Affiliate Transactions................................................52
Section 4.12. Limitation on Liens.................................................................53
Section 4.13. Corporate Existence.................................................................53
Section 4.14. Change of Control...................................................................54
Section 4.15. Limitation on Issuances of Capital Stock of Restricted Subsidiaries.................55
Section 4.16. Limitation on Repayment Upon a Change of Control....................................55
Section 4.17. Limitation on Sale/Leaseback Transactions...........................................56
Section 4.18. Limitation on Designations of Unrestricted Subsidiaries.............................56
Section 4.19. Further Instruments and Acts........................................................57
Section 4.20. Company to Cause Certain Subsidiaries to Become Guarantors..........................57
ARTICLE 5: SUCCESSORS...................................................................................58
Section 5.01. Limitations on Merger, Consolidation or Sale of Assets..............................58
Section 5.02. Successor Corporation Substituted...................................................59
ARTICLE 6: DEFAULTS AND REMEDIES........................................................................59
Section 6.01. Events of Default...................................................................59
Section 6.02. Acceleration........................................................................61
Section 6.03. Other Remedies......................................................................62
Section 6.04. Waiver of Past Defaults.............................................................62
Section 6.05. Control by Majority.................................................................62
Section 6.06. Limitation on Suits.................................................................63
Section 6.07. Rights of Noteholders to Receive Payment............................................63
Section 6.08. Collection Suit by Trustee..........................................................64
Section 6.09. Trustee May File Proofs of Claim....................................................64
Section 6.10. Priorities..........................................................................64
Section 6.11. Undertaking for Costs...............................................................65
</TABLE>
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<PAGE> 5
<TABLE>
<CAPTION>
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<S> <C>
ARTICLE 7: TRUSTEE......................................................................................65
Section 7.01. Duties of Trustee...................................................................65
Section 7.02. Rights of Trustee...................................................................67
Section 7.03. Individual Rights of Trustee........................................................68
Section 7.04. Trustee's Disclaimer................................................................68
Section 7.05. Notice of Defaults..................................................................68
Section 7.06. Reports by Trustee to Noteholders...................................................69
Section 7.07. Compensation and Indemnity..........................................................69
Section 7.08. Replacement of Trustee..............................................................70
Section 7.09. Successor Trustee by Merger, Etc. ..................................................71
Section 7.10. Eligibility; Disqualification.......................................................71
Section 7.11. Preferential Collection of Claims Against the Company...............................72
ARTICLE 8: DISCHARGE OF INDENTURE ......................................................................72
Section 8.01. Discharge of Liability on Note; Defeasance..........................................72
Section 8.02. Conditions to Defeasance............................................................73
Section 8.03. Application of Trust Money..........................................................75
Section 8.04. Repayment to the Company............................................................75
Section 8.05. Indemnity for Government Obligations................................................75
Section 8.06. Reinstatement.......................................................................75
ARTICLE 9: AMENDMENTS...................................................................................76
Section 9.01. Without Consent of Noteholders......................................................76
Section 9.02. With Consent of Noteholders.........................................................77
Section 9.03. Compliance with Trust Indenture Act.................................................79
Section 9.04. Revocation and Effect of Consents...................................................79
Section 9.05. Notation on or Exchange of Notes....................................................80
Section 9.06. Trustee to Sign Amendments, Etc.....................................................80
ARTICLE 10: SUBSIDIARY GUARANTEES OF NOTES...............................................................80
Section 10.01. Note Guarantee......................................................................80
Section 10.02. Execution and Delivery of Note Guarantee............................................82
Section 10.03. Note Guarantee Unconditional, Etc. ................................................82
Section 10.04. Limitation of Subsidiary Guarantor's Liability......................................83
Section 10.05. Contribution........................................................................83
Section 10.06. Release.............................................................................84
Section 10.07. Additional Subsidiary Guarantors....................................................84
Section 10.08. Subsidiary Guarantors May Consolidate, Etc. on Certain Terms........................84
</TABLE>
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<PAGE> 6
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 10.09. Successors and Assigns..............................................................85
Section 10.10. Waiver of Stay, Extension or Usury Laws.............................................85
ARTICLE 11: CREATION OF MORTGAGES........................................................................86
Section 11.01. Grant of Mortgages..................................................................86
Section 11.02. Delivery of Mortgages and Title Policies............................................86
Section 11.03. Partial Release of Pledged Properties...............................................87
Section 11.04. Delivery of Additional Documentation Required.......................................90
Section 11.05. Right to Inspect....................................................................90
Section 11.06. Compliance with the TIA.............................................................90
ARTICLE 12: MISCELLANEOUS................................................................................91
Section 12.01. Trust Indenture Act Controls........................................................91
Section 12.02. Notices.............................................................................91
Section 12.03. Communication by Noteholders with Other Noteholders.................................92
Section 12.04. Certificate and Opinion as to Conditions Precedent..................................92
Section 12.05. Statements Required in Certificate or Opinion.......................................92
Section 12.06. Rules by Trustee and Agents.........................................................93
Section 12.07. Legal Holidays......................................................................93
Section 12.08. No Recourse Against Others..........................................................93
Section 12.09. Duplicate Originals.................................................................94
Section 12.10. Governing Law.......................................................................94
Section 12.11. No Adverse Interpretation of Other Agreements.......................................94
Section 12.12. Successors..........................................................................94
Section 12.13. Severability........................................................................94
Section 12.14. Counterpart Originals...............................................................94
Section 12.15. Table of Contents, Headings, Etc. .................................................94
Exhibit A Form of Initial Note
Exhibit B Form of Exchange Note
Exhibit C Form of Certificate To Be Delivered in Connection with Transfers to Non-QIB
Accredited Investors
Exhibit D Form of Certificate To Be Delivered in Connection with Transfers Pursuant to
Regulation S
Exhibit E Escrow Letter
Exhibit F Alternative Escrow Letter
Schedule P Pledged Properties
</TABLE>
-v-
<PAGE> 7
INDENTURE, dated as of April 1, 1998, among Bluegreen Corporation, a
Massachusetts corporation (the "Company"), Bluegreen Resorts Management, Inc., a
Delaware corporation, Bluegreen Resorts, Inc., a Delaware corporation, Bluegreen
Holding Corporation (Texas), a Delaware corporation, Properties of Southwest
One, Inc., a Delaware corporation, Properties of the Southwest, L.P., a Delaware
limited partnership, Bluegreen Asset Management Corporation, a Delaware
corporation, Bluegreen Carolina Land, Inc., a Delaware corporation, Bluegreen
Corporation of Montana, a Montana corporation, Bluegreen Corporation of
Tennessee, a Delaware corporation, Bluegreen Corporation of the Rockies, a
Delaware corporation, Virginia Land & Forest Corporation, a Delaware
corporation, Bluegreen Communities, Inc., a Delaware corporation, Bluegreen
Resorts International, Inc., a Delaware corporation, Carolina National Golf
Club, Inc., a Delaware corporation, Leisure Capital Corporation, a Delaware
corporation, Properties of the West, Inc., a Delaware corporation, BG/RDI
Acquisition Corp., a Delaware corporation, RDI Group, Inc., a Florida
corporation, Dellona Enterprises, Inc., a Florida corporation, Resort
Development International, Inc., a Florida corporation, RDI Resort Services
Corporation, a Florida corporation, RDI Resources, Inc., a Florida corporation
(collectively, the "Subsidiary Guarantors"), and SunTrust Bank, Central Florida,
National Association, a national banking association, in its capacity as trustee
(the "Notes Trustee").
The Company has duly authorized the creation of an issue of 10 1/2%
Senior Secured Notes due 2008, Series A (the "Initial Notes") and 10 1/2% Senior
Secured Notes due 2008, Series B (the "Exchange Notes") and, to provide
therefor, the Company and the Subsidiary Guarantors have duly authorized the
execution and delivery of this Indenture. All things necessary to make the Notes
(as defined), when duly issued and executed by the Company, and authenticated
and delivered hereunder, the valid obligations of the Company and the Subsidiary
Guarantors have, and to make this Indenture a valid and binding agreement of the
Company and the Subsidiary Guarantors, have been done.
The Company, the Subsidiary Guarantors and the Notes Trustee agree as
follows for the benefit of each other and for the equal and ratable benefit of
the Holders of the Notes:
ARTICLE 1: DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Accounts Receivable" means collectively Mortgages Receivable and
Timeshare Interests Receivable."
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Permitted Business; (ii) the Capital Stock
of a Person that becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Company or a Restricted Subsidiary of the Company;
(iii) Capital Stock constituting a minority interest in any Person that at such
time is a Restricted Subsidiary of the Company; or (iv) Permitted Investments of
the type and in the amounts described in clause (vii) of the definition thereof;
PROVIDED, HOWEVER, that, in
<PAGE> 8
the case of clauses (ii) and (iii), such Restricted Subsidiary is primarily
engaged in a Permitted Business.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean
the lesser of the amount by which (x) the fair value of the property of such
Subsidiary Guarantor exceeds the total amount of liabilities, including, without
limitation, the probable liability of such Subsidiary Guarantor with respect to
its contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Note Guarantee, of such Subsidiary Guarantor at such date
and (y) the present fair salable value of the assets of such Subsidiary
Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Subsidiary Guarantor on its debts (after giving
effect to all other fixed and contingent liabilities Incurred or assumed on such
date and after giving effect to any collection from any Subsidiary by such
Subsidiary Guarantor in respect of the obligations of such Subsidiary under the
Note Guarantee), excluding debt in respect of the Note Guarantees, as they
become absolute and matured.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Disposition" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan) of shares of Capital Stock of (or
any other equity interests in) a Restricted Subsidiary (other than directors'
qualifying shares and, to the extent required by local ownership laws in foreign
countries, shares owned by foreign shareholders) or of any other property or
other assets (each referred to for the purposes of this definition as a
"disposition") by the Company or any of its Restricted Subsidiaries (including
any disposition by means of a merger, consolidation or similar transaction)
other than (i) a disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Wholly-Owned Subsidiary, (ii) sales or
other transfers in the ordinary course of business (including, without
limitation, bulk sales in the ordinary course of business consistent with past
practices), of Timeshare Interests, points in a points-based vacation club
system, Accounts Receivable (including, without limitation, direct sales to
financial institutions and sales or transfers in connection with securitization
transactions in the ordinary course of business) or Residential Lots or other
real property (including, without limitation, bulk sales in the ordinary course
of business consistent with past practices), (iii) a disposition of obsolete or
worn out equipment or equipment that is no longer useful in the conduct of the
business of the Company and its Restricted Subsidiaries and that is disposed of
in each case in the ordinary course of business, (iv) dispositions of property
for net proceeds which, when taken collectively with the net proceeds of any
other such dispositions under this clause
-2-
<PAGE> 9
(iv) that were consummated since the beginning of the calendar year in which
such disposition is consummated, do not exceed $1.0 million, (v) transactions
permitted under Section 5.01 and (vi) Permitted Investments. Notwithstanding
anything to the contrary contained above, a Restricted Payment made in
compliance with Section 4.07 shall not constitute an Asset Disposition (except
for purposes of determinations of the Consolidated Coverage Ratio) to the extent
that such Restricted Payment as of the date made together with all other
Restricted Payments not constituting Asset Dispositions pursuant to this
sentence made subsequent to the Issue Date do not exceed, as of such date, 50%
of the amount calculated in accordance with Section 4.07(a)(3).
"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate per annum equal to the discount rate which would be applicable to
a Capitalized Lease obligation with a like term in accordance with GAAP) of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the product of the numbers of years (rounded upwards to the nearest
month) from the date of determination to the dates of each successive scheduled
principal payment of such Indebtedness or redemption multiplied by the amount of
such payment by (ii) the sum of all such payments.
"Bankruptcy Code" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person duly authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Notes Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is required to
be classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP,
-3-
<PAGE> 10
and the amount of Indebtedness represented by such obligation shall be the
capitalized amount of such obligation determined in accordance with GAAP, and
the Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date such lease may be
terminated without penalty.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully Guaranteed or insured by the United States
government or any agency or instrumentality thereof, (iii) certificates of
deposit, time deposits and Eurodollar time deposits with maturities of one year
or less from the date of acquisition, bankers' acceptances with maturities not
exceeding one year and overnight bank deposits, in each case with any commercial
bank having capital and surplus in excess of $500 million, (iv) repurchase
obligations for underlying securities of the types described in clauses (ii) and
(iii) entered into with any financial institution meeting the qualifications
specified in clause (iii) above, (v) commercial paper rated A-1 or the
equivalent thereof by Moody's or S&P and in each case maturing within one year
after the date of acquisition, (vi) investment funds investing 95% of their
assets in securities of the types described in clauses (i)-(v) above, and (vii)
readily marketable direct obligations issued by any state of the United States
of America or any political subdivision thereof having one of the two highest
rating categories obtainable from either Moody's or S&P.
"Change of Control" means (i) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company and its Subsidiaries; or (ii) a
majority of the Board of Directors of the Company shall consist of Persons who
are not Continuing Directors of the Company; or (iii) the acquisition by any
Person or Group of the power, directly or indirectly, to vote or direct the
voting of securities having more than 50% of the ordinary voting power for the
election of directors of the Company or of any direct or indirect holding
company thereof.
"Commission" means the U.S. Securities and Exchange Commission or any
successor.
"Common Stock" means the common stock of the Company, par value $.01
per share.
"Company" means Bluegreen Corporation, a Massachusetts corporation,
until a successor replaces it in accordance with Article 5 hereof and thereafter
means the successor.
"Consolidated Cash Flow" for any period means the Consolidated Net
Income for such period, plus, without duplication, the following to the extent
deducted in calculating such Consolidated Net Income: (i) income tax expense,
(ii) Consolidated Interest Expense, (iii) depreciation expense, (iv)
amortization expense, and (v) all other non-cash items reducing Consolidated Net
Income (excluding any non-cash item to the extent it represents an accrual of or
reserve for cash disbursements for any subsequent period prior to the stated
maturity of the Notes) and less, (x) the aggregate amount of contingent and
"earnout" payments in respect of any Permitted Business acquired by the Company
or any Restricted Subsidiary that are paid in cash during such period and (y) to
the extent added in calculating Consolidated Net Income, non-cash items
(excluding such non-cash items to the extent they represent an accrual for cash
receipts
-4-
<PAGE> 11
reasonably expected to be received prior to the Stated Maturity of the Notes),
in each case for such period. Notwithstanding the foregoing, the income tax
expense, depreciation expense and amortization expense of a Subsidiary of the
Company shall be included in Consolidated Cash Flow only to the extent (and in
the same proportion) that the net income of such Subsidiary was included in
calculating Consolidated Net Income.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of Consolidated Cash Flow for the period of
the most recent four consecutive fiscal quarters ending prior to the date of
such determination and as to which financial statements are available to (ii)
Consolidated Interest Expense for such four fiscal quarters; PROVIDED, HOWEVER,
that (A) if the Company or any of its Restricted Subsidiaries has Incurred any
Indebtedness since the beginning of such period and through the date of
determination of the Consolidated Coverage Ratio that remains outstanding or if
the transaction giving rise to the need to calculate Consolidated Coverage Ratio
is an Incurrence of Indebtedness, or both, Consolidated Cash Flow and
Consolidated Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to (1) such Indebtedness as if such Indebtedness had
been Incurred on the first day of such period (provided that if such
Indebtedness is Incurred under a revolving credit facility (or similar
arrangement or under any predecessor revolving credit or similar arrangement)
only that portion of such Indebtedness that constitutes the one year projected
average daily balance of such Indebtedness (as determined in good faith by the
Board of Directors of the Company) shall be deemed outstanding for purposes of
this calculation), and (2) the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such period,
(B) if since the beginning of such period any Indebtedness of the Company or any
of its Restricted Subsidiaries has been repaid, repurchased, defeased or
otherwise discharged (other than Indebtedness under a revolving credit or
similar arrangement unless such revolving credit Indebtedness has been
permanently repaid and the underlying commitment terminated and has not been
replaced), Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto as if such Indebtedness had been repaid,
repurchased, defeased or otherwise discharged on the first day of such period,
(C) if since the beginning of such period the Company or any of its Restricted
Subsidiaries shall have made any Asset Disposition or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an Asset
Disposition, Consolidated Cash Flow for such period shall be reduced by an
amount equal to the Consolidated Cash Flow (if positive) attributable to the
assets which are the subject of all such Asset Dispositions for such period or
increased by an amount equal to the Consolidated Cash Flow (if negative)
attributable thereto for such period, and Consolidated Interest Expense for such
period shall be (i) reduced by an amount equal to the Consolidated Interest
Expense attributable to any Indebtedness of the Company or any of its Restricted
Subsidiaries repaid, repurchased, defeased or otherwise discharged with respect
to the Company and its continuing Restricted Subsidiaries in connection with all
such Asset Dispositions for such period (or, if the Capital Stock of any
Restricted Subsidiary of the Company is sold, the Consolidated Interest Expense
for such period directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent the Company and its continuing Restricted Subsidiaries
are no longer liable for such Indebtedness after such sale) and (ii)
-5-
<PAGE> 12
increased by interest income attributable to the assets which are the subject of
all such Asset Dispositions for such period, (D) if since the beginning of such
period the Company or any of its Restricted Subsidiaries (by merger or
otherwise) shall have made an Investment in any Restricted Subsidiary of the
Company (or any Person which becomes a Restricted Subsidiary of the Company as a
result thereof) or an acquisition of assets occurring in connection with a
transaction causing a calculation to be made hereunder which constitutes all or
substantially all of an operating unit of a business, Consolidated Cash Flow and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto (including the incurrence of any Indebtedness) as if
such Investment or acquisition occurred on the first day of such period and (E)
if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary of the Company or was merged with or into the Company or
any Restricted Subsidiary of the Company since the beginning of such period)
shall have repaid, repurchased, defeased or otherwise discharged Indebtedness or
made any Asset Disposition, Investment or acquisition of assets that would have
required an adjustment pursuant to clause (B), (C) or (D) above if made by the
Company or a Restricted Subsidiary of the Company during such period,
Consolidated Cash Flow and Consolidated Interest Expense for such period shall
be calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest expense on such Indebtedness shall be calculated as
if the rate in effect on the date of determination had been the applicable rate
for the entire period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its Restricted Subsidiaries determined in
accordance with GAAP, plus, to the extent not included in such interest expense
and to the extent incurred by the Company or its Restricted Subsidiaries (i)
interest expense attributable to Capitalized Lease Obligations, (ii)
amortization of debt discount, (iii) capitalized interest, (iv) non-cash
interest expense, (v) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing, (vi)
interest actually paid by the Company or any such Restricted Subsidiary under
any guarantee of Indebtedness or other obligation of any other Person, (vii) net
payments (whether positive or negative) pursuant to Interest Rate Agreements,
(viii) the cash contributions to any employee stock ownership plan or similar
trust to the extent such contributions are used by such plan or trust to pay
interest or fees to any Person (other than the Company) in connection with
Indebtedness Incurred by such plan or trust and (ix) cash and Disqualified Stock
dividends in respect of all Preferred Stock of Subsidiaries and Disqualified
Stock of the Company held by Persons other than the Company or a Wholly-Owned
Subsidiary and less (a) to the extent included in such interest expense, the
amortization of capitalized debt issuance costs and (b) interest income.
Notwithstanding the foregoing, the Consolidated Interest Expense with respect to
any Restricted Subsidiary of the Company that was not a Wholly-Owned
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<PAGE> 13
Subsidiary shall be included only to the extent (and in the same proportion)
that the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income.
"Consolidated Net Income" means, for any period, the consolidated net
income (loss) of the Company and its consolidated Subsidiaries determined in
accordance with GAAP; PROVIDED, HOWEVER, that there shall not be included in
such Consolidated Net Income: (i) any net income (loss) of any Person acquired
by the Company or any of its Restricted Subsidiaries in a pooling of interests
transaction for any period prior to the date of such acquisition, (ii) any net
income of any Restricted Subsidiary of the Company if such Restricted Subsidiary
is subject to restrictions, directly or indirectly, on the payment of dividends
or the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company to the extent of such restriction (other than
restrictions in effect on the Issue Date with respect to a Restricted Subsidiary
of the Company and other than restrictions that are created or exist in
compliance with Section 4.08), (iii) any gain or loss realized upon the sale or
other disposition of any assets of the Company or its consolidated Restricted
Subsidiaries (including pursuant to any Sale/Leaseback Transaction) which are
not sold or otherwise disposed of in the ordinary course of business (it being
understood that direct sales of Accounts Receivable to a financial institution
or sales of Accounts Receivable in connection with securitization transactions
shall be deemed to be in the ordinary course of business) and any gain or loss
realized upon the sale or other disposition of any Capital Stock of any Person,
(iv) any extraordinary gain or loss, (v) the cumulative effect of a change in
accounting principles, (vi) the net income of any Person, other than the Company
or a Restricted Subsidiary, except to the extent of the lesser of (A) cash
dividends or distributions actually paid to the Company or any of its Restricted
Subsidiaries by such Person and (B) the net income of such Person (but in no
event less than zero), and the net loss of such Person (other than an
Unrestricted Subsidiary) shall be included only to the extent of the aggregate
Investment of the Company or any of its Restricted Subsidiaries in such Person
and (vii) any non-cash expenses attributable to grants or exercises of employee
stock options. Notwithstanding the foregoing, for the purpose of Section 4.07
only, there shall be excluded from Consolidated Net Income any dividends,
repayments of loans or advances or other transfers of assets from Unrestricted
Subsidiaries to the Company or a Restricted Subsidiary to the extent such
dividends, repayments or transfers increase the amount of Restricted Payments
permitted under such covenant pursuant to clause (a)(3)(D) thereof.
"Consolidated Net Worth" means, the total of the amounts shown on the
balance sheet of the Company and its consolidated Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP, as of the end of the
most recent fiscal quarter of the Company ending prior to the taking of any
action for the purpose of which the determination is being made and for which
financial statements are available (but in no event ending more than 135 days
prior to the taking of such action), as (i) the par or stated value of all
outstanding Capital Stock of the Company plus (ii) paid in capital or capital
surplus relating to such Capital Stock plus (iii) any retained earnings or
earned surplus less (A) any accumulated deficit and (B) any amounts attributable
to Disqualified Stock.
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<PAGE> 14
"Continuing Director" of any Person means, as of the date of
determination, any Person who (i) was a member of the Board of Directors of such
Person on the date of this Indenture or (ii) was nominated for election or
elected to the Board of Directors of such Person with the affirmative vote of a
majority of the Continuing Directors of such Person who were members of such
Board of Directors at the time of such nomination or election.
"Convertible Notes" means the Company's 8% Convertible Notes due
September 11, 2002, in the aggregate principal amount of $6,000,000, originally
issued to Joseph C. Abeles and Grace Brothers, Ltd.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 or such other address as to which the Trustee
may give notice to the Company.
"Credit Agreements" means any credit agreement or similar facility or
any other agreement governing Indebtedness entered into by the Company or any
Restricted Subsidiary, as any of the same may be amended, waived, modified,
refinanced with Refinancing Indebtedness or replaced from time to time (except
to the extent any such amendment, waiver, modification, replacement or
refinancing would be prohibited by the terms of this Indenture).
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Disqualified Stock" means any Capital Stock which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (other than an event which
would constitute a Change of Control), (i) matures (excluding any maturity as
the result of an optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
Stated Maturity of the Notes, or (ii) is convertible into or exchangeable
(unless at the sole option of the issuer thereof) for (a) debt securities or (b)
any Capital Stock referred to in (i) above, in each case at any time prior to
the final Stated Maturity of the Notes.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
-8-
<PAGE> 15
"Equity Offering" means an offering for cash by the Company of its
Common Stock, or options, warrants or rights with respect to its Common Stock,
which in any case is registered with the Commission under the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto, and the rules and regulations of
the Commission promulgated thereunder.
"Exchange Notes" has the meaning set forth in the preamble to this
Indenture.
"Exchange Offer" means the registration by the Company under the
Securities Act pursuant to a registration statement of the offer by the Company
to each Noteholder of the Initial Notes to exchange all the Initial Notes held
by such Noteholder for the Exchange Notes in an aggregate principal amount equal
to the aggregate principal amount of the Initial Notes held by such Noteholder,
all in accordance with the terms and conditions of the Notes Registration Rights
Agreement.
"Existing Indebtedness" means Indebtedness of the Company or its
Restricted Subsidiaries in existence on the Issue Date, plus interest accrued
thereon, after application of the net proceeds of the Notes as described in the
Offering Memorandum.
"fair market value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution of the
Board of Directors of the Company delivered to the Trustee.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of this Indenture, including those
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP.
"Group" shall mean any "group" for purposes of Section 13(d) of the
Exchange Act.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise)
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or (ii) entered into for purposes of assuring in any other manner the obligee of
such Indebtedness of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); PROVIDED, HOWEVER, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary; PROVIDED FURTHER that a change in GAAP that results in an obligation
of such Person that exists at such time becoming Indebtedness shall not be
deemed an incurrence of such Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of indebtedness of such Person for borrowed money, (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto) (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in clauses (i), (ii) and (v)) entered into in the ordinary
course of business of such Person to the extent that such letters of credit are
not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed
no later than the third business day following receipt by such Person of a
demand for reimbursement following payment on the letter of credit), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services (except trade payables and other accrued expenses Incurred
in the ordinary course of business, which purchase price is due more than six
months after the date of placing such property in service or taking delivery and
title thereto or the completion of such services, (v) all Capitalized Lease
Obligations and all Attributable Indebtedness of such Person, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person; PROVIDED, HOWEVER,
that if such obligations have not been assumed, the amount of such Indebtedness
shall be deemed to be the lesser of the principal amount of the obligations or
the fair market value of the pledged property or assets, (vii) all Indebtedness
of other Persons to the extent Guaranteed by such Person, (viii) the amount of
all obligations of such Person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or, with respect to any Restricted
Subsidiary of the Company, any Preferred Stock of such Restricted Subsidiary to
the extent such obligation arises on or before the Stated Maturity of the Notes
(but excluding, in each case, accrued dividends) with the amount of Indebtedness
represented by such Disqualified Stock or Preferred Stock, as the case may be,
being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price; provided that, for purposes
hereof the "maximum fixed repurchase price" of any Disqualified Stock or
Preferred Stock, as the case may be, which does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Disqualified
Stock or Preferred Stock, as the case may be, as if such Disqualified Stock or
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<PAGE> 17
Preferred Stock, as the case may be, were purchased on any date on which
Indebtedness shall be required to be determined pursuant to the Indenture, and
if such price is based on the fair market value of such Disqualified Stock or
Preferred Stock, as the case may be, such fair market value shall be determined
in good faith by the Board of Directors of the Company and (ix) to the extent
not otherwise included in this definition, obligations under Currency Agreements
and Interest Rate Agreements. Unless specifically set forth above, the amount of
Indebtedness of any Person at any date shall be the outstanding principal amount
of all unconditional obligations as described above, as such amount would be
reflected on a balance sheet prepared in accordance with GAAP, and the maximum
liability of such Person, upon the occurrence of the contingency giving rise to
the obligation, of any contingent obligations described above at such date.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Initial Notes" has the meaning set forth in the preamble to this
Indenture.
"Initial Purchasers" means NatWest Capital Markets Limited and McDonald
& Company Securities, Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes, which shall be April 1 and October 1 of each year,
commencing October 1, 1998.
"Interest Rate Agreement" means with respect to any Person any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement as to which such Person is party or a beneficiary.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts payable on the balance sheet of such Person) or other
extension of credit (including by way of Guarantee or similar arrangement, but
excluding any debt or extension of credit represented by a bank deposit other
than a time deposit) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such Person. For purposes of
Section 4.07 and the definition of "Unrestricted Subsidiary," (i) "Investment"
shall include the portion (proportionate to the Company's equity interest in a
Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the
fair market value of the net assets of such Restricted Subsidiary of the Company
at the time that such Restricted Subsidiary is designated an Unrestricted
Subsidiary; PROVIDED, HOWEVER, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary in an amount (if
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positive) equal to (x) the Company's "Investment" in such Subsidiary at the time
of such redesignation less (y) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net assets
of such Subsidiary at the time that such Subsidiary is so redesignated a
Restricted Subsidiary; and (ii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer, in each case as determined in good faith by the Board of
Directors and evidenced by a resolution of such Board of Directors certified in
an Officers' Certificate to the Trustee. Notwithstanding the foregoing, in no
event shall the issuance of Capital Stock (other than Disqualified Stock) of the
Company in exchange for Capital Stock, property or assets of another Person
constitute an Investment by the Company in such other Person.
"Issue Date" means the date on which the Notes are originally issued.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Maturity Date" means April 1, 2008.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"Mortgage" or "first Mortgage" means a mortgage, deed of trust, or
similar instrument granted by any applicable Subsidiary Guarantor to or for the
benefit of the Notes Trustee as security for payment and performance of the
obligations of such Subsidiary Guarantor under the Note Guarantee and this
Indenture.
"Mortgages Receivable" means the receivables of the Company and its
Restricted Subsidiaries arising from sales by the Company and its Restricted
Subsidiaries of Residential Lots, or otherwise acquired by the Company or a
Restricted Subsidiary, determined on a consolidated basis in accordance with
GAAP.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to the properties or assets subject to such Asset Disposition) therefrom in each
case net of (i) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state, foreign and local
taxes required to be paid or accrued as a liability under GAAP, as a consequence
of such Asset Disposition, (ii) all distributions and other payments required to
be made to any Person owning a beneficial interest in assets subject to sale or
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition, (iii) the deduction of appropriate amounts to be provided by
the seller as a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition, PROVIDED,
HOWEVER, that upon any reduction in such reserves (other
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<PAGE> 19
than to the extent resulting from payments of the respective reserved
liabilities), Net Available Cash shall be increased by the amount of such
reduction to reserves, and retained by the Company or any Restricted Subsidiary
of the Company after such Asset Disposition and (iv) any portion of the purchase
price from an Asset Disposition placed in escrow (whether as a reserve for
adjustment of the purchase price, for satisfaction of indemnities in respect of
such Asset Disposition or otherwise in connection with such Asset Disposition),
PROVIDED, HOWEVER, that upon the termination of such escrow, Net Available Cash
shall be increased by any portion of funds therein released to the Company or
any Restricted Subsidiary.
"Net Cash Proceeds," with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any Restricted Subsidiary (a) provides any Guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as a guarantor, general partner or otherwise) and (ii) no
default with respect to which (including any rights that the holders thereof may
have to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity.
"Non-U.S. Person" means a Person who is not a U.S. person, as defined
in Regulation S of the Securities Act.
"Note Guarantee" means each Guarantee of the Notes by any Subsidiary
Guarantor pursuant to Article 10 of this Indenture.
"Noteholder" or "Holder" means a registered holder of one or more
Notes.
"Note Register" means the register of names and addresses of the
Holders of the Notes maintained by the Registrar.
"Notes" means the Initial Notes the Private Exchange Notes and the
Exchange Notes treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Notes Trustee" means Sun Trust Bank, Central Florida, National
Association, a national banking association, until a successor replaces it in
accordance with Article 7 and thereafter means the successor serving hereunder.
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<PAGE> 20
"Obligations" means any principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated March 27,
1998, pursuant to which the Initial Notes were offered, and any supplements
thereto.
"Officer" means the Chairman of the Board, the Vice-Chairman of the
Board, the Chief Executive Officer, the Chief Financial Officer, the President,
any Vice-President, the Treasurer or the Secretary or Clerk of the Company.
"Officers' Certificate" means a certificate signed by two Officers of
the Company, at least one of whom shall be the principal executive, financial or
accounting officer of the Company.
"Offshore Physical Notes" has the meaning provided in Section 2.01.
"Opinion of Counsel" means a written opinion, in form and substance
acceptable to the Notes Trustee, from legal counsel who is acceptable to the
Notes Trustee. Such legal counsel may be an employee of or counsel to the
Company or the Notes Trustee.
"Permitted Business" means any business which is the same as or
related, ancillary or complementary to any of the businesses of the Company and
its Restricted Subsidiaries on the date hereof, as reasonably determined by the
Company's Board of Directors.
"Permitted Investment" means an Investment by the Company or any of its
Restricted Subsidiaries in (i) the Company or a Wholly-Owned Subsidiary of the
Company; PROVIDED, HOWEVER, that the primary business of such Wholly-Owned
Subsidiary is a Permitted Business; (ii) another Person if as a result of such
Investment such other Person becomes a Wholly-Owned Subsidiary of the Company or
is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Wholly-Owned Subsidiary of the
Company; PROVIDED, HOWEVER, that in each case such Person's primary business is
a Permitted Business; (iii) Temporary Cash Investments; (iv) a Receivables
Subsidiary or originations, purchases or acquisitions of Accounts Receivable by
the Company or any Restricted Subsidiary created or acquired in the ordinary
course of business; (v) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course of
business; (vi) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company or any of
its Restricted Subsidiaries or in satisfaction of judgments or claims; (vii) a
Person engaged in a Permitted Business or a loan or advance by the Company the
proceeds of which are used solely to make an investment in a Person engaged in a
Permitted Business or a Guarantee by the Company of Indebtedness of any Person
in which such Investment has been made PROVIDED, HOWEVER, that no Permitted
Investments may be made pursuant to this clause (vii) to the extent the amount
thereof would, when taken together with all other Permitted Investments made
pursuant to this clause (vii), exceed $3.0 million in the
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aggregate (plus, to the extent not previously reinvested, any return of capital
realized on Permitted Investments made pursuant to this clause (vii), or any
release or other cancellation of any Guarantee constituting such Permitted
Investment); (viii) Persons to the extent such Investment is received by the
Company or any Restricted Subsidiary as consideration for asset dispositions
effected in compliance with the covenant described under "Limitations on Sales
of Assets and Subsidiary Stock"; (ix) prepayments and other credits to suppliers
made in the ordinary course of business consistent with the past practices of
the Company and its Restricted Subsidiaries; and (x) Investments in connection
with pledges, deposits, payments or performance bonds made or given in the
ordinary course of business in connection with or to secure statutory,
regulatory or similar obligations, including obligations under health, safety or
environmental obligations, (xi) Investments in Currency Agreements and Interest
Rate Protection Agreements permitted by Section 4.09; (xii) any Investment
acquired by the Company or any of its Restricted Subsidiaries (A) in exchange
for any other Investment or accounts receivable held by the Company or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (B) as a result of a foreclosure (or deed
in lieu of) by the Company or any of its Restricted Subsidiaries with respect to
any secured Investment or other transfer of title with respect to any secured
Investment in default; and Investments with respect to deposits made by the
Company or any Restricted Subsidiary in connection with the acquisition of
inventory in the ordinary course of business consistent with past practices.
"Permitted Liens" means: (i) Liens granted by the Company and the
Subsidiary Guarantors which secure Indebtedness to the extent the Indebtedness
is incurred pursuant to paragraph (a) or clause (i) of paragraph (b) under the
"Limitation on Incurrence of Indebtedness" covenant and Liens granted to the
Trustee or the Pledged Properties securing the obligations of certain Subsidiary
Guarantors under their respective Note Guarantees; (ii) Liens in favor of the
Company or any Subsidiary Guarantor; (iii) Liens existing on the Issue Date;
(iv) Liens on property of a Person existing at the time such Person is acquired
by or merged into or consolidated with the Company or any Restricted Subsidiary
thereof; provided that such Liens were in existence prior to the contemplation
of such acquisition and do not extend to any assets of the Company or its
Restricted Subsidiaries other than those acquired in connection with such merger
or consolidation; (v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vi) Liens in respect of
extensions, renewals, refundings or refinancings of any Indebtedness secured by
the Liens referred to in clauses (i), (ii) and (iii) above and (vii) below;
provided that the Liens in connection with such renewal, extensions, renewals,
refundings or refinancing shall be limited to all or part of the specific
property which was subject to the original Lien; (vii) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided that any reserve or other
appropriate provisions as shall be required in conformity with GAAP shall have
been made therefor; (viii) any Lien securing purchase money obligations incurred
in compliance with paragraph (b)(ii) of Section 4.09, provided that such Liens
do not extend to any property (other than the property so purchased) owned by
the Company or its Restricted Subsidiaries and is not incurred more than
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30 days after the incurrence of such Indebtedness secured by such Lien; (ix)
Liens to secure Capitalized Lease Obligations (except in respect of
Sale/Leaseback Transactions) on real or personal property of the Company to the
extent consummated in compliance with paragraph (b)(ii) of Section 4.09,
provided that such Liens do not extend to or cover any property of the Company
or any of its Subsidiaries other than the property subject to such Capitalized
Lease Obligation; (x) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary thereof with respect to obligations that do
not exceed $1.0 million at any one time outstanding and that (A) are not
incurred in connection with the borrowing of money or the obtaining of advances
or credit (other than trade credit in the ordinary course of business) and (B)
do not in the aggregate materially detract from the value of the property or
materially impair the use thereof in the operation of the business by the
Company or such Restricted Subsidiary; (xi) Liens on property or assets at the
time the Company or any Restricted Subsidiary acquired such assets, including
any acquisition by means of a merger or consolidation with or into the Company
or such Restricted Subsidiary, PROVIDED, HOWEVER, that (A) if any such Lien is
incurred in anticipation of such transaction, such property or assets subject to
such Lien will have a fair market value at the date of the acquisition thereof
not in excess of the lesser of (1) the aggregate purchase price paid or owed by
the Company or such Restricted Subsidiary in connection with the acquisition
thereof and of any other property and assets acquired simultaneously therewith
and (2) the fair market value of all such property and assets acquired by the
Company or such Restricted Subsidiary and (B) any such Lien will not extend to
any other property or assets owned by the Company or any Restricted Subsidiary;
(xii) Liens on property or assets of the Company securing Interest Rate
Agreements and Currency Agreements so long as the related Indebtedness is
permitted under Section 4.09 and is secured by a Lien on the same property
securing the relevant Interest Rate Agreement or Currency Agreement; (xiii)
survey exceptions, encumbrances, easements or, reservations of, or rights of
others for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes or zoning or other restrictions as to
the use of real property of the Company or such Restricted Subsidiary incidental
to the ordinary course of conduct of the business of the Company or such
Restricted Subsidiary or as to the ownership of properties of the Company or any
Restricted Subsidiary, which, in either case, were not incurred in connection
with Indebtedness and which do not in the aggregate materially adversely affect
the value of said properties or materially impair their use in the operation of
the business of the Company or any Restricted Subsidiary; (xiv) judgment Liens
with respect to judgments that do not cause an Event of Default under Section
6.01(a)(vii); (xv) Liens with respect to a purchase and sale agreement or other
option or right to acquire property entered into in the ordinary course of
business consistent with past practices prior to the closing date of such
purchase; (xvi) Liens with respect to deposits made by the Company or any
Restricted Subsidiary in connection with the acquisition of inventory in the
ordinary course of business consistent with past practices; and (xvii) Liens
with respect to mineral rights associated with any real property of the Company
or any Restricted Subsidiary.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
hereof or any other entity.
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"Physical Notes" has the meaning provided in Section 2.01.
"Pledged Properties" means those parcels of real property and any
improvements thereto owned by any Subsidiary Guarantor and identified in
Schedule P.
"Preferred Stock" as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Private Exchange Notes" has the meaning provided in Section 2(b) of
the Registration Rights Agreement.
"Private Placement Legend" has the meaning provided in Section 2.15.
"Public Debentures" means the Company's 8.25% Convertible Subordinated
Debentures due May 15, 2012, issued pursuant to that certain Indenture dated as
of May 15, 1987, between Patten Corporation and Shawmut Bank, N.A., as trustee.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"RDI Note" means the Promissory Note in the aggregate principal amount
of $1,500,000 issued in the RDI Acquisition to the RDI Stockholders.
"Receivables and Related Assets" means Accounts Receivable and
instruments, chattel paper, obligations, general intangibles, mortgages, deeds,
records and other similar assets, in each case relating to such Accounts
Receivable.
"Record Date" means the record dates specified in the Notes, whether or
not a Legal Holiday.
"Receivables Subsidiary" means a Subsidiary which is established and
continues to operate for the limited purpose of acquiring, selling and financing
Receivables and Related Assets in connection with receivables securitization or
financing transactions.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances,
replaces, renews, repays, prepays, reduces, defeases, retires or extends
(including pursuant to any defeasance or discharge mechanism) (collectively,
"refinances," and "refinanced" shall have a correlative meaning) any
Indebtedness existing on the date hereof or Incurred in compliance with this
Indenture (including Indebtedness of the Company that refinances Indebtedness of
any Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that
refinances Indebtedness of another Restricted Subsidiary) including Indebtedness
that refinances Refinancing
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Indebtedness; PROVIDED, HOWEVER, that (i) the Refinancing Indebtedness has a
Stated Maturity no earlier than the earlier of (A) the first anniversary of the
Stated Maturity of the Notes and (B) the Stated Maturity of the Indebtedness
being refinanced, (ii) the Refinancing Indebtedness has an Average Life at the
time such Refinancing Indebtedness is Incurred that is equal to or greater than
the lesser of (A) the Average Life of the Notes and (B) the Average Life of the
Indebtedness being refinanced and, (iii) the Refinancing Indebtedness is in an
aggregate principal amount (or if issued with original issue discount, an
aggregate issue price) that is equal to (or 101% of, in the case of a
refinancing of the Notes in connection with a Change of Control) or less than
the sum of the aggregate principal amount (or if issued with original issue
discount, the aggregate accreted value) then outstanding of the Indebtedness
being refinanced (plus the amount of any premium required to be paid in
connection therewith and reasonable fees and expenses therewith) PROVIDED,
FURTHER, that Refinancing Indebtedness shall not include Indebtedness of a
Subsidiary which refinances Indebtedness of the Company.
"Registrar" means the Trustee, or any successor thereto appointed as
registrar pursuant to the Indenture.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement dated April 1, 1998 between the Company, the Subsidiary
Guarantors and the Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Residential Lots" means any parcel of real property held or sold by
the Company and its Restricted Subsidiaries in the ordinary course of their
residential land business.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee (or any successor
group of the Trustee) with direct responsibility for the administration of this
Indenture and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Payment" has the meaning provided in Section 4.07(a).
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"S&P" and "Standard and Poor's" means Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies Inc., or any successor
organization thereto.
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<PAGE> 25
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Subsidiary leases it
from such Person.
"Secured Indebtedness" means any Senior Indebtedness of the Company or
a Subsidiary Guarantor secured by a Lien.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto, and the rules and regulations of the
Commission promulgated thereunder.
"Senior Indebtedness" means Indebtedness that is not by its terms
expressly subordinate or junior in right of payment to any other Indebtedness of
the Company or the Note Guarantee of a Subsidiary Guarantor.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Commission.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision, but excluding any provisions providing for the repurchase,
redemption or repayment of such security at the option of the holder thereof
upon the happening of any contingency unless such contingency has occurred.
"Subordinated Obligations" means Indebtedness that is expressly
subordinate or junior in right of payment to any other Indebtedness of the
Company or the Note Guarantee of a Subsidiary Guarantor.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person. Unless otherwise specified herein, each reference
to a Subsidiary shall refer to a Subsidiary of the Company.
"Subsidiary Guarantor" means each Subsidiary of the Company in
existence on the Issue Date and each Subsidiary (other than Unrestricted
Subsidiaries) created or acquired by the Company after the Issue Date, other
than BG Aruba, Resort Title Agency, Inc., any Receivables Subsidiary and any
Subsidiary which is established and continues to operate for the limited purpose
of holding a real estate broker's license and acting as a broker for the benefit
of the Company and its Subsidiaries in connection with the sale of real estate
or Timeshare Interests, and certain other Subsidiaries which have individually
less than $50,000 of assets.
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"Temporary Cash Investments" means any of the following: (i) any
Investment in direct obligations of the United States of America or any agency
thereof or obligations Guaranteed by the United States of America or any agency
thereof; (ii) Investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States of America having capital surplus and undivided
profits aggregating in excess of $250 million (or the foreign currency
equivalent thereof) and whose long-term debt, or whose parent holding company's
long-term debt, is rated "A" (or such similar equivalent rating) or higher by at
least one nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act); (iii) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in clause
(i) above entered into with a bank meeting the qualifications described in
clause (ii) above; (iv) Investments in commercial paper, maturing not more than
180 days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America with a rating at the time as of which any investment therein is made
of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P;
(v) Investments in securities with maturities of six months or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least "A" by S&P or "A" by Moody's; and
(vi) Investments in mutual funds whose investment guidelines restrict such
funds' investments to those satisfying the provisions of clauses (i) through (v)
above.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) and the rules and regulations thereunder as in effect on the date
on which this Indenture is qualified under the TIA, except as provided in
Section 9.03 hereof; PROVIDED, HOWEVER, that, in the event the Trust Indenture
Act of 1939 is amended after such date, "TIA" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"Timeshare Interests" means the right to use (whether arising by virtue
of a club membership or a deeded interest in real property or otherwise) a
fully-furnished vacation residence for a specified period each year or
otherwise, sold by the Company and its Restricted Subsidiaries in the ordinary
course of their resorts business.
"Timeshare Interests Receivable" means the receivables of the Company
and its Restricted Subsidiaries arising from sales by the Company and its
Restricted Subsidiaries of Timeshare Interests or otherwise acquired by the
Company or a Restricted Subsidiary (but excluding any receivables for service or
other fees in respect of such Timeshare Interests) determined on a consolidated
basis in accordance with GAAP.
"Title Policy" means an ALTA loan policy of title insurance issued by
Commonwealth Land Title Insurance Company (or such other title company approved
by the Notes Trustee)
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insuring the liens of the mortgages as a first priority mortgage lien on the
Pledged Properties subject only to such exceptions and exclusions permitted by
the terms of this Indenture.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company(including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any Restricted Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; PROVIDED,
HOWEVER, that each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of such designation, and does not thereafter create, Incur,
issue, assume, Guarantee or otherwise becomes liable with respect to any
Indebtedness other than Non-Recourse Indebtedness and either (A) the Subsidiary
to be so designated has total consolidated assets of $10,000 or less or (B) if
such Subsidiary has consolidated assets greater than $10,000, then such
designation would be permitted under Section 4.07. The Board of Directors may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary subject to
the limitations contained in Section 4.18.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"U.S. Physical Notes" has the meaning provided in Section 2.01.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the Company,
at least 99% of the Capital Stock of which (other than directors' qualifying
shares) is owned by the Company or another Wholly-Owned Subsidiary.
SECTION 1.02. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
TERM DEFINED
- ---- -------
<S> <C>
"actual knowledge".................................................................... Section 7.02
"Affiliate Transaction"............................................................... Section 4.11
"Agent Members"....................................................................... Section 2.16
"Appraiser" .......................................................................... Section 11.03
"Asset Disposition Offer"............................................................. Section 3.09
</TABLE>
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<TABLE>
<S> <C>
"Bankruptcy Law"...................................................................... Section 6.01
"Change of Control Payment"........................................................... Section 4.14
"Change of Control Payment Date"...................................................... Section 4.14
"covenant defeasance option".......................................................... Section 8.01
"Custodian"........................................................................... Section 6.01
"Declaration"......................................................................... Section 6.02
"Default Amount"...................................................................... Section 6.02
"Designation"......................................................................... Section 4.18
"Designation Amount".................................................................. Section 4.18
"Event of Default".................................................................... Section 6.01
"Funding Subsidiary Guarantor"........................................................ Section 10.05
"Global Note"......................................................................... Section 2.01
"Guaranteed Obligations".............................................................. Section 10.01
"judgment default provision".......................................................... Section 6.01
"legal defeasance option"............................................................. Section 8.01
"Legal Holiday"....................................................................... Section 10.07
"Net Available Cash".................................................................. Section 4.10
"Notice of Default"................................................................... Section 6.01
"Offer Amount"........................................................................ Section 3.09
"Offer Period"........................................................................ Section 3.09
"Paying Agent"........................................................................ Section 2.03
"Purchase Date"....................................................................... Section 3.09
</TABLE>
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<TABLE>
<S> <C>
"Registrar".......................................................................... Section 2.03
"Revocation"......................................................................... Section 4.18
"Successor Company".................................................................. Section 5.01
"Taxes".............................................................................. Section 4.05
</TABLE>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
applicable provision is incorporated by reference in and made a part of this
Indenture.
The following TIA term used in this Indenture has the following
meaning:
"obligor" on the Notes means the Company, the Subsidiary
Guarantors and any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires: (i) a term has the meaning
assigned to it; (ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP; (iii) "or" is not exclusive; (iv) words
in the singular include the plural, and words in the plural include the
singular; and (v) provisions apply to successive events and transactions.
ARTICLE 2: THE NOTES
SECTION 2.01. FORM AND DATING.
The Initial Notes, the notation thereon relating to the Note Guarantees
and the Note Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit A hereto. The Exchange Notes, the notation
thereon relating to the Note Guarantees and the Notes Trustee's certificate of
authentication thereon shall be substantially in the form of Exhibit B hereto.
The Notes may have notations, legends or endorsements required by law, stock
exchange rule or Depository rule or usage. The Company, the Subsidiary
Guarantors and the Notes Trustee shall approve the form of the Notes and any
notation, legend or endorsement on them. Each Note shall be dated the date of
its authentication.
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The terms and provisions contained in the forms of the Notes and the
Note Guarantees, annexed hereto as Exhibits A and B, shall constitute, and are
hereby expressly made, a part of this Indenture and, to the extent applicable,
the Company, the Subsidiary Guarantors and the Notes Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions and
to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global notes in registered form,
in substantially the form set forth in Exhibit A (the "Global Note"), deposited
with the Notes Trustee, as custodian for the Depository, duly executed by the
Company and authenticated by the Notes Trustee as hereinafter provided. The
aggregate principal amount of the Global Note may from time to time be increased
or decreased by adjustments made on the records of the Notes Trustee, as
custodian for the Depository, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "Offshore
Physical Notes"). Notes offered and sold in reliance on any other exemption from
registration under the Securities Act other than as described in the preceding
paragraph shall be issued, and Notes offered and sold in reliance on Rule 144A
may be issued, in the form of permanent certificated Notes in registered form,
in substantially the form set forth in Exhibit A (the "U.S. Physical Notes").
The Offshore Physical Notes and the U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes."
SECTION 2.02. EXECUTION AND AUTHENTICATION.
(a) Two Officers of the Company (each of whom shall, in each
case, have been duly authorized by all requisite corporate actions)
shall sign the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time the Note is authenticated, the Note shall nevertheless be
valid. Each Subsidiary Guarantor shall execute a Note Guarantee in the
manner set forth in Section 10.02.
(b) A Note shall not be valid until authenticated by the
manual signature of the Notes Trustee. The signature of the Notes
Trustee shall be conclusive evidence that the Note has been
authenticated under this Indenture.
(c) The Notes Trustee shall authenticate (i) Initial Notes for
original issue in the aggregate principal amount not to exceed
$110,000,000, and (ii) Exchange Notes from time to time for issue only
in exchange for a like principal amount of Initial Notes, in each case
upon receipt of a written authenticated order of the Company signed by
two Officers.
(d) The Notes Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Notes. Unless limited by the
terms of such appointment, an
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authenticating agent may authenticate Notes whenever the Notes Trustee
may do so. Each reference in this Indenture to authentication by the
Notes Trustee includes authentication by such agent. An authenticating
agent has the same rights as an Agent to deal with the Company or an
Affiliate.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
(a) The Company shall maintain an office or agency (which
shall be located in the Borough of Manhattan in the City of New York,
State of New York) where (i) Notes may be presented for registration of
transfer or for exchange ("Registrar"); (ii) Notes may be presented for
payment ("Paying Agent") and (iii) notices and demands to or upon the
Company in respect of the Notes and this Indenture may be served. The
Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or
more additional paying agents. The term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent,
Registrar or co-registrar without prior notice to any Noteholder. The
Company shall notify the Notes Trustee and the Notes Trustee shall
notify the Noteholders of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Notes Trustee shall act as
such. The Company or any Subsidiary Guarantor may act as Paying Agent,
Registrar or co-registrar. The Company shall enter into an appropriate
agency agreement with any Agent not a party to this Indenture, which
shall incorporate the provisions of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such Agent.
The Company shall notify the Notes Trustee of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying
Agent, or fails to give the foregoing notice, the Notes Trustee shall
act as such, and shall be entitled to appropriate compensation in
accordance with Section 7.07 hereof.
(b) The Company initially appoints the Notes Trustee as
Registrar, Paying Agent and agent for service of notices and demands in
connection with the Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company, the Subsidiary Guarantors or any other obligor on the
Notes shall require each Paying Agent other than the Notes Trustee to agree in
writing that the Paying Agent shall hold in trust for the benefit of the
Noteholders and the Notes Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, and interest on the Notes, and shall
notify the Notes Trustee of any Default by the Company, any of the Subsidiary
Guarantors or any other obligor on the Notes in making any such payment. While
any such Default continues, the Notes Trustee may require a Paying Agent to pay
all money held by it to the Notes Trustee. The Company, the Subsidiary
Guarantors or any other obligor on the Notes at any time may require a Paying
Agent to pay all money held by it to the Notes Trustee. Upon payment over to the
Notes Trustee, the Paying Agent (if other than the Company or a Subsidiary
Guarantor) shall have no further liability for the money delivered to the Notes
Trustee. If the
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<PAGE> 32
Company, the Subsidiary Guarantors or any other obligor on the Notes acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Noteholders all money held by it as Paying Agent.
SECTION 2.05. NOTEHOLDER LISTS.
The Notes Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders and shall otherwise comply with TIA Section 312(a). If the Notes
Trustee is not the Registrar, the Company, the Subsidiary Guarantors or any
other obligor on the Notes shall furnish to the Notes Trustee at least seven
Business Days before each Interest Payment Date and at such other times as the
Notes Trustee may request in writing a list in such form and as of such date as
the Notes Trustee may reasonably require of the names and addresses of
Noteholders, including the aggregate principal amount of the Notes held by each
thereof, and the Company, the Subsidiary Guarantors or any other obligor on the
Notes shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Where Notes are presented to the Registrar or a
co-registrar with a request to register the transfer thereof or
exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met; provided,
that any Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Registrar and the Notes Trustee
duly executed by the Noteholder thereof or his attorney duly authorized
in writing. To permit registrations of transfer and exchanges, the
Company shall issue and the Notes Trustee shall authenticate Notes at
the Registrar's request.
(b) Neither the Registrar nor the Company shall be required
(i) to issue, to register the transfer of or to exchange Notes during a
period beginning at the opening of business on a Business Day 15 days
before the day of any selection of Notes for redemption under Section
3.02 hereof and ending at the close of business on the day of
selection, (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part or (iii) to register the
transfer or exchange of a Note between the Record Date and the next
succeeding Interest Payment Date.
(c) No service charge by the Company shall be made for any
registration of a transfer or exchange (except as otherwise expressly
permitted herein), but the Company may require payment by the
Noteholder of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than such
transfer tax or similar governmental charge payable upon exchanges
pursuant to Section 2.10, 3.06 or 9.05 hereof).
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<PAGE> 33
(d) Each Holder of the Global Note shall, by acceptance of
such Global Note, agree that transfers of beneficial interests in such
Global Note may be effected only through a book entry system maintained
by the Holder of such Global Note (or its agent), and that ownership of
a beneficial interest in the Global Note shall be required to be
reflected in a book entry.
SECTION 2.07. REPLACEMENT NOTES.
(a) If any mutilated Note is surrendered to the Notes Trustee,
or the Company and the Notes Trustee receive evidence to the
satisfaction of each thereof of the destruction, loss or theft of any
Note, the Company shall issue and the Notes Trustee, upon receipt by it
of the written order of the Company signed by two Officers of the
Company, shall authenticate a replacement Note if the Notes Trustee's
requirements for replacements of Notes are met. If required by the
Notes Trustee or the Company, an indemnity bond must be supplied by the
Holder that is sufficient in the judgment of the Notes Trustee and the
Company to protect the Company, the Subsidiary Guarantors, the Notes
Trustee, any Agent or any authenticating agent from any loss which any
of them may suffer if a Note is replaced. The Company and the Notes
Trustee may charge a Noteholder for reasonable out-of-pocket expenses
in replacing a Note.
(b) Every replacement Note is an obligation of the Company and
each of the Subsidiary Guarantors.
SECTION 2.08. OUTSTANDING NOTES.
(a) The Notes outstanding at any time are all the Notes
authenticated by the Notes Trustee, EXCEPT for those canceled by the
Company or by the Notes Trustee, those delivered to the Notes Trustee
for cancellation and those described in this Section as not
outstanding.
(b) If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Notes Trustee receives proof
satisfactory to it that the replacement Note is held by a bona fide
purchaser.
(c) If the principal amount of any Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on
it ceases to accrue.
(d) Subject to Section 2.09 hereof, a Note does not cease to
be outstanding because the Company or an Affiliate of the Company or a
Subsidiary Guarantor holds the Note.
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<PAGE> 34
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, the Subsidiary Guarantors, or any of their respective Affiliates shall
be considered as though not outstanding, except that for purposes of determining
whether the Notes Trustee shall be protected in relying on any such direction,
waiver or consent, only Notes which a Responsible Officer of the Notes Trustee
has actual knowledge are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Notes Trustee shall authenticate temporary Notes upon written order of
the Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company, the Subsidiary Guarantors and the Notes Trustee consider appropriate
for temporary Notes. Without unreasonable delay, the Company shall prepare and
the Notes Trustee, upon receipt of the written order of the Company signed by
two Officers of the Company, shall authenticate definitive Notes in exchange for
temporary Notes. Until such exchange, temporary Notes shall be entitled to the
same rights, benefits and privileges under this Indenture as definitive Notes.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Notes Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Notes Trustee
any Notes surrendered to the Registrar and Paying Agent for registration of
transfer, exchange or payment. The Notes Trustee (or its Agent) shall cancel all
Notes, if not already canceled, surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall destroy canceled Notes
(subject to the record retention requirements of the Exchange Act), and deliver,
if requested by the Company, certification of their destruction to the Company,
unless by a written order, signed by two Officers of the Company, the Company
shall direct that canceled Notes be returned to it. The Company may not issue
new Notes to replace Notes that it has redeemed or paid or that have been
delivered to the Notes Trustee for cancellation. If the Company acquires any of
the Notes, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Notes unless or until the same are
surrendered to the Notes Trustee (or its Agent) for cancellation pursuant to
this Section.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Noteholders
on a subsequent special record date, which date shall be at the earliest
practicable date, but in all events at least five Business Days prior to the
payment
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<PAGE> 35
date, in each case at the rate provided in the Notes and in Section 4.01 hereof.
The Company shall, with the consent of the Notes Trustee, fix or cause to be
fixed each such special record date and payment date. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Notes Trustee, in the name of and at the expense of the Company)
shall mail to Noteholders a notice that states the special record date, the
related payment date and the amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number, and if so,
the Notes Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Noteholders; provided that no representation shall
be deemed to be made by the Notes Trustee as to the correctness or accuracy of
the CUSIP number printed in the notice or on the Notes, and that reliance may be
placed only on the other identification numbers printed on the Notes. The
Company shall promptly notify the Notes Trustee of any change in the CUSIP
number.
SECTION 2.14. DEPOSIT OF MONEYS.
Prior to 10:00 a.m. New York City time on each Interest Payment Date
and Maturity Date, the Company shall deposit with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
in respect of the Notes on such Interest Payment Date or Maturity Date, as the
case may be.
SECTION 2.15. RESTRICTIVE LEGENDS.
Each Global Note and Physical Note that constitutes a Restricted
Security shall bear the following legend (the "Private Placement Legend") unless
otherwise agreed by the Company and the Holder thereof:
THIS NOTE OR ITS PREDECESSORS HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED,
SOLD OR PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS OR A
BENEFICIAL INTEREST HEREIN EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IF
IT ACQUIRED THIS NOTE FROM THE INITIAL PURCHASERS, IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), OR, IF IT ACQUIRED THIS NOTE OTHER THAN FROM THE INITIAL
PURCHASERS, (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) or (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S.
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<PAGE> 36
PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 144A UNDER REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO IN RULE
144(k) UNDER THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO SUCH
TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO
BLUEGREEN CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE NOTES TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE), AND AN OPINION OF COUNSEL ACCEPTABLE TO BLUEGREEN CORPORATION
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT TO PERSONS OTHER THAN UNITED STATES
PERSONS ("FOREIGN PURCHASERS"), (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE NOTES TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Global Note shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY OR A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
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<PAGE> 37
THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTE.
(a) The Global Note initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be
delivered to the Notes Trustee as custodian for such Depository and
(iii) bear legends as set forth in Section 2.15.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depository, or the Notes
Trustee as its custodian, or under the Global Note, and the Depository
may be treated by the Company, the Notes Trustee and any agent of the
Company or the Notes Trustee as the absolute owner of the Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Notes Trustee or any agent of the
Company or the Notes Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the
operation of customary practices governing the exercise of the rights
of a Holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers
in whole, but not in part, to the Depository, its successors or their
respective nominees. Interest of beneficial owners in the Global Note
may be transferred or exchanged for Physical Notes in accordance with
the rules and procedures of the Depository and the provisions of
Section 2.17. In addition, Physical Notes shall be transferred to all
beneficial owners in exchange for their beneficial interests in the
Global Note if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the Global Note and a
successor depository is not appointed by the Company within 90 days of
such notice or (ii) an Event of Default has occurred and is continuing
and the Registrar has received a written request from the Depository or
the Notes Trustee to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion
of the beneficial interest in the Global Note to beneficial owners
pursuant to paragraph (b) above, the Registrar shall (if one or more
Physical Notes are to be issued) reflect on its books and records the
date and a decrease in the principal amount of the beneficial interest
in the Global Note to be transferred, and the Company shall execute,
and the Notes Trustee shall authenticate and deliver, one or more
Physical Notes of like tenor and amount.
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(d) In connection with the transfer of the entire Global Note
to beneficial owners pursuant to paragraph (b), the Global Note shall
be deemed to be surrendered to the Notes Trustee for cancellation, and
the Company shall execute, and the Notes Trustee shall authenticate and
deliver, to each beneficial owner identified by the Depository in
exchange for its beneficial interest in the Global Note, an equal
aggregate principal amount of Physical Notes of authorized
denominations.
(e) Any Physical Note constituting a Restricted Security
delivered in exchange for an interest in the Global Note pursuant to
paragraph (b) or (c) above shall, except as otherwise provided by
paragraphs (a)(i)(x) and (c) of Section 2.17, bear the legend regarding
transfer restrictions applicable to the Physical Notes set forth in
Section 2.15.
(f) The Holder of the Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which
a Noteholder is entitled to take under this Indenture or the Notes.
SECTION 2.17. SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS
AND NON-U.S. PERSONS. The following provisions shall apply with
respect to the registration of any proposed transfer of a Note
constituting a Restricted Security to any Institutional Accredited
Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any
Note constituting a Restricted Security, whether or not such
Note bears the Private Placement Legend, if (x) the requested
transfer is after April 1, 2000 or (y)(1) in the case of a
transfer to an Institutional Accredited Investor which is not
a QIB (excluding Non-U.S. Persons), the proposed transferee
has delivered to the Registrar a certificate substantially in
the form of Exhibit C hereto or (2) in the case of a transfer
to a Non-U.S. Person, the proposed transferor has delivered to
the Registrar a certificate substantially in the form of
Exhibit D hereto; and
(ii) if the proposed transferor is an Agent Member
holding a beneficial interest in the Global Note, upon receipt
by the Registrar of (x) the certificate, if any, required by
paragraph (i) above and (y) instructions given in accordance
with the Depository's and the Registrar's procedures,
whereupon (a) the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the
Global Note in an amount equal to the principal amount of the
beneficial interest in the Global Note to be transferred, and
(b) the Company shall execute and the Notes Trustee shall
authenticate and deliver one or more Physical Notes of like
tenor and amount.
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(b) TRANSFERS TO QIBS. The following provisions shall apply
with respect to the registration of any proposed transfer of a Note
constituting a Restricted Security to a QIB (excluding transfers to
Non-U.S. Persons):
(i) the Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has
checked the box provided for on the form of Note stating, or
has otherwise advised the Company and the Registrar in
writing, that the sale has been effected in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Note stating, or has
otherwise advised the Company and the Registrar in writing,
that it is purchasing the Note for its own account or An
account with respect to which it exercises sole investment
discretion and that any such account is a QIB within the
meaning of Rule 144A, and it is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the
transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by
Rule 144A; and
(ii) if the proposed transferee is An Agent Member
and the Notes to be transferred consist of Physical Notes
which after transfer are to be evidenced by an interest in the
Global Note, upon receipt by the Registrar of instructions
given in accordance with the Depository's and the Registrar's
procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of
the Global Note in an amount equal to the principal amount of
the Physical Notes to be transferred, and the Notes Trustee
shall cancel the Physical Notes so transferred.
(c) PRIVATE PLACEMENT LEGEND. Upon the registration of the
transfer, exchange or replacement of Notes not bearing the Private
Placement Legend, the Registrar shall deliver Notes that do not bear
the Private Placement Legend. Upon the registration of the transfer,
exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement
Legend unless (i) the circumstance contemplated by paragraph (a)(i)(x)
of this Section 2.17 exists or (ii) there is delivered to the Registrar
an Opinion of Counsel reasonably satisfactory to the Company and the
Notes Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.
(d) GENERAL. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and
in the Private Placement Legend and agrees that it will transfer such
Note only as provided in this Indenture.
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The Registrar shall retain, for at least two years, copies of all
letters, notices and other written communications received pursuant to Section
2.16 or this Section 2.17. The Company shall have the right to inspect and make
copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.
SECTION 2.18. PERSONS DEEMED OWNERS.
Prior to due presentment of a Note for registration of transfer and
subject to Section 2.12, the Company, the Notes Trustee, any Paying Agent, any
Registrar and any co-registrar and any Agent of any of the foregoing may deem
and treat the Person in whose name any Note shall be registered upon the
register of Notes kept by the Registrar as the absolute owner of such Note
(whether or not such Note shall be overdue and notwithstanding any notation of
the ownership or other writing thereon made by anyone other than the Company,
any Registrar or any co-registrar) for the purpose of receiving payments of
principal of or interest on such Note and for all other purposes; and none of
the Company, the Notes Trustee, any Paying Agent, any Registrar or any
co-registrar or any Agent of the foregoing shall be affected by any notice to
the contrary.
SECTION 2.19. RECORD DATE.
The record date for purposes of determining the identity of Noteholders
entitled to vote or consent to any action by vote or consent authorized or
permitted under this Indenture shall be the later of (i) 30 days prior to the
first solicitation of such consent or (ii) the date of the most recent list of
Holders furnished to the Notes Trustee, if applicable, pursuant to Section 2.05
hereto.
ARTICLE 3: REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
(a) If the Company elects to redeem Notes pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall furnish
to the Notes Trustee, at least 60 days (unless a shorter period is
acceptable to the Notes Trustee) prior to a redemption date, an
Officers' Certificate setting forth (i) the Section of this Indenture
pursuant to which the redemption shall occur, (ii) the redemption date,
(iii) the principal amount of Notes to be redeemed, (iv) the redemption
price and accrued and unpaid interest and (v) whether it requests the
Notes Trustee to give notice of such redemption.
(b) If the Company is required to make an offer to purchase
Notes pursuant to the provisions of Sections 4.10 or 4.14 hereof, it
shall furnish to the Notes Trustee at least 30 days (or such lesser
period as the Notes Trustee may agree), but not more than 60 days,
before mailing any offer to purchase pursuant to such Sections, an
Officers' Certificate setting forth (i) the Section of this Indenture
pursuant to which the offer to purchase shall occur, (ii) the proposed
purchase date, (iii) the maximum principal amount of Notes to be
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purchased, (iv) the purchase price and accrued and unpaid interest, (v)
whether it requests the Notes Trustee to mail any offer to purchase and
(vi) further setting forth a statement to the effect that (a) the
Company or one of its Subsidiaries has effected an Asset Disposition
and the conditions set forth in Section 4.10 have been satisfied or (b)
a Change of Control has occurred and the conditions set forth in
Section 4.14 have been satisfied, as applicable.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
(a) If less than all of the Notes are to be redeemed, the
Notes Trustee shall select the Notes to be redeemed among the
Noteholders on a pro rata basis, by lot or in accordance with any other
method the Notes Trustee considers fair and appropriate (and in such
manner as complies with applicable legal and stock exchange
requirements, if any); PROVIDED, HOWEVER, that if a partial redemption
is made with the proceeds of an Equity Offering, selection of the Notes
or portion thereof for redemption shall be made by the Notes Trustee
only on a PRO RATA basis to the extent practicable, unless such method
is otherwise prohibited. In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 45 nor more than 60 days prior to the
redemption date by the Notes Trustee from the outstanding Notes not
previously called for redemption.
(b) The Notes Trustee shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any
Note selected for partial redemption, the principal amount thereof to
be redeemed. Notes may be redeemed in part in multiples of $1,000
principal amount only. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
(c) Notice of redemption will be sent, by first class mail,
postage prepaid, at least 30 days prior to the date fixed for
redemption, to each Holder whose Notes are to be redeemed at the last
address for such Holder then shown on the Notes Register.
SECTION 3.03. NOTICE OF REDEMPTION.
(a) Subject to the provisions of Section 3.09 hereof, at least
30 days but not more than 60 days before a redemption date, the Company
shall mail or cause to be mailed a notice of redemption by first class
mail, postage prepaid to each Holder whose Notes are to be redeemed at
the last address for such Holder then shown on the Notes Register.
Each notice of redemption shall identify the Notes to be redeemed and
shall state: (i) the redemption date; (ii) the redemption price; (iii)
if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued; (iv) the name and
address of the Paying
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Agent; (v) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price; (vi) that, unless the
Company defaults in making such redemption payment, interest on Notes
called for redemption ceases to accrue on and after the redemption
date; (vii) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed;
and (viii) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such partial redemption.
(b) At the Company's request, the Notes Trustee shall give the
notice of redemption in the Company's name and at the Company's
expense; PROVIDED, HOWEVER, that the Company shall have delivered to
the Notes Trustee at least 45 days (unless a shorter period is
acceptable to the Notes Trustee) prior to the proposed redemption date
an Officers' Certificate requesting that the Notes Trustee give such
notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become due and payable on the redemption
date at the redemption price plus accrued and unpaid interest, if any.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
(a) Prior to 10:00 a.m., New York City time, on any redemption
date, the Company shall deposit with the Paying Agent (other than the
Company or any of its Subsidiaries) money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on
that date. The Paying Agent shall promptly return to the Company any
money deposited with the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest
on, all Notes to be redeemed.
(b) If the Company complies with the provisions of the
preceding paragraph, on and after the redemption date, interest ceases
to accrue on the Notes or the portions of Notes called for redemption
whether or not such Notes are presented for payment, and the only
remaining right of the Holders of such Notes shall be to receive
payment of the redemption price upon surrender to Paying Agent if the
Notes are redeemed. If a Note is redeemed on or after a Record Date,
but on or prior to the related Interest Payment Date, then any accrued
and unpaid interest shall be paid to the Person in whose name such Note
was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the
preceding paragraph, interest shall be paid on the unpaid principal,
from the redemption date until such principal is paid and, to the
extent lawful,
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on any interest not paid on such unpaid principal, in each case at the
rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
If any Note is to be redeemed in part only, the notice of redemption
that relates to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after any redemption date, interest
will cease to accrue on the Notes or part thereof called for redemption as long
as the Company has deposited with the Paying Agent funds in satisfaction of the
redemption price pursuant to this Indenture.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as provided in Section 3.07(b), the Company may
redeem all or any portion of the Notes at any time on or after April 1,
2003, at a redemption price equal to a percentage of the principal
amount thereof, as set forth in the immediately succeeding sentence,
plus accrued and unpaid interest to the redemption date. The redemption
price as a percentage of the principal amount shall be as follows, if
the Notes are redeemed during the 12 month period commencing on April 1
of the years set forth below, plus in each case, accrued and unpaid
interest to the date of redemption (subject to the right of holders of
record on the relevant record date to receive interest on the relevant
Interest Payment Date):
PERIOD REDEMPTION PRICE
------ ----------------
2003 105.25%
2004 103.50%
2005 101.75%
2006 and thereafter 100.00%
(b) At any time, or from time to time, prior to April 1, 2001
the Company may, at its option, redeem up to 35% of the original
aggregate principal amount of the Notes with the Net Cash Proceeds of
one or more Equity Offerings by the Company at a redemption price equal
to 110.5% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the date of redemption; PROVIDED, HOWEVER,
that after any such redemption the aggregate principal amount of the
Notes outstanding must equal at least $65 million. In order to effect
the foregoing redemption with the proceeds of any Equity Offering, the
Company shall make such redemption not more than 90 days after the
consummation of any such Equity Offering.
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SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth in Sections 4.10 and 4.14, the Company is not
required to make mandatory redemption or sinking fund payments with respect to
the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
(a) In the event that, pursuant to Section 4.10 hereof, the
Company shall commence an offer to all Noteholders to purchase Notes
(an "Asset Disposition Offer"), it shall follow the procedures
specified below:
(i) The Asset Disposition Offer shall remain
open for a period of 30 Business Days
following its commencement and no longer,
except to the extent that a longer period is
required by applicable law (the "Offer
Period"). No later than five Business Days
after the termination of the Offer Period
(the "Purchase Date"), the Company shall
purchase the principal amount of Notes
required to be purchased pursuant to Section
4.10 hereof (the "Offer Amount") or, if less
than the Offer Amount has been tendered, all
Notes tendered in response to the Asset
Disposition Offer.
(ii) If the Purchase Date is on or after a Record
Date and on or before the related Interest
Payment Date, any accrued interest shall be
paid to the Person in whose name a Note is
registered at the close of business on such
Record Date, and no additional interest
shall be payable to Holders who tender Notes
pursuant to the Asset Disposition Offer.
(iii) Upon the commencement of any Asset
Disposition Offer the Company shall send or
cause to be sent in accordance with Section
3.03, a notice to each Noteholder. The
notice shall contain all instructions and
materials necessary to enable such Holders
to tender Notes pursuant to the Asset
Disposition Offer. The notice, which shall
govern the terms of the Asset Disposition
Offer, shall state:
(1) that the Asset Disposition Offer
is being made pursuant to this
Section 3.09 and Section 4.10 hereof
and the length of time the Asset
Disposition Offer shall remain open;
(2) the Offer Amount, the purchase
price and the Purchase Date;
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(3) that any Note not tendered or
accepted for payment shall continue
to accrue interest;
(4) that any Note accepted for
payment pursuant to the Asset
Disposition Offer shall cease to
accrue interest after the Purchase
Date;
(5) that Holders electing to have a
Note purchased pursuant to any Asset
Disposition Offer shall be required
to surrender the Note, with the form
entitled "Option of Noteholder to
Elect Purchase" on the reverse of
the Note completed, to the Company,
a depositary, if appointed by the
Company, or a Paying Agent at the
address specified in the notice at
least three days before the Purchase
Date;
(6) that Holders shall be entitled
to withdraw their election if the
Company, depositary or Paying Agent,
as the case may be, receives, not
later than the expiration of the
Offer Period, a telegram, telex,
facsimile transmission or letter
setting forth the name of the
Holder, the principal amount of the
Note the Holder delivered for
purchase and a statement that such
Holder is withdrawing his election
to have the Note purchased;
(7) that, if the aggregate principal
amount of Notes surrendered by
Holders exceeds the Offer Amount,
the Company shall select the Notes
to be purchased on a pro rata basis
(with such adjustments as may be
deemed appropriate by the Company so
that only Notes in denominations of
$1,000, or integral multiples
thereof, shall be purchased); and
(8) that Holders whose Notes were
purchased only in part shall be
issued new Notes equal in principal
amount to the unpurchased portion of
the Notes surrendered.
(iv) On or before the Purchase Date, the Company
shall, to the extent lawful, accept for
payment, on a pro rata basis to the extent
necessary, the Offer Amount of Notes or
portions thereof tendered pursuant to the
Asset Disposition Offer or, if less than the
Offer Amount has been tendered, all Notes or
portions thereof tendered, and deliver to
the Notes Trustee an Officers' Certificate
stating that such Notes or portions thereof
were accepted for payment by the Company in
accordance with the terms of this Section
3.09. The
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Paying Agent shall promptly (but in any case
not later than five Business Days after the
Purchase Date) mail or deliver to each
tendering Holder an amount equal to the
purchase price of the Note tendered by such
Holder and accepted by the Company for
purchase, and the Company shall promptly
issue a new Note, and at the written request
of the Company the Notes Trustee shall
authenticate and mail or deliver such new
Note, to such Holder equal in principal
amount to any unpurchased portion of the
Note surrendered. Any Note not so accepted
shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company
shall publicly announce the results of the
Asset Disposition Offer on the Purchase
Date.
ARTICLE 4: COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
(a) The Company shall pay the principal of, premium, if any,
and interest on the Notes on the dates and in the manner provided in
the Notes and in this Indenture. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent,
if other than the Company or a Subsidiary Guarantor, holds as of 10:00
a.m. New York City time on the due date money deposited by the Company
in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. Such Paying
Agent shall return to the Company, no later than five Business Days
following the date of payment, any money (including accrued interest
paid by the Company) that exceeds such amount of principal, premium, if
any, and interest paid on the Notes.
(b) The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to 2% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful, and it
shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest (without
regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
(a) The Company shall maintain in the Borough of Manhattan, in
the City of New York, an office or agency (which may be an office of
the Notes Trustee or an affiliate of the Notes Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the
Company in respect of the Notes and this Indenture may be served. The
Company shall give prior written notice to the Notes Trustee of the
location, and any change in the location, of such office or agency. If
at any time the Company shall fail to maintain any
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such required office or agency or shall fail to furnish the Notes
Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office
of the Notes Trustee.
(b) The Company may also from time to time designate one or
more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time
rescind such designations; PROVIDED, HOWEVER, that no such designation
or rescission shall in any manner relieve the Company of its obligation
to maintain an office or agency in the Borough of Manhattan, in the
City of New York for such purposes. The Company shall give prior
written notice to the Notes Trustee of any such designation or
rescission and of any change in the location of any such other office
or agency.
(c) The Company hereby designates the Corporate Trust Office
of the Notes Trustee as one such office or agency of the Company in
accordance with Section 2.03. The address of the Corporate Trust Office
of the Notes Trustee in the City of New York is: SunTrust Bank, c/o
First Chicago Trust Company of New York, Corporate Trust - 8th Floor,
14 Wall Street, New York, New York 10005.
SECTION 4.03. SEC REPORTS.
(a) Upon consummation of the Exchange Offer and the issuance
of the Exchange Notes, the Company and each Subsidiary Guarantor (at
its own expense) shall file with the Commission and shall furnish to
the Notes Trustee, and , upon request, each Noteholder, within 15 days
after it files them with the Commission, copies of the quarterly and
annual reports and of the information, documents, and other reports (or
copies of such portions of any of the foregoing as the Commission may
by rules and regulations prescribe) to be filed pursuant to Section 13
or 15(d) of the Exchange Act (without regard to whether the Company is
subject to the requirements of such Section 13 or 15(d) of the Exchange
Act); PROVIDED, HOWEVER, that prior to the consummation of the Exchange
Offer and the issuance of the Exchange Notes, the Company (at its own
expense), will mail to the Notes Trustee and the Noteholders in
accordance with paragraph (b) of this Section 4.03 substantially the
same information that would have been required by the foregoing
documents within 15 days of when any such document would otherwise have
been required to be filed with the Commission. Upon qualification of
this Indenture under the TIA, the Company and each Subsidiary Guarantor
shall also comply with the provisions of TIA Section 314(a).
(b) At the Company's expense, the Company and each Subsidiary
Guarantor, as applicable, shall cause an annual report if furnished by
it to stockholders generally and each quarterly or other financial
report if furnished by it to stockholders generally to be filed with
the Notes Trustee and mailed to the Noteholders at their addresses
appearing in the register of Notes maintained by the Registrar at the
time of such mailing or furnishing to stockholders.
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(c) The Company and each Subsidiary Guarantor shall provide to
any Holder of Initial Notes any information reasonably requested by
such Holder concerning the Company and each Subsidiary Guarantor
(including financial statements) necessary in order to permit such
Holder to sell or transfer Notes in compliance with Rule 144A under the
Securities Act.
(d) If the Company instructs the Notes Trustee to distribute
any of the documents described in Section 4.03(a) to the Noteholders,
the Company shall provide the Notes Trustee with a sufficient number of
copies of all such documents.
SECTION 4.04. COMPLIANCE CERTIFICATES.
(a) The Company and each Subsidiary Guarantor shall deliver to
the Notes Trustee, within 90 days after the end of each fiscal year, an
Officers' Certificate signed by its principal executive officer,
principal financial officer or principal accounting officer stating
that a review of the activities of the Company and its Subsidiaries or
such Subsidiary Guarantor, as the case may be, during the preceding
fiscal year has been made under the supervision of the signing Officers
with a view to determining whether each has kept, observed, performed
and fulfilled its Obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge each has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is
not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default or Event
of Default shall have occurred during such period, describing all such
Defaults or Events of Default of which he or she may have knowledge and
what action each is taking or proposes to take with respect thereto).
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered pursuant to
Section 4.03 above shall be accompanied by a written statement of (x)
the Company's independent public accountants (who shall be a firm of
established national reputation) that in making the examination
necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that the
Company has violated any provisions of Article 4, 5 or 6 of this
Indenture insofar as they relate to accounting matters or, if any such
violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain
knowledge of any such violation and (y) if any Restricted Subsidiary's
or Subsidiary Guarantor's financial statements are not prepared on a
consolidated basis with the Company's, such Restricted Subsidiary's or
Guarantor's independent public accountants (who shall be a firm of
established national reputation) that in making the examination
necessary for certification of such financial statements nothing has
come to their attention which would lead them to believe that any of
the Restricted Subsidiaries or Subsidiary Guarantors is in Default
under this Indenture or, if any such Default has occurred, specifying
the nature and period
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of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to
obtain knowledge of any such violation.
(c) The Company and each of the Subsidiary Guarantors shall,
so long as any of the Notes are outstanding, deliver to the Notes
Trustee, forthwith upon any Officer becoming aware of (i) any Default
or Event of Default or (ii) any event of default under any other
mortgage, indenture or instrument to which the Company is a party, an
Officers' Certificate specifying such Default, Event of Default or
event of default and what action the Company or such Subsidiary
Guarantor, as the case may be, is taking or proposes to take with
respect thereto.
(d) The Company and each of the Subsidiary Guarantors shall
also comply with TIA Section 314(a)(4).
SECTION 4.05. TAXES.
The Company will, and will cause its Restricted Subsidiaries to, pay
and discharge when due all taxes, levies, imposts, duties or other governmental
charges ("Taxes") imposed on its income or profits or on any of its properties,
except such Taxes which are being contested in good faith in appropriate
proceedings and for which adequate reserves have been established in accordance
with GAAP.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
Each of the Company and the Subsidiary Guarantors covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay, extension or usury law wherever enacted, now or at any time hereafter
in force, that may affect the covenants or the performance of this Indenture
(including, but not limited to, the payment of the principal of or interest on
the Notes); and the Company and each Subsidiary Guarantor (to the extent that
they may lawfully do so) hereby expressly waive all benefit or advantage of any
such law, and covenant that they shall not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Notes Trustee,
but shall suffer and permit the execution of every such power as though no such
law has been enacted.
SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries, directly or indirectly, to (i) declare or pay
any dividend or make any distribution on or in respect of its Capital
Stock (including any payment in connection with any merger or
consolidation involving the Company or any of its Restricted
Subsidiaries) except (A) dividends or distributions payable in its
Capital Stock (other than Disqualified Stock) or in options, warrants
or other rights to purchase such Capital Stock and (B) dividends or
distributions payable to the Company or a Restricted
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Subsidiary of the Company which holds any equity interest in the paying
Restricted Subsidiary, (ii) purchase, redeem, retire or otherwise
acquire for value any Capital Stock of the Company held by Persons
other than a Wholly-Owned Subsidiary of the Company or any Capital
Stock of a Restricted Subsidiary of the Company held by any Affiliate
of the Company, other than a Wholly-Owned Subsidiary (in either case,
other than in exchange for its Capital Stock (other than Disqualified
Stock)), (iii) purchase, repurchase, redeem, defease or otherwise
acquire or retire for value, any Subordinated Obligations or (iv) make
any Investment (other than a Permitted Investment) in any Person (any
such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Investment as described in
preceding clauses (i) through (iv) being referred to as a "Restricted
Payment"), if at the time the Company or such Restricted Subsidiary
makes such Restricted Payment and immediately after giving pro forma
effect to such Restricted Payment:
(1) a Default shall have occurred and be continuing (or
would result therefrom); or
(2) the Company is not able to Incur an additional $1.00
of Indebtedness pursuant to paragraph (a) under
Section 4.09; or
(3) the aggregate amount of such Restricted Payment and
all other Restricted Payments declared or made
subsequent to the Issue Date would exceed the sum,
without duplication, of (A) 50% of the Consolidated
Net Income accrued during the period (treated as one
accounting period) from the first day of the first
fiscal quarter beginning on or after the Issue Date
to the end of the most recent fiscal quarter ending
prior to the date of such Restricted Payment as to
which financial results are available (but in no
event ending more than 135 days prior to the date of
such Restricted Payment) (or, in case such
Consolidated Net Income shall be a deficit, minus
100% of such deficit); (B) the aggregate net proceeds
received by the Company from the issue or sale of its
Capital Stock subsequent to the Issue Date (other
than Disqualified Stock and other than Net Cash
Proceeds received from an issuance or sale of such
Capital Stock to a Subsidiary of the Company); (C)
the amount by which Indebtedness of the Company is
reduced on the Company's balance sheet upon the
conversion or exchange (other than by a Restricted
Subsidiary of the Company) subsequent to the Issue
Date of any Indebtedness of the Company convertible
or exchangeable for Capital Stock of the Company
(less the amount of any cash, or other property,
distributed by the Company upon such conversion or
exchange); (D) the amount equal to the net reduction
in Investments (other than Permitted Investments)
made after the Issue Date by the Company or any of
its Restricted Subsidiaries in any Person resulting
from (i) repurchases or redemptions of such
Investments by such Person, proceeds realized upon
the sale of such Investment to an
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unaffiliated purchaser, repayments of loans or
advances or other transfers of assets by such Person
to the Company or any Restricted Subsidiary of the
Company or (ii) the redesignation of Unrestricted
Subsidiaries as Restricted Subsidiaries (valued in
each case as provided in the definition of
"Investment") not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments
previously included in the calculation of the amount
of Restricted Payments; PROVIDED, HOWEVER, that no
amount shall be included under this clause (D) to the
extent it is already included in Consolidated Net
Income; and (E) $5 million.
(b) The provisions of paragraph (a) shall not prohibit: (i)
any purchase or redemption of Capital Stock or Subordinated Obligations
of the Company made by exchange for, conversion into or out of the
proceeds of the substantially concurrent sale of, Capital Stock of the
Company (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary); PROVIDED, HOWEVER, that (A) such
purchase or redemption shall be excluded in the calculation of the
amount of Restricted Payments and (B) the Net Cash Proceeds (to the
extent used for such purchase or redemption) from such sale shall be
excluded from clause (3) (B) of paragraph (a); (ii) any purchase or
redemption of Subordinated Obligations of the Company made by exchange
for, conversion into or out of the proceeds of the substantially
concurrent sale of, Subordinated Obligations constituting Refinancing
Indebtedness of the Company in compliance with Section 4.09; PROVIDED,
FURTHER, that such purchase or redemption shall be excluded in the
calculation of the amount of Restricted Payments; (iii) any purchase or
redemption of Subordinated Obligations as a result of a Change of
Control (provided that Section 4.14 is complied with); (iv) any
purchase or redemption of Subordinated Obligations from Net Available
Cash to the extent permitted under Section 4.10; PROVIDED, FURTHER,
that such purchase or redemption shall be excluded in the calculation
of the amount of Restricted Payments; (v) payment by the Company of any
scheduled sinking fund payments under the Public Debentures; provided
that the Company reduces its required sinking fund payments to the
maximum amount permitted under the Indenture pursuant to which such
Public Debentures were issued; (vi) repayment of the Convertible Notes
upon stated maturity, PROVIDED, HOWEVER, that the amount of such
payment shall be included in the calculation of the amount of
Restricted Payments subsequent to the date of such payment; (vii)
dividends paid within 60 days after the date of declaration if at such
date of declaration such dividend would have complied with this
provision; PROVIDED, HOWEVER, that such dividend shall be included in
the calculation of the amount of Restricted Payments; and (viii)
repurchases of Capital Stock deemed to occur upon the exercise of stock
options (other than options relating to Disqualified Stock) if such
Capital Stock represents a portion of the exercise price of such
options; PROVIDED, HOWEVER, that such dividend shall be included in the
calculation of the amount of Restricted Payments; PROVIDED, HOWEVER,
that in the case of clauses (i), (ii), (iii), (iv) and (v) no Default
or Event of Default shall have occurred or be continuing at the time of
such payment or as a result thereof.
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(c) For purposes of determining compliance with the covenant
set forth in this Section 4.07, Restricted Payments may be made with
cash or non-cash assets, provided that any Restricted Payment made
other than in cash shall be valued at the fair market value
(determined, subject to the additional requirements of the immediately
succeeding proviso, in good faith by the Board of Directors) of the
assets so utilized in making such Restricted Payment, PROVIDED,
HOWEVER, that (i) in the case of any Restricted Payment made with
Capital Stock or Indebtedness, such Restricted Payment shall be deemed
to be made in an amount equal to the greater of the fair market value
thereof and the liquidation preference (if any) or principal amount of
the Capital Stock or Indebtedness, as the case may be, so utilized, and
(ii) in the case of any Restricted Payment in an aggregate amount in
excess of $2.0 million but less than $4.0 million, the fairness of the
valuation thereof (as determined by the Company) for purposes of
determining compliance with Section 4.07 shall be approved by a
majority of the disinterested members of the Board of Directors of the
Company and (iii) in the case of any Restricted Payment in an aggregate
amount of $4.0 million or more, a written opinion as to the fairness of
the valuation thereof (as determined by the Company) for purposes of
determining compliance with Section 4.07 shall be issued by an
independent investment banking, accounting or qualified appraisal firm
of national standing.
(d) Not later than the date of making any Restricted Payment,
the Company shall deliver to the Notes Trustee an Officer's Certificate
stating that such Restricted Payment complies with this Indenture and
setting forth in reasonable detail the basis upon which the required
calculations were computed, which calculations may be based upon the
Company's latest available quarterly financial statements, and a copy
of any required investment banker's, accountant's or appraiser's
opinion.
SECTION 4.08. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any such Restricted Subsidiary to
(i) pay dividends or make any other distributions on its Capital Stock or pay
any Indebtedness or other obligation owed to the Company, (ii) make any loans or
advances to the Company or (iii) transfer any of its property or assets to the
Company, or (iv) guarantee the Notes, except: (a) any encumbrance or restriction
pursuant to an agreement in effect at or entered into on the Issue Date,
including, without limitation, the Indenture, the Notes and the Credit
Agreements, if any; (b) any encumbrance or restriction with respect to such a
Restricted Subsidiary pursuant to an agreement relating to any Indebtedness
issued by such Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary was acquired by the Company and outstanding on such date
(other than Indebtedness Incurred in anticipation of, or to provide all or any
portion of the funds or credit support utilized to consummate, the transaction
or series of related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary of the Company or was acquired by the Company)
provided that such encumbrance or restriction is not applicable to any
properties or assets other than of the types
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owned or held by such Restricted Subsidiary at the time it became a Restricted
Subsidiary; (c) any encumbrance or restriction with respect to such a Restricted
Subsidiary effecting a refinancing of Indebtedness issued pursuant to an
agreement referred to in clauses (a) or (b) or this clause (c) or contained in
any amendment to an agreement referred to in clauses (a) or (b) or this clause
(c) (or effecting a Refinancing of such Refinancing Indebtedness pursuant to
this clause (c) or contained in any amendment, modification, restatement,
renewal or supplement to an agreement referred to in clauses (i) or (ii) or this
clause (iii)); PROVIDED, HOWEVER, that the encumbrances and restrictions with
respect to such Restricted Subsidiary contained in any of such agreement,
refinancing agreement or amendment, taken as a whole, are no less favorable to
the Holders of the Notes in any material respect, as determined in good faith by
the Board of Directors of the Company, than encumbrances and restrictions with
respect to such Restricted Subsidiary contained in agreements in effect at, or
entered into on, the Issue Date; (d) in the case of clause (iii) of this Section
4.08, any encumbrance or restriction (A) that restricts in a customary manner
the subletting, assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset, (B) by virtue of
any transfer of, agreement to transfer, option, or right with respect to, or
Lien on, any property or assets of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture or (C) that is included in a licensing
agreement to the extent such restrictions limit the transfer of the property
subject to such licensing agreement; (e) in the case of clause (iii) of this
Section 4.08, restrictions contained in security agreements, mortgages or
similar documents securing Indebtedness (including purchase money Indebtedness)
of a Restricted Subsidiary to the extent such restrictions restrict the transfer
of the property subject to such security agreements, mortgages or similar
documents; (f) any restriction with respect to such a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or disposition of all
or substantially all of the Capital Stock or assets of such Restricted
Subsidiary pending the closing of such sale or disposition; (g) encumbrances or
restrictions arising or existing by reason of applicable law; (h) any
encumbrance or restriction pursuant to Indebtedness of Receivables Subsidiaries
that is permitted to be Incurred subsequent to the Issue Date pursuant to
Section 4.07; and (i) restrictions on cash or other deposits imposed by
customers under contracts incurred in the ordinary course of business consistent
with past practices.
SECTION 4.09. LIMITATION ON INDEBTEDNESS.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, Incur any Indebtedness; PROVIDED, HOWEVER,
that the Company and its Restricted Subsidiaries may Incur Indebtedness
if no Default or Event of Default shall have occurred and be continuing
at the time of such Incurrence or would occur as a consequence of such
Incurrence and the Consolidated Coverage Ratio would be equal to at
least (x) 2.00 to 1.00 if such Indebtedness is Incurred prior to April
1, 2000, (y) 2.25 to 1.00 if such Indebtedness is Incurred after April
1, 2000 but prior to March 31, 2002, and (z) 2.50 to 1.00 after March
31, 2002.
(b) Notwithstanding the foregoing paragraph (a), the Company
and its Restricted Subsidiaries may Incur the following Indebtedness:
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(i) Indebtedness Incurred under any Credit
Agreements and/or pursuant to seller
financing in connection with the acquisition
of inventory; PROVIDED, HOWEVER, after
giving effect to such Incurrence, the
aggregate principal amount of such
Indebtedness then outstanding does not
exceed $30.0 million;
(ii) Indebtedness represented by Capitalized
Lease Obligations, mortgage financings or
purchase money obligations in addition to
that specified in clause (i) above, in each
case Incurred for the purpose of financing
all or any part of the purchase price or
cost of construction or improvement of
property or equipment used in a Permitted
Business or Incurred to refinance any such
purchase price or cost of construction or
improvement, in each case Incurred no later
than 365 days after the date of such
acquisition or the date of completion of
such construction or improvement; PROVIDED,
HOWEVER, that the principal amount of any
Indebtedness Incurred pursuant to this
clause (ii) shall not exceed $2.0 million at
any time outstanding;
(iii) Indebtedness outstanding pursuant to the
Public Debentures, the Convertible Notes and
the RDI Note and other Existing Indebtedness
outstanding as of the Issue Date after the
application of the net proceeds of the
Offering;
(iv) Indebtedness of the Company owing to and
held by any Wholly-Owned Subsidiary or
Indebtedness of a Restricted Subsidiary
owing to and held by the Company or any
Wholly-Owned Subsidiary; PROVIDED, HOWEVER,
that (A) if the Company is the obligor on
such Indebtedness, such Indebtedness is
expressly subordinate to the payment in full
of all Obligations with respect to the Notes
and (B) any subsequent issuance or transfer
of any Capital Stock or any other event
which results in any such Wholly-Owned
Subsidiary ceasing to be a Wholly-Owned
Subsidiary or any subsequent transfer of any
such Indebtedness (except to the Company or
any Wholly-Owned Subsidiary) shall be
deemed, in each case, to constitute the
Incurrence of such Indebtedness by the
issuer thereof;
(v) Indebtedness represented by (A) the Notes
and any Exchange Notes issued in exchange
for the Notes of any equal principal amount,
(B) the Note Guarantees, (C) any Refinancing
Indebtedness Incurred in respect of any
Indebtedness described in clauses (i)
through (iii) or this clause (v) or Incurred
pursuant to paragraph (a) above;
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(vi) (A) Indebtedness of a Restricted Subsidiary
Incurred and outstanding on the date on
which such Restricted Subsidiary was
acquired by the Company (other than
Indebtedness Incurred in anticipation of, or
to provide all or any portion of the funds
or credit support utilized to consummate the
transaction or series of related
transactions pursuant to which such
Restricted Subsidiary became a Subsidiary or
was otherwise acquired by the Company);
PROVIDED, HOWEVER, that at the time such
Restricted Subsidiary is acquired by the
Company, the Company would have been able to
Incur $ 1.00 of additional Indebtedness
pursuant to paragraph (a) above after giving
effect to the Incurrence of such
Indebtedness pursuant to this clause (vi)
and (B) Refinancing Indebtedness Incurred by
a Restricted Subsidiary in respect of
Indebtedness Incurred by such Restricted
Subsidiary pursuant to this clause (vi);
(vii) Indebtedness (A) in respect of performance
bonds, completion and maintenance bonds,
bankers' acceptances letters of credit and
surety or appeal bonds provided by the
Company or any of its Restricted
Subsidiaries to their customers in the
ordinary course of their business, (B) in
respect of performance bonds or similar
obligations of the Company or any of its
Restricted Subsidiaries for or in connection
with pledges, deposits or payments made or
given in the ordinary course of business in
connection with or to secure statutory,
regulatory or similar obligations, including
obligations under health, safety or
environmental obligations and (C) arising
from Guarantees to suppliers, lessors,
licensees, contractors, franchises or
customers of obligations (other than
Indebtedness) Incurred in the ordinary
course of business;
(viii) Indebtedness arising from agreements
providing for indemnification, adjustment of
purchase price or similar obligations, or
from Guarantees or letters of credit, surety
bonds or performance bonds securing any
obligations of the Company or any of its
Restricted Subsidiaries pursuant to such
agreements, in each case Incurred in
connection with the disposition of any
business assets or Restricted Subsidiary of
the Company (other than Guarantees of
Indebtedness or other obligations Incurred
by any Person acquiring all or any portion
of such business assets or Restricted
Subsidiary of the Company for the purpose of
financing such acquisition) in a principal
amount not to exceed the gross proceeds
actually received by the Company or any of
its Restricted Subsidiaries in connection
with such disposition; PROVIDED, HOWEVER,
that the principal amount of any
Indebtedness Incurred
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pursuant to this clause (viii), when taken
together with all Indebtedness Incurred
pursuant to this clause (viii) and then
outstanding, shall not exceed $2.0 million;
(ix) Indebtedness under Currency Agreements and
Interest Rate Agreements; PROVIDED, HOWEVER,
that in the case of Currency Agreements and
Interest Rate Agreements, such Currency
Agreements and Interest Rate Agreements are
entered into for bona fide hedging purposes
of the Company or its Restricted
Subsidiaries (as determined in good faith by
the Board of Directors of the Company) and
correspond in terms of notional amount,
duration, currencies and interest rates, as
applicable, to Indebtedness of the Company
or its Restricted Subsidiaries Incurred
without violation of the Indenture or to
business transactions of the Company or its
Restricted Subsidiaries on customary terms
entered into in the ordinary course of
business;
(x) Indebtedness consisting of (A) Guarantees by
the Company (so long as the Company could
have Incurred such Indebtedness directly
without violation of this Indenture) and (B)
Guarantees by a Restricted Subsidiary of
Senior Indebtedness Incurred by the Company
without violation of this Indenture (so long
as such Restricted Subsidiary could have
Incurred such Indebtedness directly without
violation of this Indenture);
(xi) Indebtedness arising from the honoring by a
bank or other financial institution of a
check, draft or similar instrument issued by
the Company or its Restricted Subsidiaries
drawn against insufficient funds in the
ordinary course of business in an amount not
to exceed $250,000 at any time; provided
that such Indebtedness is extinguished
within two Business Days of its incurrence;
and
(xii) Indebtedness (other than Indebtedness
described in clauses (i) - (xi)) in a
principal amount which, when taken together
with the principal amount of all other
Indebtedness Incurred pursuant to this
clause (xii) and then outstanding, will not
exceed $10.0 million
For purposes of determining compliance with this Section 4.09,
in the event that an item of Indebtedness meets the criteria of more
than one of the types of Indebtedness described in the above clauses at
the time of incurrence, the Company shall, in its sole discretion,
classify such item of Indebtedness and only be required to include the
amount and type of such Indebtedness in the applicable clause(s) so
selected by the Company. No fluctuation in currency exchange rates or
interest rates following the incurrence of any
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Indebtedness shall result in a Default hereunder, if the Indebtedness
itself was incurred in compliance with the Indenture at the time of
incurrence.
(c) Neither the Company nor any Restricted Subsidiary shall
Incur any Indebtedness under paragraph (b) above if the proceeds
thereof are used, directly or indirectly, to refinance any Subordinated
Obligations of the Company unless such Indebtedness shall be
subordinated to the Notes to at least the same extent as such
Subordinated Obligations. No Restricted Subsidiary shall Incur any
Indebtedness under paragraph (b) above if the proceeds thereof are
used, directly or indirectly, to refinance any Subordinated Obligation
of such Subsidiary Guarantor unless such Indebtedness shall be
subordinated to the obligations of such Subsidiary Guarantor under the
Note Guarantee to at least the same extent as such Subordinated
Obligation.
(d) The Company will not permit any Unrestricted Subsidiary to
Incur any Indebtedness other than Non-Recourse Debt.
SECTION 4.10. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any Asset Disposition unless (i) the
Company or such Restricted Subsidiary receives consideration at the
time of such Asset Disposition at least equal to the fair market value,
as determined in good faith by the Company's Board of Directors
(including as to the value of all non-cash consideration), of the
shares and assets subject to such Asset Disposition, (ii) at least 75%
of the consideration thereof received by the Company or such Restricted
Subsidiary is in the form of cash or Cash Equivalents and (iii) an
amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Company (or such Restricted Subsidiary,
as the case may be) (A) FIRST, to the extent the Company or any
Restricted Subsidiary elects (or is required by the terms of any
Secured Indebtedness), (x) to prepay, repay or purchase Secured
Indebtedness or (y) to the investment in or acquisition of Additional
Assets within 360 days from the later of the date of such Asset
Disposition or the receipt of such Net Available Cash; (B) SECOND,
within 360 days from the receipt of such Net Available Cash, to the
extent of the balance of such Net Available Cash after application in
accordance with clause (A), to make an offer to purchase Notes at 100%
of their principal amount plus accrued and unpaid interest, if any,
thereon; (C) THIRD, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A) and (B), (w) to
the investment in or acquisition of Additional Assets, (x) the making
of Temporary Cash Investments or (y) any other purpose otherwise
permitted under this Indenture, in each case within the later of 45
days after the application of Net Available Cash in accordance with
clauses (A) or (B) or the date that is one year from the receipt of
such Net Available Cash; PROVIDED, HOWEVER, that, in connection with
any prepayment, repayment or purchase of Indebtedness pursuant to
clause (A) or (B) above, the Company or such Restricted Subsidiary
shall retire such Indebtedness and shall cause the related loan
commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid,
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repaid or purchased. Notwithstanding the foregoing provisions, the
Company and its Restricted Subsidiaries shall not be required to apply
any Net Available Cash in accordance herewith except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which are
not applied in accordance with this covenant at any time exceeds $10.0
million. The Company shall not be required to make an offer for Notes
pursuant to this covenant if the Net Available Cash available therefor
(after application of the proceeds as provided in clause (A)) is less
than $10.0 million for any particular Asset Disposition (which lesser
amounts shall be carried forward for purposes of determining whether an
offer is required with respect to the Net Available Cash from any
subsequent Asset Disposition).
For the purposes of this covenant, the following will be deemed to be
cash: (x) the assumption by the transferee of Senior Indebtedness of the Company
or Senior Indebtedness of any Restricted Subsidiary and the release of the
Company or such Restricted Subsidiary from all liability on such Senior
Indebtedness in connection with such Asset Disposition (in which case the
Company shall, without further action, be deemed to have applied such assumed
Indebtedness in accordance with clause (A) of the preceding paragraph) and (y)
securities received by the Company or any Restricted Subsidiary of the Company
from the transferee that are promptly (and in any event within 90 days)
converted by the Company or such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the
purchase of Notes pursuant to clause (a) (iii) (B), the Company will be
required to purchase Notes tendered pursuant to an offer by the Company
for the Notes at a purchase price of 100% of their principal amount
plus accrued and unpaid interest, if any, to the purchase date in
accordance with the procedures (including prorating in the event of
oversubscription) set forth in this Indenture. If the aggregate
purchase price of the Notes tendered pursuant to the offer is less than
the Net Available Cash allotted to the purchase of the Notes, the
Company will apply the remaining Net Available Cash in accordance with
clause (a) (iii) (C) above.
SECTION 4.11. LIMITATION ON AFFILIATE TRANSACTIONS.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into or
conduct any transaction or series of related transactions (including
the purchase, sale, lease or exchange of any property or the rendering
of any service) with or for the benefit of any Affiliate of the
Company, other than the Company a Wholly-Owned Subsidiary (an
"Affiliate Transaction"), unless: (i) the terms of such Affiliate
Transaction are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could be obtained at
the time of such transaction in arm's length dealings with a Person who
is not such an Affiliate; (ii) in the event such Affiliate Transaction
involves an aggregate amount in excess of $1 million or is a loan,
advance or other indebtedness, the terms of such transaction have been
approved by a majority of the disinterested members of the Board, if
any (and such
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majority determines that such Affiliate Transaction satisfies the
criteria in clause (i) above); and (iii) in the event such Affiliate
Transaction involves an aggregate amount in excess of $2.0 million, the
Company has received a written opinion from an independent investment
banking, accounting or appraisal firm of nationally recognized standing
that such Affiliate Transaction is fair to the Company or such
Restricted Subsidiary, as the case may be, from a financial point of
view.
(b) The foregoing paragraph (a) shall not apply to (i) the
Company's employee compensation and other benefit arrangements
(including, without limitation, any option grants or other equity based
awards, (ii) loans or advances to employees in the ordinary course of
business of the Company or any of its Restricted Subsidiaries in
aggregate amount outstanding not to exceed $250,000 to any employee or
$500,000 in the aggregate at any time, (iii) the payment of reasonable
and customary fees to directors of the Company who are not employees of
the Company (including without limitation the grant of stock options),
(iv) indemnification agreements with, and the payment of fees and
indemnities to, directors, officers and employees of the Company and
its Restricted Subsidiaries, in each case in the ordinary course of
business, (v) transactions pursuant to agreements in existence on the
Issue Date which are (x) described in the Offering Memorandum or (y)
otherwise, in the aggregate, immaterial to the Company and its
Restricted Subsidiaries taken as a whole, and, in either case, are
effected pursuant to the terms of agreements as in effect on the Issue
Date, and (vi) transactions with respect to the acquisition of Accounts
Receivable and/or direct sales of Accounts Receivable to financial
institutions or sales of Accounts Receivable in connection with
securitization transactions, in each case in the ordinary course of
business.
SECTION 4.12. LIMITATION ON LIENS.
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume or suffer to exist any Liens,
except for Permitted Liens.
SECTION 4.13. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence, and the corporate, partnership or other existence of each Subsidiary,
in accordance with the respective organizational documents (as the same may be
amended from time to time) of each Subsidiary and the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
PROVIDED, HOWEVER, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any Subsidiary, if the Board of Directors of the Company shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and its Subsidiaries, taken as a whole, and that the loss thereof
is not adverse in any material respect to the Noteholders.
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SECTION 4.14. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control each Holder
will have the right to require the Company to repurchase all or any
part of such Holder's Notes at a purchase price in cash equal to 101%
of the principal amount thereof plus accrued and unpaid interest, if
any, to the date of purchase (the "Change of Control Payment") (subject
to the right of Holders of record on a relevant Record Date to receive
interest due on the relevant Interest Payment Date).
(b) Within 30 days following any Change of Control, unless the
Company has mailed a redemption notice with respect to all the
outstanding Notes in connection with such Change of Control, the
Company shall mail a notice to each Holder with a copy to the Notes
Trustee or, at the Company's option, by the Notes Trustee (at the
Company's expense) stating:
(i) that a Change of Control has occurred and
that such Holder has the right to require
the Company to purchase such Holder's Notes
at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued
and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of
record on a Record Date to receive interest
on the relevant Interest Payment Date);
(ii) the repurchase date (which shall be no
earlier than 30 days nor later than 60 days
from the date such notice is mailed) (the
"Change of Control Payment Date"); and
(iii) the procedures determined by the Company,
consistent with this Indenture, that a
Noteholder must follow in order to have its
Notes purchased.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other applicable
securities laws or regulations in connection with the repurchase of Notes
pursuant to this Section 4.14. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Indenture, the
Company will comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations described in this Indenture
by virtue thereof.
(c) Noteholders electing to have a Note repurchased will be
required to surrender the Note, with the form entitled "Option of
Noteholder to Elect Purchase" on the reverse of the Note completed, to
the Company at the address specified in the notice at least 10 Business
Days prior to the repurchase date. Noteholders will be entitled to
withdraw their election if the Notes Trustee or the Company receives,
not later than three Business Days prior to the repurchase date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Noteholder, the principal amount of the Note which was
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delivered for repurchase by the Noteholder and a statement that such
Noteholder is withdrawing his election to have such Note purchased.
(d) On the Change of Control Payment Date, the Company will,
to the extent lawful, (i) accept for payment all Notes or portions
thereof properly tendered pursuant to the Change of Control Offer, (ii)
deposit with the Notes Trustee an amount equal to the Change of Control
Payment in respect of all Notes or portions thereof so tendered and
(iii) deliver or cause to be delivered to the Notes Trustee the Notes
so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased
by the Company. The Notes Trustee will promptly mail to each Noteholder
so tendered the Change of Control Payment for such Notes, and the Notes
Trustee will promptly authenticate and mail (or cause to be transferred
by book entry) to each Noteholder a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered, if any; provided
that each such new Note will be in a principal amount of $1,000 or an
integral multiple thereof. Unless the Company defaults in the payment
for any Notes properly tendered pursuant to the Change of Control
Offer, any Notes accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Change of Control
Payment Date.
SECTION 4.15. LIMITATION ON ISSUANCES OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES.
The Company will not permit any of its Restricted Subsidiaries to issue
any Capital Stock to any Person (other than to the Company or a Wholly-Owned
Subsidiary of the Company) or permit any Person (other than the Company or a
Wholly-Owned Subsidiary of the Company and other than directors' qualifying
shares and, to the extent required by local ownership in foreign countries,
shares owned by foreign shareholders) to own any Capital Stock of a Restricted
Subsidiary of the Company, if in either case as a result thereof such Restricted
Subsidiary would no longer be a Restricted Subsidiary of the Company; PROVIDED,
HOWEVER, that this provision shall not prohibit (x) the Company or any of its
Restricted Subsidiaries from selling, leasing or otherwise disposing of all of
the Capital Stock of any Restricted Subsidiary, provided that the net cash
proceeds from such sale, lease or other disposition are applied in accordance
with Section 4.10 or (y) the designation of a Restricted Subsidiary as an
Unrestricted Subsidiary in compliance with this Indenture.
SECTION 4.16. LIMITATION ON REPAYMENT UPON A CHANGE OF CONTROL.
The Company will not make an offer to repurchase any Subordinated
Obligations if it is required to do so pursuant to a Change of Control until at
least 60 days after the occurrence of such Change of Control and shall not
purchase any Subordinated Obligations for 30 days following the time the Company
is required to make purchases of the Notes under this Indenture following such
Change of Control.
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SECTION 4.17. LIMITATION ON SALE/LEASEBACK TRANSACTIONS.
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, enter into, Guarantee or otherwise become liable with
respect to any Sale/Leaseback Transaction with respect to any property or assets
unless (i) the Company or such Restricted Subsidiary, as the case may be, would
be entitled pursuant to this Indenture to Incur Indebtedness secured by a
Permitted Lien on such property or assets in an amount equal to the Attributable
Indebtedness with respect to such Sale/Leaseback Transaction, (ii) the Net Cash
Proceeds from such Sale/Leaseback Transaction are at least equal to the fair
market value of the property or assets subject to such Sale/Leaseback
Transaction (such fair market value determined, in the event such property or
assets have a fair market value in excess of $1.0 million, no more than 30 days
prior to the effective date of such Sale/ Leaseback Transaction, by the Board of
Directors of the Company as evidenced by a resolution of such Board of
Directors) and (iii) the net cash proceeds of such Sale/Leaseback Transaction
are applied in accordance with the provisions described under Section 4.10.
SECTION 4.18. LIMITATION ON DESIGNATIONS OF UNRESTRICTED SUBSIDIARIES.
(a) The Company may designate any Subsidiary of the Company
(other than a Subsidiary of the Company which owns Capital Stock of a
Restricted Subsidiary) as an "Unrestricted Subsidiary" under this
Indenture (a "Designation") only if:
(i) no Default or Event of Default shall have
occurred and be continuing at the time of
or, after giving effect to such Designation;
and
(ii) except in the case of a newly organized
Subsidiary in which the Company and the
Restricted Subsidiaries have made aggregate
investments of $10,000 or less, the Company
would be permitted under this Indenture to
make an Investment at the time of
Designation (assuming the effectiveness of
such Designation) in an amount (the
"Designation Amount") equal to the sum of
(i) the fair market value of the Capital
Stock of such Subsidiary owned by the
Company and the Restricted Subsidiaries on
such date and (ii) the aggregate amount of
other Investments of the Company and the
Restricted Subsidiaries in such Subsidiary
on such date; and
(iii) the Company would be permitted to Incur
$1.00 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to Section
4.09 at the time of Designation (assuming
the effectiveness of such Designation).
(b) In the event of any such Designation, the Company shall be
deemed to have made an Investment constituting a Restricted Payment
pursuant to the covenant described
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under Section 4.07 for all purposes of this Indenture in the
Designation Amount. The Company shall not, and shall not permit any
Restricted Subsidiary to, at any time (i) provide direct or indirect
credit support for or a Guarantee of any Indebtedness of any
Unrestricted Subsidiary (including of any undertaking, agreement or
instrument evidencing such Indebtedness), (ii) be directly or
indirectly liable for any Indebtedness of any Unrestricted Subsidiary
or (iii) be directly or indirectly liable for any Indebtedness of any
Unrestricted which provides that the holder thereof may (upon notice,
lapse of time or both) declare a default thereon or cause the payment
thereof to be accelerated or payable prior to its final scheduled
maturity upon the occurrence of a default with respect to any
Indebtedness of any Unrestricted Subsidiary (including any right to
take enforcement action against such Unrestricted Subsidiary), except,
in the case of clause (i) or (ii), to the extent permitted under
Section 4.07.
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation"), whereupon such Subsidiary shall then
constitute a Restricted Subsidiary, if:
(i) no Default or Event of Default shall have
occurred and be continuing at the time of
and after giving effect to such Revocation;
and
(ii) all Liens and Indebtedness of such
Unrestricted Subsidiary outstanding
immediately following such Revocation would,
if incurred at such time, have been
permitted to be incurred for all purposes of
this Indenture.
All Designations and Revocations must be evidenced by Board Resolutions
of the Company delivered to the Notes Trustee certifying compliance with the
foregoing provisions.
SECTION 4.19. FURTHER INSTRUMENTS AND ACTS.
The Notes Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Company, except as otherwise set forth herein, but the Notes Trustee may
require of the Company full information and advice as to the performance of the
covenants, conditions and agreements contained herein, and upon request of the
Notes Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
SECTION 4.20. COMPANY TO CAUSE CERTAIN SUBSIDIARIES TO BECOME
GUARANTORS.
The Company shall not (i) permit any of its Restricted Subsidiaries to
incur, guarantee or secure through the granting of Liens any Indebtedness or
(ii) pledge any intercompany notes representing obligations of any of its
Restricted Subsidiaries to secure the payment of any
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Indebtedness, in either case unless such Restricted Subsidiary is a Wholly Owned
Subsidiary which is a Subsidiary Guarantor or at such time becomes a Subsidiary
Guarantor by executing a supplemental indenture in which such Restricted
Subsidiary agrees to be bound by the terms of this Indenture as a Subsidiary
Guarantor and executes a Note Guarantee.
ARTICLE 5: SUCCESSORS
SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company shall not consolidate with or merge with or into, or
convey, transfer or lease all or substantially all of its assets to, any Person,
unless:
(i) the resulting, surviving or transferee
Person (the "Successor Company") shall be a
corporation organized and existing under the
laws of the United States of America, any
State thereof or the District of Columbia
and the Successor Company (if not the
Company) shall expressly assume, by
supplemental indenture, executed and
delivered to the Notes Trustee, in form
satisfactory to the Notes Trustee, all the
obligations of the Company under the Notes
and this Indenture;
(ii) immediately after giving effect to such
transaction (and treating any Indebtedness
that becomes an obligation of the Successor
Company or any Subsidiary of the Successor
Company as a result of such transaction as
having been incurred by the Successor
Company or such Restricted Subsidiary at the
time of such transaction), no Default or
Event of Default shall have occurred and be
continuing;
(iii) immediately after giving effect to such
transaction, the Successor Company (A) would
have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of
the Company immediately prior to such
transaction and (B) would be able to Incur
at least an additional $1.00 of Indebtedness
pursuant to paragraph (a) of Section 4.09;
(iv) there has been delivered to the Notes
Trustee an Opinion of Counsel to the effect
that Holders of the Notes will not recognize
income, gain or loss for U.S. Federal income
tax purposes as a result of such
consolidation, merger, conveyance, transfer
or lease and will be subject to U.S. Federal
income tax on the same amount and in the
same manner and at the same times as would
have been
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the case if such consolidation, merger,
conveyance, transfer or lease had not
occurred; and
(v) the Company shall have delivered to the
Notes Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that
such consolidation, merger or transfer and
such supplemental indenture (if any) comply
with this Indenture.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, but, in the
case of a lease of all or substantially all its assets, the Company will not be
released from the obligation to pay the principal of and interest on the Notes.
Notwithstanding clauses (ii) and (iii) of Section 5.01, any Restricted
Subsidiary of the Company may consolidate with, merge into or transfer all or
part of its properties and assets to the Company or any other Restricted
Subsidiary.
ARTICLE 6: DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
(a) an "Event of Default" occurs if:
(i) there is a default in any payment of
interest on any Note when due, continued for
30 days;
(ii) there is a default in the payment of
principal of any Note when due at its Stated
Maturity, upon optional redemption, upon
required repurchase, upon declaration or
otherwise;
(iii) there is a failure by the Company to comply
with its obligations under Section 5.01
hereof;
(iv) there is failure by the Company to comply
for 30 days after notice by the trustee or
holders of not less than 25% of the
aggregate principal amount of Notes then
outstanding with any of the Company's
obligations under Sections 4.01, 4.03, 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.14, 4.15,
4.16, 4.17 or 4.18 hereof (in each case,
other than a failure to purchase Notes which
shall constitute an Event of Default under
clause (ii) above);
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(v) there is a failure by the Company or any
Subsidiary Guarantor to comply for 60 days
after notice with its other agreements
contained in this Indenture;
(vi) Indebtedness of the Company or any
Restricted Subsidiary is not paid within any
applicable grace period after final maturity
or is accelerated by the holders thereof
because of a default and the total amount of
such Indebtedness unpaid or accelerated
exceeds $2.0 million and such default shall
not have been cured or such acceleration
rescinded after a 20-day period;
(vii) any judgment or decree for the payment of
money in excess of $2.0 million (to the
extent not covered by insurance) is rendered
against the Company or a Significant
Subsidiary and such judgment or decree shall
remain undischarged or unstayed for a period
of 60 days after such judgment becomes final
and non-appealable;
(viii) any Note Guarantee by a Significant
Subsidiary ceases to be in full force and
effect (except as contemplated by the terms
of this Indenture) or any Subsidiary
Guarantor that is a Significant Subsidiary
denies or disaffirms its obligations under
this Indenture or its Note Guarantee and
such Default continues for 10 days;
(ix) an event of default under, or if none is
specified therein, a failure to comply with
any provision of any Mortgage and the
continuance of such event of default or
failure to comply, as the case may be, for a
period of 30 days after written notice is
given by the Notes Trustee to the Company or
to the Company and the Notes Trustee by the
holders of at least 25% in aggregate
principal amount of the Notes outstanding;
or
(x) the Company or any of its Significant
Subsidiaries pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order
for relief against it in an
involuntary case,
(C) consents to the appointment of a
Custodian of it or for all or
substantially all of its property,
(D) makes a general assignment for the
benefit of its creditors,
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(E) consents to or acquiesces in the
institution of a bankruptcy or an
insolvency proceeding against it,
or
(F) takes any corporate action to
authorize or effect any of the
foregoing; or
(xi) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law
that:
(A) is for relief against the Company
or any of its Significant
Subsidiaries in an involuntary
case,
(B) appoints a Custodian of the Company
or any of its Significant
Subsidiaries or for all or
substantially all of the property
of the Company or any of its
Significant Subsidiaries, or
(C) orders the liquidation of the
Company or any of its Significant
Subsidiaries, and the order or
decree remains unstayed and in
effect for 60 consecutive days.
(b) The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
(c) A Default under clause (iv) or (v) of Section 6.01(a)
hereof will not constitute an Event of Default until the Notes Trustee
notifies the Company or such Subsidiary Guarantor, as the case may be,
or the Holders of 25% in principal amount of the outstanding Notes
notifies the Company or such Subsidiary Guarantor, as the case may be,
and the Notes Trustee of the Default and the Company or such Subsidiary
Guarantor, as the case may be, does not cure such Default within the
time specified in such clause (iv) or (v) after receipt of the notice.
The written notice must specify the Default, demand that it be remedied
and state that the notice is a "Notice of Default."
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clause (ix) or (x) of Section 6.01(a) with respect to the Company or any
Subsidiary Guarantor) occurs and is continuing, the Notes Trustee by notice to
the Company, or the Holders of not less than 25% in aggregate principal amount
of the then outstanding Notes by notice to the Company and the Notes Trustee,
may declare (a "Declaration") the unpaid principal of, and any accrued and
unpaid interest on, all the Notes to be due and payable (the "Default Amount").
Upon any such
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Declaration the Default Amount shall be due and payable immediately. If an Event
of Default specified in clause (x) of Section 6.01(a) occurs with respect to the
Company or any of the Subsidiary Guarantors, the Default Amount shall ipso facto
become and be immediately due and payable without any Declaration or other act
on the part of the Notes Trustee or any Noteholder. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by written notice to
the Notes Trustee and to the Company may rescind any Declaration if the
rescission would not conflict with any judgment or decree and if all Events of
Default then continuing (other than any Events of Default with respect to the
nonpayment of principal of or interest on any Note which has become due solely
as a result of such Declaration) have been cured and the Notes Trustee has been
paid all amounts due to it under Section 7.07, and may waive any Default other
than a Default with respect to a covenant or provision that cannot be modified
or amended without the consent of each Noteholder pursuant to Section 9.02
hereof.
SECTION 6.03. OTHER REMEDIES.
(a) If an Event of Default occurs and is continuing, the Notes
Trustee and the Noteholders may pursue any available remedy to collect
the payment of principal, premium, if any, or interest on the Notes or
to enforce the performance of any provision of the Notes or this
Indenture.
(b) The Notes Trustee may maintain a proceeding even if it
does not possess any of the Notes or does not produce any of them in
the proceeding. A delay or omission by the Notes Trustee or any
Noteholder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. All remedies are cumulative to
the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Noteholders of not less than a majority in aggregate principal amount
of the then outstanding Notes by notice to the Notes Trustee may, on behalf of
all the Noteholders, waive an existing Default or Event of Default and its
consequences, except a continuing Default or Event of Default in the payment of
the principal, premium, if any, or interest on any Note (other than principal,
premium (if any) or interest which has become due solely as a result of a
Declaration) or a Default or Event of Default that cannot be modified or amended
without the consent of the Holder of each outstanding Note affected. Upon any
such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Noteholders of a majority in principal amount of the Notes then
outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Notes
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Trustee or exercising any trust or power conferred on it. However, the Notes
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that the Notes Trustee determines may be unduly prejudicial to the
rights of other Noteholders or that may involve the Notes Trustee in personal
liability. The Notes Trustee may take any other action deemed proper by the
Notes Trustee that is not inconsistent with such direction. Prior to taking any
action under this Indenture, the Notes Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
SECTION 6.06. LIMITATION ON SUITS.
(a) Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, a Noteholder may
pursue a remedy with respect to this Indenture or the Notes only if:
(i) the Noteholder has previously given to the
Notes Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least 25% in principal
amount of the then outstanding Notes make a
written request to the Notes Trustee to
pursue the remedy;
(iii) such Noteholder or Noteholders offer, and,
if requested, provide, to the Notes Trustee
indemnity satisfactory to the Notes Trustee
against any loss, liability or expense;
(iv) the Notes Trustee does not comply with the
request within 60 days after receipt of the
request and the offer and, if requested, the
provision of indemnity; and
(v) during such 60-day period the Holders of a
majority in principal amount of the then
outstanding Notes do not give the Notes
Trustee, in the reasonable opinion of such
Notes Trustee, a direction inconsistent with
the request.
(b) A Noteholder may not use this Indenture to prejudice the
rights of another Noteholder or to obtain a preference or priority over
another Noteholder.
SECTION 6.07. RIGHTS OF NOTEHOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Noteholder to receive payment of principal, premium, if any, interest on the
Note, on or after the respective due dates expressed in the Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of the Noteholder.
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SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a)(i) or (ii) or an
acceleration pursuant to Section 6.02 occurs and is continuing, the Notes
Trustee is authorized to recover judgment in its own name and as trustee of an
express trust against the Company or any Subsidiary Guarantor or any other
obligor on the Notes for the whole amount of principal, premium, if any, and
accrued interest remaining unpaid on the Notes and interest on overdue
principal, premium, if any, and, to the extent lawful, interest on overdue
installments of interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including any advances made by the Notes
Trustee and the reasonable compensation, expenses and disbursements of the Notes
Trustee, its agents and counsel, and any other amounts due the Notes Trustee
under Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Notes Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Notes Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Notes Trustee, its agents and
counsel, and any other amounts due the Notes Trustee under Section 7.07) and the
Noteholders allowed in any judicial proceedings relative to the Company or any
Subsidiary Guarantor (or any other obligor on the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each
Noteholder to make such payments to the Notes Trustee, and in the event that the
Notes Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Notes Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Notes Trustee, its
agents and counsel, and any other amounts due the Notes Trustee under Section
7.07 hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Notes Trustee, its agents and counsel, and any
other amounts due the Notes Trustee under Section 7.07 hereof out of the estate
in any such proceeding, shall be denied for any reason, payment of the same
shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the
Noteholders may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Notes Trustee to authorize or consent
to or accept or adopt on behalf of any Noteholder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Noteholder thereof, or to authorize the Notes Trustee to vote in respect of the
claim of any Noteholder in any such proceeding.
SECTION 6.10. PRIORITIES.
(a) If the Notes Trustee collects any money pursuant to this
Article, it shall pay out the money in the following order:
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(i) First: to the Notes Trustee, its agents and
attorneys for amounts due under Section
7.07, including payment of all compensation,
expenses and liabilities incurred, and all
advances made, by the Notes Trustee and the
costs and expenses of collection;
(ii) Second: if the Noteholders are forced to
proceed against the Company directly without
the Notes Trustee, to the Noteholders for
their collection costs;
(iii) Third: to the Noteholders for amounts due
and unpaid on the Notes for principal,
premium, if any, and interest, ratably,
without preference or priority of any kind,
according to the amounts due and payable on
the Notes for principal, premium, if any,
and interest, respectively; and
(iv) Fourth: to the Company or, to the extent the
Notes Trustee collects any amount pursuant
to Article 10 hereof from any Subsidiary
Guarantor, to such Subsidiary Guarantor, or
to such party as a court of competent
jurisdiction shall direct.
(b) The Notes Trustee may fix a record date and payment date
for any payment to Noteholders. At least 15 calendar days before such
record date, the Company shall mail to each Holder and the Notes
Trustee a notice that states the record date, the payment date and the
amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Notes Trustee for any action taken or
omitted by it as a Notes Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Notes Trustee, a suit by
a Noteholder pursuant to Section 6.07 hereof, or a suit by Holders of more than
10% in principal amount of the then outstanding Notes.
ARTICLE 7: TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Notes Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same
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degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances and in the conduct of his own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Notes Trustee undertakes to perform only
those duties as are specifically set forth
in this Indenture and the duties of the
Notes Trustee shall be determined solely by
the express provisions of this Indenture,
the Notes Trustee need perform only those
duties that are specifically set forth in
this Indenture and no others, and no implied
covenants or obligations shall be read into
this Indenture against the Notes Trustee;
and
(ii) in the absence of bad faith on its part, the
Notes Trustee may conclusively rely, as to
the truth of the statements and the
correctness of the opinions expressed
therein, upon any certificates or opinions
furnished to the Notes Trustee and
conforming to the requirements of this
Indenture, but in the case of any such
certificates or opinions which by any
provision hereof are specifically required
to be furnished to the Notes Trustee, the
Notes Trustee shall examine the same to
determine whether or not they conform to the
requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained,
the Notes Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(ii) the Notes Trustee shall not be liable for
any error of judgment made in good faith by
a Responsible Officer, unless it is proved
that the Notes Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Notes Trustee shall not be liable with
respect to any action it takes or omits to
take in good faith in accordance with a
direction received by it pursuant to Section
6.05 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Notes
Trustee is subject to paragraphs (a), (b), and (c) of this Section
7.01.
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(e) No provision of this Indenture shall require the Notes
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder
or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(f) The Notes Trustee shall not be liable for interest on any
money received by it except as the Notes Trustee may agree in writing
with the Company. Assets held in trust by the Notes Trustee need not be
segregated from other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Notes
Trustee shall be subject to the provisions of Section 7.01 and to the
provisions of the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Notes Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by
the proper Person. The Notes Trustee need not investigate any fact or
matter stated in the document unless the Notes Trustee has reason to
believe such fact or matter is not true.
(b) Before the Notes Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel or both.
The Notes Trustee shall not be liable for any action it takes or omits
to take in good faith reliance on such Officers' Certificate or Opinion
of Counsel. The Notes Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Notes Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Notes Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized
or within its rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(f) The permissive rights of the Notes Trustee to do certain
things enumerated in this Indenture shall not be construed as a duty
and the Notes Trustee shall not be
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answerable for other than its negligence or wilful default with respect
to such permissive rights.
(g) Except for (i) an Event of Default under 6.01(a)(i)
(except with respect to Additional Interest) or (ii) hereof, or (ii)
any other event of which the Notes Trustee has "actual knowledge,"
which event, with the giving of notice or the passage of time or both,
would constitute an Event of Default, the Notes Trustee shall not be
deemed to have notice of any Default or Event of Default unless
specifically notified in writing of such event by the Company or the
Noteholders of not less than 25% in aggregate principal amount of Notes
outstanding; as used herein, the term "actual knowledge" means the
actual fact or statement of knowing, without any duty to make any
investigation with regard thereto.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Notes Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company, any
Subsidiary Guarantor or any Affiliate of the Company or any Subsidiary Guarantor
with the same rights it would have if it were not Notes Trustee. Any Agent may
do the same with like rights. However, the Notes Trustee is subject to Sections
7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Notes Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the Notes or
the Note Guarantees or the Mortgages, it shall not be accountable for the
Company's use of the proceeds from the Notes or any money paid to the Company or
upon the Company's direction under any provision of this Indenture, it shall not
be responsible for the use or application of any money received by any Paying
Agent other than the Notes Trustee, and it shall not be responsible for any
statement or recital herein or any statement in the Notes, the Note Guarantees
or the Mortgages, or any other document (including, without limitations, an
offering document) in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if a
Responsible Officer of the Notes Trustee has knowledge thereof, the Notes
Trustee shall mail to each Noteholder in the manner and to the extent provided
in TIA Section 313(a) a notice of the Default or Event of Default within 60 days
after it occurs. Except in the case of a Default or Event of Default in any
payment of principal, premium (if any) or interest on any Note, the Notes
Trustee may withhold the notice if and so long as its Board of Directors, a
committee of its Board of Directors or a committee of its officers in good faith
determines that withholding the notice is in the interest of the Noteholders.
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SECTION 7.06. REPORTS BY TRUSTEE TO NOTEHOLDERS.
(a) Within 60 days after each April 1 beginning with the April
1 following the date of this Indenture, and for so long as the Notes
remain outstanding, the Notes Trustee shall mail to the Noteholders a
brief report dated as of such reporting date that complies with TIA
Section 313(a) (but if no event described in TIA Section 313(a) has
occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Notes Trustee also shall comply with
TIA Section 313(b) and Section 313(c).
(b) A copy of each report at the time of its mailing to the
Noteholders shall be filed with the Commission and each stock exchange,
if any, on which the Notes are listed, in accordance with and to the
extent required by TIA Section 313(d). The Company shall promptly
notify the Notes Trustee if and when the Notes are listed on any stock
exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
(a) The Company and the each of the Subsidiary Guarantors,
jointly and severally, shall pay to the Notes Trustee from time to time
reasonable compensation for its acceptance of this Indenture and
services hereunder, including extraordinary services such as default
administration. The Notes Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The
Company and each of the Subsidiary Guarantors, jointly and severally,
shall reimburse the Notes Trustee upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition
to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Notes
Trustee's agents and counsel.
(b) The Company and each of the Subsidiary Guarantors, jointly
and severally, shall indemnify the Notes Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under
this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.07) and
defending itself against any claim (whether asserted by the Company,
any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder,
except as set forth below in subparagraph (d). The Notes Trustee shall
notify the Company and each of the Subsidiary Guarantors promptly of
any claim for which it may seek indemnity. Failure by the Notes Trustee
to so notify the Company or any Subsidiary Guarantor shall not relieve
the Company or any of the Subsidiary Guarantors of their Obligations
hereunder. The Notes Trustee may have separate counsel and the Company
and each of the Subsidiary Guarantors, jointly and severally, shall pay
the reasonable fees and expenses of such counsel. Neither the Company
nor any Subsidiary Guarantor need pay for any settlement made without
its consent, which consent shall not be unreasonably withheld.
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(c) The obligations of the Company and each of the Subsidiary
Guarantors under this Section 7.07 shall survive the resignation or
removal of the Notes Trustee and the satisfaction and discharge or
termination of this Indenture.
(d) Notwithstanding subparagraphs (a) or (b) above, neither
the Company nor any Subsidiary Guarantor need reimburse any expense or
indemnify against any loss or liability incurred by the Notes Trustee
through its own negligence, bad faith or willful misconduct.
(e) To secure the Company's and each of the Subsidiary
Guarantor's payment obligations in this Section, the Notes Trustee
shall have a Lien prior to the Notes on all money or property held or
collected by the Notes Trustee, except that held in trust to pay
principal, premium, if any, and interest on particular Notes. Such Lien
shall survive the resignation or removal of the Notes Trustee and the
satisfaction and discharge or termination of this Indenture.
(f) When the Notes Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(ix) or (x) hereof
occurs, the expenses and the compensation for such services (including
the reasonable fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under any Bankruptcy
Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
(a) A resignation or removal of the Notes Trustee and
appointment of a successor Notes Trustee shall become effective only
upon the successor Notes Trustee's acceptance of appointment as
provided in this Section 7.08.
(b) The Notes Trustee may resign at any time and be discharged
from the trust hereby created by so notifying the Company. The
Noteholders of a majority in principal amount of the then outstanding
Notes may remove the Notes Trustee by so notifying the Notes Trustee
and the Company. The Company may remove the Notes Trustee if:
(i) the Notes Trustee fails to comply with
Section 7.10 hereof;
(ii) the Notes Trustee is adjudged a bankrupt or
an insolvent or an order for relief is
entered with respect to the Notes Trustee
under any Bankruptcy Law;
(iii) a Custodian, receiver or other public
officer takes charge of the Notes Trustee or
its property; or
(iv) the Notes Trustee becomes incapable of
acting.
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(c) If the Notes Trustee resigns or is removed or if a vacancy
exists in the office of Notes Trustee for any reason, the Company shall
notify each Noteholder of such event and promptly appoint a successor
Notes Trustee. Within one year after the successor Notes Trustee takes
office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Notes Trustee to replace the
successor Notes Trustee appointed by the Company.
(d) A successor Notes Trustee shall deliver a written
acceptance of its appointment to the retiring Notes Trustee and to the
Company. Thereupon, the resignation or removal of the retiring Notes
Trustee shall become effective, and the successor Notes Trustee shall
have all the rights, powers and duties of the Notes Trustee under this
Indenture. The successor Notes Trustee shall mail a notice of its
succession to each Noteholder. The retiring Notes Trustee shall
promptly transfer all property held by it as Notes Trustee to the
successor Notes Trustee, provided all sums owing to the Notes Trustee
hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding replacement of the Notes Trustee
pursuant to this Section 7.08, the Company's and each of the Subsidiary
Guarantor's obligations under Section 7.07 hereof shall continue for
the benefit of the retiring Notes Trustee.
(e) If a successor Notes Trustee does not take office within
60 days after the retiring Notes Trustee resigns or is removed, the
retiring Notes Trustee, the Company, any of the Subsidiary Guarantors
or the Noteholders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for
the appointment of a successor Notes Trustee.
(f) If the Notes Trustee after written request by any
Noteholder who has been a Noteholder for at least six months fails to
comply with Section 7.10, such Noteholder may petition any court of
competent jurisdiction for the removal of the Notes Trustee and the
appointment of a successor Notes Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Notes Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Notes Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
(a) There shall at all times be a Notes Trustee hereunder
which shall be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or the District of Columbia authorized under such laws to exercise
corporate trustee power, shall be subject to supervision or examination
by Federal, State, Territorial, or District of Columbia authority and
shall have (or be a part of
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a holding company with) a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of
condition.
(b) This Indenture shall always have a Notes Trustee who
satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The
Notes Trustee shall comply with TIA Section 310(b). The provisions of
TIA Section 310 shall also apply to the Company and each of the
Subsidiary Guarantors, as obligor on the Notes.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Notes Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Notes Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein. The provisions of TIA Section 311 shall apply to the Company
and each of the Subsidiary Guarantors as obligor on the Notes.
ARTICLE 8: DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE.
(a) When (i) the Company delivers to the Notes Trustee all
outstanding Notes (other than Notes replaced pursuant to Section 2.07
hereof) canceled or for cancellation or (ii) all outstanding Notes have
become due and payable and the Company irrevocably deposits with the
Notes Trustee funds sufficient to pay at maturity all outstanding
Notes, including interest thereon (other than Notes replaced pursuant
to Section 2.07 hereof), and if in either case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall,
subject to Sections 8.01(e) and 8.06 hereof, cease to be of further
effect. The Notes Trustee shall acknowledge satisfaction and discharge
of this Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel reasonably acceptable to the
Notes Trustee and at the cost and expense of the Company.
(b) Subject to Sections 8.01(e), 8.02 and 8.06 hereof, the
Company at any time may terminate (i) all its obligations under the
Notes and this Indenture ("legal defeasance option") or (ii) all
obligations under Sections 3.09, 4.04(a), (b) and (c), 4.05, 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.15, 4.16, 4.17, 4.18 and 5.01(iii) and
(v) ("covenant defeasance option"). The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant
defeasance option.
(c) If the Company exercises its legal defeasance option,
payment of the Notes may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option,
payment of the Notes may not be accelerated because of an Event of
Default specified in Section 6.01(a)(iv), 6.01(a)(vi), 6.01(a)(vii),
6.01(a)(viii) or
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6.01(a)(ix) (but only with respect to Significant Subsidiaries) or
6.01(a)(x) hereof (but only with respect to Significant Subsidiaries),
or because of the failure of the Company or the Subsidiary Guarantors
to comply with Sections 5.01(iii) or 5.01(v).
(d) Upon satisfaction of the conditions set forth herein and
Section 8.02 and upon request of the Company, the Notes Trustee shall
acknowledge in writing the discharge of those obligations that the
Company terminates.
(e) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08,
8.01(d), 8.04, 8.05 and 8.06 hereof and the obligations of each
Subsidiary Guarantor under Article 10 in respect thereof shall survive
until the Notes have been paid in full. Thereafter, the Company's
obligations in Sections 7.07, 8.04, 8.05 and 8.08 hereof and the
obligations of each Subsidiary Guarantor under Article 10 in respect
thereof shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE.
(a) The Company may exercise its legal defeasance option or
its covenant defeasance option only if:
(i) the Company irrevocably deposits in trust
with the Notes Trustee money or U.S.
Government Obligations in amounts (including
interest, but without consideration of any
reinvestment of such interest) and
maturities sufficient, but in the case of
the legal defeasance option only, not more
than such amounts (as certified by a
nationally recognized firm of independent
public accountants), to pay and discharge at
their Stated Maturity (or such earlier
redemption date as the Company shall have
specified to the Notes Trustee) the
principal of, premium, if any, interest on
all outstanding Notes to maturity or
redemption, as the case may be, and to pay
all of the sums payable by it hereunder;
provided, that the Notes Trustee shall have
been irrevocably instructed to apply such
money or the proceeds of such U.S.
Government Obligations to the payment of
said principal, premium, if any, and
interest with respect to the Notes;
(ii) in the case of the legal defeasance option
only, 123 days pass after the deposit is
made and during the 123-day period no
Default or Event of Default specified in
Section 6.01(ix) or (x) hereof with respect
to the Company or any Subsidiary Guarantor
occurs which is continuing at the end of the
period;
(iii) no Default or Event of Default has occurred
and is continuing on the date of such
deposit and after giving effect thereto;
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(iv) the deposit does not constitute a default
under any other agreement binding on the
Company;
(v) the Company delivers to the Notes Trustee an
Opinion of Counsel to the effect that the
trust resulting from the deposit does not
constitute, or is qualified as, a regulated
investment company under the Investment
Company Act of 1940, as amended;
(vi) in the case of the legal defeasance option,
the Company shall have delivered to the
Notes Trustee an Opinion of Counsel stating
that (x) the Company has received from, or
there has been published by, the Internal
Revenue Service a ruling, or (y) since the
date of this Indenture there has been a
change in the applicable Federal income tax
law, in either case to the effect that, and
based thereon such Opinion of Counsel shall
confirm that, the Noteholders will not
recognize income, gain or loss for U.S.
Federal income tax purposes as a result of
such defeasance and will be subject to U.S.
Federal income tax on the same amounts, in
the same manner and at the same times as
would have been the case if such defeasance
had not occurred;
(vii) in the case of the covenant defeasance
option, the Company shall have delivered to
the Notes Trustee an Opinion of Counsel to
the effect that the Noteholders will not
recognize income, gain or loss for Federal
income tax purposes as a result of such
covenant defeasance and will be subject to
Federal income tax on the same amounts, in
the same manner and at the same times as
would have been the case if such covenant
defeasance had not occurred; and
(viii) the Company delivers to the Notes Trustee an
Officers' Certificate and an Opinion of
Counsel, each stating that all conditions
precedent to the defeasance and discharge of
the Notes as contemplated by this Article 8
have been complied with.
(b) In order to have money available on a payment date to pay
principal, premium, if any, or interest on the Notes, the U.S.
Government Obligations deposited pursuant to preceding clause (a) shall
be payable as to principal or interest at least one Business Day before
such payment date in such amounts as shall provide the necessary money.
U.S. Government Obligations shall not be callable at the issuer's
option.
(c) Before or after a deposit, the Company may make
arrangements satisfactory to the Notes Trustee for the redemption of
Notes at a future date in accordance with Article 3 hereof.
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SECTION 8.03. APPLICATION OF TRUST MONEY.
The Notes Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to this Article 8. It shall apply the
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of principal,
premium, if any, and interest on the Notes.
SECTION 8.04. REPAYMENT TO THE COMPANY.
(a) The Notes Trustee and the Paying Agent shall promptly pay
to the Company upon written request any excess money or securities held
by them at any time; PROVIDED, HOWEVER, that the Notes Trustee shall
not pay any such excess to the Company unless the amount remaining on
deposit with the Notes Trustee, after giving effect to such transfer
are sufficient to pay principal, premium, if any, and interest on the
outstanding Notes, which amount shall be certified to the Notes Trustee
by independent public accountants.
(b) The Notes Trustee and the Paying Agent shall pay to the
Company upon written request any money held by them for the payment of
principal, premium, if any, or interest that remains unclaimed for two
years after the date upon which such payment shall have become due;
PROVIDED, HOWEVER, that the Company shall have either caused notice of
such payment to be mailed to each Noteholder entitled thereto no less
than 30 days prior to such repayment or within such period shall have
published such notice in a financial newspaper of widespread
circulation published in the City of New York. After payment to the
Company, Noteholders entitled to the money must look to the Company and
the Subsidiary Guarantors for payment as general creditors unless an
applicable abandoned property law designates another Person, and all
liability of the Notes Trustee and such Paying Agent with respect to
such money shall cease.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.
The Company and the Subsidiary Guarantors, jointly and severally, shall
pay and shall indemnify the Notes Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S.
Government Obligations.
SECTION 8.06. REINSTATEMENT.
If the Notes Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with this Article 8 by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and each of the Subsidiary Guarantor's Obligations
under this Indenture and the Notes and the Note Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 8 until
such time as the Notes Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in
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accordance with this Article 8; PROVIDED, HOWEVER, that if the Company or any
Subsidiary Guarantor has made any payment of principal of, premium, if any, or
interest on any Notes because of the reinstatement of its Obligations, the
Company or any of the Subsidiary Guarantors, as the case may be, shall be
subrogated to the rights of the Noteholders to receive such payment from the
money or U.S. Government Obligations held by the Notes Trustee or Paying Agent.
ARTICLE 9: AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF NOTEHOLDERS.
(a) Notwithstanding Section 9.02 of this Indenture, the
Company, the Subsidiary Guarantors and the Notes Trustee may amend or
supplement this Indenture or the Notes without the consent of any
Noteholder:
(i) to cure any ambiguity, omission, defect or
inconsistency; provided, that such amendment
or supplement does not, as evidenced by an
Opinion of Counsel delivered to the Notes
Trustee, adversely affect the rights of any
Noteholder in any respect;
(ii) to comply with Article 5 hereof;
(iii) to provide for uncertificated Notes in
addition to or in place of certificated
Notes (provided, that the uncertificated
Notes are issued in registered form for
purposes of Section 163(f) of the Internal
Revenue Code, or in a manner such that the
uncertificated Notes are described in
Section 163(f)(2)(B) of the Internal Revenue
Code);
(iv) to add further Guarantees with respect to
the Notes or to secure the Notes with
additional collateral;
(v) to add to the covenants of the Company for
the benefit of the Noteholders or to
surrender any right or power conferred upon
the Company or the Guarantors;
(vi) to comply with requirements of the
Commission in order to effect or maintain
the qualification of this Indenture under
the TIA;
(vii) to make any change that would provide
additional rights or benefits to the Holders
of the Notes or that does not, as evidenced
by an Opinion of Counsel delivered to the
Notes Trustee, adversely affect the rights
of any Noteholder in any respect; or
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(viii) to evidence or provide for a replacement
Notes Trustee under Section 7.08 hereof;
provided, that the Company has delivered to the Notes Trustee an
Opinion of Counsel stating that any such amendment or supplement
complies with the provisions of this Section 9.01.
(b) Upon the request of the Company and the Subsidiary
Guarantors accompanied by Board Resolutions of their respective Boards
of Directors authorizing the execution of any such supplemental
indenture, and upon receipt by the Notes Trustee of the documents
described in Section 7.02, Section 9.06 and Section 12.04 hereof, the
Notes Trustee shall join with the Company and the Subsidiary Guarantors
in the execution of any supplemental indenture authorized or permitted
by the terms of this Indenture and to make any further appropriate
agreements and stipulations which may be therein contained, but the
Notes Trustee shall not be obligated to enter into such supplemental
indenture which affects its own rights, duties or immunities under this
Indenture or otherwise.
(c) After an amendment or supplement under this Section 9.01
becomes effective, the Company shall mail to all Noteholders a notice
briefly describing such amendment or supplement. The failure to give
such notice to all Noteholders, or any defect therein, shall not impair
or affect the validity of an amendment or supplement under this
Section.
SECTION 9.02. WITH CONSENT OF NOTEHOLDERS.
(a) Except as provided below in this Section 9.02, the Company
and the Notes Trustee may amend or supplement this Indenture or the
Notes with the written consent of the Noteholders of not less than a
majority in aggregate principal amount of the Notes then outstanding
(including consents obtained in connection with a purchase of, or
tender offer or exchange offer for the Notes) and subject to Section
6.04 and 6.07 any existing Default or Event of Default and its
consequences (other than a Default or Event of Default in the payment
of principal premium, if any, or interest, if any, on the Notes except
a payment default resulting from an acceleration of the Notes that has
been rescinded) or compliance with any provision of this Indenture or
the Notes may be waived with the consent of the Holders of a majority
in principal amount of the then outstanding Notes (including consents
obtained in connection with a purchase of, or tender offer or exchange
offer for the Notes). However, without the consent of each Noteholder
affected, an amendment, supplement or waiver under this Section 9.02
may not (with respect to any Notes held by a non-consenting Holder):
(i) reduce the principal amount of Notes whose
Holders must consent to an amendment,
supplement or waiver;
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(ii) reduce the stated rate of or extend the
stated time for payment of any interest on
any Note;
(iii) reduce the principal of or extend the Stated
Maturity of any Note or alter the redemption
provisions (including without limitation
Sections 3.07, 3.09, 4.11 and 4.14 hereof)
with respect thereto;
(iv) reduce the premium payable upon the
redemption or repurchase of any Note or
change the time at which any Note may be
redeemed in accordance with Section 3.07;
(v) make any Note payable in money other than
that stated in the Note;
(vi) make any change in Section 6.04 or 6.07
hereof or in this Section 9.02(a);
(vii) waive a Default or Event of Default in the
payment of principal of premium, if any, or
interest, if any, on, or redemption payment
with respect to, any or Note (except a
rescission of acceleration of the Notes by
the Holders of at least a majority in
aggregate principal amount of the Notes and
a waiver of the payment default that
resulted from such acceleration);
(viii) impair the right of any Holder to receive
payment of principal of and interest on such
Holder's Notes on or after the due dates
therefor or to institute suit for the
enforcement of any payment on or with
respect to such Holder's Notes;
(ix) make any change in the amendment provisions
which require each Holder's consent or in
the waiver provisions; or
(b) Upon the request of the Company and the Subsidiary
Guarantors accompanied by Board Resolutions of their respective Boards
of Directors authorizing the execution of any such supplemental
indenture, and upon the filing with the Notes Trustee of evidence
satisfactory to the Notes Trustee of the consent of the Noteholders as
aforesaid, and upon receipt by the Notes Trustee of the documents
described in Section 7.02, Section 9.06 and Section 12.04 hereof, the
Notes Trustee shall join with the Company and the Subsidiary Guarantors
in the execution of such supplemental indenture unless such
supplemental indenture affects the Notes Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the
Notes Trustee may in its discretion, but shall not be obligated to,
enter into such supplemental indenture.
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(c) It shall not be necessary for the consent of the
Noteholders under this Section 9.02 to approve the particular form of
any proposed amendment, supplement or waiver, but it shall be
sufficient if such consent approves the substance thereof.
(d) After an amendment, supplement or waiver under this
Section 9.02 becomes effective, the Company shall mail to all
Noteholders a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity
of any such amendment, supplement or waiver.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall
comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
(a) Until an amendment, supplement or waiver becomes
effective, a consent to it by a Noteholder is a continuing consent by
the Noteholder and every subsequent Noteholder or portion of a Note
that evidences the same debt as the consenting Holder's Note, even if
notation of the consent is not made on any Note. However, any such
Noteholder or subsequent Noteholder may revoke the consent as to its
Note if the Notes Trustee receives written notice of revocation before
the date the waiver, supplement or amendment becomes effective. an
amendment, supplement or waiver becomes effective when approved by the
requisite Holders and executed by the Notes Trustee (or, if otherwise
provided in such waiver, amendment or supplement, in accordance with
its terms) and thereafter binds every Noteholder, unless it makes a
change described in any of clauses (i) through (x) of Section 9.02, in
which case, the amendment, supplement or waiver shall bind only each
Holder of a Note who has consented to it and every subsequent Holder of
a Note or portion of a Note that evidences the same indebtedness as the
consenting Holder's Note.
(b) The Company may fix a record date for determining which
Noteholders must consent to such amendment, supplement or waiver. If
the Company fixes a record date, the record date shall be fixed at (i)
the later of 30 days prior to the first solicitation of such consent or
the date of the most recent list of Noteholders furnished to the Notes
Trustee prior to such solicitation pursuant to Section 2.05 hereof, or
(ii) such other date as the Company shall designate. If a record date
is fixed, then notwithstanding the last sentence of the immediately
preceding paragraph, those Persons who were Holders at such record date
(or their duly designated proxies), and only those Persons, shall be
entitled to consent to such amendment or waiver or revoke any consent
previously given, whether or not such Persons continue to be Holders
after such record date. No consent shall be valid or effective for more
than 90 days after such record date except to the extent that the
requisite number of consents to the amendment, supplement or waiver
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have been obtained within such 90-day period or as set forth in the
preceding paragraph of this Section 9.04.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
(a) Notes authenticated and delivered after the execution of
any supplemental indenture may bear a notation in form approved by the
Notes Trustee as to any matter provided for in such amendment,
supplement or waiver on any Note thereafter authenticated. The Company
in exchange for all Notes may issue and the Notes Trustee shall
authenticate new Notes that reflect the amendment, supplement or
waiver.
(b) Failure to make the appropriate notation or issue a new
Note shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Notes Trustee shall sign any amendment, waiver or supplemental
indenture authorized pursuant to this Article 9 if the amendment, waiver or
supplemental indenture does not adversely affect the rights, duties, liabilities
or immunities of the Notes Trustee. If it does, the Notes Trustee may, but need
not, sign it. In signing or refusing to sign such amendment, waiver or
supplemental indenture, the Notes Trustee shall be entitled to receive and,
subject to Section 7.01, shall be fully protected in relying upon, in addition
to the documents required by Section 7.02 and Section 12.04, an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that such
amendment, waiver or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms.
ARTICLE 10: SUBSIDIARY GUARANTEES OF NOTES
SECTION 10.01. NOTE GUARANTEE
(a) Each Subsidiary Guarantor hereby jointly and severally
irrevocably and unconditionally guarantees, as a primary obligor and
not a surety, to each Noteholder of a Note now or hereafter
authenticated and delivered by the Notes Trustee and to the Notes
Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the Obligations of
the Company hereunder or thereunder, (i) the due and punctual payment
of the principal, premium, if any, interest (including post-petition
interest in any proceeding under any Bankruptcy Law whether or not an
allowed claim in such proceeding) on overdue principal, premium, if
any, and interest, if lawful on such Note, and (ii) all other monetary
Obligations payable by the Company under this Indenture (including
under Section 7.07 hereof) and the Notes (all of the foregoing being
hereinafter collectively called the "Guaranteed Obligations"), when and
as the same shall become due and payable, whether by acceleration
thereof, call for redemption or
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otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy
Code), in accordance with the terms of any such Note and of this
Indenture, subject, however, in the case of (i) and (ii) above, to the
limitations set forth in Section 10.04 hereof. Each Subsidiary
Guarantor hereby agrees that its Obligations hereunder shall be
absolute and unconditional, irrespective of, and shall be unaffected
by, the validity or enforceability of the Notes or obligations of the
Company under the Indenture, any failure to enforce the provisions of
any such Note or this Indenture, other than waivers granted by
Noteholders, the recovery of any judgment against the Company, any
action to enforce the same, by the Noteholders or the Notes Trustee, or
any other circumstances which may otherwise constitute a legal or
equitable discharge of a surety or guarantor. Each Subsidiary Guarantor
hereby waives diligence, presentment, filing of claims with a court in
the event of a merger or bankruptcy of the Company, any right to
require a proceeding first against the Company, the benefit of
discussion, protest or notice with respect to any such Note or the
Indebtedness evidenced thereby and all demands whatsoever, and
covenants that this Note Guarantee shall not be discharged as to any
such Note except by payment in full of the principal thereof, premium,
if any, and all accrued interest thereon.
(b) Each Subsidiary Guarantor further agrees that this Note
Guarantee herein constitutes a guarantee of payment, performance and
compliance when due (and not a guarantee of collection) and waives any
right to require that any resort be had by any Noteholder or the Notes
Trustee to any Note held for payment of the Guaranteed Obligations.
(c) Each Subsidiary Guarantor agrees that it shall not be
entitled to, and hereby irrevocably waives, any right of subrogation in
relation to the Noteholders or the Notes Trustee in respect of any
Guaranteed Obligations. Each Subsidiary Guarantor further agrees that,
as between such Subsidiary Guarantor, on the one hand, and the
Noteholders and the Notes Trustee, on the other hand, (x) the maturity
of the Guaranteed Obligations may be accelerated as provided in Article
6 for the purposes of such Subsidiary Guarantor's Note Guarantee
herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Guaranteed Obligations,
and (y) in the event of any Declaration of acceleration of such
Guaranteed Obligations as provided in Article 6 hereof, such Guaranteed
Obligations (whether or not due and payable) shall forthwith become due
and payable by such Subsidiary Guarantor for the purpose of this
Article 10.
(d) Each Subsidiary Guarantor also agrees to pay any and all
costs and expenses (including reasonable attorneys' fees) incurred by
the Notes Trustee or any Noteholder in enforcing any rights under this
Article 10.
(e) The Note Guarantee set forth in this Article 10 shall not
be valid or become obligatory for any purpose with respect to a Note
until the certificate of authentication on such Note shall have been
signed by or on behalf of the Notes Trustee.
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SECTION 10.02. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
(a) To evidence each Subsidiary Guarantor's Note Guarantee set
forth in this Article 10, each Subsidiary Guarantor hereby agrees that
a notation of such Note Guarantee shall be placed on each Note
authenticated and delivered by the Notes Trustee.
(b) This Indenture shall be executed on behalf of each
Subsidiary Guarantor, and an Officer of each Subsidiary Guarantor shall
sign the notation of the Note Guarantee on the Notes by manual or
facsimile signature. If an Officer whose signature is on this Indenture
or the notation of Note Guarantee no longer holds that office at the
time the Notes Trustee authenticates the Note on which the Note
Guarantee is endorsed, the Note Guarantee shall be valid nevertheless.
Each Subsidiary Guarantor hereby agrees that the Note Guarantee set
forth in Section 10.01 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of the
Note Guarantee.
(c) The delivery of any Note by the Notes Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Note Guarantee set forth in this Indenture on behalf of each Subsidiary
Guarantor.
SECTION 10.03. NOTE GUARANTEE UNCONDITIONAL, ETC.
Upon failure of payment when due of any Guaranteed Obligation for
whatever reason, each Subsidiary Guarantor will be obligated to pay the same
immediately. Each Subsidiary Guarantor hereby agrees that its obligations
hereunder shall be continuing, absolute and unconditional, irrespective of: (a)
the recovery of any judgment against the Company or any Subsidiary Guarantor;
(b) any extension, renewal, settlement, compromise, waiver or release in respect
of any obligation of the Company under this Indenture or any Note, by operation
of law or otherwise; (c) any modification or amendment of or supplement to this
Indenture or any Note; (d) any change in the corporate existence, structure or
ownership of the Company, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Company or its assets or any resulting release
or discharge of any obligation of the Company contained in this Indenture or any
Note; (e) the existence of any claim, set-off or other rights which any
Subsidiary Guarantor may have at any time against the Company, the Notes
Trustee, any Noteholder or any other Person, whether in connection herewith or
any unrelated transactions; provided, that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim; any
invalidity or unenforceability relating to or against the Company for any reason
of this Indenture or any Note, or any provision of applicable law or regulation
purporting to prohibit the payment by the Company of the principal, premium, if
any, or interest on any Note or any other Guaranteed Obligation; or any other
act or omission to act or delay of any kind by the Company, the Notes Trustee,
any Noteholder or any other Person or any other circumstance whatsoever which
might, but for the provisions of this paragraph, constitute a legal or equitable
discharge of the Subsidiary Guarantors' obligations hereunder. Each Subsidiary
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding
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first against the Company, protest, notice and all demand whatsoever and
covenants that this Note Guarantee will not be discharged except by the complete
performance of the obligations contained in the Notes, this Indenture and in
this Article 10. Each Subsidiary Guarantor's obligations hereunder shall remain
in full force and effect until the Indenture shall have terminated and the
principal of and interest on the Notes and all other Guaranteed Obligations
shall have been paid in full. If at any time any payment of the principal of or
interest on any Note or any other payment in respect of any Guaranteed
Obligation is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, each
Subsidiary Guarantor's obligations hereunder with respect to such payment shall
be reinstated as though such payment had been due but not made at such time, and
this Article 10, to the extent theretofore discharged, shall be reinstated in
full force and effect. Each Subsidiary Guarantor irrevocably waives any and all
rights to which it may be entitled, by operation of law or otherwise, upon
making any payment hereunder to be subrogated to the rights of the payee against
the Company with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by the Company in respect thereof.
SECTION 10.04. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY.
Each Subsidiary Guarantor and by its acceptance hereof each Noteholder
hereby confirms that it is the intention of all such parties that the guarantee
by such Subsidiary Guarantor pursuant to its Note Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, Federal
and state fraudulent conveyance laws or other legal principles. To effectuate
the foregoing intention, the Noteholders and each Subsidiary Guarantor hereby
irrevocably agree that the obligations of such Subsidiary Guarantor under the
Note Guarantee shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Note Guarantee or pursuant to Section
10.05 hereof, result in the obligations of such Subsidiary Guarantor under the
Note Guarantee not constituting such fraudulent transfer or conveyance under
federal or state law.
SECTION 10.05. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, INTER SE, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Subsidiary Guarantor") under the Note Guarantee, such Funding
Subsidiary Guarantor shall be entitled to a contribution from all other
Subsidiary Guarantors in a pro rata amount based on the Adjusted Net Assets of
each Subsidiary Guarantor (including the Funding Subsidiary Guarantor) for all
payments, damages and expenses incurred by that Funding Subsidiary Guarantor in
discharging the Company's obligations with respect to the Notes or any other
Subsidiary Guarantor's obligations with respect to the Note Guarantee.
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SECTION 10.06. RELEASE.
Upon the sale or disposition of all of the Equity Interests of a
Subsidiary Guarantor to a Person which is not the Company or a Subsidiary of the
Company, which is otherwise in compliance with this Indenture, such Subsidiary
Guarantor shall be deemed released from all its obligations under the Indenture
without any further action required on the part of the Notes Trustee or any
Noteholder; PROVIDED, HOWEVER, that any such termination shall occur if and only
to the extent that all Obligations of each Subsidiary Guarantor under all of its
guarantees of, and under all of its pledges of assets or other security
interests which secure, Indebtedness of the Company and the other Subsidiary
Guarantors shall also terminate upon such release, sale or transfer; provided
further, that without limiting the foregoing, any proceeds received by the
Company or any Subsidiary of the Company from such transaction shall be applied
as provided in Section 4.10 and Section 3.09. The Notes Trustee shall execute an
appropriate instrument prepared by the Company evidencing such release upon
receipt of a request by the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section 10.06. Any Subsidiary
Guarantor not so released remains liable for the full amount of principal,
premium, if any, and interest on the Notes as provided in this Article 10.
SECTION 10.07. ADDITIONAL SUBSIDIARY GUARANTORS.
Any Person that was not a Subsidiary Guarantor on the date of this
Indenture may become a Subsidiary Guarantor by executing and delivering to the
Notes Trustee a supplemental indenture in form and substance satisfactory to the
Notes Trustee, which subjects such Person to the provisions (including, without
limitation, the representations and warranties in this Article 10 and Article
12) of this Indenture as a Subsidiary Guarantor. The Note Guarantee of each
Person described in this Section 10.07 shall apply to all Notes theretofore
executed and delivered, notwithstanding any failure of such Notes to contain a
notation of such Note Guarantee thereon.
SECTION 10.08. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON
CERTAIN TERMS.
(a) Nothing contained in this Indenture or in any of the Notes
shall prevent any consolidation or merger of a Subsidiary Guarantor
with or into the Company or another Subsidiary Guarantor that is a
Wholly-Owned Subsidiary of the Company or shall prevent any sale or
conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety to the Company or another Subsidiary
Guarantor that is a Wholly-Owned Subsidiary of the Company. Upon any
such consolidation, merger, sale or conveyance, the Note Guarantee
given by such Subsidiary Guarantor shall no longer have any force or
effect.
(b) Nothing contained in this Indenture or in any of the Notes
shall prevent any consolidation or merger of a Subsidiary Guarantor
with or into a Person or Persons other than the Company or another
Subsidiary Guarantor (whether or not affiliated with the Subsidiary
Guarantor), or successive consolidations or mergers in which a
Subsidiary
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Guarantor or its successor or successors shall be a party or parties,
or shall prevent any sale or conveyance of the property of a Subsidiary
Guarantor as an entirety or substantially as an entirety, to a Person
other than the Company or another Subsidiary Guarantor (whether or not
affiliated with the Subsidiary Guarantor); PROVIDED, HOWEVER, that,
subject to Sections 10.06 and 10.08(a), (x) (i) immediately after such
transaction, and giving effect thereto, no Default or Event of Default
shall have occurred as a result of such transaction and be continuing,
or (ii) such transaction does not violate any covenants set forth in
this Indenture, and (y) (i) the respective transaction is treated as an
Asset Disposition for purposes of Section 4.10 and Section 3.09 hereof
or (ii) if the surviving Person is not the Subsidiary Guarantor, each
Subsidiary Guarantor hereby covenants and agrees that, upon any such
consolidation, merger, sale or conveyance, the Note Guarantee set forth
in this Article 10, and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be
performed by such Subsidiary Guarantor, shall be expressly assumed (in
the event that the Subsidiary Guarantor is not the surviving Person in
the merger), by supplemental indenture satisfactory in form to the
Notes Trustee of the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the
Subsidiary Guarantor, and such successor Person shall succeed to, and
be substituted for, the Subsidiary Guarantor with the same effect as if
it had been named herein as a Subsidiary Guarantor.
SECTION 10.09. SUCCESSORS AND ASSIGNS.
This Article 10 shall be binding upon each Subsidiary Guarantor and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Notes Trustee and the Noteholders and, in the event of any
transfer or assignment of rights by any Noteholder or the Notes Trustee, the
rights and privileges conferred upon that party in this Indenture and in the
Notes shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
SECTION 10.10. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each Subsidiary Guarantor covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law that would prohibit or forgive each such
Subsidiary Guarantor from performing its Note Guarantee as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each such Subsidiary Guarantor hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Notes Trustee,
but will suffer and permit the execution of every such power as though no such
law had been enacted.
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ARTICLE 11: CREATION OF MORTGAGES.
SECTION 11.01. GRANT OF MORTGAGES.
(a) Each Subsidiary Guarantor shall grant to the Notes Trustee
a first Mortgage (subject to encumbrances of the type referred to in
paragraph (c) below) encumbering each of the Pledged Properties owned
by such Subsidiary Guarantor and which is identified on Schedule P
attached hereto in order to secure any and all obligations of such
Subsidiary Guarantor under the Subsidiary Guaranty made by such
Subsidiary Guarantor and in order to secure prompt performance by such
Subsidiary Guarantor of its covenants and duties under this Indenture.
Anything contained in this Indenture to the contrary notwithstanding,
and other than sales to buyers in the ordinary course of business, and
bulk sales permitted pursuant to this Indenture, no Subsidiary
Guarantor has the authority, express or implied, to dispose of any item
or portion of the Pledged Properties.
(b) Each Mortgage shall be recorded in the real property
records of the county in which the Pledged Property to which it
pertains is located.
(c) As promptly as possible following the recording of the
Mortgage, each Subsidiary Guarantor shall cause to be issued to the
Notes Trustee a Title Policy with respect thereto, which Title Policy
shall be in the amount identified on Schedule P attached hereto and
shall insure the Mortgage as being a valid first lien on the Pledged
Property subject only to (i) the printed exclusions of the Title
Policy, (ii) the lien of taxes and assessments not yet due and payable,
(iii) such covenants, conditions, and restrictions of record (other
than liens for payment of money) as existed at the time of the
acquisition thereof by the Subsidiary Guarantor executing the Mortgage
as evidenced by the owner's policy of title insurance obtained by the
Subsidiary Guarantor at the time of such acquisition, (iv) portions of
the Pledged Property dedicated to public use for roads, utility
easements, and open areas in connection with the plotting and
subdivision thereof, and (v) such other covenants, conditions,
easements, and restrictions of record thereafter executed by, or
consented to by, the Subsidiary Guarantor executing the Mortgage which
do not affect adversely the marketability of title to, or the value of,
such Pledged Property.
SECTION 11.02. DELIVERY OF MORTGAGES AND TITLE POLICIES.
Each Subsidiary Guarantor shall cause each Mortgage to be filed for
record in the real property records of the county in which the Pledged Property
is located and, as soon as available following recording, cause to be delivered
promptly to the Notes Trustee each original recorded Mortgage along with the
original of each Title Policy pertaining thereto.
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SECTION 11.03. PARTIAL RELEASES OF PLEDGED PROPERTIES.
(a) Each Subsidiary Guarantor shall have the right to enter
into contracts of sale for Residential Lots constituting portions of
the Pledged Properties upon the following terms and conditions:
(i) there shall not have occurred and be
continuing at the time of entry into such
contract of sale any Event of Default for
which the Notes Trustee has given notice to
the Noteholders as provided in Section 7.05
above;
(ii) the contract of sale for the Residential Lot
shall be entered into at arms-length with a
bona fide purchaser (including any employee
of the Company or any Subsidiary Guarantor
who purchases a Residential Lot pursuant to
the Company's employee purchase discount
policy, up to one (1) such residential
purchase per calendar year (an "Employee
Purchase")) in the ordinary course of
business which is not an affiliate of the
Company or any Subsidiary Guarantor;
(iii) the Residential Lot has been lawfully
subdivided and may be legally conveyed using
the legal description set forth in the
contract of sale;
(iv) the sale price of the Residential Lot shall
be acceptable to the Subsidiary Guarantor
acting in good faith and shall represent, in
the good faith opinion of the Subsidiary
Guarantor, the fair market value thereof;
(v) the contract of sale shall provide for
offset against, or deduction from, the sales
price only such closing costs, commissions,
and fees as are usual and customary in
transactions involving the sales of
undeveloped Residential Lots in the
jurisdiction in which the Residential Lot is
located; provided, however, that in the case
of an Employee Purchase, the contract of
sale shall provide for an offset against, or
deduction from the sale price of not more
than fifteen (15) percent; and
(vi) the contract of sale shall provide that the
entire net proceeds of sale shall be payable
at the time of conveyance of the Residential
Lot to the purchaser thereunder, with any
portion thereof not being paid in cash being
secured by a first mortgage or deed of trust
encumbering the Residential Lot or such
other collateral which in the good faith
judgment of the Subsidiary Guarantor selling
the
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Residential Lot has a fair market value
reasonably equivalent to the fair market
value of the Residential Lot being sold.
During the continuance of any Event of Default as to which the Notes
Trustee has given notice to the Noteholders as provided in Section 7.05 above,
no Subsidiary Guarantor shall have the right to enter into contracts of sale for
Residential Lots.
(b) The Notes Trustee shall release, or cause to be released,
the lien of the Mortgage encumbering the Residential Lot in connection
with the conveyance of the Residential Lot pursuant to the contract of
sale upon receipt by the Notes Trustee of a written notice from an
Escrow Agent (defined below) stating that each of the following
conditions has been satisfied:
(i) an officer or partner of the Subsidiary
Guarantor has delivered a certificate to the
Escrow Agent certifying that each of the
conditions set forth in Section 11.03(a) was
true and correct as of the date of entry
into the contract of sale for the
Residential Lot;
(ii) the Subsidiary Guarantor has delivered to
the Escrow Agent a preliminary settlement
statement showing the contract sales price
for the Residential Lot and all closing
costs and prorations attributable to, or
charged against, the Subsidiary Guarantor,
the amount of any purchase money mortgage
taken back by the Subsidiary Guarantor or
any affiliate of the Company or the
Subsidiary Guarantor, and the net proceeds
payable to the Subsidiary Guarantor in cash
as a result of the sale;
(iii) the Subsidiary Guarantor has delivered to
the Escrow Agent a legal description of the
Residential Lot being sold.
The Notes Trustee may rely conclusively without inquiry or
investigation on any notice from the Escrow Agent received by it
pursuant to this paragraph (b).
(c) In order to expedite such partial release of Residential
Lots, the Notes Trustee, from time to time, upon written request by a
Subsidiary Guarantor, and no later than two Business Days following the
Notes Trustee's receipt of the related notice from the Escrow Agent
received by it pursuant to paragraph (b), above, shall cause multiple
partial releases or deeds of reconveyance for Residential Lots (to be
provided by the Subsidiary Guarantor with such request) to be deposited
in escrow with such title company, financial institution, or other
escrow agent (an "Escrow Agent") designated by the Subsidiary
Guarantor. The Notes Trustee shall deliver such instruments of release
or reconveyance, executed in blank, to the Escrow Agent with a covering
letter in form identical to EXHIBIT E attached hereto (the "Escrow
Letter"), with bracketed language therein being replaced by the
appropriate information. If, in connection with its appointment as
Escrow Agent,
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any Escrow Agent requires that it be indemnified with respect to its
activities in connection with any Residential Lot releases pursuant to
this paragraph (c), then the Company and/or the appropriate Subsidiary
Guarantor shall indemnify such Escrow Agent to the extent usual and
customary in similar transactions. The Notes Trustee shall have no
obligation to determine, inquire, or investigate as to whether the
Escrow Agent complies with the terms of the Escrow Letter. Upon the
request of any Escrow Agent, the Trustee may agree to modify the terms
of the Escrow Letter, PROVIDED, HOWEVER, that the Trustee shall have
received an opinion of counsel acceptable to the Trustee opining that
the proposed modifications would not materially adversely affect the
Noteholders.
(d) Provided there then exists no Event of Default for which
the Notes Trustee has given notice to the Noteholders as provided in
Section 7.05, each Subsidiary Guarantor shall have the right to sell
portions of the Pledged Properties owned by it in bulk (I.E., multiple
lots) or as unsubdivided acreage at a price not less than its fair
market value as evidenced by a certificate of an officer or partner of
the Subsidiary Guarantor.
(e) In the event of such a sale in bulk, the Notes Trustee
shall release, or cause to be released, the lien of the Mortgage
encumbering such land upon receipt by the Notes Trustee of a written
notice from the Escrow Agent charged with closing the sale, stating
that each of the following conditions has been satisfied:
(i) The Escrow Agent has received a copy of the
executed purchase and sale agreement.
(ii) The Escrow Agent has received the
certification referenced in Section 11.03
(d).
(iii) The sales price set forth in the purchase
and sale agreement shall be not less than
the fair market value certified as provided
in Section 11.03(d).
(iv) The Escrow Agent has been provided with a
legal description of the property being
sold.
(v) The Escrow Agent has been provided with a
preliminary closing statement.
Upon receipt of the foregoing notice from the Escrow Agent, upon which
the Notes Trustee may rely conclusively without inquiry or investigation, the
Notes Trustee, within ten days, shall cause to be deposited in escrow with the
Escrow Agent, a partial release pertaining to such property with instructions
that it shall be delivered and recorded only at such time as the entire net cash
proceeds of sale are payable to or for the benefit of the seller thereof. The
Notes Trustee shall deliver such partial release (which may be executed in
blank) to the Escrow Agent with a covering letter in the form identical to
EXHIBIT F attached hereto (the "Alternative Escrow
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Letter"), with bracketed language therein being replaced by the appropriate
information. If, in connection with its appointment as Escrow Agent, any Escrow
Agent requires that it be indemnified with respect to its activities in
connection with any releases pursuant to this paragraph (e), then the Company
and/or the appropriate Subsidiary Guarantor shall indemnify such Escrow Agent to
the extent usual and customary in similar transactions. The Notes Trustee shall
have no obligation to determine, inquire, or investigate as to whether the
Escrow Agent complies with the terms of the Alternative Escrow Letter. Upon the
request of any Escrow Agent, the Trustee may agree to modify the terms of the
Alternative Escrow Letter, PROVIDED, HOWEVER, that the Notes Trustee shall have
received an opinion of counsel acceptable to the Notes Trustee opining that the
proposed modifications would not materially adversely effect the Noteholders.
SECTION 11.04. DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED.
At any time upon the request of the Notes Trustee, each Subsidiary
Guarantor shall execute and deliver to the Notes Trustee all reports, notices,
schedules of accounts, letters of authority, and all other documents of any kind
whatsoever as the Notes Trustee may reasonably request, in form satisfactory to
the Notes Trustee, to perfect and continue perfected the Mortgages and in order
to fully consummate all of the transactions contemplated hereby.
SECTION 11.05. RIGHT TO INSPECT.
The Notes Trustee (through any of its officers, employees or agents)
shall have the right, from time to time hereafter to inspect any Subsidiary
Guarantor's books and to check, test, and appraise the Pledged Properties in
order to verify any Subsidiary Guarantor's financial condition or the amount,
quality, value, condition of, or any other matter relating to the Pledged
Properties.
SECTION 11.06. COMPLIANCE WITH THE TIA.
Pursuant to Section 314(b) of the TIA, in connection with the creation
of the Mortgages, the Company and each Subsidiary Guarantor as obligor of the
Notes shall furnish to the Notes Trustee:
(a) Promptly following the execution and delivery of this
Indenture, an opinion of counsel for the Company and each Subsidiary
Guarantor as obligor of the Notes, opining that the Indenture has been
properly recorded and filed so as to make effective the lien intended
to be created thereby or stating that in the opinion of such counsel,
no such action is necessary to make such lien effective; and
(b) At least annually following the execution and delivery of
this Indenture, but only so long as any Pledged Properties remain
subject to this Article 11, an opinion of counsel for the Company and
each Subsidiary Guarantor as obligor of the Notes, stating that either
(i) in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this
Indenture as is necessary to
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maintain the lien of this Indenture and reciting the details of such
action, or (ii) in the opinion of such counsel, no such action is
necessary to maintain such lien.
ARTICLE 12: MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control. Until such time as this Indenture becomes
qualified under the TIA, the Company, the Subsidiary Guarantors and the Notes
Trustee shall be deemed subject to and governed by the TIA as if the Indenture
were so qualified on the date hereof.
SECTION 12.02. NOTICES.
(a) Any notice or communication by the Company, any Subsidiary
Guarantor or the Notes Trustee to the other is duly given if in writing
and delivered in person or mailed by first class mail (registered or
certified, return receipt requested), confirmed facsimile transmission
or overnight air courier guaranteeing next day delivery, to the other's
address:
If to the Company or any of the Subsidiary Guarantors:
Bluegreen Corporation
5295 Town Center Road
Boca Raton, Florida 33486
Attention: Chief Financial Officer
Facsimile No.: (561) 361-2800
If to the Notes Trustee:
SunTrust Bank, Central Florida, National Association
225 East Robinson Street, Suite 250
Orlando, Florida 32801
Attention: Corporate Trust Administration
Facsimile No.: (407) 237-4285
(b) The Company or the Notes Trustee, by notice to the other,
may designate additional or different addresses for subsequent notices
or communications.
(c) All notices and communications (other than those sent to
Noteholders) shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when
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receipt acknowledged, if by facsimile transmission; and the next
Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
(d) Any notice or communication to a Noteholder shall be
mailed by first class mail, postage prepaid, to its address shown on
the register kept by the Registrar. Any notice or communication shall
also be so mailed to any Person described in TIA Section 313(c), to the
extent required by the TIA. Failure to mail a notice or communication
to a Noteholder or any defect in it shall not affect its sufficiency
with respect to other Noteholders.
(e) If a notice or communication is mailed to any Person in
the manner provided above within the time prescribed, it is duly given,
whether or not the addressee receives it.
(f) If the Company mails a notice or communication to
Noteholders, it shall mail a copy to the Notes Trustee and each Agent
at the same time.
SECTION 12.03. COMMUNICATION BY NOTEHOLDERS WITH OTHER
NOTEHOLDERS.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Subsidiary Guarantors, the Notes Trustee, the Registrar and anyone
else shall have the protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company and/or any of the
Subsidiary Guarantors to the Notes Trustee to take any action under this
Indenture, the Company and/or any of the Subsidiary Guarantors, as the case may
be, shall furnish to the Notes Trustee:
(a) an Officer's Certificate in form and substance reasonably
satisfactory to the Notes Trustee (which shall include the statements
set forth in Section 12.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied
(except with regard to an authentication order pursuant to Section
2.02(c) hereof, which shall require a certificate of two Officers); and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Notes Trustee (which shall include the statements
set forth in Section 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
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SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e), shall comply with the definition of the term "Officers'
Certificate" and shall include:
(a) a statement that the person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Notes Trustee may make reasonable rules for action by or at a
meeting of Noteholders. The Registrar or Paying Agent may make reasonable rules
and set reasonable requirements for its functions.
SECTION 12.07. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York City, Orlando, Florida, or at a place of payment are
authorized or obligated by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 12.08. NO RECOURSE AGAINST OTHERS.
No past, present or future director, officer, employee, agent, manager,
shareholder or partner of the Company or any Subsidiary or any of their
predecessors, as such, shall have any liability for any Obligations of the
Company or any Subsidiary under the Note, or this Indenture, the Note Guarantee,
the Mortgages or for any claim based on, in respect of, or by reason of such
Obligations or their creation. Each Noteholder by accepting a Note waives and
releases all such liability. This waiver and release are part of the
consideration for issuance of the Notes and the Note Guaranteed the grant of the
Mortgages. Such waiver may not be effective to waive
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<PAGE> 100
liabilities under the Federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
SECTION 12.09. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One signed
copy is enough to prove this Indenture.
SECTION 12.10. GOVERNING LAW.
This Indenture and the Notes shall be governed by, and construed in
accordance with, the internal, substantive laws of the State of New York,
without giving effect to applicable principles of conflicts of law to the extent
that the application of the laws of another jurisdiction would be required
thereby.
SECTION 12.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of any of the Subsidiary Guarantors, the Company or their
respective Subsidiaries. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
SECTION 12.12. SUCCESSORS.
All agreements of the Company and the Subsidiary Guarantors in this
Indenture and the Notes shall bind its successors. All agreements of the Notes
Trustee in this Indenture shall bind its successor.
SECTION 12.13. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.14. COUNTERPART ORIGINALS.
This Indenture may be executed in any number of counterparts, each of
which so executed shall be an original, but all of them together represent the
same agreement.
SECTION 12.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
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<PAGE> 101
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
SIGNATURES
BLUEGREEN CORPORATION
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: Senior Vice President
BLUEGREEN RESORTS MANAGEMENT, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN RESORTS, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN HOLDING CORPORATION (TEXAS)
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: President
PROPERTIES OF THE SOUTHWEST ONE, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: Executive Vice President
PROPERTIES OF THE SOUTHWEST, L.P.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: Executive Vice President of Its General
Partner, PROPERTIES OF THE
SOUTHWEST ONE, INC.
<PAGE> 102
BLUEGREEN ASSET MANAGEMENT CORPORATION
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CAROLINA LAND, INC.
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CORPORATION OF MONTANA
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CORPORATION OF TENNESSEE
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CORPORATION OF THE ROCKIES
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
VIRGINIA LAND & FOREST CORPORATION
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
<PAGE> 103
BLUEGREEN COMMUNITIES, INC.
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN RESORTS INTERNATIONAL,
INC.
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
CAROLINA NATIONAL GOLF CLUB, INC.
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
LEISURE CAPITAL CORPORATION
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
PROPERTIES OF THE WEST, INC.
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
BG/RDI ACQUISITION CORP.
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: President
<PAGE> 104
RDI GROUP, INC.
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: Secretary
DELLONA ENTERPRISES, INC.
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: Secretary
RESORT DEVELOPMENT INTERNATIONAL,
INC.
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: Secretary
RDI RESORT SERVICES CORPORATION
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: Secretary
RDI RESOURCES, INC.
By: /s/ PATRICK E. RONDEAU
----------------------------------
Name: Patrick E. Rondeau
Title: Secretary
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 105
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
By: /s/ JONATHAN W. FOX
----------------------------------
Name: Jonathan W. Fox
Title: Sr. Vice President
<PAGE> 106
EXHIBIT A
FORM OF INITIAL NOTE
THIS NOTE OR ITS PREDECESSORS HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED,
SOLD OR PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS OR A
BENEFICIAL INTEREST HEREIN EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IF
IT ACQUIRED THIS NOTE FROM THE INITIAL PURCHASERS, IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), OR, IF IT ACQUIRED THIS NOTE OTHER THAN FROM THE INITIAL
PURCHASERS, (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) or (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE
FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 144A UNDER
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k) UNDER THE SECURITIES
ACT AS IN EFFECT WITH RESPECT TO SUCH TRANSFER, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO BLUEGREEN CORPORATION OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE NOTES TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), AND AN OPINION OF
COUNSEL ACCEPTABLE TO BLUEGREEN CORPORATION THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT TO PERSONS OTHER THAN UNITED STATES PERSONS ("FOREIGN PURCHASERS"),
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS
A-1
<PAGE> 107
LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE NOTES TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY OR A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
CUSIP No: ____________
(Front of Note)
No. ___ $_______________
BLUEGREEN CORPORATION
10 1/2% Senior Secured Notes due 2008, Series A
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
A-2
<PAGE> 108
BLUEGREEN CORPORATION, a Massachusetts corporation promises to pay to CEDE &
Co., or its registered assigns, the principal sum of $__________________ on
April 1, 2008. Interest Payment Dates: April 1 and October 1, commencing October
1, 1998. Record Dates: March 15 and September 15 (whether or not a Business
Day). Additional provisions of this Note are set forth on the other side of this
Note.
Dated:
BLUEGREEN CORPORATION
By: ____________________________
Name:
Title:
By: ____________________________
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned Indenture
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION
By:_________________________________
Authorized Signatory
A-3
<PAGE> 109
(Reverse of Note)
10 1/2% SENIOR SECURED NOTE DUE 2008, Series A
Capitalized terms used herein have the meanings assigned to them in the
Indenture (as defined below) unless otherwise indicated.
1. INTEREST. Bluegreen Corporation, a Massachusetts
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at the rate and in the manner specified below. The Company shall pay,
in cash, interest on the principal amount of this Note at the rate per annum of
10 1/2%. The Company will pay interest semiannually in arrears on April 1 and
October 1 of each year (each an "Interest Payment Date"), commencing October 1,
1998, or if any such day is not a Business Day on the next succeeding Business
Day. Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Interest shall accrue from the most recent Interest
Payment Date to which interest has been paid or, if no interest has been paid,
from the date of the original issuance of the Notes. To the extent lawful, the
Company shall pay interest on overdue principal at the rate of 2% per annum in
excess of the then applicable interest rate on the Notes; it shall pay interest
on overdue installments of interest (without regard to any applicable grace
periods) at the same rate to the extent lawful. The rate of interest payable on
this Note shall be subject to the assessment of additional interest (the
"Additional Interest") as follows:
(i) if the Exchange Offer Registration Statement (as defined
below) or Shelf Registration Statement (as defined below) is
not filed within 75 days following the Issue Date or, in the
case of the Shelf Registration Statement, 75 days following a
Shelf Request, (as defined in the Registration Rights
Agreement) Additional Interest shall accrue on the Notes over
and above the stated interest at a rate of 0.50% per annum for
the first 30 days commencing on the 75th day after the Issue
Date or the Shelf Request, respectively, such Additional
Interest rate increasing by an additional 0.50% per annum at
the beginning of each subsequent 30-day period;
(ii) if the Exchange Offer Registration Statement or Shelf
Registration Statement is not declared effective within, in
the case of the Exchange Offer Registration Statement, 135
days following the Issue Date or, in the case of the Shelf
Registration Statement, 135 days following a Shelf Request,
Additional Interest shall accrue on the Notes over and above
the stated interest at a rate of 0.50% per annum for the first
30 days commencing on the 135th day after the Issue Date or
the Shelf Request, respectively, such Additional Interest rate
increasing by an additional 0.50% per annum at the beginning
of each subsequent 30-day period; or
(iii) if (A) the Company and the Subsidiary Guarantors have
not exchanged all Notes validly tendered in accordance with
the terms of the Exchange Offer on or prior to 165 days after
the Issue Date or (B) the Exchange Offer Registration
A-4
<PAGE> 110
Statement ceases to be effective at any time prior to the time
that the Exchange Offer is consummated or (C) if applicable,
the Shelf Registration Statement has been declared effective
and such Shelf Registration Statement ceases to be effective
at any time prior to the first anniversary of the Issue Date
(unless all the Notes have been sold thereunder), then
Additional Interest shall accrue on the Notes over and above
the stated interest at a rate of 0.50% per annum for the first
30 days commencing on (x) the 165th day after the Issue Date
with respect to the Notes validly tendered and not exchanged
by the Company, in the case of (A) above, or (y) the day the
Exchange Offer Registration Statement ceases to be effective
or usable for its intended purpose in the case of (B) above,
or (z) the day such Shelf Registration Statement ceases to be
effective in the case of (C) above, such Additional Interest
rate increasing by an additional 0.50% per annum at the
beginning of each subsequent 30-day period; PROVIDED, HOWEVER,
that the Additional Interest rate on the Notes under clauses
(i), (ii) and (iii) above may not exceed in the aggregate 1.5%
per annum; and provided further, that (1) upon the filing of
the Exchange Offer Registration Statement or Notes Shelf
Registration Statement (in the case of clause (i) above), (2)
upon the effectiveness of the Exchange Offer Registration
Statement or Shelf Registration Statement (in the case of (ii)
above), or (3) upon the exchange of Exchange Notes for all
Notes tendered (in the case of clause (iii)(A) above), or upon
the effectiveness of the Exchange Offer Registration Statement
which had ceased to remain effective (in the case of clause
(iii)(B) above), or upon the effectiveness of the Shelf
Registration Statement which had ceased to remain effective
(in the case of clause (iii)(C) above), Additional Interest on
the Notes as a result of such clause (or the relevant
subclause thereof), as the case may be, shall cease to accrue.
The Company and each of the Subsidiaries will use their best efforts
and will assist counsel for the Initial Purchasers, to obtain title insurance
policies, in each case in form and content reasonably satisfactory to the
Initial Purchasers, for each of the Pledged Properties as soon as reasonably
practicable after the Closing Date. It is understood that such title insurance
policies will reflect customary exceptions which are acceptable to mortgage
lenders generally and that any encumbrance on mortgaged property which existed
at the time the Company or one of its Subsidiaries acquired the property shall
be acceptable. Each policy obtained shall be in an amount not less than the cost
basis of Th applicable property as of January 25, 1998 (minus any land which has
been sold since that date). The Company and each of the Subsidiaries agree that
the Initial Purchasers and any subsequent holders of the Notes will suffer
damages if such title insurance policies are not obtained for all of the Pledged
Properties by the 60th day following the Closing Date, and further agree that it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, the Company and the Subsidiaries agree to pay, as liquidated
damages and as the sole and exclusive remedy therefor, additional interest on
the Notes ("Title Insurance Additional Interest") at the rate of 0.50% per annum
commencing on the 61st day after the Closing Date. The Title Insurance
Additional Interest rate on the Notes shall be in addition to any Additional
Interest that may be accruing pursuant to the Registration Rights Agreement.
Title Insurance Additional Interest on the Notes will cease to accrue upon the
earlier to occur of (a) date on which a title insurance policy, in form and
content reasonably satisfactory
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to the Initial Purchasers, for the last of the Pledged Properties is delivered
to and received by the Initial Purchasers or (b) the date on which the last of
the Pledged Properties has been sold.
The Company shall pay any Title Insurance Additional Interest due on
the Notes by depositing with the Paying Agent (which shall not be the Company
for these purposes) for the Notes, in trust, for the benefit of the holders
thereof, prior to 11:00 A.M. on the next Interest Payment Date specified by the
Indenture, sums sufficient to pay the Title Insurance Additional Interest then
due. Any amounts of Title Insurance Additional Interest due will be payable in
cash, semi-annually on each Interest Payment Date to the record holders entitled
to receive the interest payment to be made on such date, commencing with the
first such date occurring after any such Title Insurance Additional Interest
commences to accrue. The amount of Title Insurance Additional Interest will be
determined by multiplying the applicable Title Insurance Additional Interest
rate by the principal amount of the affected Notes of such holders, multiplied
by a fraction, the numerator of which is the number of days such Title Insurance
Additional Interest rate was applicable during such period (determined on the
basis of a 360-day year comprised of twelve 30-day months and, in the case of a
partial month, the actual number of days elapsed), and the denominator of which
is 360.
"Exchange Offer" shall mean the exchange offer by the Company of
Initial Notes for Exchange Notes pursuant to Section 2(a) of the Registration
Rights Agreement.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in each
case including the Offering Memorandum or prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Record Date" shall have the meaning provided on the front of this
Note.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company and the Subsidiary Guarantors pursuant to the
provisions of the Registration Rights Agreement which covers all of the Initial
Notes on an appropriate form under Rule 415 under the Securities Act, or any
similar rule that may be adopted by the Commission, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Offering Memorandum contained therein, all exhibits
thereto and all material incorporated by reference therein.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the Record Date immediately preceding the Interest
Payment Date, even if such Notes are canceled after such Record Date and on or
before such Interest Payment Date. Noteholders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal, premium,
if any, and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts ("U.S. Legal Tender").
However, the Company may pay principal, premium, if any, and interest by its
check payable in such U.S.
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Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Noteholder at the Noteholder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, the Notes Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-registrar without prior notice to any Noteholder. The Company or any
Subsidiary Guarantor may act in any such capacity, except that none of the
Company, its Subsidiaries or their Affiliates shall act (i) as Paying Agent in
connection with any redemption, offer to purchase, discharge or defeasance, as
otherwise specified in the Indenture, and (ii) as Paying Agent or Registrar if a
Default or Event of Default has occurred and is continuing.
4. INDENTURE. The Company issued the Notes under an Indenture, dated as
of April 1, 1998 (the "Indenture"), between the Company and SunTrust Bank,
Central Florida, National Association, as Trustee (the "Trustee"). The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the TIA as in effect on the date the Indenture is
qualified, except as otherwise provided in the Indenture. The Notes are subject
to all such terms, and Noteholders are referred to the Indenture and the TIA for
a statement of such terms. The terms of the Indenture shall govern any
inconsistencies between the Indenture and the Notes. The Notes are senior
secured Obligations of the Company limited to $110,000,000 in aggregate
principal amount.
5.(a) OPTIONAL REDEMPTION. Except as indicated in the next succeeding
paragraph, the Notes are not redeemable at the Company's option prior to April
1, 2003. Thereafter, the Notes will be redeemable, at the option of the Company,
in whole or in part, at the redemption prices (expressed as percentages of the
principal amount of the Notes) set forth below, plus accrued interest to the
redemption date:
PERIOD REDEMPTION PRICE
2003.......................................................105.25%
2004.......................................................103.50%
2005.......................................................101.75%
2006 and thereafter........................................100.00%
(b) OPTIONAL REDEMPTION UPON EQUITY OFFERINGS. At any time, or
from time to time, on or prior to April 1, 2001, the Company may, at
its option, redeem up to 35% of the original aggregate principal amount
of the Notes, with the Net Cash Proceeds of one or more Equity
Offerings by the Company, at a redemption price equal to 110.5% of the
principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the date of redemption; PROVIDED, HOWEVER, that after any such
redemption, the aggregate principal amount of the Notes outstanding
must equal at least $65 million. In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company shall
make such redemption not more than 90 days after the consummation of
any such Equity Offering.
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6. MANDATORY REDEMPTION. Except as set forth in Section 7, the Notes
are not subject to mandatory redemption or sinking fund payments.
7. REPURCHASE AT OPTION OF NOTEHOLDER. (a) If there is a Change of
Control, each Holder of Notes will have the right to require the Company to
repurchase all or any part of such Holder's Notes at a repurchase price equal to
101% of the principal amount thereof, plus accrued and unpaid interest, if any,
to the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant Interest Payment
Date). Within 30 days following any Change of Control, the Company will mail a
notice to each Noteholder stating (i) that a Change of Control has occurred and
that such Noteholder has the right to require the Company to repurchase all or
any part of such Noteholder's Notes at a repurchase price in cash equal to 101%
of the principal amount thereof plus accrued and unpaid interest, if any, to the
date of repurchase (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date); (ii)
the repurchase date (which will be no earlier then 30 days nor later than 60
days from the date such notice is mailed); and (iii) the procedures, determined
by the Company consistent with the Indenture, that a Noteholder must follow in
order to have its Notes repurchased. Noteholders that are subject to an offer to
repurchase may elect to have such Notes repurchased by completing the form
entitled "Option of Noteholder to Elect Purchase" appearing below.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Disposition, and when the aggregate amount of Net Available Cash
from such an Asset Disposition exceeds $10.0 million, the Company shall
be required to offer to purchase the maximum principal amount of Notes,
that is in an integral multiple of $1,000, that may be purchased out of
the Net Available Cash at 100% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date fixed for the closing
of such offer in accordance with the procedures set forth in the
Indenture. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Net Available Cash, the Notes to
be redeemed shall be selected on a pro rata basis. Noteholders that are
the subject of an offer to purchase will receive an Asset Disposition
Offer from the Company prior to any related purchase date and may elect
to have such Notes purchased by completing the form entitled "Option of
Noteholder to Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
45 (unless a shorter period is acceptable to the Notes Trustee) before the
redemption date to each Holder whose Notes are to be redeemed at its registered
address. Notes may be redeemed in part but only in whole multiples of $1,000,
unless all of the Notes held by a Noteholder are to be redeemed. On and after
the redemption date, interest ceases to accrue on Notes or portions of them
called for redemption.
9. REGISTRATION RIGHTS. Pursuant to the Registration Rights Agreement,
and subject to certain terms and conditions stated therein, the Company will be
obligated to consummate an Exchange Offer pursuant to which the Holders of the
Initial Notes shall have the right to
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exchange this Note for Exchange Notes, which have been registered under the
Securities Act, in like principal amount and having terms identical in all
material respect to the Initial Note.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Notes Trustee may require a Noteholder
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Note or portion of a
Note selected for redemption. Also, it need not exchange or register the
transfer of any Notes during a period beginning at the opening of business on a
Business Day 15 days before the day of any selection of Notes to be redeemed and
ending at the close of business on the day of selection or during the period
between a Record Date and the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. Prior to due presentment to the Notes
Trustee for registration of the transfer of this Note, the Notes Trustee, any
Agent and the Company may deem and treat the Person in whose name this Note is
registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Note and for all other
purposes whatsoever, whether or not this Note is overdue, and neither the Notes
Trustee, any Agent nor the Company shall be affected by notice to the contrary.
The registered Noteholder shall be treated as its owner for all purposes.
12. AMENDMENTS AND WAIVERS. Subject to certain exceptions provided in
the Indenture, the Indenture or the Notes may be amended with the consent of the
Holders of a majority in principal amount of the then outstanding Notes, and any
existing Default or Event of Default (except a payment default) may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes. Without the consent of any Noteholder the Indenture or the
Notes may be amended to, among other things, cure any ambiguity, defect or
inconsistency, to comply with the requirements of the Commission in order to
effect or maintain qualification of the Indenture under the TIA or to make any
change that does not adversely affect the rights of any Noteholder.
13. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Notes Trustee or the Holders of at least 25% in principal amount
of the then outstanding Notes may declare the unpaid principal of, and any
accrued and unpaid interest on, all the Notes to be due and payable immediately;
provided, that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Company or any Subsidiary
Guarantor, all outstanding Notes shall become due and payable immediately
without further action or notice. Noteholders may not enforce the Indenture or
the Notes except as provided in the Indenture. The Notes Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Notes.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Notes Trustee in its exercise of any trust
or power. The Notes Trustee may withhold from Noteholders notice of any
continuing default (except a default in payment of principal or interest) if it
determines that withholding notice is in their interests. The Company must
furnish an annual compliance certificate to the Notes Trustee.
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<PAGE> 115
14. NOTES TRUSTEE DEALINGS WITH THE COMPANY. The Notes Trustee under
the Indenture, in its individual or any other capacity may make loans to, accept
deposits from, and perform services for the Company, the Subsidiary Guarantors
or any Affiliate of the Company or the Subsidiary Guarantors, and may otherwise
deal with the Company, the Subsidiary Guarantors and their respective Affiliates
as if it were not Notes Trustee.
15. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions provided for in the Indenture. The Company must
annually report to the Notes Trustee on compliance with such limitations.
16. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Notes Trustee or an authenticating agent.
17. NOTE GUARANTEE. Each Subsidiary Guarantor has jointly and severally
irrevocably and unconditionally guaranteed the payment of principal, premium, if
any, and interest (including interest on overdue principal and overdue interest,
if lawful) on the Notes; PROVIDED, HOWEVER, each Subsidiary Guarantor that makes
a payment or distribution under a Note Guarantee shall be entitled to a
contribution from each other Subsidiary Guarantor in a pro rata amount based on
the Adjusted Net Assets of each Subsidiary Guarantor.
18. DEFEASANCE. Subject to certain conditions provided for in the
Indenture, the Company at any time may terminate some or all of its obligations
under the Notes and the Indenture if the Company deposits with the Notes Trustee
money or U.S. Government Obligations for the payment of principal, premium (if
any) and interest on the Notes to redemption or maturity, as the case may be.
19. GOVERNING LAW. The laws of the State of New York shall govern this
Note and the Indenture, without regard to the principles of conflict of laws of
such State.
20. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
21. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Note Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and has directed the Notes Trustee to
use CUSIP numbers in notices of redemption as a convenience to Noteholders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
A-10
<PAGE> 116
The Company will furnish to any Noteholder upon written request and
without charge a copy of the Indenture. Request may be made to:
Bluegreen Corporation
5295 Town Center Road
Boca Raton, Florida 33486
Attn: Chief Financial Officer
FORM OF NOTATION ON SECURITY
RELATING TO NOTE GUARANTEE
NOTE GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture referred to in
the Note upon which this notation is endorsed and each hereinafter referred to
as a "Subsidiary Guarantor," which term includes any successor person under the
Indenture) (i) have jointly and severally irrevocably and unconditionally
guaranteed as a primary obligor and not a surety, (such guarantee by each
Subsidiary Guarantor being referred to herein as the "Note Guarantee") (a) the
due and punctual payment of the principal, premium, if any, and interest on the
Notes, whether at Stated Maturity or interest payment date, by acceleration,
call for redemption or otherwise, (b) the due and punctual payment of interest
on the overdue principal of and interest, if any, on the Notes, to the extent
lawful, (c) the due and punctual performance of all other monetary Obligations
of the Company under the Indenture and the Notes to the Noteholders or the Notes
Trustee, all in accordance with the terms set forth in Article 10 of the
Indenture and (d) in case of any extension of time of payment or renewal of any
Notes or any such Obligations, the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at Stated Maturity, by acceleration or otherwise and (ii) have agreed to pay any
and all costs and expenses (including reasonable attorneys' fees) incurred by
the Notes Trustee or any Noteholders in enforcing any rights under this Note
Guarantee.
The Obligations of each Subsidiary Guarantor to the Holders of Notes
and to the Notes Trustee pursuant to this Note Guarantee and the Indenture are
expressly set forth in Article 10 of the Indenture and reference is hereby made
to such Indenture for the precise terms of this Note Guarantee.
No stockholder, officer, director or incorporator, as such, past,
present or future of any Subsidiary Guarantor shall have any liability under
this Note Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.
This is a continuing Note Guarantee and, except as otherwise expressly
provided for in Section 10.06 of the Indenture, shall remain in full force and
effect and shall be binding upon the Subsidiary Guarantor and its successors and
assigns until full and final payment of all of the Company's Obligations under
the Notes and the Indenture and shall inure to the benefit of the successors and
assigns of the Notes Trustee and the Noteholders and, in the event of any
transfer
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<PAGE> 117
or assignment of rights by any Noteholder or the Notes Trustee, the rights and
privileges herein conferred upon that party shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof. This is a Note Guarantee of payment and not of collectability.
This Note Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Note
Guarantee is noted shall have been executed by the Notes Trustee under the
Indenture by the manual signature of one of its authorized officers.
THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED
HEREIN BY REFERENCE.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Guarantors:
BLUEGREEN RESORTS MANAGEMENT, INC.
By:
---------------------------------------
Name:
Title:
BLUEGREEN RESORTS, INC.
By:
---------------------------------------
Name:
Title:
BLUEGREEN HOLDING CORPORATION
(TEXAS)
By:
---------------------------------------
Name:
Title:
PROPERTIES OF THE SOUTHWEST ONE, INC.
By:
---------------------------------------
Name:
Title:
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<PAGE> 118
PROPERTIES OF THE SOUTHWEST, L.P.
By:
----------------------------
Name:
Title:
BLUEGREEN ASSET MANAGEMENT
CORPORATION
By:
----------------------------
Name:
Title:
BLUEGREEN CAROLINA LAND, INC.
By:
----------------------------
Name:
Title:
BLUEGREEN CORPORATION OF MONTANA
By:
----------------------------
Name:
Title:
BLUEGREEN CORPORATION OF TENNESSEE
By:
----------------------------
Name:
Title:
BLUEGREEN CORPORATION OF THE
ROCKIES
By:
----------------------------
Name:
Title:
A-13
<PAGE> 119
VIRGINIA LAND & FOREST CORPORATION
By:
----------------------------------
Name:
Title:
BLUEGREEN COMMUNITIES, INC.
By:
----------------------------------
Name:
Title:
BLUEGREEN RESORTS INTERNATIONAL,
INC.
By:
----------------------------------
Name:
Title:
CAROLINA NATIONAL GOLF CLUB, INC.
By:
----------------------------------
Name:
Title:
LEISURE CAPITAL CORPORATION
By:
----------------------------------
Name:
Title:
PROPERTIES OF THE WEST, INC.
By:
----------------------------------
Name:
Title:
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BG/RDI ACQUISITION CORP.
By:
---------------------------------------
Name:
Title:
RDI GROUP, INC.
By:
---------------------------------------
Name:
Title:
DELLONA ENTERPRISES, INC.
By:
---------------------------------------
Name:
Title:
RESORT DEVELOPMENT INTERNATIONAL,
INC.
By:
---------------------------------------
Name:
Title:
RDI RESORT SERVICES CORPORATION
By:
---------------------------------------
Name:
Title:
RDI RESOURCES, INC.
By:
---------------------------------------
Name:
Title:
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<PAGE> 121
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:______________
Your Signature:
-----------------------------------
(Sign exactly as your name appears
on the face of this Note)
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<PAGE> 122
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) April 1, 2000, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
CHECK ONE
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the
Securities Act; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Notes Trustee a signed letter containing
certain representations and agreements (the form of which
letter can be obtained from the Notes Trustee); or
(4) ___ outside the United States to a "foreign person" in compliance
with Rule 904 of Regulation S under the Securities Act; or
(5 ___ pursuant to the exemption from registration provided by Rule
144 under the Securities Act; or
(6) ___ pursuant to an effective registration statement under the
Securities Act; or
(7) ___ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Notes Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any Person other
than the registered Noteholder thereof; provided that if box (3), (4), (5) or
(7) is checked, the Company or the Notes Trustee may require, prior to
registering any such transfer of the Notes, in its sole discretion, such legal
opinions, certifications (including an investment letter in the case of box (3)
or (4)) and other information as the Notes Trustee or the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act. If none of the foregoing boxes is checked, the Notes Trustee or
Registrar shall not be obligated to register this Note in the name of any person
other than the Noteholder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.17 of the Indenture
shall have been satisfied.
Dated:__________________________ Signed:_________________________________
(Sign exactly as name appears on
the other side of this Note)
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<PAGE> 123
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:_______________________ ______________________________________________
NOTICE: To be executed by an executive officer
OPTION OF NOTEHOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by
the Company pursuant to Section 4.10 or Section 4.14 of the Indenture check the
appropriate box:
[ ] Section 4.10 [ ] Section 4.14
If you want to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you
elect to have purchased:
$______________________
Date:__________________
Your Signature__________________________________
(Sign exactly as your name appears
on the face of this Note)
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<PAGE> 124
EXHIBIT B
FORM OF EXCHANGE NOTE
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY OR A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
CUSIP No: __________
(Front of Note)
No. __ $_______________
BLUEGREEN CORPORATION
10 1/2% Senior Secured Notes due 2008, Series B
BLUEGREEN CORPORATION, a Massachusetts corporation promises to pay to CEDE &
CO., or its registered assigns, the principal sum of $__________________ on
April 1, 2008. Interest Payment Dates: April 1 and October 1, commencing October
1, 1998. Record Dates: March 15 and September 15 (whether or not a Business
Day). Additional provisions of this Note are set forth on the other side of this
Note.
B-1
<PAGE> 125
Dated:
BLUEGREEN CORPORATION
By: _______________________
By: _______________________
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Notes referred
to in the within-mentioned Indenture
SUNTRUST, CENTRAL FLORIDA, NATIONAL ASSOCIATION
By:_________________________________
Authorized Signatory
B-2
<PAGE> 126
(Reverse of Note)
10 1/2% SENIOR SECURED NOTE DUE 2008, Series B
Capitalized terms used herein have the meanings assigned to them in the
Indenture (as defined below) unless otherwise indicated.
1. INTEREST. Bluegreen Corporation, a Massachusetts corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate and in the manner specified below. The Company shall pay, in cash, interest
on the principal amount of this Note at the rate per annum of 10 1/2%. The
Company will pay interest semiannually in arrears on April 1, and October 1, of
each year (each an "Interest Payment Date"), commencing October 1, 1998, or if
any such day is not a Business Day on the next succeeding Business Day. Interest
will be computed on the basis of a 360-day year consisting of twelve 30-day
months. Interest shall accrue from the most recent Interest Payment Date to
which interest has been paid or, if no interest has been paid, from the date of
the original issuance of the Notes. To the extent lawful, the Company shall pay
interest on overdue principal at the rate of 2% per annum in excess of the then
applicable interest rate on the Notes; it shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) at the
same rate to the extent lawful.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the Record Date immediately preceding the Interest
Payment Date, even if such Notes are canceled after such Record Date and on or
before such Interest Payment Date. Noteholders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal, premium,
if any, and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts ("U.S. Legal Tender").
However, the Company may pay principal, premium, if any, and interest by its
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Noteholder at the Noteholder's
registered address.
3. PAYING AGENT AND REGISTRAR. Initially, the Notes Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-registrar without prior notice to any Noteholder. The Company or any
Guarantor of the Company may act in any such capacity, except that none of the
Company, its Subsidiaries or their Affiliates shall act (i) as Paying Agent in
connection with any redemption, offer to purchase, discharge or defeasance, as
otherwise specified in the Indenture, and (ii) as Paying Agent or Registrar if a
Default or Event of Default has occurred and is continuing.
4. INDENTURE. The Company issued the Notes under an Indenture, dated as
of April 1, 1998 (the "Indenture"), between the Company and SunTrust, Central
Florida, National Association, as Trustee (the "Trustee"). The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the TIA as in effect on the date the Indenture is qualified,
except as otherwise provided in the Indenture. The Notes are subject to all such
terms, and Noteholders are referred to the Indenture and the TIA for a statement
of
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such terms. The terms of the Indenture shall govern any inconsistencies between
the Indenture and the Notes. The Notes are senior secured Obligations of the
Company limited to $100,000,000 in aggregate principal amount.
5.(a) OPTIONAL REDEMPTION. Except as indicated in the next succeeding
paragraph, the Notes are not redeemable at the Company's option prior to April
1, 2003. Thereafter, the Notes will be redeemable, at the option of the Company,
in whole or in part, at the redemption prices (expressed as percentages of the
principal amount of the Notes) set forth below, plus accrued interest to the
redemption date:
PERIOD REDEMPTION PRICE
2003......................................................105.25%
2004......................................................103.50%
2005......................................................101.75%
2006 and thereafter.......................................100.00%
(b) OPTIONAL REDEMPTION UPON EQUITY OFFERINGS. At any time, or
from time to time, on or prior to April 1, 2001, the Company may, at
its option, redeem up to 35% of the original aggregate principal amount
of the Notes, with the Net Cash Proceeds of one or more Equity
Offerings by the Company, at a redemption price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the date of redemption; PROVIDED, HOWEVER, that after any such
redemption, the aggregate principal amount of the Notes outstanding
must equal at least $65 million. In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company shall
make such redemption not more than 90 days after the consummation of
any such Equity Offering.
6. MANDATORY REDEMPTION. Except as set forth in Section 7, the Notes
are not subject to mandatory redemption or sinking fund payments.
7. REPURCHASE AT OPTION OF NOTEHOLDER. (a) If there is a Change of
Control, each Holder of Notes will have the right to require the Company to
repurchase all or any part of such Holder's Notes at a repurchase price equal to
101% of the principal amount thereof, plus accrued and unpaid interest, if any,
to the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant Interest Payment
Date). Within 30 days following any Change of Control, the Company will mail a
notice to each Noteholder stating (i) that a Change of Control has occurred and
that such Noteholder has the right to require the Company to repurchase all or
any part of such Noteholder's Notes at a repurchase price in cash equal to 101%
of the principal amount thereof plus accrued and unpaid interest, if any, to the
date of repurchase (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date); (ii)
the repurchase date (which will be no earlier then 30 days nor later than 60
days from the date such notice is mailed); and (iii) the procedures, determined
by the Company consistent with the Indenture, that a Noteholder must follow in
order to have its Notes repurchased. Noteholders that are subject to an offer to
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repurchase may elect to have such Notes repurchased by completing the form
entitled "Option of Noteholder to Elect Purchase" appearing below.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Disposition, and when the aggregate amount of Net Available Cash
from such an Asset Disposition exceeds $10.0 million, the Company shall
be required to offer to purchase the maximum principal amount of Notes,
that is in an integral multiple of $1,000, that may be purchased out of
the Net Available Cash at 100% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date fixed for the closing
of such offer in accordance with the procedures set forth in the
Indenture. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Net Available Cash, the Notes to
be redeemed shall be selected on a pro rata basis. Noteholders that are
the subject of an offer to purchase will receive an Asset Disposition
Offer from the Company prior to any related purchase date and may elect
to have such Notes purchased by completing the form entitled "Option of
Noteholder to Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
45 (unless a shorter period is acceptable to the Notes Trustee) before the
redemption date to each Holder whose Notes are to be redeemed at its registered
address. Notes may be redeemed in part but only in whole multiples of $1,000,
unless all of the Notes held by a Noteholder are to be redeemed. On and after
the redemption date, interest ceases to accrue on Notes or portions of them
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Notes Trustee may require a Noteholder
among other things, to furnish appropriate endorsements and transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Note or portion of a
Note selected for redemption. Also, it need not exchange or register the
transfer of any Notes during a period beginning at the opening of business on a
Business Day 15 days before the day of any selection of Notes to be redeemed and
ending at the close of business on the day of selection or during the period
between a Record Date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. Prior to due presentment to the Notes
Trustee for registration of the transfer of this Note, the Notes Trustee, any
Agent and the Company may deem and treat the Person in whose name this Note is
registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Note and for all other
purposes whatsoever, whether or not this Note is overdue, and neither the Notes
Trustee, any Agent nor the Company shall be affected by notice to the contrary.
The registered Noteholder shall be treated as its owner for all purposes.
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11. AMENDMENTS AND WAIVERS. Subject to certain exceptions provided in
the Indenture, the Indenture or the Notes may be amended with the consent of the
Holders of a majority in principal amount of the then outstanding Notes, and any
existing Default or Event of Default (except a payment default) may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes. Without the consent of any Noteholder the Indenture or the
Notes may be amended to, among other things, cure any ambiguity, defect or
inconsistency, to comply with the requirements of the Commission in order to
effect or maintain qualification of the Indenture under the TIA or to make any
change that does not adversely affect the rights of any Noteholder.
12. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Notes Trustee or the Holders of at least 25% in principal amount
of the then outstanding Notes may declare the unpaid principal of, and any
accrued and unpaid interest on, all the Notes to be due and payable immediately;
provided, that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Company or any Subsidiary
Guarantor, all outstanding Notes shall become due and payable immediately
without further action or notice. Noteholders may not enforce the Indenture or
the Notes except as provided in the Indenture. The Notes Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Notes.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Notes Trustee in its exercise of any trust
or power. The Notes Trustee may withhold from Noteholders notice of any
continuing default (except a default in payment of principal or interest) if it
determines that withholding notice is in their interests. The Company must
furnish an annual compliance certificate to the Notes Trustee.
13. NOTES TRUSTEE DEALINGS WITH THE COMPANY. The Notes Trustee under
the Indenture, in its individual or any other capacity may make loans to, accept
deposits from, and perform services for the Company, the Subsidiary Guarantors
or any Affiliate of the Company or the Subsidiary Guarantors, and may otherwise
deal with the Company, the Subsidiary Guarantors and their respective Affiliates
as if it were not Notes Trustee.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions provided for in the Indenture. The Company must
annually report to the Notes Trustee on compliance with such limitations.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Notes Trustee or an authenticating agent.
16. NOTE GUARANTEE. Each Subsidiary Guarantor has jointly and severally
irrevocably and unconditionally guaranteed the payment of principal, premium, if
any, and interest (including interest on overdue principal and overdue interest,
if lawful) on the Notes; PROVIDED,
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HOWEVER, each Subsidiary Guarantor that makes a payment or distribution under a
Note Guarantee shall be entitled to a contribution from each other Subsidiary
Guarantor in a pro rata amount based on the Adjusted Net Assets of each
Subsidiary Guarantor.
17. DEFEASANCE. Subject to certain conditions provided for in the
Indenture, the Company at any time may terminate some or all of its obligations
under the Notes and the Indenture if the Company deposits with the Notes Trustee
money or U.S. Government Obligations for the payment of principal, premium (if
any) and interest on the Notes to redemption or maturity, as the case may be.
18. GOVERNING LAW. The laws of the State of New York shall govern this
Note and the Indenture, without regard to the principles of conflict of laws of
such State.
19. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Noteholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Note Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and has directed the Notes Trustee to
use CUSIP numbers in notices of redemption as a convenience to Noteholders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
The Company will furnish to any Noteholder upon written request and
without charge a copy of the Indenture. Request may be made to:
Bluegreen Corporation
5295 Town Center Road
Boca Raton, Florida 33486
Attn: Chief Financial Officer
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FORM OF NOTATION ON SECURITY
RELATING TO NOTE GUARANTEE
NOTE GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture referred to in
the Note upon which this notation is endorsed and each hereinafter referred to
as a "Subsidiary Guarantor," which term includes any successor person under the
Indenture) (i) have jointly and severally irrevocably and unconditionally
guaranteed as a primary obligor and not a surety, (such guarantee by each
Subsidiary Guarantor being referred to herein as the "Note Guarantee") (a) the
due and punctual payment of the principal, premium, if any, and interest on the
Notes, whether at Stated Maturity or interest payment date, by acceleration,
call for redemption or otherwise, (b) the due and punctual payment of interest
on the overdue principal of and interest, if any, on the Notes, to the extent
lawful, (c) the due and punctual performance of all other monetary Obligations
of the Company under the Indenture and the Notes to the Noteholders or the Notes
Trustee, all in accordance with the terms set forth in Article 10 of the
Indenture and (d) in case of any extension of time of payment or renewal of any
Notes or any such Obligations, the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at Stated Maturity by acceleration or otherwise and (ii) have agreed to pay any
and all costs and expenses (including reasonable attorneys' fees) incurred by
the Notes Trustee or any Noteholders in enforcing any rights under this Note
Guarantee.
The Obligations of each Subsidiary Guarantor to the Holders of Notes
and to the Notes Trustee pursuant to this Note Guarantee and the Indenture are
expressly set forth in Article 10 of the Indenture and reference is hereby made
to such Indenture for the precise terms of this Note Guarantee.
No stockholder, officer, director or incorporator, as such, past,
present or future of any Subsidiary Guarantor shall have any liability under
this Note Guarantee by reason of his or its status as such stockholder, officer,
director or incorporator.
This is a continuing Note Guarantee and, except as otherwise expressly
provided for in Section 10.06 of the Indenture, shall remain in full force and
effect and shall be binding upon the Subsidiary Guarantor and its successors and
assigns until full and final payment of all of the Company's Obligations under
the Notes and the Indenture and shall inure to the benefit of the successors and
assigns of the Notes Trustee and the Noteholders and, in the event of any
transfer or assignment of rights by any Noteholder or the Notes Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions hereof. This is a Note Guarantee of payment and not of
collectability.
This Note Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Note
Guarantee is noted shall have been executed
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by the Notes Trustee under the Indenture by the manual signature of one of its
authorized officers.
THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED
HEREIN BY REFERENCE.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Guarantors:
BLUEGREEN RESORTS MANAGEMENT, INC.
By:
------------------------------------
Name:
Title:
BLUEGREEN RESORTS, INC.
By:
------------------------------------
Name:
Title:
BLUEGREEN HOLDING CORPORATION
(TEXAS)
By:
------------------------------------
Name:
Title:
PROPERTIES OF THE SOUTHWEST ONE, INC.
By:
------------------------------------
Name:
Title:
PROPERTIES OF THE SOUTHWEST, L.P.
By:
------------------------------------
Name:
Title:
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BLUEGREEN ASSET MANAGEMENT CORPORATION
By:
------------------------------------
Name:
Title:
BLUEGREEN CAROLINA LAND, INC.
By:
------------------------------------
Name:
Title:
BLUEGREEN CORPORATION OF MONTANA
By:
------------------------------------
Name:
Title:
BLUEGREEN CORPORATION OF TENNESSEE
By:
------------------------------------
Name:
Title:
BLUEGREEN CORPORATION OF THE ROCKIES
By:
------------------------------------
Name:
Title:
VIRGINIA LAND & FOREST CORPORATION
By:
------------------------------------
Name:
Title:
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BLUEGREEN COMMUNITIES, INC.
By:
------------------------------------
Name:
Title:
BLUEGREEN RESORTS INTERNATIONAL,
INC.
By:
------------------------------------
Name:
Title:
CAROLINA NATIONAL GOLF CLUB, INC.
By:
------------------------------------
Name:
Title:
LEISURE CAPITAL CORPORATION
By:
------------------------------------
Name:
Title:
PROPERTIES OF THE WEST, INC.
By:
------------------------------------
Name:
Title:
BG/RDI ACQUISITION CORP.
By:
------------------------------------
Name:
Title:
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RDI GROUP, INC.
By:
----------------------------------------
Name:
Title:
DELLONA ENTERPRISES, INC.
By:
----------------------------------------
Name:
Title:
RESORT DEVELOPMENT INTERNATIONAL,
INC.
By:
----------------------------------------
Name:
Title:
RDI RESORT SERVICES CORPORATION
By:
----------------------------------------
Name:
Title:
RDI RESOURCES, INC.
By:
----------------------------------------
Name:
Title:
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<PAGE> 136
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_____________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:______________
Your Signature:
----------------------------------
(Sign exactly as your name appears
on the face of this Note)
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OPTION OF NOTEHOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by
the Company pursuant to Section 4.10 or Section 4.14 of the Indenture check the
appropriate box:
[ ] Section 4.10 [ ] Section 4.14
If you want to have only part of the Note purchased by the company
pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you
elect to have purchased:
$______________________
Date:__________________
Your Signature:__________________________
(Sign exactly as your name appears on the
face of this Note)
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<PAGE> 138
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
------------, ----
SunTrust, Central Florida, National Association
225 East Robinson
Suite 350
Orlando, FL 32802
Attention: Corporate Trust Administration
Re: Bluegreen Corporation
10 1/2% Senior Notes due 2008
Ladies and Gentlemen:
In connection with our proposed purchase of 10 1/2% Senior Secured
Notes due 2008 (the "Notes") of Bluegreen Corporation (the "Company"), we
confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum"), dated March 27, 1998 relating to the
Notes and such other information as we deem necessary in order
to make our investment decision. We acknowledge that we have
read and agreed to the matters stated on pages (ii) and (iii)
of the Offering Memorandum and in the section entitled
"Transfer Restrictions" of the Offering Memorandum including
the restrictions on duplication and circulation of the
Offering Memorandum. We acknowledge that we have had access to
such financial and other information, and have been offered
the opportunity to ask such questions of representatives of
the Company and receive answers thereto, as we have deemed
necessary.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in
the Indenture relating to the Notes (as described in the
Offering Memorandum) and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the Notes
except in compliance with, such restrictions and conditions
and the Securities Act of 1933, as amended (the "Securities
Act"). We are not acquiring the Notes with a view to any
distribution thereof in a transaction that would violate the
Securities Act.
3. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes
may not be offered or sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf
of any accounts for which we are acting as hereinafter stated,
that if we should sell
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or otherwise transfer any Notes prior to the date which is two
years after the original issuance of the Notes, we will do so
only (i) to the Company or any of its subsidiaries, (ii)
inside the United States in accordance with Rule 144A under
the Securities Act to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act), (iii) inside
the United States to an institutional "accredited investor"
(as defined below) that, prior to such transfer, furnishes (or
has furnished on its behalf by a U.S. broker-dealer) to the
Notes Trustee (as defined in the Indenture relating to the
Notes), a signed letter containing certain representations and
agreements relating to the restrictions on transfer of the
Notes and an opinion (the form of which can be obtained from
the Notes Trustee) and on opinion of counsel satisfactory to
the Company that such transfer is in compliance with the
Securities Act, (iv) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act to
persons other than U.S. persons (as defined in Regulation S),
(v) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act (if available), or (vi)
pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person
purchasing any of the Notes from us a notice advising such
purchaser that resales of the Notes are restricted as stated
herein.
4. We are not acquiring the Notes for or on behalf of, and will
not transfer the Notes to, any pension or welfare plan (as
defined in Section 3 of the Employee Retirement Income
Security Act of 1974), except as permitted in the section
entitled "Transfer Restrictions" of the Offering Memorandum.
5. We understand that, on any proposed resale of any Notes, we
will be required to furnish to the Notes Trustee and the
Company such certification, legal opinions and other
information as the Notes Trustee and the Company may
reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that
the Notes purchased by us will bear a legend to the foregoing
effect.
6. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act) and have such knowledge and experience in
financial and business matters as to be capable of evaluating
the merits and risks of our investment in the Notes, and we
and any accounts for which we are acting are each able to bear
the economic risk of our or their investment, as the case may
be.
7. We are acquiring the Notes purchased by us for our account or
for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole
investment discretion.
C-2
<PAGE> 140
You, the Company and other interested parties are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
By:________________________________
Name:
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<PAGE> 141
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
---------------, ----
SunTrust Bank, Central Florida, National Association
225 East Robinson, Suite 350
Orlando, FL 32802
Attention: Corporate Trust Administration
Re: Bluegreen Corporation
(the "Company") 10 1/2% Senior
Notes due 2008 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $_____________ aggregate
principal amount of the Notes, we confirm and represent that such sale has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
further represent that:
(1) We have received a copy of the Offering Memorandum (the
"Offering Memorandum"), dated March 27, 1998 relating to the
Notes and such other information as we deem necessary in order
to make our investment decision. We acknowledge that we have
read and agreed to the matters stated on pages (ii) and (iii)
of the Offering Memorandum and in the section entitled
"Transfer Restrictions" of the Offering Memorandum including
the restrictions on duplication and circulation of the
Offering Memorandum. We acknowledge that we have had access to
such financial and other information, and have been offered
the opportunity to ask such questions of representatives of
the Company and receive answers thereto, as we have deemed
necessary.
(2) We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in
the Indenture relating to the Notes (as described in the
Offering Memorandum) and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the Notes
except in compliance with, such restrictions and conditions
and the Securities Act of 1933, as amended
D-1
<PAGE> 142
(the "Securities Act"). We are not acquiring the Notes with a
view to any distribution thereof in a transaction that would
violate the Securities Act.
(3) the offer of the Notes was not made to a Person in the United
States;
(4) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee
was outside the United States, or (b) the transaction was
executed in, on or through the facilities of a designated
off-shore securities market and neither we nor any person
acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(5) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S, as applicable;
(6) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(7) we have advised the transferee of the transfer restrictions
applicable to the Notes.
(8) we understand that the Notes have not been registered under
the Securities Act and no transfer thereof may be made, except
when such Notes are registered or are transferred pursuant to
an applicable exemption.
You, the Company and others are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:__________________________
Authorized Signature
D-2
<PAGE> 143
EXHIBIT E
[Letterhead of Notes Trustee]
[Date]
[Name and Address of Escrow Agent]
Re: Indenture Dated as of April 1, 1998,
By and Among Bluegreen Corporation,
as Issuer, Certain of its Subsidiaries as
Subsidiary Guarantors, and SunTrust Bank,
Central Florida, National Association,
as Notes Trustee (the "Indenture")
$110,000,000 at 10 1/2% Senior Secured
Notes Due 2008 (the "Notes")
----------------------------
Ladies and Gentlemen:
As Notes Trustee under the Indenture and pursuant to a request
made by [name of subsidiary guarantor] ("Subsidiary Guarantor") pursuant to
Section 11.03(c) thereof, we are delivering to you, in escrow, subject to your
strict compliance with the terms and conditions of this letter, [number]
executed counterparts of a [partial release of mortgage/partial reconveyance of
deed of trust] (the "Release Instruments") pertaining to Residential Lots (the
"Residential Lots") in the [name of project] in [name of County], County,
[State] (the "Project"), each of which has been executed in blank.
You are authorized and directed, as escrow agent, to file, or
cause to be filed for record, in the county and state aforesaid, a Release
Instrument pertaining to each Residential Lot at the time of its conveyance by
the Subsidiary Guarantor provided that you have received a certification from
the Subsidiary Guarantor, certifying that each of the following terms and
conditions has been satisfied with respect to such Residential Lot:
(i) Subsidiary Guarantor has entered into a contract
of sale (the "Contract of Sale") pertaining to Lot No. _____
in the Project;
(ii) Subsidiary Guarantor had not received notice
from SunTrust, Central Florida, National Association, or any
successor trustee thereunder, that it has
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<PAGE> 144
notified the holders of the Notes of any Event of Default as provided
in Section 7.05 of the Indenture at the time of entry into such
Contract of Sale;
(iii) the Contract of Sale for the Residential Lot
was entered into at arms-length with a bona fide purchaser in
the ordinary course of business with a purchaser which is not
an affiliate of Bluegreen Corporation or Subsidiary Guarantor;
(iv) the Residential Lot has been lawfully subdivided
and may be legally conveyed using the legal description set
forth in the Contract of Sale;
(v) the sale price of the Residential Lot represents,
in the good faith opinion of Subsidiary Guarantor, the fair
market value thereof; and
(vi) the Contract of Sale only provides such offsets
against, or deductions from, the sales price, including
closing costs, commissions, and fees, as are usual and
customary in transactions involving the sales of undeveloped
Residential Lots in [State].
Upon receipt of a written notice from the undersigned
indicating that the undersigned has sent a notice of an Event of Default to the
holders of the Notes in accordance with Section 7.05 of the Indenture, you are
not to deliver any further Release Instruments, but, instead, shall return all
Release Instruments then in your possession to the undersigned at once.
Please indicate your agreement to the terms and conditions set
forth in this letter by countersigning and returning to us a copy hereof.
Very truly yours,
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION, TRUSTEE
By:
------------------------------------
Name:
Title:
The undersigned hereby agrees to the terms and conditions of the above letter.
[NAME OF ESCROW AGENT]
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
E-2
<PAGE> 145
EXHIBIT F
[Letterhead of Notes Trustee]
[Date]
[Name and Address of Escrow Agent]
Re: Indenture Dated as of April 1, 1998,
By and Among Bluegreen Corporation,
as Issuer, Certain of its Subsidiaries as
Subsidiary Guarantors, and SunTrust Bank,
Central Florida, National Association,
as Notes Trustee (the "Indenture")
$110,000,000 at 10 1/2% Senior Secured
Notes Due 2008 (the "Notes")
----------------------------
Ladies and Gentlemen:
As Notes Trustee under the Indenture and pursuant to a request
made by [name of subsidiary guarantor] ("Subsidiary Guarantor") pursuant to
Section 11.03(e) thereof, we are delivering to you, in escrow, subject to your
strict compliance with the terms and conditions of this letter, [number]
executed counterparts of a [partial release of mortgage/partial reconveyance of
deed of trust] (the "Release Instruments") pertaining to certain parcels of
property to be transferred in bulk (the "Bulk Transfer Property") in the [name
of project] in [name of County], County, [State] (the "Project"), each of which
has been executed in blank.
You are authorized and directed, as escrow agent, to file, or
cause to be filed for record, in the county and state aforesaid, a Release
Instrument pertaining to each parcel of Bulk Transfer Property at the time of
its conveyance by the Subsidiary Guarantor provided that you have received a
certification from the Subsidiary Guarantor, certifying that each of the
following terms and conditions has been satisfied with respect to such Bulk
Transfer Property:
(i) Subsidiary Guarantor has entered into a contract
of sale (the "Contract of Sale") pertaining to such Bulk
Transfer Property;
(ii) Subsidiary Guarantor had not received notice
from SunTrust, Central Florida, National Association, or any
successor trustee thereunder, that it has
F-1
<PAGE> 146
notified the holders of the Notes of any Event of Default as provided
in Section 7.05 of the Indenture at the time of entry into such
Contract of Sale;
(iii) the Contract of Sale for the Bulk Transfer
Property was entered into at arms-length with a bona fide
purchaser in the ordinary course of business with a purchaser
which is not an affiliate of Bluegreen Corporation or
Subsidiary Guarantor;
(iv) the Bulk Transfer Property has been lawfully
subdivided and may be legally conveyed using the legal
description set forth in the Contract of Sale;
(v) the sale price of the Bulk Transfer Property
represents, in the good faith opinion of Subsidiary Guarantor,
the fair market value thereof; and
(vi) the Contract of Sale only provides such offsets
against, or deductions from, the sales price, including
closing costs, commissions, and fees, as are usual and
customary in transactions involving the sales of undeveloped
property such as to the Bulk Transfer Property in [State].
Upon receipt of a written notice from the undersigned
indicating that the undersigned has sent a notice of an Event of Default to the
holders of the Notes in accordance with Section 7.05 of the Indenture, you are
not to deliver any further Release Instruments, but, instead, shall return all
Release Instruments then in your possession to the undersigned at once.
Please indicate your agreement to the terms and conditions set
forth in this letter by countersigning and returning to us a copy hereof.
Very truly yours,
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION, TRUSTEE
By:
------------------------------------
Name:
Title:
The undersigned hereby agrees to the terms and conditions of the above letter.
[NAME OF ESCROW AGENT]
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
F-2
<PAGE> 147
SCHEDULE P
<TABLE>
<CAPTION>
AMOUNT OF
PROPERTY OWNER TITLE INSURANCE
-------- ----- ---------------
<S> <C> <C>
CROSSROADS RANCH PROPERTIES OF THE WEST, INC. $2,300,000
YAVAPAI COUNTY
ARIZONA
EAGLES LANDING BLUEGREEN CORPORATION OF THE 900,000
LAS ANIMAS COUNTY ROCKIES
COLORADO
MEADOWS AT CASTLEWOOD BLUEGREEN CORPORATION OF THE 2,000,000
DOUGLAS COUNTY ROCKIES
COLORADO
WHITEWATER WILDERNESS RANCH BLUEGREEN CORPORATION OF 675,000
IDAHO COUNTY MONTANA
IDAHO
GRASSY MOUNTAIN RANCH BLUEGREEN CORPORATION OF 1,500,000
MEAGHER/BROADWATER COUNTIES MONTANA
MONTANA
RANCHES OF SONTERRA PROPERTIES OF THE SOUTHWEST, 2,340,000
LINCOLN COUNTY L.P.
NEW MEXICO
HICKORY BLUFF BLUEGREEN CAROLINA LAND, INC. 329,000
ONSLOW COUNTY
NORTH CAROLINA
WINDING RIVER PLANTATION BLUEGREEN CAROLINA LAND, INC. 9,124,000
BRUNSWICK COUNTY
NORTH CAROLINA
SEASIDE AT WINDING RIVER BLUEGREEN CAROLINA LAND, INC. 300,000
BRUNSWICK COUNTY
NORTH CAROLINA
SOUTHPORT BLUEGREEN CAROLINA LAND, INC. 1,274,000
BRUNSWICK COUNTY
NORTH CAROLINA
BAY HARBOR BLUEGREEN CAROLINA LAND, INC. 1,358,000
BEAUFORT COUNTY
NORTH CAROLINA
</TABLE>
P-1
<PAGE> 148
<TABLE>
<S> <C> <C>
LAKE RIDGE PROPERTIES OF THE SOUTHWEST, 6,181,000
DALLAS COUNTY L.P.
TEXAS
BENT WATER PROPERTIES OF THE SOUTHWEST, 3,400,000
HOOD COUNTY L.P.
TEXAS
HIDDEN LAKES PROPERTIES OF THE SOUTHWEST, 2,780,000
GRAYSON COUNTY L.P.
TEXAS
RAY ROBERTS RANCH PROPERTIES OF THE SOUTHWEST, 888,000
COOK COUNTY L.P.
TEXAS
RIVER MOUNTAIN RANCH PROPERTIES OF THE SOUTHWEST, 3,500,000
KENDALL COUNTY L.P.
TEXAS
TAMARON PROPERTIES OF THE SOUTHWEST, 870,000
BEXAR/MEDINA COUNTIES L.P.
TEXAS
SUMMER VALLEY PROPERTIES OF THE SOUTHWEST, 800,000
HAYS COUNTY L.P.
TEXAS
CLEAR CREEK ESTATES PROPERTIES OF THE SOUTHWEST, 330,000
MONTGOMERY COUNTY L.P.
TEXAS
LAKE HOUSTON PROPERTIES OF THE SOUTHWEST, 1,947,000
HARRIS COUNTY L.P.
TEXAS
WHITE OAK ESTATES PROPERTIES OF THE SOUTHWEST, 900,000
MONTGOMERY COUNTY L.P.
TEXAS
MEADOWS AT DAHLGREN VIRGINIA LAND & FOREST 920,000
KING GEORGE COUNTY CORPORATION
VIRGINIA
SANDS OF THE POTOMAC VIRGINIA LAND & FOREST 830,000
NORTH UMBERLAND COUNTY CORPORATION
VIRGINIA
</TABLE>
P-2
<PAGE> 149
<TABLE>
<S> <C> <C>
SOUTHGATE VIRGINIA LAND & FOREST 744,000
NORTH UMBERLAND COUNTY CORPORATION
VIRGINIA
TWIN HARBORS VIRGINIA LAND & FOREST 249,000
NORTH UMBERLAND COUNTY CORPORATION
VIRGINIA
</TABLE>
P-3
<PAGE> 1
CHOATE, HALL & STEWART
A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
EXCHANGE PLACE
53 STATE STREET
BOSTON, MASSACHUSETTS 02109-2891
TELEPHONE (617) 248-5000
FACSIMILE (617) 248-4000
TELEX 49615860
June 17, 1998
Bluegreen Corporation
4960 Blue Lake Drive
Boca Raton, FL 33431
Ladies and Gentlemen:
We are acting as counsel to Bluegreen Corporation (the "Company"), a
corporation organized under the laws of the Commonwealth of Massachusetts, in
connection with the offer to exchange (the "Exchange Offer") $1,000 principal
amount of the Company's 10 1/2% Senior Secured Notes due 2008 (the "Exchange
Notes") for each $1,000 principal amount of the Company's outstanding 10 1/2%
Senior Secured Notes due 2008 (the "Private Notes"), and in connection with the
preparation of the prospectus (the "Prospectus") contained in the registration
statement on Form S-4, as amended (the "Registration Statement") (No.
333-50717), filed with the Securities and Exchange Commission (the "Commission")
by the Company for the purpose of registering the Exchange Notes under the
Securities Act of 1933, as amended (the "Act"). The Private Notes have been, and
the Exchange Notes will be, issued pursuant to an Indenture, dated as of April
1, 1998 (the "Indenture"), among the Company, the guarantors set forth on the
signature pages thereto and SunTrust Bank, Central Florida National Association
(the "Trustee"). Unless otherwise defined herein, terms defined in the
Prospectus are used herein as defined therein.
We have examined and relied on originals, or copies certified or
otherwise identified to our satisfaction, of the following documents:
(a) a copy of the articles of organization of the Company, as amended
to the date hereof;
(b) a copy of the by-laws of the Company, as amended to the date
hereof;
(c) Resolution of the Company's Directors in connection with the
Exchange Offer;
(d) an executed copy of the Indenture;
<PAGE> 2
Bluegreen Corporation
June 17, 1998
Page 2
(e) a specimen of the certificates for the Exchange Notes; and
(f) a copy of the Registration Statement and all exhibit thereto, all
as filed with the Commission.
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such corporate records, agreements, documents
and other instruments and such certificates or comparable documents of public
officials and representatives of the Company, and have made such other and
further investigations, as we have deemed relevant and necessary as a basis for
the opinion hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
Based on the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that, assuming the due
authorization, execution and delivery by the Trustee of the indenture, when the
Exchange Notes, substantially in the form presented to us have been executed by
the Company and authenticated by the Trustee in accordance with the Indenture,
and duly issued and delivered in exchange for the Private Notes in accordance
with the Exchange Offer in the manner described in the Registration Statement,
the Exchange Notes will constitute valid and legally binding obligations of the
Company, entitled to the benefits of the Indenture.
Our opinion set forth above is subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
We are members of the Bar of the Commonwealth of Massachusetts and we do
not express any opinion herein concerning any law other than the laws of the
Commonwealth of Massachusetts, the Delaware General Corporation Law and the
federal law of the United States of America.
We hereby consent to the use of our name under the caption "Legal
Matters" in the Prospectus forming part of the Registration Statement and to the
filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
CHOATE, HALL & STEWART
<PAGE> 1
Exhibit 10.123
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
Dated as of April 1, 1998
by and among
BLUEGREEN CORPORATION
and
THE SUBSIDIARY GUARANTORS
named herein
and
NATWEST CAPITAL MARKETS LIMITED
and
MCDONALD & COMPANY SECURITIES, INC.
as the Initial Purchasers
$110,000,000
10 1/2% SENIOR SECURED NOTES DUE 2008
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. Definitions...............................................................................................
2. Exchange Offer............................................................................................
3. Notes Shelf Registration..................................................................................
4 Additional Interest.......................................................................................
5. Registration Procedures...................................................................................
6. Registration Expenses.....................................................................................
7. Indemnification...........................................................................................
8. Rules 144 and 144A........................................................................................
9. Underwritten Registrations................................................................................
10. Miscellaneous.............................................................................................
(a) No Inconsistent Agreements.......................................................................
(b) Adjustments Affecting Registrable Notes..........................................................
(c) Amendments and Waivers...........................................................................
(d) Notices..........................................................................................
(e) Successors and Assigns...........................................................................
(f) Counterparts.....................................................................................
(g) Headings.........................................................................................
(h) Governing Law....................................................................................
(i) Severability.....................................................................................
(j) Notes Held by the Issuers or their Affiliates....................................................
(k) Third Party Beneficiaries........................................................................
Schedule A: Adjustments Reflecting Registrable Notes
</TABLE>
-i-
<PAGE> 3
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
This Notes Exchange and Registration Rights Agreement (the "Agreement")
is dated as of April 1, 1998, by and among Bluegreen Corporation, a
Massachusetts corporation (the "Company"), Bluegreen Resorts Management, Inc., a
Delaware corporation, Bluegreen Resorts, Inc., a Delaware corporation, Bluegreen
Holding Corporation (Texas), a Delaware corporation, Properties of Southwest
One, Inc., a Delaware corporation, Properties of the Southwest L.P., a Delaware
limited partnership, Bluegreen Asset Management Corporation, a Delaware
corporation, Bluegreen Carolina Land, Inc., a Delaware corporation, Bluegreen
Corporation of Montana, a Montana corporation, Bluegreen Corporation of
Tennessee, a Delaware corporation, Bluegreen Corporation of the Rockies, a
Delaware corporation, Virginia Land & Forest Corporation, a Delaware
corporation, Bluegreen Communities, Inc., a Delaware corporation, Bluegreen
Resorts International, Inc., a Delaware corporation, Carolina National Golf
Club, Inc., a Delaware corporation, Leisure Capital Corporation, a Delaware
corporation, Properties of the West, Inc., a Delaware corporation, BG/RDI
Acquisition Corporation, a Delaware corporation, RDI Group, Inc., a Florida
corporation, Dellona Enterprises, Inc., a Florida corporation, Resort
Development International, Inc., a Florida corporation, RDI Resort Services
Corporation, a Florida corporation, RDI Resources, Inc., a Florida corporation
(collectively, the "Subsidiary Guarantors"), and NatWest Capital Markets Limited
and McDonald & Company Securities, Inc. (each an "Initial Purchaser" and,
collectively the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement, dated March 26, 1998, among the Company, the Subsidiary Guarantors
and the Initial Purchasers (the "Purchase Agreement"), which provides for the
sale by the Company to the Initial Purchasers of $110,000,000 aggregate
principal amount of the Company's 10 1/2% Senior Secured Notes due 2008 (the
"Notes"), which Notes will be guaranteed by the Subsidiary Guarantors and
secured by mortgages on properties held by certain Subsidiary Guarantors. The
Company and the Subsidiary Guarantors are collectively referred to herein as the
"Issuers." In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Issuers have agreed to provide the registration rights set forth
in this Agreement for the benefit of the Initial Purchasers and their direct and
indirect transferees. The execution and delivery of this Agreement is a
condition to the obligation of the Initial Purchasers to purchase the Notes
under the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
Advice: Has the meaning provided in the last paragraph of Section 5
hereof.
Agreement: Has the meaning provided in the first introductory paragraph
hereto.
Applicable Period: Has the meaning provided in Section 2(b) hereof.
<PAGE> 4
Closing Date: Has the meaning provided in the Purchase Agreement.
Company: Has the meaning provided in the first introductory paragraph
hereto.
Effectiveness Date: The 135th day after the Issue Date.
Effectiveness Period: Has the meaning provided in Section 3(a) hereof.
Event Date: Has the meaning provided in Section 4(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Exchange Notes: Has the meaning provided in Section 2(a) hereof.
Exchange Offer: Has the meaning provided in Section 2(a) hereof.
Exchange Registration Statement: Has the meaning provided in Section
2(a) hereof.
Filing Date: The 75th day after the Issue Date.
Holder: Any holder of a Note or Registrable Notes.
Indemnified Person: Has the meaning provided in Section 7(c) hereof.
Indemnifying Person: Has the meaning provided in Section 7(c) hereof.
Indenture: Means the Indenture dated as of April 1, 1998 among the
Company, the Subsidiary Guarantors and SunTrust Bank, Central Florida, National
Association ("SunTrust"), as Trustee, pursuant to which the Notes are being
issued, as amended or supplemented from time to time in accordance with the
terms thereof.
Initial Purchasers: Has the meaning provided in the first introductory
paragraph hereto.
Inspectors: Has the meaning provided in Section 5(n) hereof.
Issue Date: The date on which the original Notes were sold to the
Initial Purchasers pursuant to the Purchase Agreement.
Issuers: Has the meaning provided in the second introductory paragraph
hereto.
NASD: Has the meaning provided in Section 5(r) hereof.
Notes: Has the meaning provided in the second introductory paragraph
hereto.
-2-
<PAGE> 5
Notes Additional Interest: Has the meaning provided in Section 4(a)
hereof.
Notes Shelf Request: Has the meaning provided in Section 2(c) hereof.
Participant: Has the meaning provided in Section 7(a) hereof.
Participating Broker-Dealer: Has the meaning provided in Section 2(b)
hereof.
Persons: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other legal entity.
Private Exchange: Has the meaning provided in Section 2(b) hereof.
Private Exchange Notes: Has the meaning provided in Section 2(b)
hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, with respect to the terms of the offering of any portion of the
Registrable Notes covered by such Registration Statement including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
Purchase Agreement: Has the meaning provided in the second introductory
paragraph hereto.
Records: Has the meaning provided in Section 5(n) hereof.
Registrable Notes: Each Note upon original issuance of the Notes and at
all times subsequent thereto, each Exchange Note as to which Section 2(c)(iv)
hereof is applicable upon original issuance and at all times subsequent thereto
and each Private Exchange Note upon original issuance thereof and at all times
subsequent thereto, until in the case of any such Note, Exchange Note or Private
Exchange Note, as the case may be, the earliest to occur of (i) a Registration
Statement (other than, with respect to any Exchange Note as to which Section
2(c)(iv) hereof is applicable, the Exchange Registration Statement) covering
such Note, Exchange Note or Private Exchange Note, as the case may be, has been
declared effective by the SEC and such Note (unless such Note was not tendered
for exchange by the Holder thereof), Exchange Note or Private Exchange Note, as
the case may be, has been disposed of in accordance with such effective
Registration Statement, (ii) such Note, Exchange Note or Private Exchange Note,
as the case may be, is, or may be, sold in compliance with Rule 144, or (iii)
such Note, Exchange Note or Private Exchange Note, as the case may be, ceases to
be outstanding for purposes of the Indenture.
-3-
<PAGE> 6
Registration Statement: Any registration statement of the Company,
including, but not limited to, the Exchange Registration Statement, that covers
any of the Registrable Notes pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission or any successor thereto.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
Shelf Registration: Has the meaning provided in Section 3(a) hereof.
Shelf Registration Statement: shall mean a "shelf" registration
statement of the Company and the Subsidiary Guarantors which covers all of the
Registrable Notes on an appropriate form under Rule 415 under the Securities
Act, or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
Subsidiary Guarantors: Has the meaning provided in the first
introductory paragraph hereto.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: SunTrust, as trustee under the Indenture and any successor
trustee under the Indenture.
Underwritten registration or underwritten offering: A registration in
which securities of one or more of the Issuers are sold to an underwriter for
reoffering to the public.
-4-
<PAGE> 7
2. EXCHANGE OFFER
(a) Each of the Issuers agrees to file with the SEC no later than the
Filing Date an Exchange Registration Statement with respect to an offer
to exchange (the "Exchange Offer") any and all of the Registrable Notes
(other than the Private Exchange Notes, if any) for a like aggregate
principal amount of debt securities of the Company, guaranteed by the
Subsidiary Guarantors and secured by mortgages on properties held by
certain Subsidiary Guarantors (to the extent such properties have not
been sold), which are identical in all material respects to the Notes
(the "Exchange Notes") (and which are entitled to the benefits of the
Indenture or a trust indenture which is identical in all material
respects to the Indenture (other than such changes to the Indenture or
any such identical trust indenture as are necessary to comply with any
requirements of the SEC to effect or maintain the qualification thereof
under the TIA) and which, in either case, has been qualified under the
TIA), except that the Exchange Notes (other than Private Exchange
Notes, if any) shall have been registered pursuant to an effective
Registration Statement under the Securities Act and shall contain no
restrictive legend thereon. The Exchange Offer shall be registered
under the Securities Act on the appropriate form (the "Exchange
Registration Statement") and shall comply with all applicable tender
offer rules and regulations under the Exchange Act. The Issuers agree
to use their reasonable efforts to (x) cause the Exchange Registration
Statement to be declared effective under the Securities Act no later
than the Effectiveness Date; (y) keep the Exchange Offer open for at
least 30 days (or longer if required by applicable law) after the date
that notice of the Exchange Offer is mailed to the Holders; and (z)
consummate the Exchange Offer on or prior to the 165th day following
the Issue Date. If after such Exchange Registration Statement is
declared effective by the SEC, the Exchange Offer or the issuance of
the Exchange Notes thereunder is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other
governmental agency or court, such Exchange Registration Statement
shall be deemed not to have become effective for purposes of this
Agreement until such stop order, injunction or other order or
requirement is no longer in effect. Each Holder who participates in the
Exchange Offer will be required to represent that any Exchange Notes
received by it will be acquired in the ordinary course of its business,
that at the time of the consummation of the Exchange Offer such Holder
will have no arrangement or understanding with any Person to
participate in the distribution of the Exchange Notes in violation of
the provisions of the Securities Act, that such Holder in not an
"affiliate" of any of the Issuers within the meaning of the Securities
Act or acting on behalf of a person who could not truthfully make the
foregoing representations, and that such Holder is not a broker-dealer
tendering Notes acquired directly from the Company for its own account.
Upon consummation of the Exchange Offer in accordance with this Section
2, the Issuers shall have no further obligation to register Registrable
Notes (other than Private Exchange Notes and other than in respect of
any Exchange Notes as to which clause 2(c)(v) hereof applies) pursuant
to Section 3 hereof. No securities other than the Exchange Notes shall
be included in the Exchange Registration Statement.
-5-
<PAGE> 8
(b) The Issuers shall include within the Prospectus contained in the
Exchange Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Initial Purchasers and
their counsel, which shall contain a summary statement of the positions
taken or policies made by the Staff of the SEC with respect to the
potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Notes received by such broker-dealer in the Exchange Offer (a
"Participating Broker-Dealer"), whether such positions or policies have
been publicly disseminated by the Staff of the SEC or such positions or
policies, in the reasonable judgment of the Initial Purchasers and
their counsel, represent the prevailing views of the Staff of the SEC.
Such "Plan of Distribution" section shall also expressly permit the use
of the Prospectus by all Persons subject to the prospectus delivery
requirements of the Securities Act, including all Participating
Broker-Dealers, and include a statement describing the means by which
Participating Broker-Dealers may resell the Exchange Notes.
Each of the Issuers shall use its reasonable efforts to keep
the Exchange Registration Statement effective and to amend and
supplement the Prospectus contained therein, in order to permit such
Prospectus to be lawfully delivered by any Participating Broker-Dealer
subject to the prospectus delivery requirements of the Securities Act
for such period of time as is necessary to comply with applicable law
in connection with any resale of the Exchange Notes; PROVIDED, HOWEVER,
that such period shall not exceed 180 days after the consummation of
the Exchange Offer (or such longer period if extended pursuant to the
last paragraph of Section 5 hereof) (the "Applicable Period").
If, prior to consummation of the Exchange Offer, either of the Initial
Purchasers holds any Notes acquired by it and having the status of an unsold
allotment in the initial distribution, the Issuers shall, upon the request of
either of the Initial Purchasers, simultaneously with the delivery of the
Exchange Notes in the Exchange Offer issue and deliver to the Initial Purchasers
in exchange (the "Private Exchange") for such Notes held by the Initial
Purchasers a like principal amount of debt securities of the Company, guaranteed
by the Subsidiary Guarantors and secured by mortgages on properties held by
certain Subsidiary Guarantors, that are identical in all material respects to
the Exchange Notes (the "Private Exchange Notes") (and which are issued pursuant
to the same Indenture as the Exchange Notes) except for the placement of a
restrictive legend on such Private Exchange Notes. The Private Exchange Notes
shall if permissible bear the same CUSIP number as the Exchange Notes.
Interest on the Exchange Notes and the Private Exchange Notes will
accrue from the last interest payment date on which interest was paid on the
Notes surrendered in exchange therefor or, if no interest has been paid on the
Notes, from the Issue Date.
In connection with the Exchange Offer, the Issuers shall:
(1) mail to each Holder a copy of the Prospectus forming part of
the Exchange Registration Statement, together with an
appropriate letter of transmittal and related documents;
-6-
<PAGE> 9
(2) utilize the services of a depositary for the Exchange Offer
with an address in the Borough of Manhattan, The City of New
York;
(3) permit Holders to withdraw tendered Notes at any time prior to
5:00 p.m., New York time, on the last business day on which
the Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer or the
Private Exchange, as the case may be, the Issuers shall:
(1) accept for exchange all Notes duly tendered and not validly
withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(2) deliver to the Trustee for cancellation all Notes so accepted
for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder of Notes, Exchange Notes or Private Exchange Notes, as
the case may be, equal in principal amount to the Notes of
such Holder so accepted for exchange.
The Exchange Notes and the Private Exchange Notes are to be issued
under (i) the Indenture or (ii) an indenture identical in all material respects
to the Indenture, which in either event shall provide that (1) the Exchange
Notes shall not be subject to the transfer restrictions set forth in the
Indenture and (2) the Private Exchange Notes shall be subject to the transfer
restrictions set forth in the Indenture. The Indenture or such indenture shall
provide that the Exchange Notes, the Private Exchange Notes and the Notes shall
vote and consent together on all matters as to which they have the right to vote
or consent as one class and that none of the Exchange Notes, the Private
Exchange Notes or the Notes will have the right to vote or consent as a separate
class on any matter.
(c) If, (i) because of any change in law, SEC rules or regulations or
in currently prevailing interpretations of the Staff of the SEC, the
Issuers are not permitted to effect an Exchange Offer, (ii) the
Exchange Offer is not consummated within 165 days after the Issue Date,
(iii) any holder of Private Exchange Notes so requests at any time
after the consummation of the Private Exchange, or (iv) any Holder
(other than the Initial Purchasers) is not eligible to participate in
the Exchange Offer, then the Issuers shall promptly deliver to the
Holders and the Trustee written notice thereof (the "Notes Shelf
Request") and, in the case of clauses (i) and (ii) above, all Holders,
in the case of clause (iii) above, the Holders of the Private Exchange
Notes and, in the case of clause (iv) above, the affected Holder, and
shall file a Notes Shelf Registration pursuant to Section 3 hereof;
PROVIDED, HOWEVER, that in the case of clause (iii) above such Holders
shall pay all reasonable registration expenses of the Company as
described in Section 6 hereof in connection with such Notes Shelf
Registration.
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<PAGE> 10
3. NOTES SHELF REGISTRATION
If a Notes Shelf Request is delivered as contemplated by Section 2(c)
hereof, then:
(a) NOTES SHELF REGISTRATION. The Issuers shall, at their cost, as
promptly as reasonably practicable, but in any case not later than the
75th day after a Notes Shelf Request, file with the SEC a Registration
Statement for an offering to be made on a continuous basis pursuant to
Rule 415 under the Securities Act covering all of the Registrable Notes
(the "Notes Shelf Registration"); PROVIDED, HOWEVER, that no holder of
Notes or Exchange Notes shall be entitled to have Notes or Exchange
Notes held by it covered by such Shelf Registration Statement unless
such holder expressly agrees to be bound by the provisions of this
Agreement applicable to such holder. If the Issuers shall not have yet
filed a Notes Exchange Registration Statement, each of the Issuers
shall use its reasonable efforts to file with the SEC the Notes Shelf
Registration on or prior to the Filing Date. The Notes Shelf
Registration shall be on Form S-3 (if available) or another appropriate
form permitting registration of such Registrable Notes for resale by
Holders in the manner or manners designated by them (including, without
limitation, one or more underwritten offerings). The Issuers shall not
permit any securities other than the Registrable Notes to be included
in the Notes Shelf Registration.
Each of the Issuers shall use its reasonable efforts to cause the Notes
Shelf Registration to be declared effective under the Securities Act by
the 135th day after the Notes Shelf Request and to keep the Notes Shelf
Registration continuously effective under the Securities Act until the
date which is one year from the Issue Date, subject to extension
pursuant to the last paragraph of Section 5 hereof, or such shorter
period ending when all Registrable Notes covered by the Notes Shelf
Registration have been sold in the manner set forth and as contemplated
in the Notes Shelf Registration or when the Notes become eligible for
registration without volume restrictions, pursuant to Rule 144 under
the Securities Act (the "Effectiveness Period").
(b) WITHDRAWAL OF STOP ORDERS. If the Notes Shelf Registration ceases
to be effective for any reason at any time during the Effectiveness
Period (other than because of the sale of all of the securities
registered thereunder), each of the Issuers shall use its reasonable
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof. Issuers shall be deemed not to have used their
reasonable efforts to keep the Shelf Registration Statement effective
during the requisite period if any of them voluntarily takes any action
that would result in Holders of Notes or Exchange Notes covered thereby
not being able to offer and sell such Notes or Exchange Notes during
that period, unless such action is required by applicable law;
PROVIDED, HOWEVER, that the foregoing shall not apply to actions taken
by the issuers in good faith and for valid business reasons including,
without limitation, the acquisition or divestiture of assets, so long
as the issuers within 90 days thereafter comply with the requirements
of Section 5 hereof.
(c) SUPPLEMENTS AND AMENDMENTS. The Issuers shall promptly supplement
and amend the Notes Shelf Registration if required by the rules,
regulations or instructions applicable
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<PAGE> 11
to the registration form used for such Notes Shelf Registration, if
required by the Securities Act, or if reasonably requested for such
purpose by the Holders of a majority in aggregate principal amount of
the Registrable Notes covered by such Registration Statement or by any
underwriter of such Registrable Notes.
4. ADDITIONAL INTEREST
(a) The Issuers and the Initial Purchasers agree that the Holders of
Registrable Notes will suffer damages if the Issuers fail to fulfill
their obligations under Section 2 or Section 3 hereof and that it would
not be feasible to ascertain the extent of such damages with precision.
Accordingly, the Issuers agree to pay, as liquidated damages and as the
sole and exclusive remedy therefor, additional interest on the Notes
("Notes Additional Interest") under the circumstances and to the extent
set forth below:
(i) if the Notes Exchange Offer Registration Statement or
Notes Shelf Registration Statement is not filed
within, in the case the Notes Exchange Offer
Registration Statement, 75 days following the Issue
Date or, in the case of the Notes Shelf Registration
Statement, 75 days following a Notes Shelf Request,
Notes Additional Interest shall accrue on the Notes
over and above the stated interest at a rate of 0.50%
per annum for the first 30 days commencing on the
76th day after the Issue Date or the Shelf Request,
respectively, such Notes Additional Interest rate
increasing by an additional 0.50% per annum at the
beginning of each subsequent 30-day period;
(ii) if the Notes Exchange Offer Registration Statement or
Notes Shelf Registration Statement is not declared
effective within, in the case of the Notes Exchange
Offer Registration Statement, 135 days following the
Issue Date or, in the case of the Notes Shelf
Registration Statement, 135 days following a Notes
Shelf Request, Notes Additional Interest shall accrue
on the Notes over and above the stated interest at a
rate of 0.50% per annum for the first 30 days
commencing on the 135th day after the Issue Date or
the Notes Shelf Request, respectively, such Notes
Additional Interest rate increasing by an additional
0.50% per annum at the beginning of each subsequent
30-day period; or
(iii) if (A) the Company has not exchanged all Notes
validly tendered in accordance with the terms of the
Exchange Offer on or prior to 165 days after the
Issue Date or (B) the Exchange Offer Registration
Statement ceases to be effective at any time prior to
the time that the Exchange Offer is consummated or
(C) if applicable, the Notes Shelf Registration
Statement has been declared effective and such Notes
Shelf Registration Statement ceases to be effective
at any time prior to the second anniversary of the
Issue Date (unless all the Notes have been sold
thereunder), then Notes Additional Interest shall
accrue on the Notes over
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<PAGE> 12
and above the stated interest at a rate of 0.50% per
annum for the first 30 days commencing on (x) the
165th day after the Issue Date with respect to the
Notes validly tendered and not exchanged by the
Company, in the case of (A) above, or (y) the day the
Notes Exchange Offer Registration Statement ceases to
be effective or usable for its intended purpose in
the case of (B) above, or (z) the day such Notes
Shelf Registration Statement ceases to be effective
in the case of (C) above, such Notes Additional
Interest rate increasing by an additional 0.50% per
annum at the beginning of each subsequent 30-day
period; PROVIDED, HOWEVER, that the Notes Additional
Interest rate on the Notes under clauses (i) or (ii)
above or this clause (iii), may not exceed in the
aggregate 1.5% per annum; and provided further, that
(1) upon the filing of the Notes Exchange Offer
Registration Statement or Notes Shelf Registration
Statement (in the case of clause (i) above), (2) upon
the effectiveness of the Notes Exchange Offer
Registration Statement or Notes Shelf Registration
Statement (in the case of (ii) above), or (3) upon
the exchange of Exchange Notes for all Notes tendered
(in the case of clause (iii)(A) above), or upon the
effectiveness of the Notes Exchange Offer
Registration Statement which had ceased to remain
effective (in the case of clause (iii)(B) above), or
upon the effectiveness of the Notes Shelf
Registration Statement which had ceased to remain
effective (in the case of clause (iii)(C) above),
Notes Additional Interest on the Notes as a result of
such clause (or the relevant subclause thereof), as
the case may be, shall cease to accrue.
"Transfer Restricted Notes" means each Note until (i) the date on which
such Note has been exchanged for a freely transferable Exchange Note in the
Exchange Offer, (ii) the date on which such Note or Exchange Note has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (iii) the date on which such Note or
Exchange Note is distributed to the public pursuant to Rule 144 under the
Securities Act or is salable pursuant to Rule 144(k) under the Securities Act.
Notwithstanding anything to the contrary in this Section 4(a), the Company shall
not be required to pay any Notes Additional Interest to the holder of the
Transfer Restricted Notes if such holder; (a) failed to comply with its
obligations to make the representations in the first paragraph of Section 2; or
(b) failed to provide the information required to be provided by it, if any,
pursuant to the penultimate paragraph of Section 5.
(b) The Issuers shall notify the Trustee within one business day after
each and every date on which an event occurs in respect of which Notes
Additional Interest is required to be paid (an "Event Date"). The
Company shall pay the Notes Additional Interest due on the Transfer
Restricted Notes by depositing with the paying agent (which shall not
be the Company for these purposes) for the Transfer Restricted Notes,
in trust, for the benefit of the holders thereof, prior to 11:00 A.M.
on the next interest payment date specified by the Indenture (or such
other indenture), sums sufficient to pay the Notes Additional Interest
then due. Any amounts of Notes Additional Interest due pursuant to
clauses (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable
to the Holders of affected Notes in cash
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<PAGE> 13
semi-annually on each interest payment date specified by the Indenture
(or such other indenture) to the record holders entitled to receive the
interest payment to be made on such date, commencing with the first
such date occurring after any such Notes Additional Interest commences
to accrue. The amount of Notes Additional Interest will be determined
by multiplying the applicable Notes Additional Interest rate by the
principal amount of the affected Registrable Notes of such Holders,
multiplied by a fraction, the numerator of which is the number of days
such Notes Additional Interest rate was applicable during such period
(determined on the basis of a 360-day year comprised of twelve 30-day
months and, in the case of a partial month, the actual number of days
elapsed), and the denominator of which is 360.
(c) The Notes Additional Interest provided for herein shall be in
addition to any Title Insurance Additional Interest (as defined in the
Purchase Agreement) that may accrue pursuant to the Purchase Agreement.
5. REGISTRATION PROCEDURES
In connection with the filing of any Registration Statement pursuant to
Sections 2 or 3 hereof, the Issuers shall effect such registration(s) to permit
the sale of the securities covered thereby in accordance with the intended
method or methods of disposition thereof, and pursuant thereto and in connection
with any Registration Statement filed by the Issuers hereunder, the Issuers
shall:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2 or 3 hereof, and
use their reasonable efforts to cause each such Registration Statement
to become effective and remain effective as provided herein; PROVIDED,
HOWEVER, that, if (1) such filing is pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker- Dealer who seeks to sell
Exchange Notes during the Applicable Period, before filing any
Registration Statement or Prospectus or any amendments or supplements
thereto, the Issuers shall, if requested in writing, furnish to and
afford the Holders of the Registrable Notes covered by such
Registration Statement or each such Participating Broker-Dealer, as the
case may be, their counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed (in each case at
least three business days prior to such filing). The Issuers shall not
file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders must be afforded an
opportunity to review prior to the filing of such document under the
immediately preceding sentence, if the Holders of a majority in
aggregate principal amount of the Registrable Notes covered by such
Registration Statement, or any such Participating Broker-Dealer, as the
case may be, their counsel, or the managing underwriters, if any, shall
object thereto in writing, which writing shall set forth a reasonable
basis for such objection.
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<PAGE> 14
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Notes Shelf Registration or Exchange Registration
Statement, as the case may be, as may be necessary to keep such
Registration Statement continuously effective for the Effectiveness
Period or the Applicable Period or until consummation of the Exchange
Offer, as the case may be; cause the related Prospectus to be
supplemented by any Prospectus supplement required by applicable law,
and as so supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) promulgated under the Securities Act; and
comply with the provisions of the Securities Act and the Exchange Act
applicable to it with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such
Prospectus as so supplemented and with respect to the subsequent resale
of any securities being sold by a Participating Broker-Dealer covered
by any such Prospectus; the Company shall be deemed not to have used
its reasonable efforts to keep a Registration Statement effective
during the Applicable Period if it voluntarily takes any action that
would result in selling Holders of the Registrable Notes covered
thereby or Participating Broker-Dealers seeking to sell Exchange Notes
not being able to sell such Registrable Notes or such Exchange Notes
during that period unless such action is required by applicable law or
unless such action is taken in good faith and for valid business
reasons so long as the Company complies with this Agreement, including
without limitation, the provisions of paragraph 5(k) hereof and the
last paragraph of this Section 5.
(c) If (1) a Notes Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, notify
the selling Holders of Registrable Notes, or each such Participating
Broker-Dealer, as the case may be, their counsel and the managing
underwriters, if any, promptly (but in any event within two business
days), and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act
(including in such notice a written statement that any Holder may, upon
request, obtain, at the sole expense of the Issuers, one conformed copy
of such Registration Statement or post-effective amendment including
financial statements and schedules, documents incorporated or deemed to
be incorporated by reference and exhibits), (ii) of the issuance by the
SEC of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that
purpose, (iii) if at any time when a Prospectus is required by the
Securities Act to be delivered in connection with sales of the
Registrable Notes or resales of Exchange Notes by Participating
Broker-Dealers the representations and warranties of the Issuers
contained in any agreement (including any underwriting agreement),
contemplated by Section 5(n) hereof cease to be true and correct in all
material respects, (iv) of the receipt by the Issuers of any
notification with respect to the suspension of the qualification or
exemption from qualification of a Registration Statement or any of the
Registrable Notes or the Exchange Notes to be sold by any Participating
Broker-Dealer for offer or sale in
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<PAGE> 15
any jurisdiction, or the initiation or threatening of any proceeding
for such purpose, (v) of the happening of any event, the existence of
any condition or any information becoming known that makes any
statement made in such Registration Statement or related Prospectus or
any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of
any changes in or amendments or supplements to such Registration
Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
that in the case of the Prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and (vi) of the determination by the Issuers that a
post-effective amendment to a Registration Statement would be
appropriate.
(d) Use its reasonable efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending
the qualification (or exemption from qualification) of any of the
Registrable Notes or the Exchange Notes for sale in any jurisdiction,
and, if any such order is issued, to use its reasonable efforts to
obtain the withdrawal of any such order at the earliest possible
moment.
(e) If a Notes Shelf Registration is filed pursuant to Section 3 hereof
and if requested by the managing underwriter or underwriters (if any),
or the Holders of a majority in aggregate principal amount of the
Registrable Notes being sold in connection with an underwritten
offering, (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter
or underwriters (if any), such Holders, or counsel for any of them
reasonably request to be included therein, (ii) make all required
filings of such prospectus supplement or such post-effective amendment
as soon as practicable after the Issuers have received notification of
the matters to be incorporated in such prospectus supplement or
post-effective amendment, and (iii) supplement or make amendments to
such Registration Statement.
(f) If (1) a Notes Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, furnish
to each selling Holder of Registrable Notes and to each such
Participating Broker-Dealer who so requests and to counsel and each
managing underwriter, if any, at the sole expense of the Issuers, one
conformed copy of the Registration Statement or Registration Statements
and each post-effective amendment thereto, including financial
statements and schedules, and, if requested, all documents incorporated
or deemed to be incorporated therein by reference and all exhibits.
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<PAGE> 16
(g) If (1) a Notes Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker- Dealer
who seeks to sell Exchange Notes during the Applicable Period, deliver
to each selling Holder of Registrable Notes, or each such Participating
Broker-Dealer, as the case may be, their respective counsel, and the
underwriters, if any, at the sole expense of the Issuers, as many
copies of the Prospectus or Prospectuses (including each form of
preliminary pros-pectus) and each amendment or supplement thereto and
any documents incorporated by reference therein as such Persons may
reasonably request; and, subject to the last paragraph of this Section
5 or applicable law, each Issuer hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the
selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case-may be, and the underwriters or agents, if
any, and dealers (if any), in connection with the offering and sale of
the Registrable Notes covered by, or the sale by Participating Broker-
Dealers of the Exchange Notes pursuant to, such Prospectus and any
amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any delivery
of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, to use its reasonable efforts to register or qualify
such Registrable Notes (and to cooperate with selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case
may be, the managing underwriter or underwriters, if any, and their
respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such
Registrable Notes) for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any selling
Holder, Participating Broker-Dealer, or the managing underwriter or
underwriters reasonably request in writing; PROVIDED, HOWEVER, that
where Exchange Notes held by Participating Broker-Dealers or
Registrable Notes are offered other than through an underwritten
offering, the Issuers agree to cause their counsel to perform Blue Sky
investigations and file registrations and qualifications required to be
filed pursuant to this Section 5(h); use reasonable efforts to keep
each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to
be kept effective, and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions
of the Exchange Notes held by Participating Broker-Dealers or the
Registrable Notes covered by the applicable Registration Statement;
PROVIDED, HOWEVER, that none of the Issuers shall be required to
qualify as a foreign corporation or as a dealer in securities or to
execute a general consent to service of process in any jurisdiction
where it is not then so subject or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is otherwise
not subject.
(i) If a Notes Shelf Registration is filed pursuant to Section 3
hereof, cooperate with the selling Holders of Registrable Notes and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Notes
to be sold, which certificates shall not bear any restrictive legends
and
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<PAGE> 17
shall be in a form eligible for deposit with The Depository Trust
Company; and enable such Registrable Notes to be in such denominations
and registered in such names as the managing underwriter or
underwriters, if any, or Holders may reasonably request.
(j) Use its reasonable efforts to cause the Registrable Notes covered
by the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to
enable the Holders thereof or the underwriter or underwriters, if any,
to dispose of such Registrable Notes, except as may be required solely
as a consequence of the nature of a selling Holder's business, in which
case each of the Issuers will cooperate in all reasonable respects with
the filing of such Registration Statement and the granting of such
approvals.
(k) If (1) a Notes Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, upon the
occurrence of any event contemplated by paragraph 5(c)(v) or 5(c)(vi)
hereof, as promptly as practicable prepare and (subject to Section 5(a)
hereof) file with the SEC, at the sole expense of the Issuers, a
supplement or post-effective amendment to the Registration Statement or
a supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, or file any other
required document so that, as thereafter delivered to the purchasers of
the Registrable Notes being sold thereunder or to the purchasers of the
Exchange Notes to whom such Prospectus will be delivered by a
Participating Broker-Dealer, any such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(l) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with
certificates for the Registrable Notes or Exchange Notes, as the case
may be, in a form eligible for deposit with The Depositary Trust
Company and (ii) provide a CUSIP number for the Registrable Notes or
Exchange Notes, as the case may be.
(m) In connection with any underwritten offering initiated by the
Company of Registrable Notes pursuant to a Notes Shelf Registration,
enter into an underwriting agreement as is customary in underwritten
offerings of debt securities similar to the Notes and take all such
other actions as are reasonably requested by the managing underwriter
or underwriters in order to facilitate the registration or the
disposition of such Registrable Notes and, in such connection, (i) make
such representations and warranties to, and covenants with, the
underwriters with respect to the business of the Issuers and their
respective subsidiaries and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by
reference therein, in each case, as are customarily made by Issuers to
underwriters in underwritten offerings of debt securities similar to
the Notes, and confirm the same in writing if and when requested; (ii)
obtain
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<PAGE> 18
the written opinion of counsel to the Issuers and written updates
thereof in form, scope and substance reasonably satisfactory to the
managing underwriter or underwriters, addressed to the underwriters
covering the matters customarily covered in opinions requested in
underwritten offerings of debt similar to the Notes and such other
matters as may be reasonably requested by the managing underwriter or
underwriters; (iii) obtain "cold comfort" letters and updates thereof
in form, scope and substance reasonably satisfactory to the managing
underwriter or underwriters from the independent certified public
accountants of the Issuers (and, if necessary, any other independent
certified public accountants of any subsidiary of any of the Issuers or
of any business acquired by any of the Issuers for which financial
statements and financial data are, or are required to be, included or
incorporated by reference in the Registration Statement), addressed to
each of the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings of debt similar to
the Notes and such other matters as reasonably requested by the
managing underwriter or underwriters; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in
Section 7 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of Registrable
Notes covered by such Registration Statement and the managing
underwriter or underwriters or agents) with respect to all parties to
be indemnified pursuant to said Section. The above shall be done at
each closing under such underwriting agreement, or as and to the extent
required thereunder.
(n) If (1) a Notes Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Exchange Notes during the Applicable Period, make
available for inspection by any selling Holder of such Registrable
Notes being sold, or each such Participating Broker-Dealer, as the case
may be, any underwriter participating in any such disposition of
Registrable Notes, if any, and any attorney, accountant or other agent
retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate
documents and instruments of the Issuers and their respective
subsidiaries (collectively, the "Records") as shall be reasonably
necessary to enable them to exercise any applicable due diligence
responsibilities, and cause the officers, directors and employees of
the Issuers and their respective subsidiaries to make available for
inspection all information reasonably requested by any such Inspector
in connection with such Registration Statement. Records which any of
the Issuers determine, in good faith, to be confidential and any
Records which the Company notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of
such Records is necessary to avoid or correct a misstatement or
omission in such Registration Statement, (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court
of competent jurisdiction, (iii) disclosure of such information is, in
the opinion of counsel (a copy of which shall be delivered to the
Issuers) for any Inspector, necessary or advisable in
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<PAGE> 19
connection with any action, claim, suit or proceeding, directly or
indirectly, involving or potentially involving such Inspector and
arising out of, based upon, relating to, or involving this Agreement,
or any transactions contemplated hereby or arising hereunder, or (iv)
the information in such Records has been made generally available to
the public. Each selling Holder of such Registrable Securities and each
such Participating Broker-Dealer will be required to agree that
information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Issuers unless and until
such information is generally available to the public. Each selling
Holder of such Registrable Notes and each such Participating
Broker-Dealer will be required to further agree that it will, promptly
upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Issuers and allow the
Issuers to undertake appropriate action to prevent disclosure of the
Records deemed confidential at the Issuers' sole expense.
(o) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the
trust indenture provided for in Section 2(a) hereof, as the case may
be, to be qualified under the TIA not later than the effective date of
the Exchange Offer or the first Registration Statement relating to the
Registrable Notes; and in connection therewith, cooperate with the
trustee under any such indenture and the Holders of the Registrable
Notes, to effect such changes to such indenture as may be required for
such indenture to be so qualified in accordance with the terms of the
TIA; and execute, and use its reasonable efforts to cause such trustee
to execute, all documents as may be required to effect such changes,
and all other forms and documents required to be filed with the SEC to
enable such indenture to be so qualified in a timely manner.
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Notes are sold to underwriters in a firm commitment
or reasonable efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12-month
periods.
(q) If an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Notes by Holders to the Issuers (or to
such other Person as directed by the Issuers) in exchange for the
Exchange Notes or the Private Exchange Notes, as the case may be, the
Issuers shall mark, or cause to be marked, on such Registrable Notes
that such Registrable Notes are being canceled in exchange for the
Exchange Notes or the Private Exchange Notes, as the case may be; in no
event shall such Registrable Notes be marked as paid or otherwise
satisfied.
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<PAGE> 20
(r) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in
the disposition of such Registrable Notes and their respective counsel
in connection with any filings required to be made with the National
Association of Securities Dealers, Inc. (the "NASD").
(s) Use its reasonable efforts to take all other steps necessary or
advisable to effect the registration of the Registrable Notes covered
by a Registration Statement contemplated hereby.
The Issuers may require each seller of Registrable Notes as to which
any Registration Statement is being effected to furnish to the Issuers such
information regarding such seller and the distribution of such Registrable Notes
as the Issuers may, from time to time, reasonably request. The Issuers may
exclude from such Registration Statement the Registrable Notes of any seller who
fails to furnish such information within a reasonable time after receiving such
request. Each seller as to which any Notes Shelf Registration is being effected
agrees to furnish promptly to the Issuers all information required to be
disclosed in order to make the information previously furnished to the Issuers
by such seller not materially misleading.
Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by
such Participating Broker-Dealer, as the case may be, that, upon actual receipt
of any notice from the Issuers of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such
Holder will forthwith discontinue disposition of such Registrable Notes or
Exchange Notes, as the case may be, covered by such Registration Statement or
Prospectus to be sold by such Holder or Participating Broker-Dealer, as the case
may be, until such Holder's or Participating Broker-Dealer's receipt of the
copies of the supplemented or amended Prospectus contemplated by Section 5(k)
hereof, or until it is advised in writing (the "Advice") by the Issuers that the
use of the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto. In the event the Issuers shall give any such
notice, the Issuers will be deemed to have satisfied its obligations to keep the
Registration Statement effective during such period of suspension and each of
the Effectiveness Period and the Applicable Period shall be extended by the
number of days during such periods from and including the date of the giving of
such notice to and including the date when each seller of Registrable Notes
covered by such Registration Statement or Exchange Notes to be sold by such
Participating Broker-Dealer, as the case may be, shall have received (x) the
copies of the supplemented or amended Prospectus contemplated by Section 5(k)
hereof or (y) the Advice. At the Company's request and expense, the Holders will
return all copies of the Prospectus referred to in the first sentence of this
paragraph.
6. REGISTRATION EXPENSES
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Issuers shall be borne by the Issuers
whether or not the Exchange Offer or a Notes Shelf Registration is filed or
becomes effective, including, without limitation, (i) all registration and
filing fees (including, without limitation, (A) fees with respect to filings
required
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<PAGE> 21
to be made with the NASD in connection with an underwritten offering and (B)
fees and expenses of compliance with state securities or Blue Sky laws
(including, without limitation, reasonable fees and disbursements of counsel in
connection with Blue Sky qualifications of the Registrable Notes or Exchange
Notes and determination of the eligibility of the Registrable Notes or Exchange
Notes for investment under the laws of such jurisdictions (x) where the holders
of Registrable Notes are located, in the case of the Exchange Notes, or (y) as
provided in Section 5(h) hereof, in the case of Registrable Notes or Exchange
Notes to be sold by a Participating Broker-Dealer during the Applicable
Period)), (ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Notes or Exchange Notes in a form eligible
for deposit with The Depository Trust Company and of printing Prospectuses if
the printing of Prospectuses is requested by the managing underwriter or
underwriters, if any, by the Holders of a majority in aggregate principal amount
of the Registrable Notes included in any Registration Statement or sold by any
Participating Broker-Dealer, as the case may be, (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Issuers, (v)
fees and disbursements of all independent certified public accountants referred
to in Section 5(n)(iii) hereof (including, without limitation, the expenses of
any special audit and "cold comfort" letters required by or incident to such
performance by or incident to such performance), (vi) rating agency fees, if
any, and any fees associated with making the Registrable Notes or Exchange Notes
eligible for trading through The Depository Trust Company, (vii) Securities Act
liability insurance, if the Issuers desire such insurance, (viii) fees and
expenses of all other Persons retained by the Issuers, (ix) internal expenses of
the Issuers (including, without limitation, all salaries and expenses of
officers and employees of the Issuers performing legal or accounting duties),
(x) the expense of any annual audit, (xi) the fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange or any inter-dealer quotation system, if applicable, and (xii) the
expenses relating to printing, word processing and distributing all Registration
Statements, underwriting agreements, securities sales agreements, indentures and
any other documents necessary in order to comply with this Agreement.
(b) The Issuers, jointly and severally, shall reimburse the Holders of
the Registrable Notes being registered in a Notes Shelf Registration for the
reasonable fees and disbursements of not more than one counsel chosen in writing
by the Holders of a majority in aggregate principal amount of the Registrable
Notes to be included in such Registration Statement. In addition, the Issuers,
jointly and severally, shall reimburse the Initial Purchasers for the reasonable
fees and expenses of one counsel in connection with the Exchange Offer, which
shall be Jones, Day, Reavis & Pogue, and shall not be required to pay any other
legal expenses of the Initial Purchasers in connection therewith.
7. INDEMNIFICATION. (a) Each of the Issuers, jointly and severally,
agrees to indemnify and hold harmless each Holder of Registrable Notes offered
pursuant to a Notes Shelf Registration Statement and each Participating
Broker-Dealer selling Exchange Notes during the Applicable Period, the
affiliates, directors, officers, agents, representatives and employees of each
such Person, and each other Person, if any, who controls any such Person within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "Participant") from and against any and all losses,
claims, damages and liabilities (including,
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<PAGE> 22
without limitation, the reasonable legal fees and other expenses actually
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement pursuant to which the offering of such Registrable Notes or Exchange
Notes, as the case may be, is registered (or any amendment thereto) or related
Prospectus (or any amendments or supplements thereto) or any related preliminary
prospectus, or caused by, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; PROVIDED, HOWEVER, that the Issuers will
not be required to indemnify a Participant if (i) such losses, claims, damages
or liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
furnished to the Issuers in writing by or on behalf of such Participant
expressly for use therein or (ii) if such Participant sold to the person
asserting the claim the Registrable Notes or Exchange Notes which are the
subject of such claim and such untrue statement or omission or alleged untrue
statement or omission was contained or made in any preliminary prospectus and
corrected in the Prospectus or any amendment or supplement thereto and the
Prospectus does not contain any other untrue statement or omission or alleged
untrue statement or omission of a material fact that was the subject matter of
the related proceeding and such Participant failed to deliver or provide a copy
of the Prospectus (as amended or supplemented) to such Person with or prior to
the confirmation of the sale of such Registrable Notes or Exchange Notes sold to
such Person if required by applicable laws, unless such failure to deliver or
provide a copy of the Prospectus (as amended or supplemented) was a result of
noncompliance by the Issuers with Section 5 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Issuers, their respective affiliates, directors, officers,
agents, representatives and employees and each Person who controls the Issuers
or any such other Person within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Issuers to each Participant, but only (i) with reference to information
furnished to the Issuers in writing by or on behalf of such Participant
expressly for use in any Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus or (ii) with respect to any
untrue statement or representation made by such Participant in writing to the
Issuers.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, shall have the right to retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may reasonably
designate in such proceeding and shall pay the reasonable fees and expenses
actually incurred by such counsel related to such proceeding; PROVIDED, HOWEVER,
that the failure to so notify the Indemnifying Person shall not relieve it of
any obligation or liability which it may have hereunder or otherwise (unless and
only to the extent that such failure results in the loss or compromise of any
material
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<PAGE> 23
rights or defenses by the Indemnifying Person). In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed in writing to the contrary, (ii) the Indemnifying Person shall
have failed within a reasonable period of time to retain counsel reasonably
satisfactory to the Indemnified Person or (iii) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that, unless there exists a conflict among
Indemnified Persons, the Indemnifying Person shall not, in connection with any
one such proceeding or separate but substantially similar related proceeding in
the same jurisdiction arising out of the same general allegations, be liable for
the fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such reasonable fees and
expenses shall be reimbursed promptly as they are incurred. Any such separate
firm for the Participants and such control Persons of Participants shall be
designated in writing by Participants who sold a majority in interest of
Registrable Notes and Exchange Notes sold by all such Participants and any such
separate firm for the Issuers, their directors, their officers and such control
Persons of the Issuers shall be designated in writing by the Issuers. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its prior written consent, but if settled with such consent or
if there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
the Indemnifying Person agrees to indemnify and hold harmless each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of the
Indemnified Person, effect any settlement or compromise of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party, and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement (A) includes an unconditional written
release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (B) does not include any statement as
to an admission of fault, culpability or failure to act by or on behalf of any
Indemnified Person.
(d) If the indemnification provided for in Sections 7(a) and 7(b)
hereof is for any reason unavailable to, or insufficient to hold harmless, an
Indemnified Person in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraphs, in
lieu of indemnifying such Indemnified Person thereunder and in order to provide
for just and equitable contribution, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect (i) the relative
benefits received by the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other from the offering of the Notes or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the Indemnifying Person or Persons on the one hand and the Indemnified Person or
Persons on the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative fault of the
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<PAGE> 24
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Issuers
on the one hand or such Participant or such other Indemnified Person, as the
case may be, on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission,
and any other equitable considerations appropriate in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purposes) or by
any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this Section
7 will be in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
8. RULES 144 AND 144A. The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder in a timely manner
in accordance with the requirements of the Securities Act and the Exchange Act
and, if at any time the Company ceases to be required to file such reports, it
will, upon the request of any Holder of Registrable Notes, make publicly
available annual reports and such information, documents and other reports of
the type specified in Sections 13 and 15(d) of the Exchange Act. The Company
further covenants for so long as any Registrable Notes remain outstanding, to
make available to any Holder or beneficial owner of Registrable Notes in
connection with any sale thereof and any prospective purchaser of such
Registrable Notes from such Holder or beneficial owner the information required
by Rule 144(d)(4) under the Securities Act in order to permit resales of such
Registrable Notes pursuant to Rule 144A.
9. UNDERWRITTEN REGISTRATIONS. If any of the Registrable Notes covered
by any Notes Shelf Registration are to be sold in an underwritten offering
initiated by the Holders, the investment banker or investment bankers and
manager or managers that will manage the offering
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<PAGE> 25
will be selected by the Holders of a majority in aggregate principal amount of
such Registrable Notes included in such offering and reasonably acceptable to
the Issuers.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. MISCELLANEOUS. (a) NO INCONSISTENT AGREEMENTS. None of the Issuers
have entered, as of the date hereof, and none of the Issuers shall, after the
date of this Agreement, enter into any agreement with respect to any of its
securities that is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with the provisions
hereof. None of the Issuers have entered and none of the Issuers will enter into
any agreement with respect to any of its securities which will grant to any
Person piggy-back registration rights with respect to a Registration Statement.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of the Holders of not less than a majority in aggregate principal amount
of the then outstanding Registrable Notes. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders of Registrable Notes whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Notes may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Notes being sold by such Holders
pursuant to such Registration Statement; PROVIDED, HOWEVER, that the provisions
of this sentence may not be amended, modified or supplemented except in
accordance with the provisions of the immediately preceding sentence.
(c) NOTICES. All notices and other communications (including, without
limitation, any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(i) if to a Holder of the Registrable Notes or any
Participating Broker-Dealer, at the most current address of such
Holder or Participating Broker-Dealer, as the case may be, set forth on
the records of the registrar under the Indenture, with a copy in like
manner to the Initial Purchasers as follows:
NatWest Capital Markets Limited
135 Bishopsgate
London, EC2M 3XT
United Kingdom
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<PAGE> 26
with copies to:
Gleacher NatWest, Inc.
660 Madison Avenue
New York, NY 10021
Attention: Roger Hoit
Facsimile No: (212) 752-3201
and
Jones, Day Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Christopher M. Kelly
Facsimile No: (216) 579-0212
(ii) if to an Issuer, as follows:
Bluegreen Corporation
5295 Town Center Road
Boca Raton, Florida 33486
Attention: Chief Financial Officer
Facsimile No: (561) 361-2800
with a copy to:
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: William P. Gelnaw
Facsimile No: (617) 248-4000
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in such Indenture.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties hereto;
PROVIDED, HOWEVER, that
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<PAGE> 27
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign holds
Registerable Notes.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE. EACH OF THE PARTIES HERETO AGREES
TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(h) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(i) NOTES HELD BY THE ISSUERS OR THEIR AFFILIATES. Whenever the consent
or approval of Holders of a specified percentage of Registerable Notes is
required hereunder, Registerable Notes held by the Issuers or their affiliates
(as such term is defined in Rule 405 under the Securities Act) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.
(j) THIRD PARTY BENEFICIARIES. Holders of Registerable Notes and
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement, and this Agreement may be enforced by such Persons.
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<PAGE> 28
IN WITNESS WHEREOF, the parties have executed the Agreement as of the
date first written above.
Issuer:
BLUEGREEN CORPORATION
By: /s/ PATRICK E. RONDEAU
------------------------------------
Name: Patrick E. Rondeau
Title: Senior Vice President
BLUEGREEN RESORTS MANAGEMENT, INC.
By: /s/ PATRICK E. RONDEAU
------------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN RESORTS, INC.
By: /s/ PATRICK E. RONDEAU
------------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN HOLDING CORPORATION
(TEXAS)
By: /s/ PATRICK E. RONDEAU
------------------------------------
Name: Patrick E. Rondeau
Title: President
PROPERTIES OF THE SOUTHWEST ONE, INC.
By: /s/ PATRICK E. RONDEAU
------------------------------------
Name: Patrick E. Rondeau
Title: Executive Vice President
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<PAGE> 29
PROPERTIES OF THE SOUTHWEST, L.P.
By: /s/ PATRICK E. RONDEAU
-----------------------------------------
Name: Patrick E. Rondeau
Title: Executive Vice President of Its General
Partner, PROPERTIES OF THE
SOUTHWEST ONE, INC.
BLUEGREEN ASSET MANAGEMENT CORPORATION
By: /s/ PATRICK E. RONDEAU
-----------------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CAROLINA LAND, INC.
By: /s/ PATRICK E. RONDEAU
-----------------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CORPORATION OF MONTANA
By: /s/ PATRICK E. RONDEAU
-----------------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CORPORATION OF TENNESSEE
By: /s/ PATRICK E. RONDEAU
-----------------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN CORPORATION OF THE ROCKIES
By: /s/ PATRICK E. RONDEAU
-----------------------------------------
Name: Patrick E. Rondeau
Title: President
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<PAGE> 30
VIRGINIA LAND & FOREST CORPORATION
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN COMMUNITIES, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: President
BLUEGREEN RESORTS INTERNATIONAL, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: President
CAROLINA NATIONAL GOLF CLUB, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: President
LEISURE CAPITAL CORPORATION
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: President
PROPERTIES OF THE WEST, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: President
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<PAGE> 31
BG/RDI ACQUISITION CORP.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: President
RDI GROUP, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: Secretary
DELLONA ENTERPRISES, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: Secretary
RESORT DEVELOPMENT INTERNATIONAL, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: Secretary
RDI RESORT SERVICES CORPORATION
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: Secretary
RDI RESOURCES, INC.
By: /s/ PATRICK E. RONDEAU
---------------------------------------
Name: Patrick E. Rondeau
Title: Secretary
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<PAGE> 32
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written:
NATWEST CAPITAL MARKETS LIMITED
By: /s/ ALTON IRBY
-------------------------------------
Name: Alton Irby
Title: Director
MCDONALD & COMPANY SECURITIES, INC.
By: /s/ THOMAS W. MOIR, JR.
-------------------------------------
Name: Thomas W. Moir, Jr.
Title: Senior Vice President
-30-
<PAGE> 1
EXHIBIT 10.124
EMPLOYMENT AGREETMENT
---------------------
AGREEMENT made as of this 1st day of March, 1998 between BLUEGREEN
CORPORATION, a Massachusetts corporation (hereafter "Bluegreen"), having a usual
place of business in Boca Raton, Florida, and GEORGE F.DONOVAN (hereafter
"Employee"), an individual and resident of Florida.
1. GENERAL.
Employee is, and for some time has been, the President and Chief
Executive Officer of Bluegreen.
The parties desire to enter into this Agreement to ensure the continued
service of Employee to Bluegreen and to ensure Employee of his long term
employment as President and Chief Executive Officer. This Agreement supersedes
and replaces all other employment agreements between the parties and sets forth
the terms and conditions of employment.
The parties agree that Employee has, and will continue to have, a
thorough knowledge of the business and affairs of Bluegreen, both past and
present, and by reason of his position of its future plans, and that this
knowledge does and will include proprietary knowledge, trade secrets and all
manner of confidential, proprietary, sensitive and confidential information.
NOW, THEREFORE, the parties agree further as follows:
2. TERM. The term of this Agreement shall be from March 2, 1998 until
January 6, 2004, unless sooner terminated as herein set forth, or unless
extended by the agreement of the parties.
3. POSITION. Employee shall be employed as President and Chief
Executive Officer of Bluegreen during the term hereof.
4. DUTIES. Employee shall have and perform the duties customarily
assumed by the chief executive officer of a corporation, which shall include
general executive powers and duties over the affairs of Bluegreen and such other
duties as shall be assigned to him by the Board of Directors.
Employee shall devote all of his business time to the business and
affairs of Bluegreen, except that with consent of the Board of Directors he may
pursue other business and affairs.
Employee shall, except as above, devote his business time exclusively
to the performance of his duties hereunder and shall carry out his duties in a
good and professional manner.
<PAGE> 2
Employee shall be subject, and shall report solely, to the Board of
Directors of the company.
5. COMPENSATION. Beginning with the commencement of the next fiscal
year of the corporation (April 1, 1998), the base salary of Employee shall be
$375,000 annually, payable bi-weekly. (Prior to that time the base salary shall
be $350,000.) This base salary shall not be reduced during the term of this
Agreement.
6. BONUS. Employee shall be eligible to receive cash bonuses payable
annually (or at such lesser intervals as may be approved by the Board of
Directors), pursuant to the incentive bonus plan of Bluegreen as approved by the
Board of Directors from time to time.
7. BENEFITS.
(a) Employee shall be entitled, in accordance with Bluegreen's
general policies and procedures for management personnel, to participation in
any pension, savings, 401(k), stock option, employee stock ownership and
profit-sharing plans, health insurance, leave, vacation and other employment
benefits as are made available from time to time by the Board to or for the
benefit of Company management.
(b) During his term of employment, Employee shall be entitled
to prompt reimbursement of all reasonable expenses incurred in the course of and
pursuant to the performance of his duties hereunder and in connection with
promoting and carrying out the business of Bluegreen. Employee agrees to
maintain adequate documentary proof and written records, in such detail as the
Company may reasonably request, of all fees, costs and expenses to be reimbursed
by the Company hereunder.
(c) Employee shall be eligible to receive stock options as may
be approved by the Board of Directors from time to time.
8. DISABILITY. In the event that Employee shall be incapacitated by
reason of mental or physical disability during the term of his employment
hereunder so that he is substantially prevented from performing his duties and
services hereunder for a period of ninety (90) consecutive days, or for shorter
periods aggregating 120 days during any 12-month period (a "Disability"),
Bluegreen thereafter shall have the right to terminate Employee's employment
under this Agreement by sending written notice of such termination to Employee
or his legal representative and thereupon Employee's employment hereunder shall
immediately terminate. Upon such termination, Employee shall be entitled to
receive and shall be paid by Bluegreen, all amounts for expenses, etc., properly
due to him and, on a bi-weekly basis, his base salary as in effect on the date
of termination for 24 months. Employee shall accept such payments in full
discharge and release of Bluegreen of and from any further obligations under
this Agreement. Such discharge and release shall not affect any rights or
remedies which may be available to Employee otherwise than under this Agreement.
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9. DEATH. In the event of Employee's death during the term of his
employment hereunder, Employee's designated beneficiary or, if no such
beneficiary shall have been designated by Employee, the estate of Employee,
shall be entitled to receive and shall be paid by Bluegreen any and all of
Employee's unpaid salary compensation due as of the date of his death, and any
other amounts due to Employee, in each case through the date of death. Employee
shall be entitled to no payments or benefits following the date of death. Such
payments shall be in full discharge and release of Bluegreen of and from any
further obligations under this Agreement. Such discharge and release shall not
affect any rights or remedies which may be available to Employee (or Employee's
estate) otherwise than under this Agreement.
10. TERMINATION FOR CAUSE.
(a) Bluegreen shall have the right to terminate the employment
of Employee hereunder for cause at any time if:
(i) Employee shall be convicted by a court of
competent and final jurisdiction of any crime (whether or not involving
Bluegreen) which constitutes a felony in the jurisdiction involved or shall be
habitually drunk or intoxicated in public or otherwise commit acts of moral
turpitude in such a manner as to materially and adversely reflect upon the
reputation of Bluegreen or its senior management; or
(ii) Employee shall commit any act of embezzlement,
fraud or similar dishonest and injurious conduct against or with respect to
Bluegreen; or
(iii) Employee shall demonstrate injurious misconduct
in connection with the performance of his duties and responsibilities under this
Agreement (and/or as assigned to him from time to time by the Board in
accordance with the provisions hereof); or
(iv) Employee shall demonstrate negligent, reckless
or grossly negligent and injurious conduct in connection with the performance
of, or a gross disregard for, his duties and responsibilities under this
Agreement and as assigned to him from time to time by the Board in accordance
with the provisions hereof.
(b) Any determination to terminate Employee for Cause pursuant
to paragraph 10(a) hereof shall be made in the good faith judgment of the Board
after Employee has been provided a reasonable opportunity to be heard, which
judgment shall be final and binding upon Employee. In the event that the
employment of Employee shall be terminated by Bluegreen for cause pursuant to
this paragraph, Employee shall be entitled to receive his salary, and any other
amounts properly due from Bluegreen to Employee, through the date of such
termination. Employee shall accept payment pursuant to this subparagraph in full
discharge and release of Bluegreen of and from any further obligations under
this Agreement. Nothing contained in this paragraph shall constitute a waiver or
release by Bluegreen of any rights or claims it may have against Employee.
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<PAGE> 4
11. TERMINATION WITHOUT CAUSE.
(a) Bluegreen may, by written notice to Employee, terminate
Employee's employment hereunder at any time without cause, provided that it
delivers to Employee written notice of such termination and provides to Employee
the payments required in this paragraph. Upon termination of Employee's
employment pursuant to this Paragraph, Employee shall be paid the base salary to
which Employee is entitled under paragraph 5 hereof, at Bluegreen's regular and
customary intervals for such payment, together with any other amounts then due
to him.
The following events shall, ipso facto, constitute a termination
without cause:
(i) Employee is assigned to any position, duties or
responsibilities that are significantly diminished when compared with the
position, duties or responsibilities of the Employee on the date of this
Agreement, except when such action is taken because of Employee's inability to
perform his duties;
(ii) the Employee is requested to engage in conduct
that is reasonably likely to result in a violation of law;
(iii) the failure by Bluegreen to obtain the
assumption of, and agreement to perform, this Agreement by any successor to its
business;
(iv) repudiation by Bluegreen of any material
obligation of Bluegreen under this Agreement;
(v) the sale of all or substantially all of the
business and/or assets of Bluegreen or the liquidation of Bluegreen.
The payments shall continue for twenty-four (24) months following
termination.
(c) In the event of a termination of Employee's employment
under the preceding subparagraph, and thereafter Employee obtains other
employment then, to the extent that Employee receives compensation (whether in
the form of salary, bonus or otherwise) from such other employment, the payments
to be made by Bluegreen under any provision of this Agreement shall be
correspondingly reduced, dollar-for-dollar, by such compensation received by
Employee through such other employment.
(d) Upon termination without cause by Bluegreen, Employee
shall, in addition to the payment of the base salary above provided for, and to
all other amounts due him from Bluegreen, receive at the same time as bonus
payments are made to other executive Employees, a pro rata share of any bonus
payable for the fiscal year during which the termination occurred, determined
upon the same basis that his bonus would have been determined had he continued
in employment for the entire fiscal year of termination, provided
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that at the time of payment he is not in breach of any of the continuing
obligations imposed upon him in paragraph 15 hereof.
(e) Upon Employee's termination by Bluegreen without cause,
all options theretofore granted to Employee that are not vested shall
immediately vest.
12. TERMINATION BY EMPLOYEE. Employee may, by written notice to
Bluegreen, terminate Employee's employment hereunder, provided that he delivers
to Bluegreen not less than six (6) months advance written notice of such
termination (the six-month period between such notice and termination being
referred to herein as the "Termination Period"). During the Termination Period,
so long as Employee performs his duties and responsibilities as required in
accordance with this Agreement (and so long as Bluegreen is not entitled to
terminate Employee for cause pursuant to paragraph 10 hereof, in which case the
provisions of paragraph 10, and not this paragraph 12, shall apply), Employee
shall be entitled to the salary, bonus and benefits (to the extent earned,
accrued and payable) described in paragraphs 5 and 6 hereof, in each case,
payable at Bluegreen's regular and customary intervals for such payment or
benefit, through the date of termination. Employee shall be entitled to no
payments or benefits following the date of any termination under this paragraph
12. Employee shall accept such payments and benefits in full discharge and
release of Bluegreen of and from any further obligations under this Agreement.
Such discharge and release shall not affect any rights or remedies which may be
available to Employee otherwise than under this Agreement.
13. RESTRICTION ON EMPLOYEE'S ACTIVITIES FOLLOWING TERMINATION.
Employee agrees that following termination of his employment for any reason, and
for a period of twenty-four (24) months thereafter:
(a) NON-COMPETITION. Employee shall not, directly or
indirectly, for himself or any other person or entity, engage in or have any
interest in any sole proprietorship, partnership, corporation, association or
business or any other person or entity (whether as an employee, officer,
director, partner, agent, security holder, creditor, consultant or otherwise)
that, directly or indirectly, engages in competition (as defined herein) with
Bluegreen and/or any subsidiary; provided, however, that Employee may acquire,
solely as an investment, shares of capital stock or other equity securities of
any company which are traded on any national securities exchange or are
regularly quoted in the over-the-counter market, so long as the Employee does
not control, acquire a controlling interest in or become a member of a group
which exercises direct or indirect control of, more than five percent (5%) of
any class of capital stock of such corporation. The Employee acknowledges that
Bluegreen would be severely and adversely affected if the Employee engages in
competition with Bluegreen.
(b) NONDISCLOSURE. Employee will not divulge, communicate,
utilize or exploit in any way other than in performing his duties hereunder, any
material confidential information (as hereinafter defined) pertaining to the
business of Bluegreen. Any material confidential information or data now or
hereafter acquired by the Employee with respect to the business of Bluegreen
(which shall include material information concerning Bluegreen's financial
condition, prospects, customers, methods of doing business, including purchasing
and
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<PAGE> 6
sourcing information and marketing and promotion of Bluegreen's products and
services) shall be deemed a valuable, special and unique asset of Bluegreen that
is received by the Employee in confidence and as a fiduciary, and Employee shall
remain a fiduciary to Bluegreen with respect to all of such information during
the Employee's employment hereunder and for a period of twenty-four (24) months
thereafter. In addition, with respect to specific contractual relationships of
Bluegreen, Employee shall not divulge, communicate or utilize or exploit in any
way other than in performing his duties hereunder and shall remain a fiduciary
with respect to confidential information relating to such contractual
relationships of Bluegreen for the longer of (a) the term of such contract, or
(b) twenty-four (24) months after the end of the Employee's employment
hereunder. For purposes of this Agreement "confidential information" means
information disclosed to the Employee or known by the Employee as a consequence
of or through his employment by Bluegreen (including information conceived,
originated, discovered or developed by the Employee) prior to or after the date
hereof, and not generally known, about Bluegreen's products and services.
(c) NON-SOLICITATION OF EMPLOYEES. Employee will not, directly
or indirectly, for himself or for any other person, firm, corporation,
partnership, association or other entity, attempt to employ or enter into any
contractual arrangement with any employee or former employee of Bluegreen,
unless such employee or former employee has not been employed by Bluegreen for a
period in excess of six (6) months.
(d) BOOKS AND RECORDS. All books, records, accounts and
similar tangible repositories of confidential information of Bluegreen, whether
prepared by Employee or otherwise coming into Employee's possession, shall be
the exclusive property of Bluegreen and shall be returned immediately to
Bluegreen on termination of this Agreement, or at the Board of Director's
request at any time.
(e) Competition, as used herein, shall mean any organizations
or persons who are in the business of land development or time sharing within
any state or jurisdiction in which Bluegreen is, at the time of termination of
employment, itself engaged in land development or time sharing.
14. INJUNCTION. Employee acknowledges that the services to be rendered
by him are of a special, unique and extraordinary character, that, in connection
with such services, he will have access to confidential, proprietary and/or
sensitive competitive information vital to Bluegreen's business operations and
prospects and that therefore the restrictive covenants set forth in paragraph 13
are fair and reasonable, are material to this Agreement and have materially
induced Bluegreen to enter into this Agreement and provide the benefits to
Employee provided hereunder. Accordingly, Employee consents and agrees that if
he violates or breaches any of the provisions of paragraph 13, Bluegreen would
sustain irreparable harm and, therefore, in addition to any other remedies which
may be available to it, Bluegreen shall be entitled to apply to any court of
competent jurisdiction, for an injunction restraining Employee from committing
or continuing any such violation of this Agreement, or for such other equitable
or special relief that Bluegreen shall deem appropriate in view of such
violation. Nothing in this Agreement shall be construed as prohibiting Bluegreen
from
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pursuing any other remedy or remedies including, without limitation, recovery of
damages, permitted at law or in equity.
15. MODIFICATION OF RESTRICTIONS. In the event that any of the
provisions contained in this Agreement shall be held to be in any way an
unreasonable restriction on Employee or otherwise void or unenforceable, then
the court so holding may reduce the territory and/or period of time in which
such restriction operates, or modify or eliminate any such restriction, to the
extent necessary to render such paragraph enforceable to the maximum extent
permitted by law.
16. ARBITRATION. Save for the provisions of paragraph 14 with respect
to injunctive relief, all disputes arising under this Agreement shall be subject
to arbitration, and neither party shall bring any action in any court with
reference thereto except to obtain enforcement of any arbitration award.
Arbitration shall be in accordance with and under the rules of the American
Arbitration Association as in effect at the time of the dispute unless the
parties shall agree to some different alternative dispute resolution method.
All costs, expenses and awards under the arbitration or alternative
dispute resolution method shall be divided between the parties as the arbitrator
may determine.
The arbitrator's decision shall be final.
17. DEBT FORGIVENESS: In addition to the base salary payments herein
provided for in paragraph 5, Bluegreen shall forgive, on a pro rata basis (20%
per year), over a five (5) year period, beginning April 1, 1998, the debt
carried on the books of Bluegreen as owing from Employee, which debt as of April
1, 1998 will be $_________. This debt forgiveness will be treated as income to
Employee. There will be no tax gross up.
Any amounts not forgiven at the time of termination of Employee's
employment shall remain as debt due to Bluegreen.
18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
19. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by hand or when deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Bluegreen:
Bluegreen Corporation
5295 Town Center Road
Boca Raton, FL 33486
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If to Employee:
George F. Donovan
6287 NW 23rd Way
Boca Raton, FL 33496
or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.
19. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement of any
part thereof all of which are inserted conditioned on their being valid in law,
and, in the event that any one or more of the words, phases, sentences, clauses
or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses or section or sections had not
been inserted. If such invalidity is caused by length of time or size of area,
or both the otherwise invalid provisions will be considered to be reduced to a
period or area which would cure such invalidity.
20. WAIVERS. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate as nor be construed
as a waiver of any subsequent breach or violation.
21. DAMAGES. Subject to the provisions of Paragraph 16, nothing
contained herein shall be construed to prevent Bluegreen or the Employee from
seeking and recovering from the other damages sustained by either or both of
them as a result of its or his breach of any term or provision of this
Agreement.
22. NO THIRD-PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
(other than the parties hereto and, in the case of the Employee, his heirs,
personal representative(s) and/or legal representative) any rights or remedies
under or by reason of this Agreement.
23. SUCCESSORS. This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
24. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between Bluegreen and the Employee with respect to its subject matter and
supersedes all prior negotiations, agreements, understandings and arrangements,
both oral and written, between Bluegreen and the Employee with respect to his
employment.
25. COUNSEL. Bluegreen and the Employee represent and agree that each
of them have thoroughly discussed all aspects of this Agreement with their
respective attorneys, and
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that they have carefully read and fully understand all of the provisions of this
Agreement and have voluntarily entered into it.
26. MISCELLANEOUS. The captions and headings herein are for convenience
of reference only and shall not be deemed to be a par of the substance of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
BLUEGREEN CORPORATION
/s/ Fredrick Myers /s/ George F. Donovan
- ----------------------------------- --------------------------------------
Chairman
- ------------------------ George F. Donovan
Board of Directors
Bluegreen Corporation
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EXHIBIT 10.125
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT made as of this 1st day of March, 1998 between BLUEGREEN
CORPORATION, a Massachusetts corporation (hereafter "Bluegreen"), having a usual
place of business in Boca Raton, Florida, and JOHN F. CHISTE (hereafter
"Employee"), an individual and resident of Florida.
1. GENERAL.
Employee is, and for some time has been, the Chief Financial Officer of
Bluegreen.
The parties desire to enter into this Agreement to ensure the continued
service of Employee to Bluegreen and to ensure Employee of his long term
employment as the Chief Financial Officer of Bluegreen. This Agreement
supersedes and replaces all other employment agreements between the parties and
sets forth the terms and conditions of employment.
The parties agree that Employee has, and will continue to have, a
thorough knowledge of the business and affairs of Bluegreen, both past and
present, and, by reason of his position, of its future plans, and that this
knowledge does and will include proprietary knowledge, trade secrets and all
manner of confidential, proprietary, sensitive and confidential information.
NOW, THEREFORE, the parties agree further as follows:
2. TERM. The term of this Agreement shall be for three (3) years from
date hereof, provided further that this Agreement shall automatically renew
itself at the end of each year unless terminated as provided in paragraph 8
hereof, or unless extended by the agreement of the parties.
3. POSITION. Employee shall be employed as Chief Financial Officer of
Bluegreen during the term hereof.
4. DUTIES. Employee shall have and perform the duties customarily
assumed by the chief financial officer of a corporation, which shall include
duties over the affairs of Bluegreen and such other duties as shall be assigned
to him by the Chief Executive Officer. Additionally, Employee shall have duties,
authority and responsibility commensurate with his position and those of
executives of similarly sized companies in the industry of which Bluegreen is a
part.
Employee shall devote all of his business time to the business and
affairs of Bluegreen, except that with consent of the Chief Executive Officer he
may pursue other business and affairs.
Employee shall, except as above, devote his business time exclusively
to the performance of his duties hereunder and shall carry out his duties in a
good and professional manner.
<PAGE> 2
Employee shall be subject, and shall report, to the Chief Executive
Officer of Bluegreen.
5. COMPENSATION. Beginning with the commencement of the next fiscal
year Bluegreen (April 1, 1998), the base salary of Employee shall be $175,000
annually, payable bi-weekly. (Prior to that time the base salary shall be
$160,000.) This base salary shall not be reduced during the term of this
Agreement.
6. BONUS. Employee shall be eligible to receive cash bonuses payable
annually (or at such lesser intervals as may be approved by the Board of
Directors), pursuant to the incentive bonus plan of Bluegreen as approved by the
Board of Directors from time to time.
7. BENEFITS.
(a) Employee shall be entitled, in accordance with Bluegreen's
general policies and procedures for management personnel, to participation in
any pension, savings, 401(k), stock option, employee stock ownership and
profit-sharing plans, health insurance, leave, vacation and other employment
benefits as are made available from time to time by the Board to or for the
benefit of Company management.
(b) During his term of employment, Employee shall be entitled
to prompt reimbursement of all reasonable expenses incurred in the course of and
pursuant to the performance of his duties hereunder and in connection with
promoting and carrying out the business of Bluegreen. Employee agrees to
maintain adequate documentary proof and written records, in such detail as the
Company may reasonably request, of all fees, costs and expenses to be reimbursed
by the Company hereunder.
(c) Employee shall be eligible to receive stock options as may
be approved by the Board of Directors from time to time.
8. AUTOMATIC RENEWAL; NOTICE OF NON-RENEWAL.
(a) This Agreement shall automatically renew itself at the end
of each year of the Agreement, unless either party shall give notice to the
other of its intention not to renew the Agreement, in which case the Agreement
shall terminate at the expiration of its stated three (3) year term. Any notice
of intention not to renew shall be given at least ninety (90) days prior to the
expiration of the applicable term.
(b) A notice of non-renewal by Bluegreen shall be deemed a
termination without cause as of the end of the then term, except that if the
determination by Bluegreen not to renew is based upon an event or action which
would permit a for cause termination, it shall be deemed a "for cause"
termination.
A notice by Employee shall be deemed a termination without cause.
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(c) Bluegreen may, by written notice to Employee, terminate
this Agreement with or without cause at any time.
9. TERMINATION WITHOUT CAUSE.
(a) Bluegreen may, by written notice to Employee, terminate
Employee's employment hereunder at any time without cause, or elect not to renew
this Agreement without cause, provided that it delivers to Employee written
notice of such termination or election and provides to Employee the payments
required in this paragraph. Upon termination of Employee's employment pursuant
to this Paragraph , Employee shall be paid the base salary to which Employee is
entitled under paragraph 5 hereof, at Bluegreen's regular and customary
intervals for such payment.
The following events shall, ipso facto, constitute a termination
without cause:
(i) Employee is assigned to any position, duties or
responsibilities that are significantly diminished when compared with the
position, duties or responsibilities of the Employee on the date of this
Agreement, except when such action is taken because of Employee's inability to
perform his duties;
(ii) the Employee is requested to engage in conduct
that is reasonably likely to result in a violation of law;
(iii) the failure by Bluegreen to obtain the
assumption of, and agreement to perform, this Agreement by any successor to its
business;
(iv) repudiation by Bluegreen of any material
obligation of Bluegreen under this Agreement;
(v) the sale of all or substantially all of the
business and/or assets of Bluegreen or the liquidation of Bluegreen.
The payments shall continue for twelve (12) months following
termination.
(c) In the event of a termination of Employee's employment
under the preceding subparagraph, and thereafter Employee obtains other
employment then, to the extent that Employee receives compensation (whether in
the form of salary, bonus or otherwise) from such other employment, the payments
to be made by Bluegreen under any provision of this Agreement shall be
correspondingly reduced, dollar-for-dollar, by such compensation received by
Employee through such other employment.
Upon the termination of employment, Bluegreen shall further promptly
pay to Employee all other amounts to which Employee is entitled (eg. expense
accounts, vacation pay, etc.).
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(d) Upon termination without cause by Bluegreen, Employee
shall, in addition to the payment of the base salary above provided for, and to
all other amounts due him from Bluegreen, receive at the same time as bonus
payments are made to other executive Employees, a pro rata share of any bonus
payable for the fiscal year during which the termination occurred, determined
upon the same basis that his bonus would have been determined had he continued
in employment for the entire fiscal year of termination, provided that at the
time of payment he is not in breach of any of the continuing obligations imposed
upon him in paragraph 15 hereof.
(e) Upon Employee's termination by Bluegreen without cause,
all options theretofore granted to Employee that are not vested shall
immediately vest.
10. TERMINATION BY EMPLOYEE. If Employee terminates this Agreement, or
gives notice of his intention not to renew, Employee shall be entitled to
receive only those amounts owing to him as of the time of the termination of his
employment, which amounts shall be paid to him promptly on the termination of
employment.
11. DISABILITY. In the event that Employee shall be incapacitated by
reason of mental or physical disability during the term of his employment
hereunder so that he is substantially prevented from performing his duties and
services hereunder for a period of ninety (90) consecutive days, or for shorter
periods aggregating 120 days during any 12-month period, Bluegreen thereafter
shall have the right to terminate Employee's employment under this Agreement by
sending written notice of such termination to Employee or his legal
representative and thereupon Employee's employment hereunder shall immediately
terminate. Upon such termination, Employee shall be entitled to receive and
shall be paid by Bluegreen, all amounts for expenses, etc. properly due to
Employee, and on a bi-weekly basis, his base salary as in effect on the date of
termination for twelve (12) months. Employee shall accept such payments in full
discharge and release of Bluegreen of and from any further obligations under
this Agreement. Such discharge and release shall not affect any rights or
remedies which may be available to Employee otherwise than under this Agreement.
12. DEATH. In the event of Employee's death during the term of his
employment hereunder, Employee's designated beneficiary or, if no such
beneficiary shall have been designated by Employee, the estate of Employee,
shall be entitled to receive and shall be paid by Bluegreen any and all of
Employee's unpaid salary compensation due as of the date of his death, and any
other amounts due to Employee, in each case through the date of death. Employee
shall be entitled to no payments or benefits following the date of death. Such
payments shall be in full discharge and release of Bluegreen of and from any
further obligations under this Agreement. Such discharge and release shall not
affect any rights or remedies which may be available to Employee (or Employee's
estate) otherwise than under this Agreement.
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13. TERMINATION FOR CAUSE.
(a) Bluegreen shall have the right to terminate the employment
of Employee, or elect not to renew this Agreement, for cause, at any time if:
(i) Employee shall be convicted by a court of
competent and final jurisdiction of any crime (whether or not involving
Bluegreen) which constitutes a felony in the jurisdiction involved or shall be
habitually drunk or intoxicated in public or otherwise commit acts of moral
turpitude in such a manner as to materially and adversely reflect upon the
reputation of Bluegreen or its senior management; or
(ii) Employee shall commit any act of embezzlement,
fraud or similar dishonest and injurious conduct against or with respect to
Bluegreen; or
(iii) Employee shall demonstrate injurious misconduct
in connection with the performance of his duties and responsibilities under this
Agreement (and/or as assigned to him from time to time by the Chief Executive
Officer in accordance with the provisions hereof); or
(iv) Employee shall demonstrate negligent, reckless
or grossly negligent and injurious conduct in connection with the performance
of, or a gross disregard for, his duties and responsibilities under this
Agreement and as assigned to him from time to time by the Chief Executive
Officer in accordance with the provisions hereof.
(b) Any determination to terminate Employee for Cause pursuant
to paragraph 13(a) hereof shall be made in the good faith judgment of the Chief
Executive Officer.
(c) In the event that the employment of Employee shall be
terminated by Bluegreen for cause pursuant to this paragraph, Employee shall be
entitled to receive his salary, and any other amounts properly due from
Bluegreen to Employee, through the date of such termination. Employee shall
accept payment pursuant to this subparagraph in full discharge and release of
Bluegreen of and from any further obligations under this Agreement. Nothing
contained in this paragraph shall constitute a waiver or release by Bluegreen of
any rights or claims it may have against Employee.
14. TERMINATION BY EMPLOYEE. Employee may, by written notice to
Bluegreen, terminate Employee's employment hereunder, provided that he delivers
to Bluegreen not less than ninety (90) days advance written notice of such
termination (the ninety (90) day period between such notice and termination
being referred to herein as the "Termination Period"). During the Termination
Period, so long as Employee performs his duties and responsibilities as required
in accordance with this Agreement (and so long as Bluegreen is not entitled to
terminate Employee for cause pursuant to paragraph 13 hereof, in which case the
provisions of paragraph 13, and not this paragraph 14, shall apply), Employee
shall be entitled to the salary, bonus and benefits (to the extent earned,
accrued and payable) described in this Agreement, in each case, payable at
Bluegreen's regular and customary intervals for such payment or benefit, through
the date of termination. Employee shall be entitled to no payments or benefits
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following the date of any termination under this paragraph 14. Employee shall
accept such payments and benefits in full discharge and release of Bluegreen of
and from any further obligations under this Agreement. Such discharge and
release shall not affect any rights or remedies which may be available to
Employee otherwise than under this Agreement.
15. RESTRICTION ON EMPLOYEE'S ACTIVITIES FOLLOWING TERMINATION.
Employee agrees that following termination of his employment for any reason, and
for a period of twelve (12) months thereafter:
(a) NON-COMPETITION. Employee shall not, directly or
indirectly, for himself or any other person or entity, engage in or have any
interest in any sole proprietorship, partnership, corporation, association or
business or any other person or entity (whether as an employee, officer,
director, partner, agent, security holder, creditor, consultant or otherwise)
that, directly or indirectly, engages in competition (as defined herein) with
Bluegreen and/or any subsidiary; provided, however, that Employee may acquire,
solely as an investment, shares of capital stock or other equity securities of
any company which are traded on any national securities exchange or are
regularly quoted in the over-the-counter market, so long as the Employee does
not control, acquire a controlling interest in or become a member of a group
which exercises direct or indirect control of, more than five percent (5%) of
any class of capital stock of such corporation. The Employee acknowledges that
Bluegreen would be severely and adversely affected if the Employee engages in
competition with Bluegreen.
(b) NONDISCLOSURE. Employee will not divulge, communicate,
utilize or exploit in any way other than in performing his duties hereunder, any
material confidential information (as hereinafter defined) pertaining to the
business of Bluegreen. Any material confidential information or data now or
hereafter acquired by the Employee with respect to the business of Bluegreen
(which shall include material information concerning Bluegreen's financial
condition, prospects, customers, methods of doing business, including purchasing
and sourcing information and marketing and promotion of Bluegreen's products and
services) shall be deemed a valuable, special and unique asset of Bluegreen that
is received by the Employee in confidence and as a fiduciary, and Employee shall
remain a fiduciary to Bluegreen with respect to all of such information during
the Employee's employment hereunder and for a period of twelve (12) months
thereafter. In addition, with respect to specific contractual relationships of
Bluegreen, Employee shall not divulge, communicate or utilize or exploit in any
way other than in performing his duties hereunder and shall remain a fiduciary
with respect to confidential information relating to such contractual
relationships of Bluegreen for the longer of (a) the term of such contract, or
(b) twelve (12) months after the end of the Employee's employment hereunder. For
purposes of this Agreement "confidential information" means information
disclosed to the Employee or known by the Employee as a consequence of or
through his employment by Bluegreen (including information conceived,
originated, discovered or developed by the Employee) prior to or after the date
hereof, and not generally known, about Bluegreen's products and services.
(c) NON-SOLICITATION OF EMPLOYEES. Employee will not, directly
or indirectly, for himself or for any other person, firm, corporation,
partnership, association
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or other entity, attempt to employ or enter into any contractual arrangement
with any employee or former employee of Bluegreen, unless such employee or
former employee has not been employed by Bluegreen for a period in excess of six
(6) months.
(d) BOOKS AND RECORDS. All books, records, accounts and
similar tangible repositories of confidential information of Bluegreen, whether
prepared by Employee or otherwise coming into Employee's possession, shall be
the exclusive property of Bluegreen and shall be returned immediately to
Bluegreen on termination of this Agreement, or at the request of the Chief
Executive Officer at any time.
(e) Competition, as used herein, shall mean any organizations
or persons who are in the business of land development or time sharing within
any state or jurisdiction in which Bluegreen is, at the time of termination of
employment, itself engaged in land development or time sharing.
16. INJUNCTION. Employee acknowledges that the services to be rendered
by him are of a special, unique and extraordinary character, that, in connection
with such services, he will have access to confidential, proprietary and/or
sensitive competitive information vital to Bluegreen's business operations and
prospects and that therefore the restrictive covenants set forth in paragraph 15
are fair and reasonable, are material to this Agreement and have materially
induced Bluegreen to enter into this Agreement and provide the benefits to
Employee provided hereunder. Accordingly, Employee consents and agrees that if
he violates or breaches any of the provisions of paragraph 15, Bluegreen would
sustain irreparable harm and, therefore, in addition to any other remedies which
may be available to it, Bluegreen shall be entitled to apply to any court of
competent jurisdiction, for an injunction restraining Employee from committing
or continuing any such violation of this Agreement, or for such other equitable
or special relief that Bluegreen shall deem appropriate in view of such
violation. Nothing in this Agreement shall be construed as prohibiting Bluegreen
from pursuing any other remedy or remedies including, without limitation,
recovery of damages, permitted at law or in equity.
17. MODIFICATION OF RESTRICTIONS. In the event that any of the
provisions contained in this Agreement shall be held to be in any way an
unreasonable restriction on Employee or otherwise void or unenforceable, then
the court so holding may reduce the territory and/or period of time in which
such restriction operates, or modify or eliminate any such restriction, to the
extent necessary to render such paragraph enforceable to the maximum extent
permitted by law.
18. ARBITRATION. Save for the provisions of paragraph 16 with respect
to injunctive relief, all disputes arising under this Agreement shall be subject
to arbitration, and neither party shall bring any action in any court with
reference thereto except to obtain enforcement of any arbitration award.
Arbitration shall be in accordance with and under the rules of the American
Arbitration Association as in effect at the time of the dispute unless the
parties shall agree to some different alternative dispute resolution method.
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All costs, expenses and awards under the arbitration or alternative
dispute resolution method shall be divided between the parties as the arbitrator
may determine.
The arbitrator's decision shall be final.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
20. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by hand or when deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Bluegreen:
Bluegreen Corporation
5295 Town Center Road
Boca Raton, FL 33486
If to Employee:
John F. Chiste
9194 Marquis Ct.
Boynton Beach, FL 33437
or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.
21. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement of any
part thereof all of which are inserted conditioned on their being valid in law,
and, in the event that any one or more of the words, phases, sentences, clauses
or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses or section or sections had not
been inserted. If such invalidity is caused by length of time or size of area,
or both the otherwise invalid provisions will be considered to be reduced to a
period or area which would cure such invalidity.
22. WAIVERS. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate as nor be construed
as a waiver of any subsequent breach or violation.
23. DAMAGES. Subject to the provisions of paragraph 18, nothing
contained herein shall be construed to prevent Bluegreen or the Employee from
seeking and recovering from the
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other damages sustained by either or both of them as a result of its or his
breach of any term or provision of this Agreement.
24. NO THIRD-PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
(other than the parties hereto and, in the case of the Employee, his heirs,
personal representative(s) and/or legal representative) any rights or remedies
under or by reason of this Agreement.
25. SUCCESSORS. This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
26. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between Bluegreen and the Employee with respect to its subject matter and
supersedes all prior negotiations, agreements, understandings and arrangements,
both oral and written, between Bluegreen and the Employee with respect to his
employment.
27. COUNSEL. Bluegreen and the Employee represent and agree that each
of them have thoroughly discussed all aspects of this Agreement with their
respective attorneys, and that they have carefully read and fully understand all
of the provisions of this Agreement and have voluntarily entered into it.
28. MISCELLANEOUS. The captions and headings herein are for convenience
of reference only and shall not be deemed to be a par of the substance of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
BLUEGREEN CORPORATION
/s Fredrick M. Myers /s/ John F. Chiste
- ----------------------------------- --------------------------------
Chairman John F. Chiste
- -----------------------
Board of Directors
Bluegreen Corporation
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EXHIBIT 10.126
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT made as of this 1st day of March, 1998 between BLUEGREEN
CORPORATION, a Massachusetts corporation (hereafter "Bluegreen"), having a usual
place of business in Boca Raton, Florida, and L. NICOLAS GRAY (hereafter
"Employee"), an individual and resident of Florida.
1. GENERAL.
Employee is, and for some time has been, the President of Resort
Division of Bluegreen.
The parties desire to enter into this Agreement to ensure the continued
service of Employee to Bluegreen and to ensure Employee of his long term
employment as President of Resort Division of Bluegreen. This Agreement
supersedes and replaces all other employment agreements between the parties and
sets forth the terms and conditions of employment.
The parties agree that Employee has, and will continue to have, a
thorough knowledge of the business and affairs of Bluegreen, both past and
present, and, by reason of his position, of its future plans, and that this
knowledge does and will include proprietary knowledge, trade secrets and all
manner of confidential, proprietary, sensitive and confidential information.
NOW, THEREFORE, the parties agree further as follows:
2. TERM. The term of this Agreement shall be for three (3) years from
date hereof, provided further that this Agreement shall automatically renew
itself at the end of each year unless terminated as provided in paragraph 8
hereof, or unless extended by the agreement of the parties.
3. POSITION. Employee shall be employed as President of Resort Division
of Bluegreen during the term hereof.
4. DUTIES. Employee shall have and perform the duties customarily
assumed by the president of resort division of a corporation, which shall
include duties over the affairs of Bluegreen and such other duties as shall be
assigned to him by the Chief Executive Officer. Additionally, Employee shall
have duties, authority and responsibility commensurate with his position and
those of executives of similarly sized companies in the industry of which
Bluegreen is a part.
Employee shall devote all of his business time to the business and
affairs of Bluegreen, except that with consent of the Chief Executive Officer he
may pursue other business and affairs.
<PAGE> 2
Employee shall, except as above, devote his business time exclusively
to the performance of his duties hereunder and shall carry out his duties in a
good and professional manner.
Employee shall be subject, and shall report, to the Chief Executive
Officer of Bluegreen.
5. COMPENSATION. Beginning with the commencement of the next fiscal
year Bluegreen (April 1, 1998), the base salary of Employee shall be $175,000
annually, payable bi-weekly. (Prior to that time the base salary shall be
$160,000.) This base salary shall not be reduced during the term of this
Agreement.
6. BONUS. Employee shall be eligible to receive cash bonuses payable
annually (or at such lesser intervals as may be approved by the Board of
Directors), pursuant to the incentive bonus plan of Bluegreen as approved by the
Board of Directors from time to time.
7. BENEFITS.
(a) Employee shall be entitled, in accordance with Bluegreen's
general policies and procedures for management personnel, to participation in
any pension, savings, 401(k), stock option, employee stock ownership and
profit-sharing plans, health insurance, leave, vacation and other employment
benefits as are made available from time to time by the Board to or for the
benefit of Company management.
(b) During his term of employment, Employee shall be entitled
to prompt reimbursement of all reasonable expenses incurred in the course of and
pursuant to the performance of his duties hereunder and in connection with
promoting and carrying out the business of Bluegreen. Employee agrees to
maintain adequate documentary proof and written records, in such detail as the
Company may reasonably request, of all fees, costs and expenses to be reimbursed
by the Company hereunder.
(c) Employee shall be eligible to receive stock options as may
be approved by the Board of Directors from time to time.
8. AUTOMATIC RENEWAL; NOTICE OF NON-RENEWAL.
(a) This Agreement shall automatically renew itself at the end
of each year of the Agreement, unless either party shall give notice to the
other of its intention not to renew the Agreement, in which case the Agreement
shall terminate at the expiration of its stated three (3) year term. Any notice
of intention not to renew shall be given at least ninety (90) days prior to the
expiration of the applicable term.
(b) A notice of non-renewal by Bluegreen shall be deemed a
termination without cause as of the end of the then term, except that if the
determination by Bluegreen not
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to renew is based upon an event or action which would permit a for cause
termination, it shall be deemed a "for cause" termination.
A notice by Employee shall be deemed a termination without cause.
(c) Bluegreen may, by written notice to Employee, terminate
this Agreement with or without cause at any time.
9. TERMINATION WITHOUT CAUSE.
(a) Bluegreen may, by written notice to Employee, terminate
Employee's employment hereunder at any time without cause, or elect not to renew
this Agreement without cause, provided that it delivers to Employee written
notice of such termination or election and provides to Employee the payments
required in this paragraph. Upon termination of Employee's employment pursuant
to this Paragraph , Employee shall be paid the base salary to which Employee is
entitled under paragraph 5 hereof, at Bluegreen's regular and customary
intervals for such payment.
The following events shall, ipso facto, constitute a termination
without cause:
(i) Employee is assigned to any position, duties or
responsibilities that are significantly diminished when compared with the
position, duties or responsibilities of the Employee on the date of this
Agreement, except when such action is taken because of Employee's inability to
perform his duties;
(ii) the Employee is requested to engage in conduct
that is reasonably likely to result in a violation of law;
(iii) the failure by Bluegreen to obtain the
assumption of, and agreement to perform, this Agreement by any successor to its
business;
(iv) repudiation by Bluegreen of any material
obligation of Bluegreen under this Agreement;
(v) the sale of all or substantially all of the
business and/or assets of Bluegreen or the liquidation of Bluegreen.
The payments shall continue for twelve (12) months following
termination.
(c) In the event of a termination of Employee's employment
under the preceding subparagraph, and thereafter Employee obtains other
employment then, to the extent that Employee receives compensation (whether in
the form of salary, bonus or otherwise) from such other employment, the payments
to be made by Bluegreen under any provision of this Agreement shall be
correspondingly reduced, dollar-for-dollar, by such compensation received by
Employee through such other employment.
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Upon the termination of employment, Bluegreen shall further promptly
pay to Employee all other amounts to which Employee is entitled (eg. expense
accounts, vacation pay, etc.).
(d) Upon termination without cause by Bluegreen, Employee
shall, in addition to the payment of the base salary above provided for, and to
all other amounts due him from Bluegreen, receive at the same time as bonus
payments are made to other executive Employees, a pro rata share of any bonus
payable for the fiscal year during which the termination occurred, determined
upon the same basis that his bonus would have been determined had he continued
in employment for the entire fiscal year of termination, provided that at the
time of payment he is not in breach of any of the continuing obligations imposed
upon him in paragraph 15 hereof.
(e) Upon Employee's termination by Bluegreen without cause,
all options theretofore granted to Employee that are not vested shall
immediately vest.
10. TERMINATION BY EMPLOYEE. If Employee terminates this Agreement, or
gives notice of his intention not to renew, Employee shall be entitled to
receive only those amounts owing to him as of the time of the termination of his
employment, which amounts shall be paid to him promptly on the termination of
employment.
11. DISABILITY. In the event that Employee shall be incapacitated by
reason of mental or physical disability during the term of his employment
hereunder so that he is substantially prevented from performing his duties and
services hereunder for a period of ninety (90) consecutive days, or for shorter
periods aggregating 120 days during any 12-month period, Bluegreen thereafter
shall have the right to terminate Employee's employment under this Agreement by
sending written notice of such termination to Employee or his legal
representative and thereupon Employee's employment hereunder shall immediately
terminate. Upon such termination, Employee shall be entitled to receive and
shall be paid by Bluegreen, all amounts for expenses, etc. properly due to
Employee, and on a bi-weekly basis, his base salary as in effect on the date of
termination for twelve (12) months. Employee shall accept such payments in full
discharge and release of Bluegreen of and from any further obligations under
this Agreement. Such discharge and release shall not affect any rights or
remedies which may be available to Employee otherwise than under this Agreement.
12. DEATH. In the event of Employee's death during the term of his
employment hereunder, Employee's designated beneficiary or, if no such
beneficiary shall have been designated by Employee, the estate of Employee,
shall be entitled to receive and shall be paid by Bluegreen any and all of
Employee's unpaid salary compensation due as of the date of his death, and any
other amounts due to Employee, in each case through the date of death. Employee
shall be entitled to no payments or benefits following the date of death. Such
payments shall be in full discharge and release of Bluegreen of and from any
further obligations under this Agreement. Such discharge and release shall not
affect any rights
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or remedies which may be available to Employee (or Employee's estate) otherwise
than under this Agreement.
13. TERMINATION FOR CAUSE.
(a) Bluegreen shall have the right to terminate the employment
of Employee, or elect not to renew this Agreement, for cause, at any time if:
(i) Employee shall be convicted by a court of
competent and final jurisdiction of any crime (whether or not involving
Bluegreen) which constitutes a felony in the jurisdiction involved or shall be
habitually drunk or intoxicated in public or otherwise commit acts of moral
turpitude in such a manner as to materially and adversely reflect upon the
reputation of Bluegreen or its senior management; or
(ii) Employee shall commit any act of embezzlement,
fraud or similar dishonest and injurious conduct against or with respect to
Bluegreen; or
(iii) Employee shall demonstrate injurious misconduct
in connection with the performance of his duties and responsibilities under this
Agreement (and/or as assigned to him from time to time by the Chief Executive
Officer in accordance with the provisions hereof); or
(iv) Employee shall demonstrate negligent, reckless
or grossly negligent and injurious conduct in connection with the performance
of, or a gross disregard for, his duties and responsibilities under this
Agreement and as assigned to him from time to time by the Chief Executive
Officer in accordance with the provisions hereof.
(b) Any determination to terminate Employee for Cause pursuant
to paragraph 13(a) hereof shall be made in the good faith judgment of the Chief
Executive Officer.
(c) In the event that the employment of Employee shall be
terminated by Bluegreen for cause pursuant to this paragraph, Employee shall be
entitled to receive his salary, and any other amounts properly due from
Bluegreen to Employee, through the date of such termination. Employee shall
accept payment pursuant to this subparagraph in full discharge and release of
Bluegreen of and from any further obligations under this Agreement. Nothing
contained in this paragraph shall constitute a waiver or release by Bluegreen of
any rights or claims it may have against Employee.
14. TERMINATION BY EMPLOYEE. Employee may, by written notice to
Bluegreen, terminate Employee's employment hereunder, provided that he delivers
to Bluegreen not less than ninety (90) days advance written notice of such
termination (the ninety (90) day period between such notice and termination
being referred to herein as the "Termination Period"). During the Termination
Period, so long as Employee performs his duties and responsibilities as required
in accordance with this Agreement (and so long as Bluegreen is not entitled to
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terminate Employee for cause pursuant to paragraph 13 hereof, in which case the
provisions of paragraph 13, and not this paragraph 14, shall apply), Employee
shall be entitled to the salary, bonus and benefits (to the extent earned,
accrued and payable) described in this Agreement, in each case, payable at
Bluegreen's regular and customary intervals for such payment or benefit, through
the date of termination. Employee shall be entitled to no payments or benefits
following the date of any termination under this paragraph 14. Employee shall
accept such payments and benefits in full discharge and release of Bluegreen of
and from any further obligations under this Agreement. Such discharge and
release shall not affect any rights or remedies which may be available to
Employee otherwise than under this Agreement.
15. RESTRICTION ON EMPLOYEE'S ACTIVITIES FOLLOWING TERMINATION.
Employee agrees that following termination of his employment for any reason, and
for a period of twelve (12) months thereafter:
(a) NON-COMPETITION. Employee shall not, directly or
indirectly, for himself or any other person or entity, engage in or have any
interest in any sole proprietorship, partnership, corporation, association or
business or any other person or entity (whether as an employee, officer,
director, partner, agent, security holder, creditor, consultant or otherwise)
that, directly or indirectly, engages in competition (as defined herein) with
Bluegreen and/or any subsidiary; provided, however, that Employee may acquire,
solely as an investment, shares of capital stock or other equity securities of
any company which are traded on any national securities exchange or are
regularly quoted in the over-the-counter market, so long as the Employee does
not control, acquire a controlling interest in or become a member of a group
which exercises direct or indirect control of, more than five percent (5%) of
any class of capital stock of such corporation. The Employee acknowledges that
Bluegreen would be severely and adversely affected if the Employee engages in
competition with Bluegreen.
(b) NONDISCLOSURE. Employee will not divulge, communicate,
utilize or exploit in any way other than in performing his duties hereunder, any
material confidential information (as hereinafter defined) pertaining to the
business of Bluegreen. Any material confidential information or data now or
hereafter acquired by the Employee with respect to the business of Bluegreen
(which shall include material information concerning Bluegreen's financial
condition, prospects, customers, methods of doing business, including purchasing
and sourcing information and marketing and promotion of Bluegreen's products and
services) shall be deemed a valuable, special and unique asset of Bluegreen that
is received by the Employee in confidence and as a fiduciary, and Employee shall
remain a fiduciary to Bluegreen with respect to all of such information during
the Employee's employment hereunder and for a period of twelve (12) months
thereafter. In addition, with respect to specific contractual relationships of
Bluegreen, Employee shall not divulge, communicate or utilize or exploit in any
way other than in performing his duties hereunder and shall remain a fiduciary
with respect to confidential information relating to such contractual
relationships of Bluegreen for the longer of (a) the term of such contract, or
(b) twelve (12) months after the end of the Employee's employment hereunder. For
purposes of this Agreement "confidential information" means information
disclosed to the Employee or known by the Employee as a consequence of or
through his employment by Bluegreen (including information conceived,
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originated, discovered or developed by the Employee) prior to or after the date
hereof, and not generally known, about Bluegreen's products and services.
(c) NON-SOLICITATION OF EMPLOYEES. Employee will not, directly
or indirectly, for himself or for any other person, firm, corporation,
partnership, association or other entity, attempt to employ or enter into any
contractual arrangement with any employee or former employee of Bluegreen,
unless such employee or former employee has not been employed by Bluegreen for a
period in excess of six (6) months.
(d) BOOKS AND RECORDS. All books, records, accounts and
similar tangible repositories of confidential information of Bluegreen, whether
prepared by Employee or otherwise coming into Employee's possession, shall be
the exclusive property of Bluegreen and shall be returned immediately to
Bluegreen on termination of this Agreement, or at the request of the Chief
Executive Officer at any time.
(e) Competition, as used herein, shall mean any organizations
or persons who are in the business of land development or time sharing within
any state or jurisdiction in which Bluegreen is, at the time of termination of
employment, itself engaged in land development or time sharing.
16. INJUNCTION. Employee acknowledges that the services to be rendered
by him are of a special, unique and extraordinary character, that, in connection
with such services, he will have access to confidential, proprietary and/or
sensitive competitive information vital to Bluegreen's business operations and
prospects and that therefore the restrictive covenants set forth in paragraph 15
are fair and reasonable, are material to this Agreement and have materially
induced Bluegreen to enter into this Agreement and provide the benefits to
Employee provided hereunder. Accordingly, Employee consents and agrees that if
he violates or breaches any of the provisions of paragraph 15, Bluegreen would
sustain irreparable harm and, therefore, in addition to any other remedies which
may be available to it, Bluegreen shall be entitled to apply to any court of
competent jurisdiction, for an injunction restraining Employee from committing
or continuing any such violation of this Agreement, or for such other equitable
or special relief that Bluegreen shall deem appropriate in view of such
violation. Nothing in this Agreement shall be construed as prohibiting Bluegreen
from pursuing any other remedy or remedies including, without limitation,
recovery of damages, permitted at law or in equity.
17. MODIFICATION OF RESTRICTIONS. In the event that any of the
provisions contained in this Agreement shall be held to be in any way an
unreasonable restriction on Employee or otherwise void or unenforceable, then
the court so holding may reduce the territory and/or period of time in which
such restriction operates, or modify or eliminate any such restriction, to the
extent necessary to render such paragraph enforceable to the maximum extent
permitted by law.
18. ARBITRATION. Save for the provisions of paragraph 16 with respect
to injunctive relief, all disputes arising under this Agreement shall be subject
to arbitration, and neither
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party shall bring any action in any court with reference thereto except to
obtain enforcement of any arbitration award. Arbitration shall be in accordance
with and under the rules of the American Arbitration Association as in effect at
the time of the dispute unless the parties shall agree to some different
alternative dispute resolution method.
All costs, expenses and awards under the arbitration or alternative
dispute resolution method shall be divided between the parties as the arbitrator
may determine.
The arbitrator's decision shall be final.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
20. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by hand or when deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Bluegreen:
Bluegreen Corporation
5295 Town Center Road
Boca Raton, FL 33486
If to Employee:
L. Nicolas Gray
12757 Spikerush Circle
Boca Raton, FL 33428
or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.
21. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement of any
part thereof all of which are inserted conditioned on their being valid in law,
and, in the event that any one or more of the words, phases, sentences, clauses
or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses or section or sections had not
been inserted. If such invalidity is caused by length of time or size of area,
or both the otherwise invalid provisions will be considered to be reduced to a
period or area which would cure such invalidity.
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22. WAIVERS. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate as nor be construed
as a waiver of any subsequent breach or violation.
23. DAMAGES. Subject to the provisions of paragraph 18, nothing
contained herein shall be construed to prevent Bluegreen or the Employee from
seeking and recovering from the other damages sustained by either or both of
them as a result of its or his breach of any term or provision of this
Agreement.
24. NO THIRD-PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
(other than the parties hereto and, in the case of the Employee, his heirs,
personal representative(s) and/or legal representative) any rights or remedies
under or by reason of this Agreement.
25. SUCCESSORS. This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
26. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between Bluegreen and the Employee with respect to its subject matter and
supersedes all prior negotiations, agreements, understandings and arrangements,
both oral and written, between Bluegreen and the Employee with respect to his
employment.
27. COUNSEL. Bluegreen and the Employee represent and agree that each
of them have thoroughly discussed all aspects of this Agreement with their
respective attorneys, and that they have carefully read and fully understand all
of the provisions of this Agreement and have voluntarily entered into it.
28. MISCELLANEOUS. The captions and headings herein are for convenience
of reference only and shall not be deemed to be a par of the substance of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
BLUEGREEN CORPORATION
/s/ Fredrick M. Myers /s/ L. Nicholas Gray
- ------------------------------------- -----------------------------
Chairman L. Nicholas Gray
- --------------------------
Board of Directors
Bluegreen Corporation
9
<PAGE> 1
EXHIBIT 10.127
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT made as of this 1st day of March, 1998 between BLUEGREEN
CORPORATION, a Massachusetts corporation (hereafter "Bluegreen"), having a usual
place of business in Boca Raton, Florida, and DANIEL C. KOSCHER (hereafter
"Employee"), an individual and resident of Florida.
1. GENERAL.
Employee is, and for some time has been, President of the Land Division
of Bluegreen.
The parties desire to enter into this Agreement to ensure the continued
service of Employee to Bluegreen and to ensure Employee of his long term
employment as President of the Land Division of Bluegreen. This Agreement
supersedes and replaces all other employment agreements between the parties and
sets forth the terms and conditions of employment.
The parties agree that Employee has, and will continue to have, a
thorough knowledge of the business and affairs of Bluegreen, both past and
present, and, by reason of his position, of its future plans, and that this
knowledge does and will include proprietary knowledge, trade secrets and all
manner of confidential, proprietary, sensitive and confidential information.
NOW, THEREFORE, the parties agree further as follows:
2. TERM. The term of this Agreement shall be for three (3) years from
date hereof, provided further that this Agreement shall automatically renew
itself at the end of each year unless terminated as provided in paragraph 8
hereof, or unless extended by the agreement of the parties.
3. POSITION. Employee shall be employed as President of Land Division
of Bluegreen during the term hereof.
4. DUTIES. Employee shall have and perform the duties customarily
assumed by the president of land division of a corporation, which shall include
duties over the affairs of Bluegreen and such other duties as shall be assigned
to him by the Chief Executive Officer. Additionally, Employee shall have duties,
authority and responsibility commensurate with his position and those of
executives of similarly sized companies in the industry of which Bluegreen is a
part.
Employee shall devote all of his business time to the business and
affairs of Bluegreen, except that with consent of the Chief Executive Officer he
may pursue other business and affairs.
<PAGE> 2
Employee shall, except as above, devote his business time exclusively
to the performance of his duties hereunder and shall carry out his duties in a
good and professional manner.
Employee shall be subject, and shall report, to the Chief Executive
Officer of Bluegreen.
5. COMPENSATION. Beginning with the commencement of the next fiscal
year Bluegreen (April 1, 1998), the base salary of Employee shall be $175,000
annually, payable bi-weekly. (Prior to that time the base salary shall be
$175,000.) This base salary shall not be reduced during the term of this
Agreement.
6. BONUS. Employee shall be eligible to receive cash bonuses payable
annually (or at such lesser intervals as may be approved by the Board of
Directors), pursuant to the incentive bonus plan of Bluegreen as approved by the
Board of Directors from time to time.
7. BENEFITS.
(a) Employee shall be entitled, in accordance with Bluegreen's
general policies and procedures for management personnel, to participation in
any pension, savings, 401(k), stock option, employee stock ownership and
profit-sharing plans, health insurance, leave, vacation and other employment
benefits as are made available from time to time by the Board to or for the
benefit of Company management.
(b) During his term of employment, Employee shall be entitled
to prompt reimbursement of all reasonable expenses incurred in the course of and
pursuant to the performance of his duties hereunder and in connection with
promoting and carrying out the business of Bluegreen. Employee agrees to
maintain adequate documentary proof and written records, in such detail as the
Company may reasonably request, of all fees, costs and expenses to be reimbursed
by the Company hereunder.
(c) Employee shall be eligible to receive stock options as may
be approved by the Board of Directors from time to time.
8. AUTOMATIC RENEWAL; NOTICE OF NON-RENEWAL.
(a) This Agreement shall automatically renew itself at the end
of each year of the Agreement, unless either party shall give notice to the
other of its intention not to renew the Agreement, in which case the Agreement
shall terminate at the expiration of its stated three (3) year term. Any notice
of intention not to renew shall be given at least ninety (90) days prior to the
expiration of the applicable term.
(b) A notice of non-renewal by Bluegreen shall be deemed a
termination without cause as of the end of the then term, except that if the
determination by Bluegreen not
2
<PAGE> 3
to renew is based upon an event or action which would permit a for cause
termination, it shall be deemed a "for cause" termination.
A notice by Employee shall be deemed a termination without cause.
(c) Bluegreen may, by written notice to Employee, terminate
this Agreement with or without cause at any time.
9. TERMINATION WITHOUT CAUSE.
(a) Bluegreen may, by written notice to Employee, terminate
Employee's employment hereunder at any time without cause, or elect not to renew
this Agreement without cause, provided that it delivers to Employee written
notice of such termination or election and provides to Employee the payments
required in this paragraph. Upon termination of Employee's employment pursuant
to this Paragraph , Employee shall be paid the base salary to which Employee is
entitled under paragraph 5 hereof, at Bluegreen's regular and customary
intervals for such payment.
The following events shall, ipso facto, constitute a termination
without cause:
(i) Employee is assigned to any position, duties or
responsibilities that are significantly diminished when compared with the
position, duties or responsibilities of the Employee on the date of this
Agreement, except when such action is taken because of Employee's inability to
perform his duties;
(ii) the Employee is requested to engage in conduct
that is reasonably likely to result in a violation of law;
(iii) the failure by Bluegreen to obtain the
assumption of, and agreement to perform, this Agreement by any successor to its
business;
(iv) repudiation by Bluegreen of any material
obligation of Bluegreen under this Agreement;
(v) the sale of all or substantially all of the
business and/or assets of Bluegreen or the liquidation of Bluegreen.
The payments shall continue for twelve (12) months following
termination.
(c) In the event of a termination of Employee's employment
under the preceding subparagraph, and thereafter Employee obtains other
employment then, to the extent that Employee receives compensation (whether in
the form of salary, bonus or otherwise) from such other employment, the payments
to be made by Bluegreen under any provision of this Agreement shall be
correspondingly reduced, dollar-for-dollar, by such compensation received by
Employee through such other employment.
3
<PAGE> 4
Upon the termination of employment, Bluegreen shall further promptly
pay to Employee all other amounts to which Employee is entitled (eg. expense
accounts, vacation pay, etc.).
(d) Upon termination without cause by Bluegreen, Employee
shall, in addition to the payment of the base salary above provided for, and to
all other amounts due him from Bluegreen, receive at the same time as bonus
payments are made to other executive Employees, a pro rata share of any bonus
payable for the fiscal year during which the termination occurred, determined
upon the same basis that his bonus would have been determined had he continued
in employment for the entire fiscal year of termination, provided that at the
time of payment he is not in breach of any of the continuing obligations imposed
upon him in paragraph 15 hereof.
(e) Upon Employee's termination by Bluegreen without cause,
all options theretofore granted to Employee that are not vested shall
immediately vest.
10. TERMINATION BY EMPLOYEE. If Employee terminates this Agreement, or
gives notice of his intention not to renew, Employee shall be entitled to
receive only those amounts owing to him as of the time of the termination of his
employment, which amounts shall be paid to him promptly on the termination of
employment.
11. DISABILITY. In the event that Employee shall be incapacitated by
reason of mental or physical disability during the term of his employment
hereunder so that he is substantially prevented from performing his duties and
services hereunder for a period of ninety (90) consecutive days, or for shorter
periods aggregating 120 days during any 12-month period, Bluegreen thereafter
shall have the right to terminate Employee's employment under this Agreement by
sending written notice of such termination to Employee or his legal
representative and thereupon Employee's employment hereunder shall immediately
terminate. Upon such termination, Employee shall be entitled to receive and
shall be paid by Bluegreen, all amounts for expenses, etc. properly due to
Employee, and on a bi-weekly basis, his base salary as in effect on the date of
termination for twelve (12) months. Employee shall accept such payments in full
discharge and release of Bluegreen of and from any further obligations under
this Agreement. Such discharge and release shall not affect any rights or
remedies which may be available to Employee otherwise than under this Agreement.
12. DEATH. In the event of Employee's death during the term of his
employment hereunder, Employee's designated beneficiary or, if no such
beneficiary shall have been designated by Employee, the estate of Employee,
shall be entitled to receive and shall be paid by Bluegreen any and all of
Employee's unpaid salary compensation due as of the date of his death, and any
other amounts due to Employee, in each case through the date of death. Employee
shall be entitled to no payments or benefits following the date of death. Such
payments shall be in full discharge and release of Bluegreen of and from any
further obligations under this Agreement. Such discharge and release shall not
affect any rights or
4
<PAGE> 5
remedies which may be available to Employee (or Employee's estate) otherwise
than under this Agreement.
13. TERMINATION FOR CAUSE.
(a) Bluegreen shall have the right to terminate the employment
of Employee, or elect not to renew this Agreement, for cause, at any time if:
(i) Employee shall be convicted by a court of
competent and final jurisdiction of any crime (whether or not involving
Bluegreen) which constitutes a felony in the jurisdiction involved or shall be
habitually drunk or intoxicated in public or otherwise commit acts of moral
turpitude in such a manner as to materially and adversely reflect upon the
reputation of Bluegreen or its senior management; or
(ii) Employee shall commit any act of embezzlement,
fraud or similar dishonest and injurious conduct against or with respect to
Bluegreen; or
(iii) Employee shall demonstrate injurious misconduct
in connection with the performance of his duties and responsibilities under this
Agreement (and/or as assigned to him from time to time by the Chief Executive
Officer in accordance with the provisions hereof); or
(iv) Employee shall demonstrate negligent, reckless
or grossly negligent and injurious conduct in connection with the performance
of, or a gross disregard for, his duties and responsibilities under this
Agreement and as assigned to him from time to time by the Chief Executive
Officer in accordance with the provisions hereof.
(b) Any determination to terminate Employee for Cause pursuant
to paragraph 13(a) hereof shall be made in the good faith judgment of the Chief
Executive Officer.
(c) In the event that the employment of Employee shall be
terminated by Bluegreen for cause pursuant to this paragraph, Employee shall be
entitled to receive his salary, and any other amounts properly due from
Bluegreen to Employee, through the date of such termination. Employee shall
accept payment pursuant to this subparagraph in full discharge and release of
Bluegreen of and from any further obligations under this Agreement. Nothing
contained in this paragraph shall constitute a waiver or release by Bluegreen of
any rights or claims it may have against Employee.
14. TERMINATION BY EMPLOYEE. Employee may, by written notice to
Bluegreen, terminate Employee's employment hereunder, provided that he delivers
to Bluegreen not less than ninety (90) days advance written notice of such
termination (the ninety (90) day period between such notice and termination
being referred to herein as the "Termination Period"). During the Termination
Period, so long as Employee performs his duties and responsibilities as required
in accordance with this Agreement (and so long as Bluegreen is not entitled to
5
<PAGE> 6
terminate Employee for cause pursuant to paragraph 13 hereof, in which case the
provisions of paragraph 13, and not this paragraph 14, shall apply), Employee
shall be entitled to the salary, bonus and benefits (to the extent earned,
accrued and payable) described in this Agreement, in each case, payable at
Bluegreen's regular and customary intervals for such payment or benefit, through
the date of termination. Employee shall be entitled to no payments or benefits
following the date of any termination under this paragraph 14. Employee shall
accept such payments and benefits in full discharge and release of Bluegreen of
and from any further obligations under this Agreement. Such discharge and
release shall not affect any rights or remedies which may be available to
Employee otherwise than under this Agreement.
15. RESTRICTION ON EMPLOYEE'S ACTIVITIES FOLLOWING TERMINATION.
Employee agrees that following termination of his employment for any reason, and
for a period of twelve (12) months thereafter:
(a) NON-COMPETITION. Employee shall not, directly or
indirectly, for himself or any other person or entity, engage in or have any
interest in any sole proprietorship, partnership, corporation, association or
business or any other person or entity (whether as an employee, officer,
director, partner, agent, security holder, creditor, consultant or otherwise)
that, directly or indirectly, engages in competition (as defined herein) with
Bluegreen and/or any subsidiary; provided, however, that Employee may acquire,
solely as an investment, shares of capital stock or other equity securities of
any company which are traded on any national securities exchange or are
regularly quoted in the over-the-counter market, so long as the Employee does
not control, acquire a controlling interest in or become a member of a group
which exercises direct or indirect control of, more than five percent (5%) of
any class of capital stock of such corporation. The Employee acknowledges that
Bluegreen would be severely and adversely affected if the Employee engages in
competition with Bluegreen.
(b) NONDISCLOSURE. Employee will not divulge, communicate,
utilize or exploit in any way other than in performing his duties hereunder, any
material confidential information (as hereinafter defined) pertaining to the
business of Bluegreen. Any material confidential information or data now or
hereafter acquired by the Employee with respect to the business of Bluegreen
(which shall include material information concerning Bluegreen's financial
condition, prospects, customers, methods of doing business, including purchasing
and sourcing information and marketing and promotion of Bluegreen's products and
services) shall be deemed a valuable, special and unique asset of Bluegreen that
is received by the Employee in confidence and as a fiduciary, and Employee shall
remain a fiduciary to Bluegreen with respect to all of such information during
the Employee's employment hereunder and for a period of twelve (12) months
thereafter. In addition, with respect to specific contractual relationships of
Bluegreen, Employee shall not divulge, communicate or utilize or exploit in any
way other than in performing his duties hereunder and shall remain a fiduciary
with respect to confidential information relating to such contractual
relationships of Bluegreen for the longer of (a) the term of such contract, or
(b) twelve (12) months after the end of the Employee's employment hereunder. For
purposes of this Agreement "confidential information" means information
disclosed to the Employee or known by the Employee as a consequence of or
through his employment by Bluegreen (including information conceived,
6
<PAGE> 7
originated, discovered or developed by the Employee) prior to or after the date
hereof, and not generally known, about Bluegreen's products and services.
(c) NON-SOLICITATION OF EMPLOYEES. Employee will not, directly
or indirectly, for himself or for any other person, firm, corporation,
partnership, association or other entity, attempt to employ or enter into any
contractual arrangement with any employee or former employee of Bluegreen,
unless such employee or former employee has not been employed by Bluegreen for a
period in excess of six (6) months.
(d) BOOKS AND RECORDS. All books, records, accounts and
similar tangible repositories of confidential information of Bluegreen, whether
prepared by Employee or otherwise coming into Employee's possession, shall be
the exclusive property of Bluegreen and shall be returned immediately to
Bluegreen on termination of this Agreement, or at the request of the Chief
Executive Officer at any time.
(e) Competition, as used herein, shall mean any organizations
or persons who are in the business of land development or time sharing within
any state or jurisdiction in which Bluegreen is, at the time of termination of
employment, itself engaged in land development or time sharing.
16. INJUNCTION. Employee acknowledges that the services to be rendered
by him are of a special, unique and extraordinary character, that, in connection
with such services, he will have access to confidential, proprietary and/or
sensitive competitive information vital to Bluegreen's business operations and
prospects and that therefore the restrictive covenants set forth in paragraph 15
are fair and reasonable, are material to this Agreement and have materially
induced Bluegreen to enter into this Agreement and provide the benefits to
Employee provided hereunder. Accordingly, Employee consents and agrees that if
he violates or breaches any of the provisions of paragraph 15, Bluegreen would
sustain irreparable harm and, therefore, in addition to any other remedies which
may be available to it, Bluegreen shall be entitled to apply to any court of
competent jurisdiction, for an injunction restraining Employee from committing
or continuing any such violation of this Agreement, or for such other equitable
or special relief that Bluegreen shall deem appropriate in view of such
violation. Nothing in this Agreement shall be construed as prohibiting Bluegreen
from pursuing any other remedy or remedies including, without limitation,
recovery of damages, permitted at law or in equity.
17. MODIFICATION OF RESTRICTIONS. In the event that any of the
provisions contained in this Agreement shall be held to be in any way an
unreasonable restriction on Employee or otherwise void or unenforceable, then
the court so holding may reduce the territory and/or period of time in which
such restriction operates, or modify or eliminate any such restriction, to the
extent necessary to render such paragraph enforceable to the maximum extent
permitted by law.
18. ARBITRATION. Save for the provisions of paragraph 16 with respect
to injunctive relief, all disputes arising under this Agreement shall be subject
to arbitration, and neither
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<PAGE> 8
party shall bring any action in any court with reference thereto except to
obtain enforcement of any arbitration award. Arbitration shall be in accordance
with and under the rules of the American Arbitration Association as in effect at
the time of the dispute unless the parties shall agree to some different
alternative dispute resolution method.
All costs, expenses and awards under the arbitration or alternative
dispute resolution method shall be divided between the parties as the arbitrator
may determine.
The arbitrator's decision shall be final.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
20. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by hand or when deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Bluegreen:
Bluegreen Corporation
5295 Town Center Road
Boca Raton, FL 33486
If to Employee:
Daniel C. Koscher
12424 NW 17th Place
Coral Springs, FL 33071
or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.
21. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement of any
part thereof all of which are inserted conditioned on their being valid in law,
and, in the event that any one or more of the words, phases, sentences, clauses
or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses or section or sections had not
been inserted. If such invalidity is caused by length of time or size of area,
or both the otherwise invalid provisions will be considered to be reduced to a
period or area which would cure such invalidity.
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<PAGE> 9
22. WAIVERS. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate as nor be construed
as a waiver of any subsequent breach or violation.
23. DAMAGES. Subject to the provisions of paragraph 18, nothing
contained herein shall be construed to prevent Bluegreen or the Employee from
seeking and recovering from the other damages sustained by either or both of
them as a result of its or his breach of any term or provision of this
Agreement.
24. NO THIRD-PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
(other than the parties hereto and, in the case of the Employee, his heirs,
personal representative(s) and/or legal representative) any rights or remedies
under or by reason of this Agreement.
25. SUCCESSORS. This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
26. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between Bluegreen and the Employee with respect to its subject matter and
supersedes all prior negotiations, agreements, understandings and arrangements,
both oral and written, between Bluegreen and the Employee with respect to his
employment.
27. COUNSEL. Bluegreen and the Employee represent and agree that each
of them have thoroughly discussed all aspects of this Agreement with their
respective attorneys, and that they have carefully read and fully understand all
of the provisions of this Agreement and have voluntarily entered into it.
28. MISCELLANEOUS. The captions and headings herein are for convenience
of reference only and shall not be deemed to be a par of the substance of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
BLUEGREEN CORPORATION
/s/ Fredrick M. Myers /s/ Daniel C. Koscher
- ------------------------------------- -----------------------------
Chairman Daniel C. Koscher
- --------------------------
Board of Directors
Bluegreen Corporation
9
<PAGE> 1
EXHIBIT 10.128
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT made as of this 1st day of March, 1998 between BLUEGREEN
CORPORATION, a Massachusetts corporation (hereafter "Bluegreen"), having a usual
place of business in Boca Raton, Florida, and PATRICK E. RONDEAU (hereafter
"Employee"), an individual and resident of Florida.
1. GENERAL.
Employee is, and for some time has been, General Counsel of Bluegreen.
The parties desire to enter into this Agreement to ensure the continued
service of Employee to Bluegreen and to ensure Employee of his long term
employment as General Counsel of Bluegreen. This Agreement supersedes and
replaces all other employment agreements between the parties and sets forth the
terms and conditions of employment.
The parties agree that Employee has, and will continue to have, a
thorough knowledge of the business and affairs of Bluegreen, both past and
present, and, by reason of his position, of its future plans, and that this
knowledge does and will include proprietary knowledge, trade secrets and all
manner of confidential, proprietary, sensitive and confidential information.
NOW, THEREFORE, the parties agree further as follows:
2. TERM. The term of this Agreement shall be for three (3) years from
date hereof, provided further that this Agreement shall automatically renew
itself at the end of each year unless terminated as provided in paragraph 8
hereof, or unless extended by the agreement of the parties.
3. POSITION. Employee shall be employed as General Counsel of Bluegreen
during the term hereof.
4. DUTIES. Employee shall have and perform the duties customarily
assumed by the general counsel of a corporation, which shall include duties over
the affairs of Bluegreen and such other duties as shall be assigned to him by
the Chief Executive Officer. Additionally, Employee shall have duties, authority
and responsibility commensurate with his position and those of executives of
similarly sized companies in the industry of which Bluegreen is a part.
Employee shall devote all of his business time to the business and
affairs of Bluegreen, except that with consent of the Chief Executive Officer he
may pursue other business and affairs.
Employee shall, except as above, devote his business time exclusively
to the performance of his duties hereunder and shall carry out his duties in a
good and professional manner.
<PAGE> 2
Employee shall be subject, and shall report, to the Chief Executive
Officer of Bluegreen.
5. COMPENSATION. Beginning with the commencement of the next fiscal
year Bluegreen (April 1, 1998), the base salary of Employee shall be $175,000
annually, payable bi-weekly. (Prior to that time the base salary shall be
$175,000.) This base salary shall not be reduced during the term of this
Agreement.
6. BONUS. Employee shall be eligible to receive cash bonuses payable
annually (or at such lesser intervals as may be approved by the Board of
Directors), pursuant to the incentive bonus plan of Bluegreen as approved by the
Board of Directors from time to time.
7. BENEFITS.
(a) Employee shall be entitled, in accordance with Bluegreen's
general policies and procedures for management personnel, to participation in
any pension, savings, 401(k), stock option, employee stock ownership and
profit-sharing plans, health insurance, leave, vacation and other employment
benefits as are made available from time to time by the Board to or for the
benefit of Company management.
(b) During his term of employment, Employee shall be entitled
to prompt reimbursement of all reasonable expenses incurred in the course of and
pursuant to the performance of his duties hereunder and in connection with
promoting and carrying out the business of Bluegreen. Employee agrees to
maintain adequate documentary proof and written records, in such detail as the
Company may reasonably request, of all fees, costs and expenses to be reimbursed
by the Company hereunder.
(c) Employee shall be eligible to receive stock options as may
be approved by the Board of Directors from time to time.
8. AUTOMATIC RENEWAL; NOTICE OF NON-RENEWAL.
(a) This Agreement shall automatically renew itself at the end
of each year of the Agreement, unless either party shall give notice to the
other of its intention not to renew the Agreement, in which case the Agreement
shall terminate at the expiration of its stated three (3) year term. Any notice
of intention not to renew shall be given at least ninety (90) days prior to the
expiration of the applicable term.
(b) A notice of non-renewal by Bluegreen shall be deemed a
termination without cause as of the end of the then term, except that if the
determination by Bluegreen not to renew is based upon an event or action which
would permit a for cause termination, it shall be deemed a "for cause"
termination.
A notice by Employee shall be deemed a termination without cause.
<PAGE> 3
(c) Bluegreen may, by written notice to Employee, terminate
this Agreement with or without cause at any time.
9. TERMINATION WITHOUT CAUSE.
(a) Bluegreen may, by written notice to Employee, terminate
Employee's employment hereunder at any time without cause, or elect not to renew
this Agreement without cause, provided that it delivers to Employee written
notice of such termination or election and provides to Employee the payments
required in this paragraph. Upon termination of Employee's employment pursuant
to this Paragraph , Employee shall be paid the base salary to which Employee is
entitled under paragraph 5 hereof, at Bluegreen's regular and customary
intervals for such payment.
The following events shall, ipso facto, constitute a termination
without cause:
(i) Employee is assigned to any position, duties or
responsibilities that are significantly diminished when compared with the
position, duties or responsibilities of the Employee on the date of this
Agreement, except when such action is taken because of Employee's inability to
perform his duties;
(ii) the Employee is requested to engage in conduct
that is reasonably likely to result in a violation of law;
(iii) the failure by Bluegreen to obtain the
assumption of, and agreement to perform, this Agreement by any successor to its
business;
(iv) repudiation by Bluegreen of any material
obligation of Bluegreen under this Agreement;
(v) the sale of all or substantially all of the
business and/or assets of Bluegreen or the liquidation of Bluegreen.
The payments shall continue for twelve (12) months following
termination.
(c) In the event of a termination of Employee's employment
under the preceding subparagraph, and thereafter Employee obtains other
employment then, to the extent that Employee receives compensation (whether in
the form of salary, bonus or otherwise) from such other employment, the payments
to be made by Bluegreen under any provision of this Agreement shall be
correspondingly reduced, dollar-for-dollar, by such compensation received by
Employee through such other employment.
Upon the termination of employment, Bluegreen shall further promptly
pay to Employee all other amounts to which Employee is entitled (eg. expense
accounts, vacation pay, etc.).
<PAGE> 4
(d) Upon termination without cause by Bluegreen, Employee
shall, in addition to the payment of the base salary above provided for, and to
all other amounts due him from Bluegreen, receive at the same time as bonus
payments are made to other executive Employees, a pro rata share of any bonus
payable for the fiscal year during which the termination occurred, determined
upon the same basis that his bonus would have been determined had he continued
in employment for the entire fiscal year of termination, provided that at the
time of payment he is not in breach of any of the continuing obligations imposed
upon him in paragraph 15 hereof.
(e) Upon Employee's termination by Bluegreen without cause,
all options theretofore granted to Employee that are not vested shall
immediately vest.
10. TERMINATION BY EMPLOYEE. If Employee terminates this Agreement, or
gives notice of his intention not to renew, Employee shall be entitled to
receive only those amounts owing to him as of the time of the termination of his
employment, which amounts shall be paid to him promptly on the termination of
employment.
11. DISABILITY. In the event that Employee shall be incapacitated by
reason of mental or physical disability during the term of his employment
hereunder so that he is substantially prevented from performing his duties and
services hereunder for a period of ninety (90) consecutive days, or for shorter
periods aggregating 120 days during any 12-month period, Bluegreen thereafter
shall have the right to terminate Employee's employment under this Agreement by
sending written notice of such termination to Employee or his legal
representative and thereupon Employee's employment hereunder shall immediately
terminate. Upon such termination, Employee shall be entitled to receive and
shall be paid by Bluegreen, all amounts for expenses, etc. properly due to
Employee, and on a bi-weekly basis, his base salary as in effect on the date of
termination for twelve (12) months. Employee shall accept such payments in full
discharge and release of Bluegreen of and from any further obligations under
this Agreement. Such discharge and release shall not affect any rights or
remedies which may be available to Employee otherwise than under this Agreement.
12. DEATH. In the event of Employee's death during the term of his
employment hereunder, Employee's designated beneficiary or, if no such
beneficiary shall have been designated by Employee, the estate of Employee,
shall be entitled to receive and shall be paid by Bluegreen any and all of
Employee's unpaid salary compensation due as of the date of his death, and any
other amounts due to Employee, in each case through the date of death. Employee
shall be entitled to no payments or benefits following the date of death. Such
payments shall be in full discharge and release of Bluegreen of and from any
further obligations under this Agreement. Such discharge and release shall not
affect any rights or remedies which may be available to Employee (or Employee's
estate) otherwise than under this Agreement.
<PAGE> 5
13. TERMINATION FOR CAUSE.
(a) Bluegreen shall have the right to terminate the employment
of Employee, or elect not to renew this Agreement, for cause, at any time if:
(i) Employee shall be convicted by a court of
competent and final jurisdiction of any crime (whether or not involving
Bluegreen) which constitutes a felony in the jurisdiction involved or shall be
habitually drunk or intoxicated in public or otherwise commit acts of moral
turpitude in such a manner as to materially and adversely reflect upon the
reputation of Bluegreen or its senior management; or
(ii) Employee shall commit any act of embezzlement,
fraud or similar dishonest and injurious conduct against or with respect to
Bluegreen; or
(iii) Employee shall demonstrate injurious misconduct
in connection with the performance of his duties and responsibilities under this
Agreement (and/or as assigned to him from time to time by the Chief Executive
Officer in accordance with the provisions hereof); or
(iv) Employee shall demonstrate negligent, reckless
or grossly negligent and injurious conduct in connection with the performance
of, or a gross disregard for, his duties and responsibilities under this
Agreement and as assigned to him from time to time by the Chief Executive
Officer in accordance with the provisions hereof.
(b) Any determination to terminate Employee for Cause pursuant
to paragraph 13(a) hereof shall be made in the good faith judgment of the Chief
Executive Officer.
(c) In the event that the employment of Employee shall be
terminated by Bluegreen for cause pursuant to this paragraph, Employee shall be
entitled to receive his salary, and any other amounts properly due from
Bluegreen to Employee, through the date of such termination. Employee shall
accept payment pursuant to this subparagraph in full discharge and release of
Bluegreen of and from any further obligations under this Agreement. Nothing
contained in this paragraph shall constitute a waiver or release by Bluegreen of
any rights or claims it may have against Employee.
14. TERMINATION BY EMPLOYEE. Employee may, by written notice to
Bluegreen, terminate Employee's employment hereunder, provided that he delivers
to Bluegreen not less than ninety (90) days advance written notice of such
termination (the ninety (90) day period between such notice and termination
being referred to herein as the "Termination Period"). During the Termination
Period, so long as Employee performs his duties and responsibilities as required
in accordance with this Agreement (and so long as Bluegreen is not entitled to
terminate Employee for cause pursuant to paragraph 13 hereof, in which case the
provisions of paragraph 13, and not this paragraph 14, shall apply), Employee
shall be entitled to the salary, bonus and benefits (to the extent earned,
accrued and payable) described in this Agreement, in
<PAGE> 6
each case, payable at Bluegreen's regular and customary intervals for such
payment or benefit, through the date of termination. Employee shall be entitled
to no payments or benefits following the date of any termination under this
paragraph 14. Employee shall accept such payments and benefits in full discharge
and release of Bluegreen of and from any further obligations under this
Agreement. Such discharge and release shall not affect any rights or remedies
which may be available to Employee otherwise than under this Agreement.
15. RESTRICTION ON EMPLOYEE'S ACTIVITIES FOLLOWING TERMINATION.
Employee agrees that following termination of his employment for any reason, and
for a period of twelve (12) months thereafter:
(a) NON-COMPETITION. Employee shall not, directly or
indirectly, for himself or any other person or entity, engage in or have any
interest in any sole proprietorship, partnership, corporation, association or
business or any other person or entity (whether as an employee, officer,
director, partner, agent, security holder, creditor, consultant or otherwise)
that, directly or indirectly, engages in competition (as defined herein) with
Bluegreen and/or any subsidiary; provided, however, that Employee may acquire,
solely as an investment, shares of capital stock or other equity securities of
any company which are traded on any national securities exchange or are
regularly quoted in the over-the-counter market, so long as the Employee does
not control, acquire a controlling interest in or become a member of a group
which exercises direct or indirect control of, more than five percent (5%) of
any class of capital stock of such corporation. The Employee acknowledges that
Bluegreen would be severely and adversely affected if the Employee engages in
competition with Bluegreen.
(b) NONDISCLOSURE. Employee will not divulge, communicate,
utilize or exploit in any way other than in performing his duties hereunder, any
material confidential information (as hereinafter defined) pertaining to the
business of Bluegreen. Any material confidential information or data now or
hereafter acquired by the Employee with respect to the business of Bluegreen
(which shall include material information concerning Bluegreen's financial
condition, prospects, customers, methods of doing business, including purchasing
and sourcing information and marketing and promotion of Bluegreen's products and
services) shall be deemed a valuable, special and unique asset of Bluegreen that
is received by the Employee in confidence and as a fiduciary, and Employee shall
remain a fiduciary to Bluegreen with respect to all of such information during
the Employee's employment hereunder and for a period of twelve (12) months
thereafter. In addition, with respect to specific contractual relationships of
Bluegreen, Employee shall not divulge, communicate or utilize or exploit in any
way other than in performing his duties hereunder and shall remain a fiduciary
with respect to confidential information relating to such contractual
relationships of Bluegreen for the longer of (a) the term of such contract, or
(b) twelve (12) months after the end of the Employee's employment hereunder. For
purposes of this Agreement "confidential information" means information
disclosed to the Employee or known by the Employee as a consequence of or
through his employment by Bluegreen (including information conceived,
originated, discovered or developed by the Employee) prior to or after the date
hereof, and not generally known, about Bluegreen's products and services.
<PAGE> 7
(c) NON-SOLICITATION OF EMPLOYEES. Employee will not, directly
or indirectly, for himself or for any other person, firm, corporation,
partnership, association or other entity, attempt to employ or enter into any
contractual arrangement with any employee or former employee of Bluegreen,
unless such employee or former employee has not been employed by Bluegreen for a
period in excess of six (6) months.
(d) BOOKS AND RECORDS. All books, records, accounts and
similar tangible repositories of confidential information of Bluegreen, whether
prepared by Employee or otherwise coming into Employee's possession, shall be
the exclusive property of Bluegreen and shall be returned immediately to
Bluegreen on termination of this Agreement, or at the request of the Chief
Executive Officer at any time.
(e) Competition, as used herein, shall mean any organizations
or persons who are in the business of land development or time sharing within
any state or jurisdiction in which Bluegreen is, at the time of termination of
employment, itself engaged in land development or time sharing.
16. INJUNCTION. Employee acknowledges that the services to be rendered
by him are of a special, unique and extraordinary character, that, in connection
with such services, he will have access to confidential, proprietary and/or
sensitive competitive information vital to Bluegreen's business operations and
prospects and that therefore the restrictive covenants set forth in paragraph 15
are fair and reasonable, are material to this Agreement and have materially
induced Bluegreen to enter into this Agreement and provide the benefits to
Employee provided hereunder. Accordingly, Employee consents and agrees that if
he violates or breaches any of the provisions of paragraph 15, Bluegreen would
sustain irreparable harm and, therefore, in addition to any other remedies which
may be available to it, Bluegreen shall be entitled to apply to any court of
competent jurisdiction, for an injunction restraining Employee from committing
or continuing any such violation of this Agreement, or for such other equitable
or special relief that Bluegreen shall deem appropriate in view of such
violation. Nothing in this Agreement shall be construed as prohibiting Bluegreen
from pursuing any other remedy or remedies including, without limitation,
recovery of damages, permitted at law or in equity.
17. MODIFICATION OF RESTRICTIONS. In the event that any of the
provisions contained in this Agreement shall be held to be in any way an
unreasonable restriction on Employee or otherwise void or unenforceable, then
the court so holding may reduce the territory and/or period of time in which
such restriction operates, or modify or eliminate any such restriction, to the
extent necessary to render such paragraph enforceable to the maximum extent
permitted by law.
18. ARBITRATION. Save for the provisions of paragraph 16 with respect
to injunctive relief, all disputes arising under this Agreement shall be subject
to arbitration, and neither party shall bring any action in any court with
reference thereto except to obtain enforcement of any arbitration award.
Arbitration shall be in accordance with and under the rules of the
<PAGE> 8
American Arbitration Association as in effect at the time of the dispute unless
the parties shall agree to some different alternative dispute resolution method.
All costs, expenses and awards under the arbitration or alternative
dispute resolution method shall be divided between the parties as the arbitrator
may determine.
The arbitrator's decision shall be final.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
20. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by hand or when deposited in the United States mail, by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Bluegreen:
Bluegreen Corporation
5295 Town Center Road
Boca Raton, FL 33486
If to Employee:
Patrick E. Rondeau
20943 Pacifico Terrace
Boca Raton, FL 33433
or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.
21. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement of any
part thereof all of which are inserted conditioned on their being valid in law,
and, in the event that any one or more of the words, phases, sentences, clauses
or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses or section or sections had not
been inserted. If such invalidity is caused by length of time or size of area,
or both the otherwise invalid provisions will be considered to be reduced to a
period or area which would cure such invalidity.
22. WAIVERS. The waiver by either party hereto of a breach or violation
of any term or provision of this Agreement shall not operate as nor be construed
as a waiver of any subsequent breach or violation.
<PAGE> 9
23. DAMAGES. Subject to the provisions of paragraph 18, nothing
contained herein shall be construed to prevent Bluegreen or the Employee from
seeking and recovering from the other damages sustained by either or both of
them as a result of its or his breach of any term or provision of this
Agreement.
24. NO THIRD-PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
(other than the parties hereto and, in the case of the Employee, his heirs,
personal representative(s) and/or legal representative) any rights or remedies
under or by reason of this Agreement.
25. SUCCESSORS. This Agreement shall inure to the benefit of and be
enforceable by the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
26. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between Bluegreen and the Employee with respect to its subject matter and
supersedes all prior negotiations, agreements, understandings and arrangements,
both oral and written, between Bluegreen and the Employee with respect to his
employment.
27. COUNSEL. Bluegreen and the Employee represent and agree that each
of them have thoroughly discussed all aspects of this Agreement with their
respective attorneys, and that they have carefully read and fully understand all
of the provisions of this Agreement and have voluntarily entered into it.
28. MISCELLANEOUS. The captions and headings herein are for convenience
of reference only and shall not be deemed to be a par of the substance of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
BLUEGREEN CORPORATION
/s/ Fredrick M. Myers /s/ Patrick E. Rondeau
- ------------------------------------- -----------------------------
Chairman Patrick E. Rondeau
- --------------------------
Board of Directors
Bluegreen Corporation
<PAGE> 1
EXHIBIT 10.129
AMENDED AND RESTATED
CREDIT FACILITY AGREEMENT
THIS AMENDED AND RESTATED CREDIT FACILITY AGREEMENT ("Agreement")
entered into as of April 16, 1998, by FINOVA CAPITAL CORPORATION, a Delaware
corporation, and BLUEGREEN CORPORATION, a Massachusetts corporation.
RECITALS
A. Lender and Borrower have previously entered into a Credit Facility
Agreement dated as of December 14, 1994, as amended by instrument dated as of
October 17, 1996 (as so amended, "Existing Loan Agreement").
B. Lender and Borrower wish to amend the Existing Loan Agreement and to
restate the Existing Loan Agreement in its entirety, all as more fully set forth
herein.
AGREEMENT
I. DEFINITIONS.
As used in this Agreement and the other Documents (as defined below)
unless otherwise expressly indicated in this Agreement or the other Documents,
the following terms shall have the following meanings (such meanings to be
applicable equally both to the singular and plural terms defined).
1.1 "Acquisition Advance": an Advance made solely for the purpose of
paying, or reimbursing Borrower for, the Acquisition Cost of Real
Property which is the subject of the Loan under which the Advance is
made.
1.2 "Acquisition Cost": with respect to any Real Property, its actual
purchase price, together with all reasonable and ordinary closing
costs, attorneys' fees and other due diligence expenses incurred in
connection with the acquisition of the Real Property.
1.3 "Acquisition Loan": a Loan which is disbursed in a single Advance and
is made solely for the purpose of paying, or reimbursing Borrower for,
the Acquisition Cost of the Real Property which is the subject of the
Acquisition Loan.
1.4 "Advance": an advance of the proceeds of a Loan by Lender to a Borrower
in accordance with the terms and conditions of this Agreement.
1.5 "Advance Formula for Acquisition Advance": with respect to any Real
Property, an amount equal to eighty percent (80%) of the lesser of (a)
its Acquisition Cost or (b) its Appraised Value; PROVIDED that if an
appraisal is not required pursuant to paragraph 4.2(b), then the
Advance Formula shall be an amount equal to eighty percent (80%) of the
Acquisition Cost.
<PAGE> 2
1.6 "Affidavit of Borrower": a sworn Affidavit of Borrower (and such other
parties as Lender may require) in the form of EXHIBIT G-3, to accompany
a Work-Related Advance Request.
1.7 "Affiliate": with respect to any individual or entity, any other
individual or entity that directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control
with, such individual or entity.
1.8 "Agreement": this Amended and Restated Credit Facility Agreement, as it
may be from time to time renewed, amended, restated or replaced.
1.9 "Applicable Usury Law": the usury law chosen by the parties pursuant to
the terms of paragraph 8.10 or such other usury law which is applicable
if such usury law is not.
1.10 "Appraised Value": with respect to any Real Property, its fair market
value as reported in the appraisal required pursuant to paragraph
4.2(b) and approved by Lender.
1.11 "Architect/Engineer": with respect to any Improvements, an architect,
design professional or engineer employed by a Borrower to perform
architectural, design or engineering services in connection with such
Improvements.
1.12 "Architect/Engineer Agreement": with respect to the Improvements being
financed in whole or in part under a Development Loan, a contract
(written or oral, now or hereafter in effect) between the Borrower
under the Development Loan and an Architect/Engineer for the
performance of architectural, design or engineering services in
connection with such Improvements, as approved by Lender in writing and
modified from time to time in accordance with the terms of the
Documents.
1.13 "Articles of Organization": the charter, articles, operating agreement,
partnership agreement, by-laws and any other written documents
evidencing the formation, organization and continuing existence of an
entity.
1.14 "Assignment(s)": with respect to a Loan, a written assignment or
assignments, which may be separate from and/or included within the
Mortgage encumbering such Real Property, executed by the Borrower under
the Loan and creating in favor of Lender, to facilitate Performance of
the Obligations of such Borrower, a perfected, direct, first and
exclusive assignment (subject only to the Permitted Encumbrances) of
all leases, sales contracts, rents and sales and other proceeds
pertaining to or arising from such Real Property or any business of
such Borrower conducted thereon or with respect thereto; Contracts,
Licenses, Permits and Other Intangibles related to such Real Property
(including, without limitation, Architect/Engineer Agreements and
Construction Contracts if the Loan is a Development Loan); and all of
the Developer's Rights with respect to such Real Property; as such
assignments may be from time to time renewed, amended, restated or
replaced.
1.15 "Bluegreen Entity": Parent or a Subsidiary.
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<PAGE> 3
1.16 "Borrower": with respect to a Loan, the Bluegreen Entity which has
requested the Loan and to whom the Loan is to be or has been made; and
with respect to any Real Property, the Bluegreen Entity which owns the
fee simple interest in the Real Property and is the seller of Parcels
of the Real Property.
1.17 "Borrowing Term": subject to the provisions of paragraph 2.2, the
period during which a Bluegreen Entity may obtain a Loan, commencing on
the date of this Agreement and ending on March 31, 2001.
1.18 "Business Day": any day other than a Saturday, a Sunday or a day on
which banks in Phoenix, Arizona are required to be closed.
1.19 "Collateral": all Real Property, Personal Property, Insurance Policies
and other property now or hereafter serving as security for the
Performance of any portion of the Obligations, and all products and
proceeds thereof.
1.20 "Completion": with respect to the Work being done in connection with a
Development Loan, the occurrence, after Substantial Completion of such
Work, of the following:
(a) final completion of such Work (including "punch-list" items),
in accordance with the related Plans and Specifications, the
related Construction Contract(s), all applicable laws, the
Documents, sound construction, engineering and architectural
principles and commonly accepted safety-standards, free of
liens and free of defective materials and workmanship; and
(b) receipt by Lender of the following in form and substance
satisfactory to it: (i) a certificate of completion from the
Borrower under the Development Loan, Architect(s)/Engineer(s)
designated by Lender, and, if Lender elects, from Lender's
Inspector to the effect that such Work has been so completed
and final payment is due under all related Construction
Contracts between Borrower and Contractors; (ii) final lien
waivers for such Work; and (iii) the title policy endorsements
required in connection with such event pursuant to the terms
of the Documents after final completion of such Work; and
(c) expiration of the statutory period in which mechanics' liens
and similar liens can be filed on account of such Work.
1.21 "Construction Budget": with respect to the Work being done in
connection with a Development Loan, a detailed budget cost itemization
prepared by Borrower and approved in writing by Lender, which specifies
by item the cost and source of payment of: (a) all labor, materials and
services necessary for Completion of such Work in accordance with the
related Plans and Specifications, the related Construction Contract(s),
the Documents, all Legal Requirements, sound construction, engineering
and architectural principles, and commonly accepted safety standards;
(b) interest on the Development Loan; and (c) all other expenses
incidental to Completion of such Work. Each Construction Budget shall
include within the
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<PAGE> 4
costs of the Work to be paid from the Development Loan a contingency
reserve determined to be adequate by Lender. Without limiting Lender's
discretion in approving the Construction Budget, Lender shall be
satisfied that any "construction overhead" contained therein does not
constitute a developer fee of any kind.
1.22 "Construction Contract": with respect to the Work being done in
connection with a Development Loan, a contract (written or oral, now or
hereafter in effect) between Borrower and a Contractor, between a
Contractor and any other person or entity relating in any way to the
construction of such Work, including the performing of labor and the
furnishing of equipment, materials or services (other than
architectural, design or engineering services), as approved by Lender
in writing and modified from time to time.
1.23 "Contractor": with respect to the Work being done in connection with a
Development Loan, a contractor employed by a Borrower to provide labor
and/or to furnish equipment, materials or services (other than
architectural, design or engineering services) for any portion of such
Work.
1.24 "Contracts, Licenses, Permits and Other Intangibles": with respect to
any Real Property, the property so described in EXHIBIT A.
1.25 "Credit Facility": the credit facility made available pursuant to this
Agreement.
1.26 "Credit Facility Modification Fee Installment Payment": the meaning
given to it in paragraph 6.15.
1.27 "Default Rate": the meaning given to it in the Notes.
1.28 "Developer's Rights": with respect to any Real Property, all special
rights and privileges of a Borrower under any declaration of covenants,
conditions and restrictions and/or other documents governing the Real
Property which are not enjoyed by all other owners of portions of the
Real Property.
1.29 "Development Loan": a Loan made for the purpose of paying or
reimbursing a Borrower for the costs of constructing Improvements on
the Real Property which is the subject of the Development Loan and
otherwise performing Work with respect to such Improvements; PROVIDED,
HOWEVER, that a Development Loan may also include an Acquisition
Advance.
1.30 "Development Loan Advance": an Advance of a Development Loan.
1.31 "Development Loan Borrowing Term": with respect to a Development Loan,
the period during which the Borrower under the Development Loan may
obtain Development Loan Advances under such Development Loan, which
period shall commence when all conditions precedent to the initial
Development Loan Advance under such Development Loan have been
satisfied and terminating on the Required Completion Date for the
Improvements being financed in whole or in part under such Development
Loan.
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<PAGE> 5
1.32 "Documents": this Agreement and any and all Requests for Advance,
Notes, Mortgages, Security Agreements, Assignments, Environmental
Certificates, and other documents now or hereafter executed in
connection with the Credit Facility, as they be from time to time
renewed, amended, restated or replaced.
1.33 "Environmental Certificate": with respect to a Loan, a certificate
executed by the Borrower under the Loan in form and substance
satisfactory to Lender, and containing representations, warranties and
covenants regarding the environmental condition of the Real Property
which is the subject of the Loan.
1.34 "Event of Default": the meaning set forth in paragraph 7.1.
1.35 "Force Majeure Event": an "act of God," a fire, a strike, a
governmental order and/or injunction which is issued by a court of
competent jurisdiction for reasons other than for a Borrower's acts or
omissions which would constitute a default under this Agreement, or a
similar event beyond a Borrower's reasonable control.
1.36 "Guaranty": a primary, joint and several guaranty made by Parent
guarantying the repayment of a Loan made to a Subsidiary, together with
interest thereon as provided in the Note evidencing such Loan, and the
payment and performance of all other Obligations pertaining to the Real
Property against which the Loan has been made.
1.37 "Improvements": with respect to a Development Loan, the infrastructure
improvements to be constructed upon, added to or made (on-site or
off-site) to or for the benefit of the Real Property which is the
subject of the Development Loan, all as more fully set forth in the
related Plans and Specifications and the related Construction Budget.
1.38 "Incipient Default": an event which after notice and/or lapse of time
would constitute an Event of Default.
1.39 "Insurance Policies": the insurance policies that a Borrower is
required to maintain and deliver pursuant to paragraph 6.5.
1.40 "Interest Reserve Advance": a Development Loan Advance made to pay
accrued and unpaid interest on any portion of the Development Loan.
1.41 "Interest Reserve Fund": that portion of a Development Loan which is
allocated within the related Construction Budget for the monthly
payment of interest on the Development Loan.
1.42 "Legal Requirements": (a) all present and future judicial decisions,
statutes, regulations, permits or certificates of any governmental
authority in any way applicable to a Borrower or any Collateral; (b)
all covenants, conditions and restrictions contained in any document by
which any Collateral is bound; (c) all business association agreements
forming, or granting and/or limiting the powers of, a Borrower; and (d)
all contracts or agreements (written or oral) by which a Borrower is
bound or, if compliance therewith would otherwise be in
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<PAGE> 6
conflict with any of the Documents, by which a Borrower becomes
bound with Lender's prior written consent.
1.43 "Lender": FINOVA Capital Corporation and its successors and assigns.
1.44 "Lender's Inspector": the meaning given to it in paragraph 9.1.
1.45 "Loan": an Acquisition Loan or a Development Loan.
1.46 "Maturity Date": with respect to a Loan, the date determined by Lender
prior to the initial Advance of the Loan and so identified in the Note
evidencing the Loan, but in no event later than the date forty-eight
(48) months after the initial Advance of the Loan.
1.47 "Maximum Credit Facility Amount": at anytime, the positive difference
between Thirty-Five Million Dollars ($35,000,000) and the unpaid
principal balance of the PRFC Loan.
1.48 "Maximum Loan Amount": (a) with respect to an Acquisition Loan, an
amount equal to the lesser of (i) the amount requested by the Borrower
under the Acquisition Loan or (ii) the Advance Formula of the Real
Property which is the subject of the Acquisition Loan; and (b) with
respect to a Development Loan, an amount determined by Lender prior to
the initial Development Loan Advance, but in no event to exceed the
least of (i) the amount requested by the Borrower under the Development
Loan, (ii) (A) eighty percent (80%) of the cost of Completion of the
Work, as shown on the original related Construction Budget, which is
being financed in whole or in part under the Development Loan plus (B)
if there is an Acquisition Advance, an amount determined in accordance
with the Advance Formula for Acquisition Advance with respect to the
Real Property which is the subject of the Development Loan, or (iii)
eighty percent (80%) of its Appraised Value, determined as if
Completion of the Work being financed in whole or in part under the
Development Loan had occurred.
1.49 "Mortgage": with respect to a Loan, a mortgage or deed of trust, as
required by Lender, executed by the Borrower under the Loan and under
the terms of which the Borrower has conveyed or granted in favor of
Lender, as security for Performance of the Obligations of such
Borrower, a perfected, direct, first and exclusive priority lien
(subject only to the Permitted Encumbrances) upon the Real Property
which is the subject of the Loan, as it may be from time to time
renewed, amended, restated or replaced.
1.50 "Note": a promissory note issued by a Borrower in the form of EXHIBIT B
to evidence the Advance(s) of a Loan which has been obtained by or
committed to such Borrower, as it may be from time to time renewed,
amended, restated or replaced.
1.51 "Obligations": all obligations, agreements, duties, covenants and
conditions that Parent and/or the Borrowers are now or hereafter
required to Perform under the Documents.
1.52 "Parcels": the meaning given to it in paragraph 3.2(a).
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<PAGE> 7
1.53 "Parent": Bluegreen Corporation, a Massachusetts corporation.
1.54 "Partial Release": the meaning given to it in paragraph 3.2(a).
1.55 "Partial Release Payment": the meaning give to it in paragraph 3.3.
1.56 "Performance" or "Perform": full, timely and faithful performance.
1.57 "Permitted Encumbrances": with respect to any Property, rights,
restrictions, reservations, easements and liens of record which do not
materially adversely lessen the value or affect the use of such
Property for purposes approved by Lender and Lender has agreed in
writing to accept, but excluding monetary liens other than liens for
taxes and assessments not yet due and payable, and inchoate artisans'
liens and mechanics' liens for amounts not yet due and payable.
1.58 "Personal Property": with respect to any Real Property, the property
described in EXHIBIT A.
1.59 "Plans and Specifications": with respect to the Improvements being
financed in whole or in part under a Development Loan, the
architectural, structural, mechanical, electrical and other plans and
specifications for the construction of such Improvements and the
completion of the rest of the Work related thereto prepared by
Architect(s)/Engineer(s), as approved by Lender as modified from time
to time with Lender's prior written consent.
1.60 "Principal Work-Related Items": with respect to the Improvements being
financed in whole or in part under a Development Loan and related Work,
the Plans and Specifications and all agreements between the Borrower
under the Development Loan and third parties pertaining thereto,
including, without limitation, Construction Contract(s) and
Architect/Engineer Agreement(s), as approved by Lender in writing and
modified from time to time in accordance with the terms of the
Documents.
1.61 "Property": with respect to a Loan, the Real Property which is the
subject of the Loan and the related Personal Property.
1.62 "PRFC Loan": the meaning given to it in paragraph 10.1(a).
1.63 "Real Property": real property which meets the criteria set forth in
EXHIBIT C.
1.64 "Request for Advance": with respect to an Acquisition Advance, the
request for the Advance executed by the Borrower under the Loan
pursuant to which the Acquisition Advance is being made and in form and
substance identical to EXHIBIT D-1 OR D-2, as applicable; and with
respect to a Work-Related Advance, a Work-Related Advance Request.
1.65 "Required Completion Assurance Deposit": with respect to the Uncovered
Cost of any Work, a cash deposit (to be made by the Borrower under the
related Development Loan and held by Lender) in an amount equal to such
Uncovered Cost.
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1.66 "Required Completion Date": with respect to the Improvements being
financed in whole or in part under a Development Loan, the date
determined by Lender prior to the initial Advance of the Development
Loan and so identified in the Request for Advance executed in
connection with the initial Advance, plus such additional time which is
necessary to achieve Completion of the related Work and is due solely
to the occurrence of one or more Force Majeure Events.
1.67 "Resolution": a resolution of a corporation certified as true and
correct by an authorized officer of such corporation, a certificate
signed by the manager of a limited liability company and/or such
members whose approval is required, or a partnership certificate signed
by all of the general partners of such partnership and such other
partners whose approval is required.
1.68 "Security Agreement": with respect to a Loan, a written security
agreement which may be separate from and/or included within a Mortgage
or this Agreement, executed by the Borrower under the Loan and creating
in favor of Lender, as security for the Performance of the Obligations,
a perfected, direct, first and exclusive security interest (subject
only to the Permitted Encumbrances) in the Personal Property related to
the Real Property which is the subject of the Loan, as it may be from
time to time renewed, amended, restated or replaced.
1.69 "Security Documents": any and all Mortgages, Security Agreements,
Assignments and other documents from time to time delivered to Lender
to create or perfect a Security Interest in the Collateral, as they may
be from time to time renewed, amended, restated or replaced.
1.70 "Security Interest": a perfected, direct and exclusive first priority
lien on, security interest in, assignment of or other charge upon the
Collateral, as the case may be, subject only to the Permitted
Encumbrances.
1.71 "Subsidiary": a wholly-owned subsidiary of Parent.
1.72 "Substantial Completion": with respect to the Work being done in
connection with a Development Loan, the occurrence of:
(a) substantial completion (as defined in AIA Document A201, most
current version) of such Work, in accordance with the related
Plans and Specifications, the related Construction
Contract(s), all Legal Requirements, the Documents, sound
construction, engineering and architectural principles and
commonly accepted safety- standards, free of liens and free of
defective materials and workmanship;
(b) receipt by Lender of the following in form and substance
satisfactory to it: (i) a certificate of substantial
completion from the Borrower under such Loan and the related
Architect(s)/ Engineer(s) and, if Lender elects, from Lender's
Inspector to the effect that such Work has been so completed,
and final payment is due under all related Construction
Contracts between such Borrower and Contractors (subject only
to retention for "punch-list" items); (ii) a certificate of
completion or acceptance (or its equivalent) from the
appropriate governmental authority having jurisdiction over
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<PAGE> 9
such Work which has the effect of allowing the use of the
Improvements constructed as part of such Work for the intended
purposes, to the extent such a certificate is customarily
issued or available; (iii) if Legal Requirements provide that
the recording of a notice of completion will cause the
expiration upon a date certain of the statutory period within
which mechanics' and similar liens can be filed, verification
of the recording of such notice in the manner prescribed by
such laws; (iv) final lien waivers, other than lien waivers
for Work remaining to be performed prior to Completion and for
which Lender is still holding Basic Retainage [as defined in
paragraph 2.1(a)] or Additional Retainage [as defined in
paragraph 2.1(a)] sufficient to cover such Work; (v) the
as-built survey required in connection with such event
pursuant to the terms of the Documents; (vi) the title policy
endorsements required in connection with such event pursuant
to the terms of the Documents; and (vii) if the related
Improvements were intended to be dedicated to a governmental
authority, evidence that such dedication has occurred and that
the governmental authority has accepted such Improvements,
subject only to customary warranty obligations on the part of
the Borrower under the Development Loan.
1.73 "Tangible Personal Property": the Personal Property described in
paragraph 3 of EXHIBIT A.
1.74 "Term": the duration of this Agreement, commencing on the date as of
which this Agreement is entered into and ending when all of the
Obligations shall have been Performed.
1.75 "Third Party Consents": with respect to a Loan, those consents which
Lender requires the Borrower under such Loan to obtain, or which such
Borrower or (if not the Borrower) Parent is contractually or legally
obligated to obtain, from others in connection with the making of the
Loan or the Performance of such entity's Obligations.
1.76 "Threshold Amount": with respect to Parent, Two Hundred Fifty Thousand
Dollars ($250,000); and with respect to any Subsidiary, Fifty Thousand
Dollars ($50,000).
1.77 "Title Insurer": with respect to a Title Policy, the title insurance
company which has issued it.
1.78 "Title Policy": with respect to a Loan, a policy of title insurance in
an amount not less than the Loan insuring Lender's interest in the
Mortgage executed in connection with the Loan as a perfected, direct,
first and exclusive lien on the Real Property which is the subject of
the Loan, subject only to the Permitted Encumbrances for such Real
Property, and issued by a title insurance company acceptable to Lender.
1.79 "Uncovered Cost of the Work" or "Uncovered Cost": with respect to the
Work being financed in whole or in part under a Development Loan and
covered by a line-item within the related Construction Budget, the
amount equal to the excess (if any) of (a) the remaining unpaid cost of
Completion of the Work covered by such line-item over (b) the
undisbursed portion of the Development Loan committed for such Work and
the remaining balance of any Required Completion Assurance Deposits
held by Lender for such Work.
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1.80 "Work": with respect to a Development Loan, the construction of the
related Improvements as shown on or described in the related Plans and
Specifications or the related Construction Contract(s).
1.81 "Work Progress Schedule": with respect to a Development Loan, the
schedule for the Completion of the related Work and parts thereof, as
approved by Lender in writing.
1.82 "Work-Related Advance": a Development Loan Advance made for the purpose
of paying or reimbursing the Borrower under the Loan for costs of any
portion of the related Work, excluding interest on the Development
Loan.
1.83 "Work-Related Advance Request": with respect to a Development Loan, the
written application of the Borrower under the Development Loan made on
Lender's standard forms by such Borrower and such other parties as
Lender may require specifying by name and amount all parties to whom
such Borrower is obligated for labor, materials, equipment or services
supplied for the performance of related Work and all other expenses
incidental to the Development Loan, the Real Property which is the
subject of the Development Loan and the Completion of the related Work,
and requesting a Development Loan Advance for payment of such items,
accompanied by an Affidavit of Borrower, certificates of the
Architect/Engineer and the related Contractor and such schedules,
affidavits, certificates, releases, waivers, statements, invoices,
bills and other documents as Lender may reasonably request.
II. CREDIT FACILITY COMMITMENT; USE OF PROCEEDS.
2.1 CREDIT FACILITY COMMITMENT. Lender hereby agrees, if all of the
Obligations then due to be Performed have been Performed, to make Loans
and Advances of such Loans to Bluegreen Entities. Each Acquisition
Advance shall be in an amount equal to the lesser of (a) the amount
requested by the Borrower or (b) the Advance Formula of the Real
Property which is the subject of the Advance. Subject to the provisions
of paragraph 4.7, the amount of each Interest Reserve Advance under a
Development Loan shall be in the amount of interest then accrued and
unpaid on the portion of the Development Loan for which payment of
interest is allocated within the related Construction Budget. The
amount of each Work-Related Advance under a Development Loan shall be
equal to the costs of the Work for related Improvements covered by the
applicable Work-Related Advance Request and allocated within the
related Construction Budget for payment out of the Development Loan
less an amount equal to the sum of (a) an amount ("Basic Retainage")
equal to ten percent (10%) of the "hard" costs of such Work and (b) any
additional retainage in excess of the amount of the Basic Retainage
("Additional Retainage") required under the applicable Construction
Contract(s); PROVIDED, HOWEVER, that Work-Related Advances shall not be
made for stored or ordered materials not yet incorporated into the
Improvements. The Basic Retainage shall apply only to "hard" costs of
the Work. The Additional Retainage shall be disbursed as part
of the next Development Loan Advance occurring after Lender has
reasonably determined that a Contractor is entitled to it under the
applicable Construction Contract. The Basic Retainage Work-Related
Advances under a Development Loan shall be disbursed at the time of
Substantial Completion of the related Work to the extent Contractor(s)
who have
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performed such Work are then entitled to it under the applicable
Construction Contract(s), subject to Lender's right to keep such
portion of the Basic Retainage as it may determine to be necessary to
ensure Completion of the related Work, with such retained portion to be
disbursed promptly after Completion of the related Work. Lender shall
have no obligation to make a Development Loan Advance if, after giving
effect to such Development Loan Advance, the sum of (a) the unpaid
principal balance of the Development Loan under which the Development
Loan Advance is made, (b) the committed and undisbursed portion of such
Development Loan, and (c) the Uncovered Cost of the Work being financed
under such Development Loan exceeds the Maximum Loan Amount for such
Development Loan. Lender shall have no obligation to make an Advance of
a Loan if, after giving effect to such Advance, the sum of (a) the
unpaid principal balance of the Loans, (b) the committed and
undisbursed portion of the Loans, and (c) the Uncovered Cost of the
Work being financed in whole or in part under all Development Loans
exceeds the Maximum Credit Facility Amount.
2.2 REVOLVING CREDIT FACILITY. Subject to the terms of the following
sentence, the Credit Facility is a revolving line of credit (i.e.,
Advances may be obtained against Real Property; and as those Advances
are repaid, other Advances may be obtained). Only one Advance may be
obtained under the Credit Facility for the purpose of paying or
reimbursing any Borrower for the Acquisition Costs of the same Real
Property; only one Development Loan may be obtained under the Credit
Facility for the purposes of paying or reimbursing any Borrower for
"hard" and "soft" costs of the Work performed on the same Real
Property; and the total Advances under a Loan may not exceed the
Maximum Loan Amount for such Loan. Each Loan shall be viewed as a
separate loan. Bluegreen Entities shall not be entitled to obtain Loans
after the expiration of the Borrowing Term unless Lender agrees in
writing with Parent to make Loans thereafter on terms and conditions
satisfactory to Lender. Subject to the provisions of paragraph 4.7, a
Borrower under a Development Loan may not obtain a Development Loan
Advance under the Development Loan after the Development Loan Borrowing
Term for such Development Loan has expired unless Lender agrees in
writing with such Borrower to do so.
2.3 USE OF ADVANCES. Parent will use the proceeds of each Advance made to
it as a Borrower, and will cause each Subsidiary which is a Borrower,
to use the proceeds of each Advance made to such Subsidiary, only for
the following purposes: if an Acquisition Advance, to pay (or reimburse
the Borrower for) the Acquisition Cost of the related Real Property
which is the subject of the Loan under which the Advance is made; and
if a Development Advance, to pay (or reimburse the Borrower for) "hard"
and "soft" costs of the related Work; PROVIDED, HOWEVER, that proceeds
disbursed to the Borrower in reimbursement of costs paid to it may be
used by the Borrower for any lawful purpose. If the amount needed by
the Borrower under a Development Loan for any line-item expense set
forth in the related Construction Budget is less than the Budgeted
Amount to be paid from such Development Loan for the line-item expense,
such excess may be reallocated to other line items in such Construction
Budget, as approved by Lender in writing. Notwithstanding anything
herein to the contrary, Lender shall have no obligation to approve any
Interest Reserve Fund and may approve or disapprove an Interest Reserve
Fund in its discretion.
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<PAGE> 12
2.4 OUTSTANDING LOANS. Lender and Borrower acknowledge that there is no
principal or interest currently outstanding under any Loan.
III. SECURITY.
3.1 MAINTENANCE OF SECURITY; CROSS COLLATERALIZATION. Parent will and will
cause each Subsidiary which is a Borrower: to deliver to Lender at the
times required pursuant to Article IV, the Guaranties, the
subordination agreements required pursuant to paragraph 6.8(b), the
Security Documents and all other security required to be given to
Lender by such entity pursuant to the terms of this Agreement; and,
subject to the provisions of the last sentence of this paragraph, to
maintain such Documents in full force and effect until all of their
respective Obligations have been Performed (except as otherwise
expressly provided in such Document or this Agreement). The Security
Documents executed by a Borrower in connection with an Advance shall,
at Lender's option, secure the repayment of all other Advances made to
such Borrower and the payment and performance of all other Obligations
of such Borrower under Documents executed by it; and in the case of
Parent shall secure the other Obligations described in paragraph 9.1.
However, if no Event of Default or Incipient Default then exists under
any Document executed by such Borrower, the Security Documents executed
by a Borrower in connection with an Advance shall be released when the
Obligations (other than those arising from a cross-collateralization
provision) under the Documents executed in connection with such Loan
have been paid and performed in full and no default exists under any
other obligation owing to Lender which is secured under such Security
Documents.
3.2 (a) SALE OF PARCELS; PARTIAL RELEASE OF PARCELS. A Borrower may
enter into a contract for the sale of portions ("Parcels") of
its Real Property encumbered by a Mortgage so long as the
contract is entered into in good faith in the ordinary course
of such Borrower's business when no Event of Default exists,
the transaction complies with applicable laws and, until
closing of the contract, the contract is subject to the terms
and conditions of the Security Documents. A Borrower shall be
entitled to close a contract entered into satisfying the
conditions of the preceding sentence and to have the Parcel
being sold and other Collateral exclusively-related to such
Parcel released from the effect of the Security Documents
encumbering such Property if (but only if):
(i) no Event of Default or Incipient Default shall exist
at the time of such partial release ("Partial
Release");
(ii) the Parcel requested to be released ("Release
Parcel") is a legally subdivided parcel and Lender
has received adequate evidence thereof;
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<PAGE> 13
(iii) such Borrower shall have delivered to Lender a
written request for a partial release of the Release
Parcel from the Mortgage, which request shall specify
a date for the consummation of the proposed Partial
Release ("Partial Release Date");
(iv) such Borrower shall have delivered to Lender for
execution by Lender a partial release/deed of release
and reconveyance of the Mortgage which is in
recordable form, contains an appropriate legal
description of the proposed Release Parcel and is
otherwise in form and substance satisfactory to
Lender;
(v) unless (i) waived in writing by Lender or (ii) the
Release Parcel is a platted single-family residential
lot and a copy of the plat for the subdivision in
which such Release Parcel is located has been
delivered to and approved by Lender (such approval
not to be unreasonably withheld), Borrower shall have
delivered to Lender a 1992 ALTA/ACSM survey certified
to Lender and prepared by a land surveyor reasonably
satisfactory to Lender showing the Release Parcel and
the Real Property remaining subject to the lien of
the Mortgage immediately after giving effect to the
Partial Release;
(vi) the Partial Release shall not impair or adversely
affect Lender's security in the Real Property
remaining subject to the lien of the Mortgage
immediately after giving effect to the Partial
Release or any provision of the Mortgage as it
pertains to the remaining Real Property; and without
limiting the generality of the foregoing, unless the
Release Parcel is a platted single-family residential
lot and a copy of the plat for which such Release
Parcel is located has been delivered to and approved
by Lender (such approval not to be unreasonably
withheld), Lender shall be entitled at the time of
the Partial Release to have the Release Parcel made
subject to such easements and restrictive covenants
as Lender may reasonably determine to be necessary
for the benefit of the remaining Real Property;
(vii) unless it has previously delivered the items to
Lender, such Borrower shall have delivered to Lender
and Lender shall have approved in writing a written
plan with respect to the development of the Real
Property, the size and anticipated sales prices of
parcels to be released, and the pattern in which
Partial Releases of Parcels is to occur; and
(viii) Borrower has paid, or simultaneously with the Partial
Release will pay, the Partial Release Payment and all
recording and escrow fees and other reasonable
out-of-pocket expenses of Lender incurred in
connection with the Partial Release of the Release
Parcel and any other exclusively-related Property.
If the preceding sentence does not specify another date by
which items must be delivered to Lender, such items shall be
delivered to Lender at least five (5) Business Days prior to
the Partial Release Date. Notwithstanding anything herein to
the contrary, Lender shall not be obligated to partially
release Parcels more than once per week.
(b) PARTIAL RELEASE OF RELATED PROPERTY. Notwithstanding anything
in the Documents to the contrary, if a partial release of a
Release Parcel is executed by Lender and recorded in the real
estate records where the Mortgage encumbering it is recorded
and Lender receives the applicable Partial Release Payment,
there shall IPSO FACTO be
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<PAGE> 14
released from the lien, assignment and security interest of
the Security Documents: (a) so long as no Event of Default
then exists, any contract for the sale by Borrower of such
Release Parcel, all instruments, chattel paper and general
intangibles evidencing or representing purchase money
indebtedness owing to Borrower in connection with the sale of
such Release Parcel, and any and all proceeds paid or payable
thereunder; (b) any tangible Personal Property appurtenant to
such Release Parcel; and (c) any other property expressly
described in the recorded partial release. However, if
requested by a Borrower, Lender shall from time to time
execute amendments to UCC financing statements and other
documents which have been prepared and delivered by Borrower
to Lender, are reasonably necessary to effectuate the release
of such Property from the Security Documents, and are in form
and substance satisfactory to Lender.
3.3 DETERMINATION OF PARTIAL RELEASE PAYMENTS. As used in this Agreement,
the term "Partial Release Payment" means an amount to be paid in
consideration of the Partial Release of a Release Parcel and
exclusively-related Personal Property. Partial Release Payments for
Parcels shall be determined by Lender at the time of the first Advance
under a Loan made for the purpose of paying (or reimbursing Borrower
for) the costs of acquiring or improving the Real Property of which the
Parcel is a part. In making its determination, Lender may consider the
projected sales volume of Parcels and the number of Parcels into which
the Real Property has been subdivided; PROVIDED, HOWEVER, that the
minimum Partial Release Payment for any such Parcel which is a
single-family residential lot shall be equal to the greater of
(assuming all single-family residential lots are of approximately
comparable value):
(a) the quotient determined by dividing (i) the Maximum Loan
Amount for such Loan by (ii) the product of (A) 0.80 times (B)
the number of single-family residential lots into which such
Real Property has been subdivided; or
(b) the quotient determined by dividing (i) the Maximum Loan
Amount for such Loan by (ii) the product of (A) 0.80 times (B)
the projected gross sales volume of single-family residential
lots into which the Real Property has been subdivided.
3.4 OTHER DEVELOPMENTAL MATTERS AFFECTING SECURITY. If a Borrower desires
Lender to give its consent to or take any other action concerning a
matter affecting the zoning, platting, development or sale of or title
to any of its Real Property encumbered by a Mortgage, it shall comply
with the procedures set forth in EXHIBIT K. The provisions of the
preceding sentence shall not apply to Borrower's desire to obtain
Partial Releases or to obtain Advances, the procedures for which are
set forth elsewhere in this Agreement.
IV. CONDITIONS PRECEDENT TO THIS AGREEMENT AND TO ADVANCES.
4.1 CONDITIONS PRECEDENT TO LOAN AGREEMENT. Lender's obligation to enter
into this Agreement shall be subject to and conditioned upon Parent
having delivered to Lender the Articles of Organization of Parent, the
terms of the Rule 144A financing which Parent recently closed, and
following Documents, duly executed, delivered and in form and substance
satisfactory to Lender:
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(a) the Resolutions of Parent;
(b) a favorable opinion from independent counsel for Parent in
form and substance satisfactory to Lender;
(c) this Agreement;
(d) the Third Party Consents required with respect to Parent's
execution of the Documents and Performance of its Obligations;
(e) the documents required pursuant to paragraph 9.1(c) in
connection with the PRFC Loan [as defined in paragraph
9.1(a)]; and
(f) such other documents as Lender may reasonably require.
4.2 CONDITIONS PRECEDENT TO FIRST ADVANCE OF ANY LOAN. Lender's obligation
to make the first Advance of a Loan to a Borrower shall be subject to
and conditioned upon the terms and conditions set forth in the
following subparagraphs and elsewhere in this Agreement being satisfied
at the time of such Advance:
(a) DOCUMENTS. Such Borrower shall have delivered to Lender the
following Documents, duly executed, delivered, recorded/filed,
if applicable, and otherwise in form and substance
satisfactory to Lender:
(i) a Note in the amount of the Loan;
(ii) a Mortgage encumbering the Real Property which is the
subject of the Loan;
(iii) a Security Agreement covering the Personal Property
relating to the Real Property which is the subject of
the Loan;
(iv) the Assignments pertaining to the Real Property which
is the subject of the Loan;
(v) UCC financing statements for filing and/or recording,
as appropriate, where necessary to perfect the
Security Interest in the Collateral covered by the
Security Documents required to be delivered to Lender
in connection with the Loan;
(vi) an Environmental Certificate pertaining to the Real
Property which is the subject of the Loan;
(vii) if the Loan is a Development Loan, a Certificate and
Agreement of Borrower Regarding Construction-Related
Matters in form and substance identical to EXHIBIT I;
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<PAGE> 16
(viii) if the Borrower is a Subsidiary, a Certificate and
Agreement of Subsidiary Borrower (Basic) in form and
substance identical to EXHIBIT J;
(ix) if the Borrower is a Subsidiary, a Guaranty;
(x) if the Borrower is a Subsidiary, the subordination
agreement, if any, required pursuant to paragraph
6.8(b);
(xi) a Title Policy insuring the Mortgage required to be
delivered to Lender in connection with the Loan (or
an unconditional commitment for the delivery of the
Title Policy promptly after delivery of the Loan);
(xii) a favorable opinion from independent counsel for the
Borrower and, if the Borrower is a Subsidiary, from
Parent with respect to the matters described in
EXHIBIT E; and
(xiii) a Request for Advance in the applicable form.
(b) ORGANIZATIONAL PROJECT AND OTHER DUE DILIGENCE DOCUMENTS.
Unless waived in writing by Lender in its discretion, such
Borrower shall have delivered to Lender at least fifteen (15)
Business Days prior to the date of the first Advance of the
Loan in form and substance satisfactory to Lender:
(i) if the Borrower is a Subsidiary, the Articles of
Organization of such Borrower;
(ii) if the Borrower is a Subsidiary, the Resolutions of
such Borrower;
(iii) current certificates of good standing for such
Borrower and Guarantor from their respective states
of incorporation; and, in the case of Borrower, in
the state where the Real Property which is the
subject of the Loan is located;
(iv) a Level I environmental assessment of the Real
Property which is the subject of the Loan and a "Haz
Map Report" for such Real Property;
(v) evidence that taxes and assessments on the Real
Property which is the subject of the Loan and related
Personal Property have been paid;
(vi) evidence that Borrower has good and marketable title
to an undivided fee simple interest in the Real
Property, together with a title commitment or
preliminary title report for the issuance of the
required Title Policy, together with copies of all
documents referred to therein;
(vii) a 1992 ALTA/ACSM survey of the Real Property which is
the subject of the Loan certified to Lender and
prepared by a licensed land surveyor acceptable to
Lender, showing such Real Property, all easements
necessary to the
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<PAGE> 17
appropriate use of such Real Property and such other
details as Lender may reasonably require;
(viii) a written plan for the proposed use, development and
sale of the Real Property which is the subject of the
Loan (including, without limitation, sales
projections and a detailed list of remaining
development/construction items, with a breakdown of
costs and completion schedules and bonds for
completion and maintenance of improvements) and
demonstrating that the gross profit margin of such
Real Property (as developed in accordance with such
plan) will be at least fifty percent (50%), evidence
that the Real Property has been platted or otherwise
legally subdivided into not less than fifty (50)
single-family residential lots in accordance with
such plan, and all licenses and certificates
(exclusive of licenses and certificates dependent
upon completion of improvements to be constructed by
the purchasers of Parcels) for the intended use of
such Real Property, including environmental permits;
(ix) evidence that the Real Property which is the subject
of the Loan is zoned for the intended uses and that
all approvals under applicable Legal Requirements
have been obtained;
(x) unless deferred by Lender in writing, evidence that
such Borrower has complied with all applicable laws
and obtained all permits and approvals needed by it
to sell single-family residential lots into which the
Real Property which is the subject of the Loan has
been subdivided, including, without limitation, a
copy of the registrations/consents to sell and the
final subdivision public reports/public offering
statements and/or prospectuses and approvals thereof
required to be issued by or used in the state where
the Real Property is located.
(xi) unless deferred by Lender in writing, a copy of the
form of the purchase contract, deed, promissory note,
real property security document, credit applications
and disclosures which will be used by such Borrower
in connection with the sale of Parcels into which the
Real Property has been subdivided, together with the
project governing documents, the project management
agreement (if any) and project advertising materials;
(xii) unless deferred by Lender in writing, owners'
association budgets, if applicable, and other owner
association information required by Lender;
(xiii) the Insurance Policies;
(xiv) evidence that the Real Property which is the subject
of the Loan is not located within a flood prone area,
except for such portion thereof which does not
materially adversely affect the development, use or
value of the Real Property (taken as a whole) which
is the subject of the Advance;
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<PAGE> 18
(xv) evidence of the current and continued availability of
adequate utilities to serve the Real Property which
is the subject of the Loan for the intended use of
such Real Property;
(xvi) evidence of access to the Real Property which is the
subject of the Loan, which is adequate to serve such
Real Property for its intended use;
(xvii) if the Loan includes an Acquisition Advance, a copy
of the purchase contract pursuant to which such
Borrower purchased or is to purchase the Real
Property which is the subject of the Loan, closing
settlement statements, paid invoices, canceled checks
and other items reasonably satisfactory to Lender to
verify the Acquisition Cost of such Real Property;
(xviii) evidence that such Borrower continues to have
invested in the Real Property which is the subject of
the Loan cash in an amount determined as follows: (A)
not less than twenty percent (20%) of the Acquisition
Cost of such Real Property, if the Loan is an
Acquisition Loan; or (B) not less than twenty percent
(20%) of the sum of the Acquisition Cost of such Real
Property plus the cost, as shown in the Construction
Budget, of Completion of the Work which is being
financed in whole or in part under the Loan, if the
Loan is a Development Loan;
(xix) a geological and soils test report or other evidence
with respect to the suitability of the soils on the
Real Property which is the subject of the Loan for
the intended use;
(xx) if the Loan exceeds Two Million Dollars ($2,000,000)
and otherwise if required by Lender in writing, an
MAI appraisal of the Real Property which is the
subject of the Loan reflecting a fair market value in
an amount satisfactory to Lender;
(xxi) unless waived or deferred by Lender in writing, a
hydrological study with respect to the Real Property
which is the subject of the Loan;
(xxii) unless waived or deferred by Lender in writing, an
archaeological study with respect to the Real
Property which is the subject of the Loan;
(xxiii) market data with respect to the Real Property which
is the subject of the Loan, including data or the
price and absorption of lots in competing projects
within such market;
(xxiv) if the Loan is a Development Loan, the items listed
in EXHIBIT F; and
(xxv) such other items as Lender requests which are
reasonably necessary to evaluate the request for the
Advance and the satisfaction of the conditions
precedent to the Advance.
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(c) LITIGATION AND JUDGMENT SEARCHES. Lender shall have received
the following in form and substance satisfactory to Lender:
(i) the results of current UCC, lien, litigation,
judgment and bankruptcy searches for such Borrower
and Parent conducted in such jurisdictions as Lender
deems appropriate; and
(ii) the results of a site inspection of the Real Property
which is the subject of the Loan made by Lender's
employees.
4.3 CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES OF DEVELOPMENT LOAN. For
each Development Loan Advance other than an Interest Reserve Advance,
Lender's obligation to make such Advance shall be subject to the terms
and conditions set forth in EXHIBIT G, including delivery to Lender of
the items called for therein at least ten (10) Business Days prior to
the date of such Advance.
4.4 GENERAL CONDITIONS PRECEDENT TO ALL ADVANCES. Lender's obligation to
fund any Advance is subject to and conditioned upon the additional
terms and conditions set forth in the following subparagraphs remaining
satisfied at the time of such Advance:
(a) NO CHANGE IN COLLATERAL, BORROWER OR PARENT. No material,
adverse change shall have occurred in the Collateral or in the
business or financial condition of Parent or any Subsidiary
which is a Borrower since the date of the latest financial and
operating statements given to Lender by or on behalf of Parent
or any Subsidiary which is a Borrower.
(b) NO CHANGE IN REPRESENTATIONS AND WARRANTIES. There shall have
been no material, adverse change in the warranties and
representations made in the Documents by Parent or any
Subsidiary which is a Borrower.
(c) NO EVENT OF DEFAULT OR INCIPIENT DEFAULT. Neither an Event of
Default nor Incipient Default shall have occurred and be
continuing.
(d) INTEREST RATE NOT USURIOUS. The interest rate applicable to
the Advance (before giving effect to any savings clause) will
not exceed the maximum rate permitted by the Applicable Usury
Law.
(e) PAYMENT OF FEES. Lender has received the Credit Facility
Modification Fee Installment Payment and all other fees
required to be paid at the time of the Advance.
4.5 DISBURSEMENT OF ADVANCES. Advances under a Loan may be disbursed to the
Borrower under such Loan; or if requested by Borrower and approved in
writing by Lender or if required by Lender in connection with a
Work-Related Advance under a Development Loan, to others, either
severally or jointly with such Borrower, for the credit or benefit of
such Borrower. Advances under a Loan shall be disbursed by wire
transfer or, at the option of the Borrower under such Loan exercised by
written request to Lender, by check or drafts. A Borrower will
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pay Lender's charge in connection with any wire transfer requested by
it, which is currently Twenty-Five Dollars ($25). Lender may, at its
option, withhold from an Advance any sum (including costs and expenses)
then due to it under the terms of the Documents by the Borrower
requesting the Advance or which such Borrower would be obligated to
reimburse Lender pursuant to the Documents if first paid directly by
Lender. Lender reserves the right to require that Work-Related Advances
under Development Loans be disbursed through a "control escrow."
4.6 NO WAIVER. Although Lender shall have no obligation to make an Advance
unless and until all of the conditions precedent to the Advance have
been satisfied, Lender may, at its sole discretion, make Advances prior
to that time without waiving or releasing any of the Obligations.
4.7 INTEREST RESERVE ADVANCES. If neither an Event of Default nor an
Incipient Default exists and subject to the terms and conditions
applicable to Interest Reserve Advances under a Development Loan,
during the Borrowing Term of a Development Loan and, in Lender's
discretion, after expiration of such Borrowing Term to the extent the
Interest Reserve Fund under such Development Loan has not been
exhausted, Lender will charge the Interest Reserve Fund, IF ANY, under
such Development Loan until it has been exhausted for monthly interest
billings on such Development Loan. If the Interest Reserve Fund, IF
ANY, under a Development Loan is exhausted or is not otherwise
available for such use, the Borrower under such Development Loan will
pay to Lender the monthly installments of interest due in connection
with such Development Loan in accordance with the terms of the related
Note and this Agreement.
V. NOTES, PAYMENTS; SALES AND PARTIAL RELEASES.
5.1 REPAYMENT OF LOANS. Each Loan shall be evidenced by a separate Note and
shall be repaid in immediately available funds with interest according
to the terms of the form of the Note executed in connection with such
Loan. Each Note executed in connection with a Loan made on or after
April 16, 1998, shall be in form and substance substantially identical
to EXHIBIT B; PROVIDED, HOWEVER, that in addition to the principal
payments required pursuant to paragraph 5.2, Lender may require that
the Borrower under such Loan make principal payments on each
anniversary of the initial Advance of such Loan in amounts which are
established in writing by Lender prior to such Advance and are
specified in the Note evidencing such Loan.
5.2 PARTIAL RELEASE PRINCIPAL PAYMENTS. Until a Note has been paid in full,
the Borrower obligated thereunder will make to Lender at the time of
each Partial Release of a Release Parcel from the Mortgage encumbering
the Note a principal payment equal to the Partial Release Payment for
such Release Parcel, and the Partial Release Payment shall be applied
to such Obligation.
5.3 PREPAYMENTS. Except as required pursuant to paragraph 5.1 or 5.2 or as
permitted pursuant to the following sentence, no Note shall be entitled
to be prepaid in whole or in part. The prohibition on prepayment shall
not apply to a one-time prepayment made pursuant to a
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consent letter dated as of March 30, 1998, from Lender to Parent, with
respect to Loans made prior to such date; PROVIDED, HOWEVER, this
Agreement shall survive any such prepayment.
5.4 APPLICATION OF PROCEEDS. Notwithstanding anything in the Documents to
the contrary other than the provisions of paragraph 3.2 or 5.2 hereof
pertaining to the application of Partial Release Payments, the amount
of all payments or amounts received by Lender with respect to each Loan
shall be applied to the extent applicable under the Documents: (i)
first, to any past due payments of interest on such Loan and to accrued
interest on such Loan through the date of such payment, including any
default interest; (ii) then, to any interest on delinquent interest,
late fees, overdue risk assessments, examination fees and expenses,
collection fees and expenses and any other fees and expenses due to
Lender under the Documents in connection with such Loan; and (iii)
last, the remaining balance, if any, to the unpaid principal balance of
such Loan; PROVIDED, HOWEVER, while an Event of Default or Incipient
Default exists, each payment with respect to such Loan shall be applied
to such amounts owed to Lender by the applicable Borrower as Lender in
its discretion may determine. In calculating interest and applying
payments as set forth above: (i) interest on each Loan shall be
calculated and collected through the date payment is actually received
by Lender; (ii) interest on the outstanding balance of such Loan shall
be charged during any grace period permitted under the Documents; (iii)
on each annual anniversary of the closing date of such Loan, all past
due interest and other past due charges provided for under the
Documents with respect to such Loan shall be added to the principal
balance of such Loan; and (iv) to the extent that the applicable
Borrower makes a payment or Lender receives any payment or proceeds of
the Collateral for Borrower's benefit that is subsequently invalidated,
set aside or required to be repaid to any other person or entity, then,
to such extent, the Obligations in connection with such Loan intended
to be satisfied shall be revived and continue as if such payment or
proceeds had not been received by Lender and Lender may adjust the
balance of such Loan as Lender, in its discretion, deems appropriate
under the circumstances.
5.5 BORROWER'S UNCONDITIONAL OBLIGATION TO MAKE PAYMENTS. Whether or not
the proceeds from the Collateral shall be sufficient for that purpose,
each Borrower will pay when due all payments required to be made
pursuant to any of the Documents executed by it, such Borrower's
Obligation to make such payments being absolute and unconditional.
VI. BORROWER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
6.1 (a) GOOD STANDING. Parent is and will remain, and will cause each
Subsidiary which is a Borrower to be and remain, duly
organized, validly existing and in good standing under the
laws of their respective state of organization and qualified
to do business and in good standing in each jurisdiction in
which the location or nature of their respective properties or
their respective businesses makes such qualification
necessary. Parent has, and will cause each Subsidiary which is
a Borrower to have, full authority to Perform their respective
Obligations and to carry on their respective business and own
their respective property.
(b) POWER AND AUTHORITY; ENFORCEABILITY. Parent has and will
maintain, and will cause each Subsidiary which is a Borrower
to have and maintain, full power and authority
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to grant the Security Interest, to execute and deliver the
Documents required of it in connection with the Loans; and to
Perform their respective Obligations. All action necessary and
required by the Articles of Organization of Parent and all
applicable laws for the obtaining of the Credit Facility and
for the execution and delivery of the Documents which have
been or will be executed and delivered by it in connection
with the Credit Facility has been duly and effectively taken.
The Documents which have been or will be executed by any
Bluegreen Entity are and shall be legal, valid, binding and
enforceable against it and do not and will not constitute a
default or result in the imposition of a lien under the terms
or provisions of any agreement to which it is a party. No
consent of any governmental agency or any other person not a
party to such Document is or will be required as a condition
to the execution, delivery or enforceability of any Documents
required of it hereunder by or against Parent or any
Subsidiary which is a Borrower.
6.2 NO LITIGATION. There is no action, litigation or other proceeding
pending or, to Parent's knowledge, threatened before any arbitration
tribunal, court, governmental agency or administrative body against
Parent, which might materially adversely affect the Collateral, the
Performance of its Obligations, the business or financial condition of
Parent, or the ability of Parent to Perform its Obligations. Parent
will promptly notify Lender if any action, litigation or proceeding is
pending or threatened against Parent or any Subsidiary which is a
Borrower, which might materially, adversely affect the Collateral, the
business or financial condition of Parent or any such Subsidiary, or
the ability of Parent or any such Subsidiary to Perform its
Obligations.
6.3 COMPLIANCE WITH LAWS. Parent has complied, and will comply and cause
each Subsidiary which is a Borrower to comply, with all Legal
Requirements where the failure to do so might materially, adversely
affect the Collateral, the business or financial condition of Parent or
any such Subsidiary, or the ability of Parent or any such Subsidiary to
Perform its Obligations.
6.4 RESTRICTIONS ON TRANSFERS, LIENS AND CHANGE OF CONTROL . Unless
expressly permitted in this Agreement or in any of the Security
Documents, without the prior written consent of Lender, Parent will
not, and will not permit any Subsidiary which is a Borrower, to do any
of the following: (a) except for sales and transfers of damaged,
obsolete or worn-out items of tangible Personal Property or other
non-material items of tangible Personal Property in accordance with the
terms of the Security Documents, sell, convey, pledge, hypothecate,
encumber or otherwise transfer any Collateral; (b) permit or suffer to
exist any liens, security interests or other encumbrances on any
Collateral, except for the Permitted Encumbrances and liens and
security interests expressly granted to Lender; (c) permit or suffer
the sale, lease, transfer or disposal of all or substantially all of
their respective assets to another entity; or (d) only in the case of a
Subsidiary, permit or suffer to exist any transfer of ownership
interests in or control of such entity.
6.5 INSURANCE. Parent will pay the cost of, will maintain, or cause to be
maintained, and will deliver or cause to be delivered to Lender
evidence of insurance policies required by Lender, and written by
insurers and in amounts and on forms satisfactory to Lender.
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<PAGE> 23
6.6 (a) NO MISREPRESENTATIONS. The Documents and all certificates,
financial statements and written materials furnished to Lender
by or on behalf of Parent or any Subsidiary which is a
Borrower in connection with the Credit Facility do not and
will not contain any untrue statement of a material fact or
omit to state a fact which materially adversely affects or in
the future may materially adversely affect the Collateral, the
business or financial condition of Parent or any Subsidiary
which is a Borrower, or the ability of Parent or any such
Subsidiary to perform its Obligations.
(b) RELIANCE. Lender's examination, inspection or receipt of
information pertaining to Parent, any Subsidiary which is a
Borrower, or the Collateral shall not in any way be deemed to
reduce the full scope and protection of the warranties,
representations and Obligations contained in the Documents.
6.7 (a) FINANCIAL INFORMATION. Parent will furnish or cause to
be furnished to Lender, within one hundred twenty (120) days
after the end of each fiscal year of Parent, a copy of the
current annual consolidated financial statements of Parent;
and will furnish to Lender, within forty-five (45) days after
the end of each interim quarterly fiscal period of Parent, a
copy of the current consolidated financial statements of
Parent for the period commencing with the first day of the
fiscal year and concluding with such quarter end. Such
financial statements shall contain a balance sheet as of the
end of the relevant fiscal period and statements of income and
of cash flow for such fiscal period (together, in each case,
with the comparable figures for the corresponding period of
the previous fiscal year), all in reasonable detail. All
financial statements shall be prepared in accordance with
generally accepted accounting principles, consistently
applied. All financial statements required pursuant to this
paragraph shall be certified by the chief financial officer of
Parent. Annual statements shall be audited and certified by a
recognized firm of certified public accountants reasonably
satisfactory to Lender. Lender acknowledges that, as of the
date hereof, the firm of Ernst & Young is acceptable to it.
Together with such financial statements, Parent will deliver
to Lender a certificate signed by Parent's chief financial
officer stating that there exists no Event of Default or
Incipient Default or, if any such Event of Default or
Incipient Default exists, specifying the nature and period of
its existence and what action Parent and any pertinent
Subsidiary proposes to take with respect to it.
(b) RIGHT TO INSPECT. Parent will permit, and will cause each
Subsidiary which is a Borrower to permit, Lender and its
representatives at all reasonable times to inspect, audit and
copy, as appropriate, the Collateral, and their respective
records.
(c) ADDITIONAL INFORMATION. Parent will make available, and will
cause each Subsidiary which is a Borrower to make available,
to Lender such further information as Lender may from time to
time reasonably request.
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<PAGE> 24
6.8 SUBORDINATION OF INDEBTEDNESS.
(a) All obligations of Parent to Lender are intended to, and do,
constitute "Senior Indebtedness" as such term is defined in
and for purposes of the Indenture dated as of May 15, 1987
("Indenture") between Parent and Shawmut Bank, N.A., as
trustee, pursuant to which the Borrower's eight and
one-quarter percent (8 1/4%) Convertible Subordinated
Debentures due 2012 ("Debentures") were issued, and will be
entitled to all the benefits associated with being "Senior
Indebtedness" under the Indenture, including, without
limitation, ranking senior to the Debentures.
(b) Parent will cause each Borrower which is a Subsidiary to cause
any and all indebtedness owing by such Subsidiary to its
shareholders, directors or officers, Parent, or the Affiliates
of such Borrower or the foregoing and all liens, security
interests and other charges on the assets of such Borrower in
respect of such indebtedness, including, without limitation,
the Collateral, to be fully subordinated in all aspects to the
Obligations of such Borrower pursuant to written agreements
satisfactory to Lender; PROVIDED, HOWEVER, that such
subordination shall not extend to reasonable salaries and fees
at normal and customary rates for services actually rendered
or, if neither an Event of Default nor an Incipient Default is
outstanding, to payments or distributions of any kind to
Parent. Any such creditor shall execute a subordination
agreement in form and substance satisfactory to Lender.
6.9 NO DEFAULT FOR THIRD PARTY OBLIGATIONS. Parent is not in default under
any other agreement evidencing, guaranteeing or securing borrowed money
or a receivables purchase financing involving an obligation in excess
of the Threshold Amount to make a payment of principal or interest or
to repurchase receivables or any other material default by Parent
permitting the acceleration of the payment or repurchase obligations of
Parent, which payment or repurchase obligations entitled to be
accelerated are in excess of the Threshold Amount in the aggregate.
Parent is not in violation of or in default under any material term in
any other material agreement, instrument, order, decree or judgment of
any court, arbitration or governmental authority to which it is a party
or by which it is bound.
6.10 NET WORTH MAINTENANCE. Parent will at all times maintain an Adjusted
Tangible Net Worth, determined in accordance with generally accepted
accounting principles, in an amount not less than Eighty-Five Million
Dollars ($85,000,000). As used herein, the term "Adjusted Tangible Net
Worth" shall mean net worth less goodwill, determined in accordance
with generally accepted accounting principles, consistently applied,
plus the principal balance outstanding under the Indenture and other
debt subordinated to the Obligations pursuant to agreements
satisfactory to Lender (collectively, "Subordinated Debt").
6.11 INTENTIONALLY LEFT BLANK.
6.12 ADJUSTED LEVERAGE RATIO. Parent will not permit the ratio of its
Adjusted Total Liabilities to Adjusted Tangible Net Worth at any time
to be greater than 3.0 to 1.0. As used herein, the term "Total
Liabilities" shall mean the aggregate of Parent's current liabilities
and non-current liabilities; and the term "Adjusted Total Liabilities"
shall mean Total Liabilities less Subordinated Debt.
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<PAGE> 25
6.13 LIMITATION ON MARKETING AND G&A EXPENSES. Parent will not incur, and
will not permit any consolidated subsidiary to incur, combined selling,
general and administrative expenses that exceed fifty-five percent
(55%) of net sales from the real estate owned by them, calculated as of
the end of each calendar quarter on a twelve (12) month rolling basis.
As used herein, the term "selling, general and administrative expenses"
shall mean selling, general and administrative expenses properly
allocable to real estate calculated in accordance with generally
accepted accounting principles, as previously reflected in the
financial statements of Parent provided to Lender.
6.14 PAYMENT OF TAXES. Parent has filed or will file and cause each
Subsidiary which is a Borrower to file all tax returns required to be
filed by such entity, and Parent has paid or will pay and will cause
each Subsidiary which is a Borrower to pay all taxes, assessments,
levies and penalties, if any, required to be paid by such entity, to
any governmental or quasi- governmental authority or subdivision,
including real estate taxes and assessments relating to the Collateral,
unless and only to the extent the item shall be contested in good faith
and by appropriate proceedings by such entity, such entity shall set
aside and cause on its books adequate reserves with respect to the
contested item and, in connection with any tax assessment, levy or
penalty levied against the Collateral, the entity granting the Security
Interest in such Collateral shall comply with the terms of Security
Documents pertaining to such contest.
6.15 CREDIT FACILITY MODIFICATION FEE INSTALLMENT PAYMENT AND OTHER FEES AND
EXPENSES. In addition to all fees paid or required to be paid to Lender
in connection with Advances made to Borrowers prior to April 16, 1998,
Parent will pay, or will cause each Subsidiary which is a Borrower to
pay, to Lender at the time of each Advance an amount equal to one
percent (1%) of the amount of the Advance (each such payment amount, a
"Credit Facility Modification Fee Installment Payment") until Lender
has received in the aggregate Credit Facility Modification Fee
Installment Payments equal to Six Hundred Twelve Thousand Five Hundred
Dollars ($612,500) ("Credit Facility Modification Fee"); PROVIDED,
HOWEVER, that Parent shall pay to Lender on June 30, 1999, the
acceleration of any portion the Credit Facility or the termination by
Parent of the Credit Facility, whichever event first occurs, the excess
of the Credit Facility Modification Fee over the aggregate of all
Credit Facility Modification Fee Installment Payments previously
received by Lender. After Lender has received the full amount of the
Credit Facility Modification Fee, no further Credit Facility
Modification Fee Installment Payments will be due. Furthermore,
Borrower will pay to Lender on April 1, 1999, and each April 1
thereafter through and including April 1, 2001, a fee equal to one
percent (1%) of the excess of (a) Twenty Million Dollars ($20,000,000)
over (b) the aggregate principal amount of Advances made during the
twelve (12) month period ending on the preceding day (i.e., April 31).
Parent will also pay on demand any and all reasonable costs and
expenses incurred by Lender in connection with the initiation,
documentation, closing and modification of the Credit Facility and the
Loans, the making of Advances, the protection of the Collateral, and
the enforcement of the Obligations, including, without limitation: all
reasonable attorneys' and other professionals' fees and charges
(including, without limitation, normal charges for photocopy, telecopy
and computer services); the costs of credit reports and UCC, lien,
litigation, judgment and bankruptcy searches, and revenue, documentary
stamp and intangible taxes. Without limiting the
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generality of the foregoing, if a bankruptcy proceeding is commenced by
or against a Borrower or otherwise involving any Collateral for the
Obligations of a Borrower, Lender shall, to the extent not already
provided for herein, be entitled to recover, and such Borrower and, if
it is not the Borrower, Parent shall be obligated to pay, Lender's
reasonable attorneys' fees incurred in connection with: (i) any
determination of the applicability of the bankruptcy laws to the terms
of this Agreement and the other Documents executed by the Borrower or,
if it is not the Borrower, by Parent or to Lender's rights thereunder;
(ii) any attempt by Lender to enforce or preserve its rights under the
bankruptcy laws or to prevent Borrower or any other person from seeking
to deny Lender its rights thereunder; (iii) any effort by Lender to
protect, preserve or enforce its rights against any Collateral for the
Obligations of such Borrower or seeking authority to modify the
automatic stay of 11 U.S.C. Section 362 or otherwise seeking to engage
in such protection, preservation or enforcement; or (iv) any
proceeding(s) arising under the bankruptcy laws or arising in or
related to a case under bankruptcy laws.
6.16 INDEMNIFICATION. Parent will INDEMNIFY, PROTECT, HOLD HARMLESS, and
defend Lender, its successors, assigns and shareholders (including
corporate shareholders), and the directors, officers, employees, agents
and servants of the foregoing, for, from and against, except to the
extent arising from the indemnitee's gross negligence or willful
misconduct, any and all losses, costs, expenses (including, without
limitation, court costs and attorneys' fees), demands, claims, suits,
proceedings (whether civil or criminal), orders, judgments, penalties,
fines and other sanctions arising from or brought in connection with
(a) any of the Collateral, the terms of the Documents or the
transactions related thereto, or any act or omission of Parent or any
Subsidiary which is a Borrower or their respective employees or agents,
whether actual or alleged, and (b) any and all brokers' commissions or
finders' fees or other costs of similar type by any party engaged by
Parent or any Subsidiary which is a Borrower in connection with the
Credit Facility. On written request by a person or other entity covered
by the above agreement of indemnity, Parent will undertake, at its own
cost and expense, on behalf of such indemnitee, using counsel
satisfactory to the indemnitee, the defense of any legal action or
proceeding to which such person or entity shall be a party and for
which such indemnitee is entitled to be indemnified pursuant to this
paragraph 6.16. At Lender's option, Lender may at Borrower's expense
prosecute or defend any action involving the priority, validity or
enforceability of the Security Interests.
6.17 PERFECTION OF SECURITY INTERESTS. Parent will execute or cause to be
executed all documents, and do or cause to be done all acts, reasonably
necessary for Lender to perfect and to continue the perfection of
Security Interests or otherwise to effect the intent and purposes of
the Documents.
6.18 SURVIVAL AND ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties and covenants contained in this Article VI
are in addition to, and not in derogation of, the representations and
warranties contained elsewhere in the Documents and shall be deemed to
be made and reaffirmed prior to the making of each Advance.
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VII. DEFAULT.
7.1 EVENTS OF DEFAULT. The occurrence of any of the following events or
conditions shall constitute an Event of Default under the Documents:
(a) failure of Lender to receive within five (5) Business Days of
the date when due and payable (i) any amount payable under a
Note or (ii) any other payment due from Parent or any
Subsidiary which is a Borrower, except for the payment due at
the Maturity Date of a Note for which no grace period is
allowed;
(b) any representation or warranty which is made by a person other
than Lender and is contained in the Documents or in any
certificate furnished to Lender under the Documents by or on
behalf of Parent or any Subsidiary which is a Borrower proves
to be, in any material, adverse respect, false or misleading
as of the date deemed made;
(c) a default in the Performance of the Obligations set forth in
paragraph 6.4(a), 6.4(c), 6.4(d), 6.5, 6.8, 6.10, 6.12 or
6.13;
(d) a default by any Borrower in the Performance of the
Obligations or a violation of any term, covenant or provision
of the Documents (other than a default or violation referred
to elsewhere in this paragraph 7.1) which continues unremedied
(i) for a period of five (5) Business Days after notice of
such default or violation given by Lender to such Borrower in
the case of a default under or violation of paragraph 6.4(b)
or any other default or violation which can be cured by the
payment of money alone or (ii) for a period of twenty (20)
Business Days after notice to such Borrower in the case of any
other default or violation;
(e) an "Event of Default", as defined elsewhere in any of the
Documents;
(f) any default by Parent or any Subsidiary which is a Borrower
under any other agreement evidencing, guaranteeing or securing
borrowed money or a receivables purchase financing involving
an obligation in excess of the applicable Threshold Amount to
make a payment of principal or interest or to repurchase
receivables or any other material default by such entity under
any such agreement permitting the acceleration of the payment
or repurchase obligations, which accelerated repayment or
repurchase obligations are in the aggregate in excess of the
Threshold Amount applicable to such entity;
(g) any final, non-appealable judgment, decree or award for money
damages or for a fine or penalty against Parent or any
Subsidiary which is a Borrower which is not paid and
discharged or stayed within thirty (30) days thereafter and
when aggregated with all other judgment(s) or decree(s)
against such entity that have remained unpaid and undischarged
or stayed for such period is in excess of the applicable
Threshold Amount;
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(h) subject to any provisions of the Security Documents permitting
the contest of such liens or security interests, any party
holding a lien or security interest in any of the Collateral
commences foreclosure or similar sale thereof;
(i) Parent or any Subsidiary which is a Borrower shall (i)
generally not be paying its debts as they become due, (ii)
file, or consent by answer or otherwise to the filing against
it of, a petition for relief or reorganization, arrangement or
liquidation or any other petition in bankruptcy or insolvency
under the laws of any jurisdiction, (iii) make an assignment
for the benefit of its creditors, (iv) consent to the
appointment of a custodian, receiver, trustee or other officer
with similar powers for itself, any of the Collateral or any
substantial part of its property, (v) be adjudicated
insolvent, (vi) dissolve or commence to wind-up its affairs or
(vii) take any action for purposes of the foregoing; or a
petition for relief or reorganization, arrangement or
liquidation or any other petition in bankruptcy or insolvency
or the appointment of a custodian under the laws of any
jurisdiction is filed against Parent or any Subsidiary which
is a Borrower or a custodian is appointed for any of the
Collateral or any substantial part of the property of Parent
or any Subsidiary which is a Borrower, and such proceeding is
not dismissed and appointment vacated within ninety (90) days
thereafter;
(j) a material, adverse change in the Collateral or the business
or financial condition of Parent or any Subsidiary which is a
Borrower, which change is not enumerated in
(k) this paragraph 7.1 as the result of which Lender in good faith
deems the prospect of Performance of the Obligations of such
entity materially impaired or the Collateral materially
imperiled;
(l) failure of Lender to receive, within twenty (20) days of the
date Parent or any Subsidiary which is a Borrower knows or
should have known of such change, notice of any material,
adverse change in any representations or warranties in the
Documents or otherwise made in connection with the Credit
Facility; or at any time prior to Completion of the Work
related to a Development Loan under which it is a Borrower,
Parent or any Subsidiary (i) abandons the Work or (ii) delays
construction or suffers construction to be delayed for any
period of time, for any reason whatsoever not covered by item
(i) of this paragraph 7.1(l) so that Completion of the Work
cannot be accomplished in the ordinary course of construction,
in the reasonable judgment of Lender, on or before the
Required Completion Date.
7.2 REMEDIES. At any time after an Event of Default has occurred and while
it is continuing, Lender may but without obligation, in addition to the
rights and powers granted elsewhere in the Documents and not in
limitation thereof, do any one or more of the following:
(a) cease to make further Advances;
(b) declare the Notes, or any of them, together with any
applicable prepayment premium and all other sums owing to
Lender by Parent and/or any Subsidiaries which are
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Borrowers in connection with the Documents, immediately due
and payable without notice, presentment, demand or protest;
(c) apply the then balance of the Required Completion Assurance
Deposits given to Lender by or on behalf of any Borrower to
the satisfaction of the Obligations of such Borrower in such
order and manner as Lender may determine;
(d) with respect to any Work financed under a Development Loan, to
the extent Completion of such Work has not occurred: (i)
continue and/or cause Completion of the Work; (ii) take
exclusive possession of the Property or any part thereof which
is security for such Development Loan; (iii) expend such funds
as Lender may deem appropriate, including the Required
Completion Assurance Deposit(s) (if any), any other funds held
by Lender as security therefor and any sums which may remain
unadvanced hereunder, to continue and/or cause Completion of
such Work; (iv) demand and receive performances due under the
related Principal Work-Related Items and the other related
Contracts, Licenses, Permits and other Intangibles; (v) make
such changes to the scope of such Work and to the related
Principal Work- Related Items and other related Contracts,
Licenses, Permits and other Intangibles as may be necessary or
desirable in Lender's judgment; (vi) file claims, institute
enforcement actions and otherwise prosecute and defend all
actions or proceedings relating to such Work, the related
Principal Work-Related Items and the other related Contracts,
Licenses, Permits and other Intangibles as Lender may
determine to be necessary or desirable; (vii) pay, settle or
compromise all existing bills and claims which are or may be
liens against any of the Property which is security for such
Development Loan or as Lender may deem to be necessary or
desirable in Lender's judgment for the continuance or
Completion of such Work related thereto or the clearance of
title, all without notice to Borrower; (viii) execute in the
name of the Borrower under such Development Loan all
applications, certificates, notices and other instruments and
give all instructions and communications which may be required
or permitted by the related Principal Work-Related Items and
other related Contracts, Licenses, Permits and other
Intangibles as determined by Lender; (ix) cancel or surrender
any of the related Principal Work-Related Items and the other
related Contracts, Licenses, Permits and other Intangibles and
enter into new contracts for the Completion of such Work and
any changes to the scope of such Work; (x) do any and every
act with respect to the Completion of such Work, the related
Principal Work-Related Items and the other related Contracts,
Licenses, Permits and other Intangibles which the Borrower
under such Development Loan may do in its behalf; (xi) employ
such contractors, subcontractors, suppliers, agents,
attorneys, architects, accountants, appraisers, security
guards and inspectors as Lender may in its judgment deem
necessary or desirable to accomplish any of the above
purposes; and (xii) receive, collect, open and read all mail
of the Borrower under such Development Loan for the purpose of
obtaining all items pertaining to such Work, the related
Principal Work-Related Items and the other related Contracts,
Licenses, Permits and other Intangibles; and
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(e) proceed to protect and enforce its rights and remedies under
the Documents and to foreclose or otherwise realize upon the
Collateral, or to exercise any other rights and remedies
available to it at law, in equity or by statute.
7.3 APPLICATION OF PROCEEDS DURING AN EVENT OF DEFAULT. Notwithstanding
anything in the Documents to the contrary, while an Event of Default
exists, any cash (including Required Completion Assurance Deposits)
received and retained by Lender as part of the Collateral given by a
Borrower may be applied to payment of the Obligations of such Borrower
(and in the case of Parent, the Obligations of its Subsidiaries) in
such order and manner as Lender may determine.
7.4 LENDER'S RIGHT TO PERFORM. Lender may, at its option, and without any
obligation to do so, pay, perform and discharge any and all Obligations
(including, without limitation, the Obligations to maintain insurance)
agreed to be paid or performed in the Documents by Parent, any
Subsidiary which is a Borrower, or any other person liable for the
Performance of the Obligations if such person has failed to do so and
either (a) an Event of Default exists or (b) Lender in good faith deems
such action necessary to protect any of the Collateral or its value.
For such purposes Lender may use the proceeds of the Collateral. All
amounts expended by Lender in so doing or in exercising its remedies
under the Documents following an Event of Default shall become part of
the Obligations, shall be immediately due and payable to Lender upon
demand by Parent and (if any) the Subsidiary failing to perform, and
shall bear interest at the Default Rate from the dates of such
expenditures until paid.
7.5 NON-EXCLUSIVE REMEDIES. No remedy in any Document conferred on or
reserved to Lender is intended to be exclusive of any other remedy or
remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given under any Document or now or
hereafter existing at law or in equity. No delay or omission to
exercise any right or power shall be construed to be a waiver of or
acquiescence to any default or a waiver of any right or power; and
every such right and power may be exercised from time to time and as
often as may be deemed expedient.
VIII. CONSTRUCTION AND GENERAL TERMS.
8.1 PAYMENT LOCATION. All monies payable under the Documents shall be paid
to Lender at its address set forth on the signature page of this
Agreement in lawful monies of the United States of America, unless
otherwise designated in the Documents or by Lender by notice.
8.2 ENTIRE AGREEMENT. The Documents executed from time to time shall
exclusively and completely state the rights and obligations of Lender,
Parent and Subsidiaries with respect to the Credit Facility. No
modification, variation, termination, discharge, abandonment, or waiver
of any of the terms or conditions of the Documents shall be valid
unless in writing and signed by duly authorized representatives of the
party sought to be bound by such action. The Documents supersede any
and all prior representations, warranties and/or inducements, written
or oral, heretofore made by Lender concerning this transaction,
including any commitment for financing.
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8.3 POWERS COUPLED WITH AN INTEREST. The powers and agency granted to
Lender by Parent or any Subsidiary which is a Borrower are coupled with
an interest and are irrevocable until the Obligations of such entity
have been performed and are granted as cumulative to Lender's other
remedies for collection and enforcement of the Obligations.
8.4 COUNTERPARTS. Any Document may be executed simultaneously in any number
of identical copies, each of which shall constitute an original for all
purposes.
8.5 NOTICES. All notices, requests or demands required or permitted to be
given under the Documents shall be in writing, and shall be deemed
effective (a) upon hand delivery, if hand delivered; (b) one (1)
Business Day after such are deposited for delivery via Federal Express
or other nationally recognized overnight courier service; or (c) three
(3) Business Days after such are deposited in the United States mails,
certified or registered mail, all with delivery charges and/or postage
prepaid, and addressed as shown below, or to such other address as
either party may, from time to time, designate in writing. Written
notice may be given by telecopy to the telecopier number shown below or
to such other telecopier number as either party may designate, from
time to time, in writing, provided that such notice shall not be deemed
effective unless it is confirmed within twenty-four (24) hours by hand
delivery, courier delivery or mailing of a copy of such notice in
accordance with the requirements set forth above.
If to Lender: FINOVA CAPITAL CORPORATION
7272 East Indian School Road, Suite 410
Scottsdale, Arizona 85251
Attn: Vice President-Resort Finance
Telecopy: (602) 874-6444
with a copy to:
FINOVA CAPITAL CORPORATION
7272 East Indian School Road, Suite 410
Scottsdale, Arizona 85251
Attn: Vice President-Group Counsel
Telecopy: (602) 874-6445
If to Parent or BLUEGREEN CORPORATION
any Borrower: 5295 Town Center Road, Suite 400
Boca Raton, Florida 33486
Attention: Patrick Rondeau, Esq.
Telecopy: (407) 391-6336
(provided that notice to any Borrower
which is a Subsidiary shall be addressed
to it c/o Parent)
8.6 SUCCESSORS AND ASSIGNS. All the covenants of Parent and the
Subsidiaries which are Borrowers and all the rights and remedies of the
Lender contained in the Documents shall
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bind Parent and such Subsidiaries, and, subject to the restrictions on
merger, consolidation and assignment contained in the Documents, their
respective successors and assigns, and shall inure to the benefit of
Lender, its successors and assigns, whether so expressed or not.
Neither Parent nor any Borrower may assign its rights in the Documents
in whole or in part. Except as may be expressly provided in a Document,
no person or other entity shall be deemed a third party beneficiary of
any provision of the Documents. Furthermore, no Subsidiary shall be
deemed be a third party beneficiary of Lender's obligations under this
Agreement to make Loans; but after the initial Advance of a Loan to a
Subsidiary, such Subsidiary, and not Parent, shall be deemed the real
party in interest with respect to the enforcement against Lender of the
terms and conditions of this Agreement and the other Documents executed
in connection with the Loan excluding any Guaranty.
8.7 SEVERABILITY. If any one or more of the provisions contained in any
Document shall be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained in the Document shall not in any way be affected
or impaired thereby. In lieu of each such enforceable provision, there
shall be added automatically as a part of such Document a provision
that is legal, valid, binding and enforceable and is as similar in
terms to such unenforceable provision as may be possible.
8.8 TIME OF THE ESSENCE. Time is of the essence in the Performance of the
Obligations.
8.9 MISCELLANEOUS. All headings are inserted for convenience only and shall
not affect any construction or interpretation of the Documents. Unless
otherwise indicated, all references in a Document to clauses and other
subdivisions refer to the corresponding paragraphs, clauses and other
subdivisions of the Document; the words "herein," "hereof," "hereto,"
hereunder" and words of similar import refer to the Document as a whole
and not to any particular paragraph, clause or other subdivision; and
reference to a numbered or lettered subdivision of an Article, or
paragraph shall include relevant matter within the Article or paragraph
which is applicable to but not within such numbered or lettered
subdivision. All Schedules and Exhibits referred to in this Agreement
are incorporated in this Agreement by reference.
8.10 (a) CHOICE OF LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED THEREIN, THE
DOCUMENTS AND THE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES THERETO
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF ARIZONA (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS) AND TO THE EXTENT THEY PREEMPT THE LAWS OF SUCH STATE, THE LAWS
OF THE UNITED STATES, PROVIDED, HOWEVER, THAT THE INTERNAL LAWS OF THE
STATE WHERE REAL PROPERTY IS LOCATED (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS) SHALL GOVERN THE PROCEDURES CONTROLLING THE
CREATION, PERFECTION AND FORECLOSURE OF THE LIEN, SECURITY INTERESTS,
ASSIGNMENT AND OTHER CHARGES INTENDED TO BE CREATED THE SECURITY
DOCUMENT ENCUMBERING SUCH REAL PROPERTY.
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(b) CHOICE OF JURISDICTION AND VENUE. EACH OF PARENT AND LENDER: (A)
HEREBY IRREVOCABLY SUBMITS ITSELF TO THE PROCESS, JURISDICTION AND
VENUE OF THE COURTS OF THE STATE OF ARIZONA, MARICOPA COUNTY, AND TO
THE PROCESS, JURISDICTION, AND VENUE OF THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF ARIZONA, FOR THE PURPOSES OF SUIT, ACTION OR
OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO THE DOCUMENTS OR THE
SUBJECT MATTER THEREOF (EXCEPT AS MAY BE SPECIFICALLY PROVIDED TO THE
CONTRARY IN THE SECURITY DOCUMENTS), AND, IF LENDER INITIATES SUCH
ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION, AND THE
CHOICE OF SUCH VENUE SHALL IN ALL INSTANCES BE AT THE LENDER'S
ELECTION; AND (B) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, DEFENSE OR
OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS
NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS,
THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.
EACH OF PARENT AND LENDER HEREBY WAIVES THE RIGHT TO COLLATERALLY
ATTACK ANY JUDGMENT OR ACTION IN ANY OTHER FORUM.
(c) WAIVER OF JURY TRIAL. LENDER AND PARENT ACKNOWLEDGE AND AGREE THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER ANY OF THE DOCUMENTS WOULD BE BASED
UPON DIFFICULT AND COMPLEX ISSUES; AND, THEREFORE, THEY AGREE THAT ANY
LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED BY A JUDGE
SITTING WITHOUT A JURY, AND KNOWINGLY AND VOLUNTARILY WAIVE TRIAL BY
JURY IN ANY SUCH PROCEEDING.
(d) BORROWER CONSENTS AND WAIVERS. PARENT WILL CAUSE EACH SUBSIDIARY WHICH
IS A BORROWER TO GRANT CONSENTS AND WAIVERS WHICH ARE APPLICABLE TO IT
SUBSTANTIALLY IDENTICAL TO THOSE SET FORTH IN THIS PARAGRAPH 8.10.
(e) INDUCEMENT TO LENDER. ALL OF THE PROVISIONS SET FORTH IN THIS PARAGRAPH
ARE MATERIAL INDUCEMENTS FOR LENDER'S EXTENDING THE CREDIT FACILITY TO
PARENT AND MAKING ADVANCES TO BORROWERS.
[Parent's (initials___)]
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8.11 COMPLIANCE APPLICABLE USURY LAW. It is the intent of the parties hereto
to comply with the Applicable Usury Law. Accordingly, notwithstanding
any provisions to the contrary in the Documents, in no event shall this
Agreement or the Documents require the payment or permit the collection
of interest in excess of the maximum contract rate permitted by the
Applicable Usury Law.
8.12 ATTORNEYS' FEES. Without limitation of the generality of any other
provision in the Documents, if Lender, Parent or any Subsidiary which
is a Borrower shall commence litigation to enforce the Documents or
otherwise related to the Credit Facility, the prevailing party shall be
entitled to its reasonable attorneys' fees and costs, to be determined
by a court and not by a jury.
8.13 NO PARTNERSHIP OR JOINT VENTURE. THE RELATIONSHIP OF EACH BORROWER AND
LENDER WILL BE THAT OF DEBTOR AND CREDITOR. IT IS NOT THE INTENTION OF
EITHER OF PARENT OR LENDER BY ANY DOCUMENT BEING EXECUTED IN CONNECTION
WITH THE CREDIT FACILITY TO ESTABLISH A PARTNERSHIP BETWEEN ANY
BORROWER AND LENDER, AND THE BORROWERS AND LENDER SHALL NOT UNDER ANY
CIRCUMSTANCES BE CONSTRUED TO BE PARTNERS OR JOINT VENTURERS.
8.14 STANDARDS APPLIED TO LENDER'S ACTION. Unless otherwise specifically
stipulated elsewhere in the Documents, if a matter is left in the
Documents to the decision, requirement, request, determination,
judgment, opinion, approval, consent, satisfaction, acceptance,
agreement, option or discretion of Lender, its employees, Lender's
counsel or any agent for or contractor of Lender, such action shall be
deemed to be exercisable by Lender or such other person in its sole and
absolute discretion and according to standards established in its sole
and absolute discretion. Without limiting the generality of the
foregoing, "option" and "discretion" shall be implied by use of the
words "if" or "may."
8.15 MEANING OF SUBORDINATION. Any subordinations required to be given under
the Documents by third parties to Lender shall include the
subordination of and the deferral of the right to receive payments on
the subordinated obligations except to the extent expressly permitted
in this Agreement; the remittances to Lender of all prohibited payments
received by the third party; the subordination of all liens, security
interests, assignments and other encumbrances and claims held by a
third party on or against any of property of the person owing the
indebtedness which is being subordinated, except for Permitted
Encumbrances, to Lender's interest (whenever acquired) in such
property; and an agreement on the part of the third party not to
exercise any remedies against Borrower so long as all obligations under
the Documents have not been fully satisfied.
8.16 PUBLICITY. Lender routinely advertises the transactions to which it is
a party in newspapers, industry periodicals, and other miscellaneous
print and electronic literature. Borrower consents to such advertising
and authorizes Lender to use Borrower's name, logo, insignia,
descriptive art work, trade name, trademark, or other similar material,
whether or not protected by copyright (or otherwise), in any such
advertisement.
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IX. LENDER'S INSPECTOR.
9.1 RETENTION OF LENDER'S INSPECTOR. Lender may retain an
architectural/engineering firm ("Lender's Inspector") to do
the following in connection with Work being financed in whole
or in part under a Development Loan: (a) until Completion of
such Work and the making of the last Work-Related Advance
(including the disbursement of the Basic Retainage and
Additional Retainage) with respect to such Work, review the
related Principal Work-Related Items, the other related
Contracts, Licenses, Permits and the budget proposed to be the
Construction Budget for such Work and any changes to such
items; (b) inspect the Real Property prior to commencement of
such Work for purposes of determining the condition of the
Real Property and any existing improvements; (c) until
Completion of such Work and the making of the last Work-
Related Advance (including the disbursement of the Basic
Retainage and Additional Retainage) with respect to such Work,
make monthly inspections of the related Real Property and such
Work (whether or not Development Loan proceeds are to be used
to pay or reimburse Borrower for the costs of the portion of
such Work which has been completed) so that Lender may monitor
whether Borrower is in compliance with the terms and
conditions of this Agreement, and certifying that each Work-
Related Advance Request under the Development Loan is not in
excess of the portion of such Work completed and the amount to
which the Borrower under the Development Loan is entitled
under the terms and conditions of this Agreement; and (d)
provide evidence satisfactory to Lender prior to the funding
of any Work-Related Advance under the Development Loan that
(subject to completion thereof as part of such Work as
contemplated by this Agreement), all necessary street,
easements and utilities are available to the boundary of the
Real Property and that the respective lines and treatment or
generator plants are of adequate capacity and size for the
intended use of the related Property. Furthermore, Lender may
require an inspection by Lender's Inspector of Work which is
being financed under a Development Loan: (a) prior to each
Work-Related Advance under the Development Loan; (b) at least
once each month during the course of Completion of such Work;
(c) upon Substantial Completion of such Work; (d) upon
Completion of such Work; and (e) until Completion of such Work
and the making of the last Work-Related Advance (including the
disbursement of the Basic Retainage and Additional Retainage)
with respect to such Work, at such other times as Lender may,
in its judgment, deem necessary due to actual or suspected
non-compliance with the related Plans and Specifications, the
related Construction Contract(s), the Documents, applicable
Legal Requirements, engineering or construction principles or
commonly accepted safety standards, or failure of the Borrower
under the Loan to satisfy the requirements of the Documents.
Any Work which is completed and funded from sources other than
a Development Loan Advance shall be subject to inspection by
and the approval of Lender's Inspector.
9.2 NO DUTY OF LENDER TO SUPERVISE, ETC. Lender shall have no duty
to supervise or to review and inspect, in connection with any
Work, any of the related Principal Work-Related Items, any of
the other related Contracts, Licenses, Permits and other
Intangibles, any budget proposed to be a Construction Budget
for such Work, any
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books and records pertaining thereto or any changes to such
items or the construction of such Work. Any inspection made by
Lender shall be for the sole purpose of determining whether
the Obligations are being Performed and preserving Lender's
rights under these Documents. If Lender, or Lender's Inspector
acting on behalf of Lender, should review or inspect any
Principal Work-Related Item, any of the other Contracts,
Licenses, Permits and other Intangibles, any Construction
Budget, any books and records pertaining thereto or any
changes to such items or the construction of any Work, Lender
and Lender's Inspector shall have no liability or obligation
to Borrower or any third person arising out of such
inspection; and neither Borrower nor any third person shall be
entitled to rely upon any such inspection or review.
Inspection not followed by notice of an Event of Default shall
not constitute (a) waiver of any Event of Default then
existing; (b) an acknowledgment or representation by Lender or
Lender's Inspector that there has been or will be compliance
with any Principal Work-Related Item, any of the other
Contracts, Licenses, Permits and other Intangibles, any
Construction Budget, Legal Requirements, sound construction,
engineering or architectural principles or commonly accepted
safety standards, or that the construction is lien free or
free from defective materials or workmanship; or (c) a waiver
of Lender's right thereafter to insist that Completion of the
Work being financed in whole or in part under a Development
Loan occur in accordance with the related Principal
Work-Related Items, the other related Contracts, Licenses,
Permits and other Intangibles, the related Construction
Budget, the Documents, Legal Requirements, sound construction,
engineering or architectural principles or commonly-accepted
safety standards and free from defective materials and
workmanship. Lender and Lender's Inspector owe no duty of care
to any Borrower under a Development Loan or any third person
to protect against, or inform such Borrower or any third
person of, the existence of negligence, faulty, inadequate or
defective design or construction of the Work being financed in
whole or in part under such Development Loan. Without limiting
the generality of the foregoing, Lender will deliver or cause
to be delivered to Borrower, within a reasonable time after
their delivery to Lender, copies of any written reports of
Lender's Inspector.
X. SPECIAL PROVISIONS.
10.1 CROSS-COLLATERALIZATION AND CROSS-DEFAULT OF OTHER LOAN OBLIGATIONS.
(a) Lender and Patten Receivables Finance Corporation VI, a
Delaware corporation ("PRFC"), are parties to an Amended and
Restated Loan and Security Agreement ("PRFC Loan Agreement")
dated as of January 9, 1990, as amended, and a Subsidiary.
Pursuant to the PRFC Loan Agreement, Lender has committed to
make to PRFC a revolving line of credit loan ("PRFC Loan"), in
an amount not to exceed at any time to lesser of (i) the
positive difference between Thirty-Five Million Dollars
($35,000,000) and the unpaid principal balance of the Loans or
(ii) Twenty Million Dollars ($20,000,000), subject to the
terms and conditions of the PRFC Loan Agreement. As used in
this Agreement, the term "Other Credit Facilities" shall mean
at any time, all loans and credit facilities other than this
Credit Facility then
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outstanding between Borrower and/or any Affiliate of Borrower
on the one hand, and Lender on the other hand, including,
without limitation, the PRFC Loan; the term "Credit Facility"
means any one of the Other Credit Facilities or this Loan; the
term "PRFC Loan Documents" shall mean the PRFC Loan Agreement
and all other documents now or hereafter executed in
connection with the PRFC Loan, as they may be from time to
time renewed, amended, restated or replaced; and the term
"Other Credit Facilities Documents" shall mean the documents
now or hereafter executed in connection with the Other Credit
Facilities, including, without limitation, the PRFC Loan
Documents, as they may be from time to time renewed, amended,
restated or replaced.
(b) An Event of Default under the Documents shall constitute an
"Event of Default" as that term is defined in any of the Other
Credit Facilities Documents; or if an "Event of Default" is
not a defined term with respect to any of the Other Credit
Facilities, shall, without further condition or delay, permit
Lender to accelerate the payment of such Other Credit
Facility, cease funding under such Other Credit Facility or to
foreclose its lien or security interest on any of the
collateral for such Other Credit Facility. An "Event of
Default" as that term is defined in any of the Other Credit
Facilities Documents and/or any act or event which, without
further condition or delay, permits Lender to accelerate the
payment of any Other Credit Facility and/or exercise its
remedies to either cease funding under such Other Credit
Facility or foreclose its lien or security interest on any
collateral for any Other Credit Facility shall constitute an
Event of Default under the Documents.
(c) Without limiting the generality of any other provision
contained herein, the Security Interest granted by Parent
under the Documents and all Collateral now or hereafter given
by Parent as security for its Obligations under the Documents
is intended to and does secure Performance of all obligations
of PRFC and Parent under the PRFC Loan Documents ("PRFC Loan
Obligations"); and all collateral given under the PRFC Loan
Documents as security for the PRFC Loan Obligations is
intended to and does secure the Obligations of Parent. Parent
shall cause PRFC to execute all amendment documents required
by Lender to reflect this cross-collateralization and other
conditions of the Loans.
(d) If an Event of Default exists and Lender is entitled to apply
to the Obligations the proceeds of the Collateral now or
hereafter given by Parent as security for its Obligations
under the Documents, it may apply such proceeds to the
Obligations and to the PRFC Loan Obligations in such order and
manner as Lender may determine.
(e) If PRFC prepays the PRFC Loan other than for partial
prepayments permitted pursuant to the terms of the PRFC Loan
Documents and terminates its right to obtain advances of the
PRFC Loan, Parent shall prepay the Loans made to it and Lender
shall have no further obligation to make any Advances
hereunder.
(f) Neither (i) the exercise or the failure to exercise by Lender
of any rights or remedies conferred on it under the Other
Credit Facilities Documents, hereunder or existing
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at law or otherwise, or against any security for performance
of the obligations under the Other Credit Facility Documents
("Other Credit Facilities Obligations"), (ii) the commencement
of an action at law or the recovery of a judgment at law
against another borrower ("Third Party Borrower") under the
Other Credit Facility Documents or any other obligor ("Third
Party Obligor") for the Other Credit Facilities Obligations
and the enforcement thereof through levy or execution or
otherwise, (iii) the taking or institution or any other action
or proceeding against a Third Party Borrower or any other
Third Party Obligor, nor (iv) any delay in taking, pursuing or
exercising any of the foregoing actions, rights, powers or
remedies (even though requested by Parent) by Lender or anyone
acting for Lender, shall extinguish or affect the Obligations
of Parent under this paragraph 10.1. Subject to the provisions
of the last sentence of paragraph 3.1 pertaining to the
release of Security Documents, the provisions of this
paragraph 10.1 shall continue until all obligations of a Third
Party Obligor under an Other Credit Facility are fully paid
and performed and for one year and one day after such payment
and performance of such obligations [and without limiting
Parent's obligations under paragraph 10.1(k)], notwithstanding
the previous discharge (total or partial) from further
liability of any Third Party Borrower or any Third Party
Obligor.
(g) Parent hereby expressly waives: (i) notice of the existence,
creation or non-payment of all or any of the Other Credit
Facilities Obligations except as otherwise provided in the
Other Credit Facilities Documents; (ii) presentment, protest,
demand, dishonor, notice of dishonor, protest and all notices
whatsoever with respect to the Other Credit Facilities
Obligations; (iii) all diligence in collection or protection
of or realization on the Other Credit Facilities Obligations
or any part thereof, any Obligation under this paragraph 10.1,
or any security for or guarantee of any of the foregoing; (iv)
any defense based upon an election of remedies by Lender or
marshaling of assets; (v) any defense arising because of
Lender's election under Section 1111(b)(2) of the United
States Bankruptcy Code ("Bankruptcy Code") in any proceeding
instituted under the Bankruptcy Code; (vi) any defense based
on post-petition borrowing or the grant of a security interest
by a Third Party Borrower under Section 365 of the Bankruptcy
Code; (vii) any duty on the part of Lender to disclose to
Parent any facts Lender may now or hereafter know about any
Third Party Borrower, regardless of whether Lender has reason
to believe that any such facts materially increase the risk
beyond that which Parent intends to assume or has reason to
believe that such facts are known to Parent or has a
reasonable opportunity to communicate such facts to Parent,
because Parent represents and warrants that it is fully
responsible for being and keeping informed of the financial
condition of any Third Party Borrower and of all circumstances
bearing on the risk of non-payment of any obligation
guaranteed hereby; and (viii) any and all suretyship defenses
and defenses in the nature thereof under Arizona and/or any
other applicable law, including, without limitation, the
benefits of the provisions of Sections 12-1641 through
12-1646, of the Arizona Revised Statutes, Sections 17 and 21,
A.R.C.P., and all other laws and procedural rules of similar
import.
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<PAGE> 39
(h) Without limiting the generality of the foregoing, Parent will
not assert against Lender any defense of waiver, release,
discharge in bankruptcy, statute of limitations, res judicata,
statute of frauds, anti-deficiency statute, fraud, usury,
illegality or unenforceability which may be available to any
Third Party Borrower with respect to the Other Credit
Facilities Documents, or any setoff available to any Third
Party Borrower against Lender, whether or not on account of a
related transaction.
(i) Anything else contained herein to the contrary
notwithstanding, Lender, from time to time, without notice to
Parent, may take all or any of the following actions without
in any manner affecting or impairing the obligations of Parent
under this paragraph 10.1: (i) obtain a lien on or a security
interest in any property to secure any of the Other Credit
Facilities Obligations; (ii) retain or obtain the primary or
secondary liability of any party or parties, in addition to
Parent, with respect to any of the Other Credit Facilities
Obligations; (iii) renew, extend or otherwise change the time
for payment or performance of any of the Other Credit
Facilities Obligations for any period; (iv) release or
compromise any liability of Parent hereunder or any liability
of any nature of any other party or parties with respect to
any of the Other Credit Facilities Obligations; (v) exchange,
enforce, waive, release and apply any security for the
performance of any of the Other Credit Facilities Obligations
and direct the order or manner of sale thereof as Lender may
in Lender's discretion determine; (vi) resort to the
Collateral for payment of any Other Credit Facilities
Obligations, whether or not Lender shall proceed against any
other party primarily or secondarily liable on any of the
Other Credit Facilities Obligations; (vii) agree to any
amendment (including, without limitation, any amendment which
changes the amount of interest to be paid under the Other
Credit Facilities Documents or extends the period of time
during which any Third Party Borrower may obtain advances of
the Other Credit Facilities), any alteration of the Other
Credit Facilities Documents or any waiver of any of the
provisions of the Other Credit Facilities Documents and/or
exercise Lender's rights to consent to any action or
non-action of any Third Party Borrower which may violate the
covenants and agreements contained in the Other Credit
Facilities Documents, with or without consideration and on
such terms and conditions as may be acceptable to Lender; or
(viii) exercise any of Lender's rights conferred by the Other
Credit Facilities Documents or by law.
(j) Notwithstanding anything herein to the contrary, if at any
time all or any part of any payment theretofore applied by
Lender to any of the Other Credit Facilities Obligations is or
must be rescinded or returned by Lender for any reason
whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of any Third Party Borrower),
such Other Credit Facilities Obligations, for purposes of this
paragraph 10.1, to the extent that such payment is or must be
rescinded or returned, shall be deemed to have never been
performed; and this paragraph 10.1 shall continue to be
effective or be reinstated, as the case may be, as to such
Other Credit Facilities Obligations, all as though such
application by Lender had not been made.
(k) Parent hereby waives any right it may have to be subrogated to
Lender's rights or remedies under the documents executed in
connection with the Other Credit
-39-
<PAGE> 40
Facilities Obligations or any right of indemnification,
reimbursement or contribution from any Third Party Borrower or
from any other Third Party Obligor with respect to the Other
Credit Facilities Obligations and any right to participate in
any collateral for the Other Credit Facility Obligations
(regardless of any payment on the Other Credit Facility
Obligations resulting from the provisions of this paragraph
10.1) until (i) all Other Credit Facilities Obligations have
been paid and performed in full and for a period of one year
thereafter and (ii) Lender has no further obligation to extend
credit to a Third Party Obligor; and Parent agrees that to the
extent any such right of subrogation, indemnification,
reimbursement, contribution or participation cannot be waived
or the waiver thereof is ineffective, any claims which Parent
may now or hereafter have against a Third Party Borrower or
any other Third Party Obligor by virtue of such right shall be
subordinated to Lender's rights against Parent.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their respective name, personally or by their duly authorized
representatives as of the date above written.
PARENT: BLUEGREEN CORPORATION, a
Massachusetts corporation
Witness as to Bluegreen Corporation
By:
- ---------------------------------------- ---------------------------
Type/Print Name: Type/Print Name:
------------------------- --------------
Title:
------------------------
LENDER: FINOVA CAPITAL CORPORATION, a
Delaware corporation
By:
---------------------------
Type/Print Name:
--------------
Title:
------------------------
-40-
<PAGE> 41
STATE OF ARIZONA )
) ss.
County of Maricopa )
This instrument was acknowledged before me by _______________________,
the _________________________ of BLUEGREEN CORPORATION a Massachusetts
corporation, on behalf of such corporation. He/She is known to me and
produced ____________________ as identification.
------------------------------------
Notary Public
Type/Print Name:
--------------------
My commission expires:
- ----------------------------
-41
<PAGE> 42
LIST OF EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
EXHIBIT A Personal Property
EXHIBIT B-1 Promissory Note (Land Loan)
EXHIBIT B-2 Promissory Note (Development Loan)
EXHIBIT C Description of Real Property
EXHIBIT D-1 Request for Acquisition Advance, Certification and Agreement (Parent)
EXHIBIT D-2 Request for Acquisition Advance, Certification and Agreement (Subsidiary)
EXHIBIT E Opinion Matters of Borrower's/Guarantor's General and Local Counsel
EXHIBIT F Additional Conditions Precedent to Initial Advance of a Development Loan
EXHIBIT G Additional Conditions Precedent to Work-Related Advances
EXHIBIT H Intentionally Not Included
EXHIBIT I Certificate and Agreement of Borrower Regarding Construction-Related
Matters
EXHIBIT J Certificate and Agreement of Subsidiary Borrower (Basic)
EXHIBIT K Procedures for Requests for Lender's Consent to Developmental Matters.
</TABLE>
<PAGE> 43
EXHIBIT A
PERSONAL PROPERTY
With respect to any Real Property, all fixtures and tangible and
intangible personal property which now or hereafter is owned by Borrower or in
which Borrower has an interest and either is now or hereafter located on such
Real Property or is necessary or intended for the ownership, development,
construction, improvement, repair, use, operation, sale or lease of any of such
Real Property or any business of Borrower conducted thereon or with respect
thereto ("Personal Property"), including, without limitation, the following:
1. mineral rights, leases, subleases, licenses, concessions or other
agreements (whether written or oral or now or hereafter in effect) which grant a
possessory interest in and to, or the right to use, any portion of the Real
Property and/or any portion of the Personal Property;
2. rents, revenues, royalties, bonuses, delay rentals, issues, income,
proceeds, profits, security and other types of deposits, and other benefits now
or hereafter paid or payable for using, leasing, licensing, possessing,
operating, residing in, mining or otherwise enjoying any portion of the Real
Property or Personal Property or arising from the operation of any business of
Borrower conducted on or with respect to the Real Property or Personal Property,
including, without limitation, income from the rental or license of the use of
rooms for lodging, meeting or banquet purposes;
3. all furniture, furnishings, equipment, inventory and other goods
and other items of tangible personal property, including, without limitation:
all building and other materials; vehicles; machinery; engines; boilers,
furnaces, oil burners, coolers, refrigeration plants, water and sewer treatment
equipment, incinerators, appliances and equipment for generating, regulating or
distributing air, water, heat, electricity, light and fuel for ventilating,
cooling or sanitary purposes, for the exclusion of vermin or insects, or for the
removal of dust, refuse or garbage; sprinkling and irrigation systems; alarm
systems; reservation systems, telephone, communication, computer, surveillance
and other electronic systems; audio-visual equipment; wall safes; cabinets,
shelving, lockers, partitions, doors, vaults, elevators, awnings, window shades,
venetian blinds, drapes, drapery rods, brackets, screens, floor tile, linoleum,
carpets, art work, appliances, built-in furniture and bars, sofas, beds, lamps,
tables, chairs and linens; walk-in refrigerator boxes, deep freeze cabinets,
steam tables, dishwashers, bake ovens, set-up tables, kitchen ranges and any and
all other kitchen equipment; and cleaning equipment;
4. (i) deposits made by third parties (including tenants' security
deposits and escrow deposits under contracts of sale); (ii) bank accounts
pertaining to the Real Property and/or Personal Property, impound accounts for
the payment of taxes, insurance and other expenses pertaining to the Real
Property and funds deposited with Lender under the Documents; (iii) all of
action, documents, insurance policies, loan commitments, accounts, chattel
paper, contract rights, general intangibles and instruments, including those
pertaining to the sale of any portion of the Real Property or Personal Property
and related escrow and security agreements, which arise from or relate to the
Real Property or the Personal
<PAGE> 44
Property or any transaction with respect thereto or any business of Borrower
conducted thereon or with respect thereto; (iv) tax refunds relating to the Real
Property or Personal Property and all other refundable or reimbursable fees,
deposits or other funds or evidences of credit or indebtedness pertaining to any
portion of the Real Property or Personal Property or any business of Borrower
conducted thereon or with respect thereto and now or hereafter deposited with
any governmental authority or other person or entity, including, without
limitation, tap fees, utility deposits, deposits on construction and materials
contracts, commitment fees and development costs; (v) books and records,
computer software, plans and specifications, shop drawings, bonds, construction
contracts, architect/engineer agreements, utility (including, without
limitation, cable television) contracts, option rights, management agreements,
marketing agreements, franchise agreements, exchange affiliation agreements,
equipment leases, maintenance contracts, service contracts and warranties which
relate to the ownership, development, operation, construction, use, improvement,
repair, sale or lease of the Real Property or Personal Property, or any business
of Borrower conducted thereon or with respect thereto; (vi) trade names,
trademarks, service marks, customer lists and copyrights used in connection with
the Real Property or Personal Property or any business of Borrower conducted
thereon or with respect thereto; (vii) all special rights and privileges of
Borrower under any declaration of covenants, conditions and restrictions and/or
other documents governing the Real Property which are not enjoyed by all other
owners of portions of the Real Property; and (viii) permits (including, without
limitation, building permits), licenses, franchises, certificates and other
rights and privileges obtained in connection with development, ownership,
construction, improvement, repair, use, operation, sale or lease of the Real
Property or Personal Property or any business of Borrower conducted thereon or
with respect thereto;
5. (i) water stock and other rights now or hereafter associated with
the Real Property or Personal Property, including, without limitation, all
rights to water located on or adjacent to the Real Property, and (ii) rights to
receive or install utility servicing, including, sewer, water, electricity, gas,
cable television and telephone;
6. all causes of action and claims of Borrower relating to any casualty
to or taking of the Real Property or the Personal Property or any rights
appurtenant thereto; and
7. all cash and non-cash proceeds (including, without limitation,
accounts, chattel paper, contracts rights, documents, instruments, general
intangibles, investment property and equipment, inventory and other goods) from
the Real Property or the Personal Property or any conversion of the Real
Property or the Personal Property, including hazard and title insurance proceeds
and awards and compensation for any taking (voluntary or involuntary, including
the change of grade of streets, curb cuts and other rights of access) for any
public or private purpose.
Nothing herein is intended to change the character of any item of real property
described herein to personal property.
The property described in subsections 4, 5 and 6 above are referred to as the
"Contracts, Licenses, Permits and Other Intangibles."
-2-
<PAGE> 45
EXHIBIT B
PROMISSORY NOTE
U.S. $_____________ ________________, 199__
FOR VALUE RECEIVED, the undersigned ________________________________,
a _________________ corporation (the "Maker"), promises to pay to FINOVA
CAPITAL CORPORATION, a Delaware corporation ("Lender"), or order, at its offices
at 7272 East Indian School Road, Suite 410, Scottsdale, Arizona 85253, or at
such other place as the holder of this Note ("Holder") may from time to time
designate in writing, in lawful money of the United States of America, the
principal sum of_____________________________________________ DOLLARS
(U.S. $____________), together with interest on the unpaid principal balance
from time to time outstanding from the date hereof until paid, as more fully
provided for below. All payments hereunder shall be made in immediately
available funds.
This Note is executed pursuant to an Amended and Restated Credit
Facility Agreement dated as of April 16, 1998, between Bluegreen Corporation, a
Massachusetts corporation [Maker], and Lender (together with any and all
extensions, renewals, modifications and restatements thereof, "Credit Facility
Agreement") and evidences a Loan (as defined in and made pursuant to the Credit
Facility Agreement). Capitalized terms used but not defined herein shall have
the meaning given to them in the Credit Facility Agreement.
This Note is secured by, among other things, a [Deed of Trust]
[Mortgage] (With Security Agreement and Assignment of Leases, Rents, Sales
Documents, Sales Proceeds and Developer's Rights) encumbering real and personal
property owned by Maker and located in ___________________ County, _________
("Mortgage"). [This Note is further secured by those vendor liens retained in
those certain deeds from ______________________________________ to Maker.]
Except as otherwise provided herein, interest ("Basic Interest") shall
accrue at a variable interest rate per annum equal to the Base Rate (as
hereinafter defined) on the date of this Note plus one hundred fifty (150) basis
points ("Basic Interest Rate"), which rate shall be adjusted on each Interest
Rate Change Date (as defined below). The term "Base Rate" as used herein shall
mean the per annum rate of interest publicly announced, from time to time, by
Citibank, N.A., New York, New York ("Citibank"), as the base (or equivalent)
rate of interest charged by Citibank to its largest and most creditworthy
commercial borrowers notwithstanding the fact that some borrowers of Citibank
may borrow from Citibank at rates less than the announced base rate, or if
Citibank ceases to publish its base rate, then such other rate published by a
comparable money-center bank as Holder shall deem comparable in its sole and
absolute discretion. "Interest Rate Change Date" shall mean the first business
day of the publisher of the Base Rate during each calendar month following the
date of this Note. Basic Interest shall be calculated on the basis of the actual
number of days elapsed during the period for which interest is being charged
predicated on a year consisting of three hundred sixty (360) days.
<PAGE> 46
As used in this Note, "Business Day" means a day other than a Saturday,
a Sunday or a day on which banks in Phoenix, Arizona, are required to be closed.
Payments of principal, interest and any other amounts due and payable
hereunder shall, at the option of Holder, earn Basic Interest AFTER they are due
at a rate ("Default Rate") equal to (a) the greater of (i) two hundred (200)
basis points above the rate of Basic Interest otherwise payable hereunder or
(ii) eighteen percent (18%) per annum, or (b) the maximum contract rate
permitted under the Applicable Usury Law, whichever of (a) or (b) is lesser. At
the option of Holder, while an Event of Default (as that term is defined in the
Credit Facility Agreement) exists, and in all events after an acceleration of
the Note by Holder, Basic Interest shall accrue on the entire outstanding
principal balance of this Note at the Default Rate.
The contracted for rate of interest of the Loan evidenced hereby,
without limitation, shall consist of the following: (i) the Basic Interest Rate,
calculated and applied to the principal balance in accordance with the
provisions of this Note; (ii) the Default Rate, calculated and applied to the
principal balance of this Note in accordance with the provisions hereof; (iii)
the late charge calculated and applied to an overdue payment in accordance with
the provisions hereof; (iv) any prepayment premium payable pursuant to the
Credit Facility Agreement in connection with the Loan evidenced by this Note;
(v) the Credit Facility Modification Fee Installment Payment (as defined in the
Credit Facility Agreement) in connection with the Loan evidenced by this Note;
and (vi) all Additional Sums (as hereinafter defined), if any. Maker agrees to
pay an effective contracted for rate of interest which is the sum of the
above-referenced elements but in no event to exceed the maximum contract rate
permitted under the Applicable Usury Law (as defined below). All fees, charges,
goods, things in action or any other sums or things of value [other than amounts
described in (i), (ii), (iii), (iv) and (v) hereof], pursuant to this Note, the
Credit Facility Agreement, the other Credit Facility Documents or any other
documents or instruments in any way pertaining to this lending transaction, or
otherwise with respect to this lending transaction, that under any applicable
law may be deemed to be interest with respect to this lending transaction, for
the purpose of any applicable law that may limit the maximum amount of interest
to be charged with respect to this lending transaction (the "Additional Sums"),
shall be payable by Maker as, and shall be deemed to be, additional interest,
and for such purposes only, the agreed upon and "contracted for rate of
interest" of this lending transaction shall be deemed to be increased by the
rate of interest resulting from the Additional Sums.
On _____________, _____, and on the last Business Day of each
succeeding month thereafter ("Installment Date") until the date _______________
(_____) months from the date of this Note ("Maturity Date") or the date all
principal and interest on this Note are paid in full, whichever date first
occurs, Maker will pay to Holder a payment of accrued and unpaid interest on the
Note.
Upon the Partial Release (as defined in the Mortgage) of a Release
Parcel (as defined in the Mortgage), Maker will pay to Holder a principal
payment in an amount equal to the Release Payment (as defined in the Mortgage)
payable with respect to such Release Parcel.
In addition to the principal payments required pursuant to the
preceding paragraph, Maker will pay to Holder on _______________ the following
principal payments: ________________.
-2-
<PAGE> 47
All payments under this Note shall be applied in accordance with the
terms of the Documents. However, if an Event of Default exists, Holder may apply
the proceeds of the security for this Note in such order and manner as Holder
may determine.
On the Due Date (as hereinafter defined), the entire unpaid principal
balance of this Note, all accrued and unpaid Basic Interest, and all other
charges or amounts owing in connection with the Loan evidenced hereby shall be
due and payable in full. The Due Date shall mean the earlier of (i) the Maturity
Date; (ii) the date of satisfaction of this Note through pre-payment by the
Maker pursuant to the terms of the Credit Facility Agreement; or (iii) the date
on which Lender or Holder accelerates payment of the this Note due to an Event
of Default by Maker.
If any installment of principal, interest or any other payment required
to be made in connection with this Note is not paid when due and, except in the
case of the final installment for which no grace period is allowed, such breach
continues for five (5) Business Days, or upon the occurrence of any other Event
of Default, Holder may at its option, without notice or demand of any type
whatsoever (including, without limitation, notice of intention to accelerate),
declare immediately due and payable the entire unpaid principal balance hereof,
all accrued and unpaid Basic Interest thereon, any prepayment premium required
under the Credit Facility Agreement in connection with the Loan evidenced by
this Note, and all other obligations owing in connection with the Credit
Facility advance evidenced hereby.
In the event that any monthly installment of principal and interest
shall not be paid within ten (10) Business Days of the date when due, a "late
charge" of two percent (2.0%) of the late payment may be charged by the Holder
for the purposes of defraying the expense incident to handling such delinquent
payments. Such late charge represents the reasonable estimate of Maker and
Lender of a fair average compensation for the loss which may be sustained by
Lender due to the failure of the Maker to make timely payments. All late charges
shall be due and payable monthly on the same dates provided herein for the
payment of installments.
Except as expressly provided in the Credit Facility Agreement,
prepayment of this Note will NOT be permitted in whole or in part.
Holder shall not by any act or omission be deemed to have waived any of
its rights or remedies hereunder unless such waiver be in writing and signed by
an authorized officer of Holder and then only to the extent specifically set
forth therein; a waiver on one occasion shall not be construed as continuing or
as a bar to or waiver of such right or remedy on any other occasion. All
remedies conferred upon Holder by this Note, the Mortgage, or any other
instrument or agreement related hereto shall be cumulative and none is
exclusive, and such remedies may be exercised concurrently or consecutively at
Holder's option.
If Holder undertakes to collect this Note following an Event of
Default, Maker will pay to Holder in addition to any indebtedness due and
unpaid, all costs and expenses of collection, including, without limitation,
attorneys' fees and expert witnesses' fees, whether or not legal proceedings
shall be instituted. In the event Holder institutes legal proceedings to enforce
this Note, the award of costs of collection, including attorneys' fees, shall be
made by the court (and not by a jury).
-3-
<PAGE> 48
Maker, and every person or entity at any time liable for the payment of
the indebtedness evidenced by this Note, hereby absolutely and unconditionally
waive: presentment for payment, protest and demand; notice of dishonor, protest,
demand and nonpayment of this Note; and each and every other notice of any kind
except (including, without limitation, notice of intention to accelerate) for
notices expressly provided in this Note or in any of the other documents
securing payment of, or otherwise related to, this Note. Maker and every such
person or entity further consent to renewals or extensions of the payment of any
sums to be paid under this Note at any time and from time to time, without limit
as to the number or aggregate period of such renewals or extensions, at the
request of any other person or entity liable for them. Any such renewals or
extensions may be made without notice to any person or entity liable for the
payment of the indebtedness evidenced by this Note.
This Note is given and accepted as evidence of indebtedness only and
not in payment or satisfaction of any indebtedness or obligation.
Time is of the essence with respect to all of Maker's obligations and
agreements under this Note.
This Note and all its provisions, conditions, promises and covenants
shall be binding upon Maker, and its successors and assigns, provided nothing
herein shall be deemed Holder's consent to any assignment restricted or
prohibited by the terms of the Credit Facility Agreement or the Mortgage. If
more than one person or entity has executed this Note as Maker, the obligations
of such persons and entities shall be joint and several.
If any one or more of the provisions contained in this Note shall be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby; provided that where the provisions of any invalidating law
may be waived, they are waived by Maker to the fullest extent possible.
THIS NOTE AND THE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES HERETO
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF ARIZONA AND TO THE EXTENT THEY PREEMPT THE LAWS OF SUCH STATE, THE LAWS
OF THE UNITED STATES.
EACH OF HOLDER (BY ITS ACCEPTANCE HEREOF) AND MAKER: (A) HEREBY
IRREVOCABLY SUBMITS ITSELF TO THE PROCESS, JURISDICTION AND VENUE OF THE COURTS
OF THE STATE OF ARIZONA, MARICOPA COUNTY, AND TO THE PROCESS, JURISDICTION, AND
VENUE OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA, FOR THE
PURPOSES OF SUIT, ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
NOTE OR THE SUBJECT MATTER HEREOF (EXCEPT AS MAY BE SPECIFICALLY PROVIDED TO THE
CONTRARY IN THE DEED OF TRUST REFERRED TO BELOW), OR, IF HOLDER INITIATES SUCH
ACTION, ANY COURT IN WHICH HOLDER SHALL INITIATE SUCH ACTION AND THE CHOICE OF
SUCH VENUE SHALL IN ALL INSTANCES BE AT HOLDER'S ELECTION; AND (B) WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, HEREBY WAIVES AND AGREES NOT TO ASSERT
BY WAY OF
-4-
<PAGE> 49
MOTION, DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED COURTS,
THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT
THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. MAKER HEREBY WAIVES
THE RIGHT TO COLLATERALLY ATTACK ANY JUDGMENT OR ACTION IN ANY OTHER FORUM.
HOLDER (BY ACCEPTANCE HEREOF) AND MAKER ACKNOWLEDGE AND AGREE THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER ANY OF THE CREDIT FACILITY DOCUMENTS WOULD BE
BASED UPON DIFFICULT AND COMPLEX ISSUES; AND HOLDER (BY ACCEPTANCE HEREOF); AND
THEREFORE AGREE THAT ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY SHALL BE
TRIED BY A JUDGE SITTING WITHOUT A JURY, AND KNOWINGLY AND VOLUNTARILY WAIVE
TRIAL BY JURY IN ANY SUCH PROCEEDING.
MAKER HAS NO RIGHT TO EXTEND OR RENEW THIS NOTE OR THE INDEBTEDNESS
EVIDENCED HEREBY.
ALL OF THE PROVISIONS SET FORTH ABOVE ARE A MATERIAL INDUCEMENT FOR
LENDER'S MAKING ADVANCES OF THE LOAN EVIDENCED HEREBY TO MAKER.
_____ MAKER's Initials
It is the intent of the parties to comply with the applicable usury law
("Applicable Usury Law") chosen by Maker and Lender in the preceding paragraph,
or any other usury law applicable. Accordingly, it is agreed that
notwithstanding any provisions to the contrary in this Note, the Credit Facility
Agreement, or in any of the documents securing payment hereof or otherwise
relating hereto, in no event shall this Note or such documents require the
payment or permit the collection of interest in excess of the maximum contract
rate permitted by the Applicable Usury Law. If (a) any such excess of interest
otherwise would be contracted for, charged or received from Maker or otherwise
in connection with the Loan evidenced hereby, or (b) the maturity of the
indebtedness evidenced by this Note is accelerated in whole or in part, or (c)
all or part of the principal or interest of this Note shall be prepaid, so that
under any of such circumstances the amount of interest contracted for, charged
or received in connection with the Loan evidenced hereby, would exceed the
maximum contract rate permitted by the Applicable Usury Law, then in any such
event: (1) the provisions of this paragraph shall govern and control; (2)
neither Maker nor any other person or entity now or hereafter liable for the
payment hereof will be obligated to pay the amount of such interest to the
extent that it is in excess of the maximum contract rate permitted by the
Applicable Usury Law; (3) any such excess which may have been collected shall be
either applied as a credit against the then unpaid principal amount hereof or
refunded to Maker, at the Holder's option; and (4) the effective rate of
interest will be automatically reduced to the maximum amount of interest
permitted by the Applicable Usury Law. It is further agreed, without limiting
the generality of the foregoing, that to the extent permitted by the Applicable
Usury Law: (x) all calculations of the rate of interest which are made for the
purpose of determining whether such rate would exceed the maximum contract rate
-5-
<PAGE> 50
permitted by the Applicable Usury Law shall be made by amortizing, prorating,
allocating and spreading during the period of the full stated term of the Credit
Facility advance evidenced hereby, all interest at any time contracted for,
charged or received from Maker or otherwise in connection with the Loan
evidenced hereby; and (y) if the effective rate of interest on the Loan
evidenced hereby should at any time exceed the maximum contract rate allowed
under the Applicable Usury Law, such excess interest that would otherwise have
been collected had there been no ceiling imposed by the Applicable Usury Law
shall be paid to Holder from time to time, if and when the effective interest
rate on the Loan evidenced hereby otherwise falls below the maximum amount
permitted by the Applicable Usury Law, to the extent that interest paid to the
date of calculation does not exceed the maximum contract rate permitted by the
Applicable Usury Law, until the entire amount of interest which would have
otherwise been collected had there been no ceiling imposed by the Applicable
Usury Law has been paid in full. Maker further agrees that should the maximum
contract rate permitted by the Applicable Usury Law be increased at any time
hereafter because of a change in the law, then to the extent not prohibited by
the Applicable Usury Law, such increases shall apply to all indebtedness
evidenced hereby regardless of when incurred; but, again to the extent not
prohibited by the Applicable Usury Law, should the maximum contract rate
permitted by the Applicable Usury Law be decreased because of a change in the
law, such decreases shall not apply to the indebtedness evidenced hereby
regardless of when incurred.
Maker warrants and represents that the Loan evidenced hereby is for
business or investment purposes.
The notice provisions of the Credit Facility Agreement shall govern the
delivery of any notice or other communication required or permitted hereunder.
MAKER: , a
---------------------------------------
corporation
------------------
By:
-----------------------------------------
Type/Print Name:
----------------------------
Title:
--------------------------------------
STATE/COMMONWEALTH OF _______________ )
) ss.
County of ________________________ )
The foregoing instrument was acknowledged before me this _____ day of
____________, _____, by _____________________________________, the
________________________ of _________________________________________________, a
______________ corporation, for and on behalf of the corporation.
-6-
<PAGE> 51
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-------------------------------------
Notary Public
My commission expires:
- ----------------------
-7-
<PAGE> 52
EXHIBIT C
DESCRIPTION OF REAL PROPERTY
1. The real property is owned in fee simple by the Bluegreen Entity
requesting a Loan to finance in whole or in part the acquisition and/or
improvement of such real property. Such Bluegreen Entity is the
developer of the real property.
2. Unless waived by Lender in its discretion in writing, the real property
meets the requirements for inclusion as an additional Project (as
defined in the PRFC Loan Agreement) under the PRFC Loan Documents,
whether or not set forth in paragraph 4.2. (As of August 16, 1998,
under the PRFC Loan Documents, an additional Project must be a
vacation/residential community approved by Lender in its discretion.)
<PAGE> 53
EXHIBIT D-1
REQUEST FOR ACQUISITION ADVANCE, CERTIFICATION AND AGREEMENT
(PARENT AS BORROWER)
The undersigned ("Borrower") requests FINOVA CAPITAL CORPORATION, a
Delaware corporation ("Lender"), to advance the sum of _____________________
________________________________ ($_________) ("Acquisition Advance") upon
receipt hereof, pursuant to the Amended and Restated Credit Facility Agreement
between such parties dated as of April 16, 1998 (with any amendments,
"Agreement").
Except as otherwise defined herein or the context otherwise requires,
all capitalized terms used herein have the meaning given to them in the
Agreement.
Borrower hereby represents and warrants to Lender that (i) the Advance
Formula for the Real Property described in Exhibit A attached hereto is
$___________________, computed as set forth in Schedule 1 attached hereto and by
this reference incorporated herein; (ii) no material adverse change has occurred
in the Collateral or in the business financial condition of Borrower or any
Subsidiary which is a Borrower since ____________________, _____, the date of
the last financial statements delivered to Lender by or on behalf of Borrower or
any Subsidiary which is a Borrower; (iii) all representations and warranties
contained in the Agreement are true and correct as of the date hereof; (iv)
neither an Event of Default nor an Incipient Default exists; (v) the Agreement
and the Documents required of it in connection with the Acquisition Advance do
not violate the Applicable Usury Law; and (vi) Borrower has performed and
complied with all agreements and conditions required by the Agreement to be
performed and complied with prior to or at the date of the requested
disbursement of the Acquisition Advance.
DATED: ______________________, _____.
BORROWER: BLUEGREEN CORPORATION, a Massachusetts
corporation
By:
-------------------------------------
Type/Print Name:
-------------------------
Title:
-----------------------------------
<PAGE> 54
SCHEDULE 1 TO
REQUEST FOR ACQUISITION ADVANCE, CERTIFICATION AND AGREEMENT
COMPUTATION OF ADVANCE FORMULA AND
MAXIMUM ADVANCE AMOUNT
The following are determined as of the date of the Request for Advance,
Certification and Agreement, assuming all other currently requested but
undisbursed Advances will be made:
1. 80% times the Acquisition Cost of the Real Property $
---------
2. if the requested Advance exceeds $2,000,000, 80%
times the Appraised Value $
---------
3. Advance Formula (the lesser of 1 or 2; or 1 if the
requested Advance does not exceed $2,000,000) $
---------
4. Unpaid Principal Balance of Credit Facility
before Advance $
---------
5. Credit Facility Availability ($35,000,000 - 4) $
---------
6. Unpaid Principal Balance of PRFC Credit Facility $
---------
7. Unpaid Principal Balance of Lake Ridge Loan $
---------
8. Overall Credit Facility Availability
($35,000,000 - 4 - 6-7) $
---------
9. Maximum Advance Amount (the least of 3, 5 or 8) $
---------
<PAGE> 55
EXHIBIT D-2
REQUEST FOR ACQUISITION ADVANCE, CERTIFICATION AND AGREEMENT
(SUBSIDIARY AS BORROWER)
The undersigned ("Borrower") requests FINOVA CAPITAL CORPORATION, a
Delaware corporation ("Lender"), to advance the sum of _____________________
________________________________ ($_________) ("Acquisition Advance") upon
receipt hereof, pursuant to the Amended and Restated Credit Facility Agreement
between Bluegreen Corporation and Lender dated as of April 16, 1998 (with any
amendments, "Agreement").
Except as otherwise defined herein or the context otherwise requires,
all capitalized terms used herein have the meaning given to them in the
Agreement.
Borrower hereby represents and warrants to Lender that (i) the Advance
Formula for the Real Property described in Exhibit A attached hereto is
$___________________, computed as set forth in Schedule 1 attached hereto and by
this reference incorporated herein; (ii) no material adverse change has occurred
in the Collateral or in the business financial condition of Parent, Borrower or
any other Subsidiary which is a Borrower since ____________________, ____, the
date of the last financial statements delivered to Lender by or on behalf of
Parent or any Subsidiary which is a Borrower; (iii) neither an Event of Default
nor an Incipient Default exists; and (vi) Parent has performed and complied with
all agreements and conditions required by the Agreement to be performed and
complied with prior to or at the date of the requested disbursement of the
Acquisition Advance.
DATED: ______________________, _____.
BORROWER: ______________________________________, a
________________________________
By:
--------------------------------------
Type/Print Name:
-------------------------
Title:
-----------------------------------
<PAGE> 56
SCHEDULE 1 TO
REQUEST FOR ACQUISITION ADVANCE, CERTIFICATION AND AGREEMENT
COMPUTATION OF ADVANCE FORMULA AND
MAXIMUM ADVANCE AMOUNT
The following are determined as of the date of the Request for Advance,
Certification and Agreement, assuming all other currently requested but
undisbursed Advances will be made:
1. 80% times the Acquisition Cost of the Real Property $
----------
2. If the requested Advance exceeds $2,000,000, 80%
times the Appraised Value $
----------
3. Advance Formula (the lesser of 1 or 2; or 1 if the
requested Advance does not exceed $2,000,000) $
----------
4. Unpaid Principal Balance of Credit Facility
before Advance $
----------
5. Credit Facility Availability ($35,000,000 - 4) $
----------
6. Unpaid Principal Balance of PRFC Credit Facility $
----------
7. Unpaid Principal Balance of Lake Ridge Loan $
----------
8. Overall Credit Facility Availability
($35,000,000 - 4 - 6-7) $
----------
9. Maximum Advance Amount (the least of 3, 5 or 8) $
----------
<PAGE> 57
EXHIBIT E-1
OPINION MATTERS OF THE BORROWER'S AND
GUARANTOR'S GENERAL COUNSEL OPINIONS
Lender will require legal opinions from the Borrower's and Guarantor's
general counsel as to such matters as Lender deems appropriate. Without limiting
the generality of the preceding sentence, opinions will be required as to due
organization, good standing and structure of the Borrower, Guarantor and (if
any) other sureties for the Performance of the Obligations who are not natural
persons; due authorization, execution and delivery of the Documents executed by
the Borrower, Guarantor and (if any) other sureties for the Performance of the
Obligations who are not natural persons in connection with the Loan;
enforceability of such Documents (including choice of law provisions); the
absence of conflict between such Documents and Legal Requirements; non-
materiality of pending and threatened litigation; compliance by the Borrower
with applicable laws (other than compliance with local laws to which Borrower's
and Guarantor's local counsel is opining).
<PAGE> 58
EXHIBIT E-2
OPINION MATTERS OF THE BORROWER'S AND GUARANTOR'S LOCAL
COUNSEL OPINIONS
Lender will require legal opinions as to such matters as Lender deems
appropriate from counsel to the Borrower and Guarantor authorized to practice
law in the state in which the Real Property which is the subject of the Loan is
located. Without limiting the generality of the preceding sentence, opinions
will be required as to enforceability of the Agreement and other Documents
executed in connection with Loan (including choice of law provisions);
compliance of the Loan with usury laws; the absence of conflict between such
Documents and Legal Requirements; compliance by the Borrower with Legal
Requirements; zoning of such Real Property; and compliance of the project
governing documents and project consumer documents with applicable laws; and
proper perfection of the required liens and security interests.
<PAGE> 59
EXHIBIT F
ADDITIONAL DUE DILIGENCE ITEMS FOR EACH DEVELOPMENT LOAN
1. all grading permits, foundation permits, building permits,
environmental permits, and other permits, licenses, approvals and
certificates for the construction of the related Improvements;
2. a copy of all marketing contracts, development agreements and other
agreements, as are necessary or desirable for the sale and development
of the Real Property which is the subject of the Development Loan,
otherwise expressly required with respect to the terms of this
Agreement;
3. unless waived or deferred by Lender in writing, a flood and drainage
study with respect to the Real Property which is the subject of the
Loan and the related Improvements;
4. the Architect/Engineer Agreement for each Architect/Engineer for the
related Improvements and such certificates as Lender may require from
each Architect/Engineer for the related Improvements regarding the
adequacy of the related Plans and Specifications and the related
Construction Budget and such other matters as Lender may deem
pertinent;
5. Plans and Specifications for the related Improvements complete in all
respects (subject only to Lender's approval);
6. the Construction Budget for the related Work complete in all respects
(subject only to Lender's approval);
7. a detailed draw schedule for the Development Loan;
8. the Work Progress Schedule for the related Work complete in all
respects (subject only to Lender's approval);
9. a list of all Contractors for the related Work with whom the Borrower
under the Development Loan has contracted and all subcontractors and
materialmen responsible for major portions of the such Work, all whom
must be satisfactory to Lender;
10. guaranteed maximum price Construction Contracts necessary for
Completion of the related Work between the Borrower under the
Development Loan and Contractors and for all subcontractors and
materialmen responsible for major portions of such Work; and such
certificates as Lender may request from the Contractors for such Work
regarding the adequacy of the related Construction Budget and such
other matters as Lender may reasonably deem appropriate; all
information as Lender may reasonably require regarding all Contractors
for the related Work, and, if required by Lender, the subcontractors
and materialmen responsible for major portions of such Work (which,
among other things, may consist of financial statements for the last
two years, federal employer tax identification numbers, a Dun &
Bradstreet report, credit references and a Better Business Bureau
report);
11. if required by Lender, a payment bond which complies with all Legal
Requirements of the state where the Real Property is located and which
is issued by a surety satisfactory to Lender and is for the
construction of the related Improvements adequate to cause all persons
providing labor, materials, equipment or services with respect thereto
to look solely to such bond, rather than the Real Property which is the
subject of the Development Loan and other Collateral, in the event of
non-payment;
12. if required by Lender, a performance bond or bonds which
complies/comply with all Legal Requirements of the state where the Real
Property is located which is/are issued by a surety satisfactory to
Lender, covering Construction Contracts for at least the major portions
of the related Work and naming Lender as a co-obligee; and
13. the report of Lender's Inspector with respect to the Construction
Budget, Plans and Specifications, Contracts, Work Progress Schedule,
and other construction-related items which pertain to the related Work;
-2-
<PAGE> 60
EXHIBIT G
FINOVA CAPITAL CORPORATION ("LENDER")
STANDARD CONSTRUCTION LOAN
ADMINISTRATIVE PROCEDURES
I. With each Work-Related Advance Request a Borrower must complete,
execute and deliver to Lender:
A. A Request for Work-Related Advance for all direct costs (Exhibit G-1
hereof for format and type of information required).
B. Request for Advance - Indirect Costs (Exhibit G-2 hereof).
C. Borrower's Affidavit for Advance (Exhibit G-3 hereof).
D. Check Sheet Form (Exhibit G-4 hereof).
E. Waiver of Liens (Exhibit G-5 hereof or such form as is required by law)
for previous application payments.
F. Change Order Approval Request (AIA Document G714) when applicable
(Exhibit G-6 hereof).
G. Invoices supporting amounts shown in columns E and F of AIA Document
G702 and G703.
H. Any surveys required pursuant to the Agreement and/or other Documents
executed by the Borrower in connection with the Development Loan.
I. Such other items as Lender requests which are reasonably necessary to
evaluate the request for the Work-Related Advance and the satisfaction
of the conditions precedent thereto.
II. The following events must take place prior to each Work-Related
Advance:
A. Contractor requests site inspection from Lender's Inspector.
B. Contractor provides Lender's Inspector with a copy of the Request for
Work-Related Advance.
C. Lender's Inspector will perform a physical inspection to review the
Work in place, including, without limitation, Work which has been
financed from sources other than a Work-Related Advance, and make a
certification and recommendation to Lender. Lender's Inspector forwards
his report, certification and recommendation to Lender.
<PAGE> 61
D. At Lender's option, Lender will request the applicable Title Insurer to
review public records, advise Lender of same, and forward to Lender
endorsement(s) as required pursuant to the Agreement and/or other
Documents executed in connection with the Development Loan.
E. Lender will review the Work-Related Advance Request, input of Lender's
Inspector and the title company's input. The Work-Related Advance
Request must be appropriate, complete and in proper order. The order of
the Work-Related Advance Request package will determine the processing
time needed.
F. All other conditions of the Agreement and/or other Documents executed
in connection with the Development Loan are satisfied.
-2-
<PAGE> 62
EXHIBIT G-1
AIA FORMS G702 AND G703
<PAGE> 63
EXHIBIT G-2
REQUEST FOR ADVANCE - INDIRECT COST
Borrower: ________________________________ Application No.: _______________
Project: _________________________________ Date: __________________________
<TABLE>
<CAPTION>
Description of Scheduled Previous This Paid & Pay- Balance
Indirect Cost Value Payments Request able to Date To Finish
<S> <C> <C> <C> <C> <C> <C>
A B C D E F G
1 Perm. Lender's Commitment Fee
2 Interim Loan Fee
3 Real Estate Commissions
4 Architect's Fees
5 Surveyor's Fees
6 Attorney's Fees - Borrower
7 Title Insurance Premium
8 Recording Fees
9 Real Estate Taxes
10 Mortgage Recording Tax
11 State Stamps on Note
12 Hazard Insurance Premium
13 Performance Bond Premium
14 Progress Inspector Fee
15 Disbursement Agent's Fee
16 Appraisal Fees
17 Advertising and Promotion Exp.
18 Organizational Expense
19 Existing Prior Mtg. Liens
20 Existing Prior Other Liens
21 Land Purchase Cost
22 Cons. Cost Analyst Fee
23 Engineer's Fees
24 Allowance for Contingencies
25 Interest Reserve
26 Discount Fee
27 Legal Fees - Lender
28 Standby Commitment Fee
29 Credit Report Fee
30 Non-Refundable Loan Proc. Fee
31 Building Permits
32
33
34
35
36
37
38
39
40
TOTAL
</TABLE>
<PAGE> 64
EXHIBIT G-3
BORROWER'S AFFIDAVIT FOR WORK-RELATED ADVANCE
Borrower: __________________________________________________
Date: ________________, ______
Loan Name
and
Request No.: ________; Request No. ______________
Period: _________________ to ____________________
Amount: _______________________________
In connection with and in order to induce FINOVA Capital Corporation
("Lender") to make a Work-Related Advance in the amount requested above and with
respect to the Development Loan identified above, Borrower hereby represents,
warrants and stipulates as follows:
1. The work listed in this Development Loan Advance Request Package
("Request") has been completed in accordance with the Amended and
Restated Credit Facility Agreement dated April 16, 1998, between the
Bluegreen Corporation and Lender (with any amendments, "Agreement");
all obligations for work submitted and received on previous Borrower's
Affidavit for Work-Related Advance submitted in connection with the
Development Loan identified above have now been paid in full (except
for retainage); the funds requested at this time shall be applied only
to the obligations for work set forth in this Request; and all
Insurance Policies (including without limitation, Builder's Risk and
General Liability Coverage policies) as required by the Agreement are
in full force and effect.
2. Attached hereto are the names of all architects, engineers, design
professionals, contractors, subcontractors, suppliers and materialmen
who have performed or who will be performing Work being financed in
whole or in part under the Development Loan identified above and whose
names have not been previously delivered to Lender in writing. Copies
are attached hereto of contracts with all such architects, engineers,
design professionals, contractors, subcontractors, suppliers and
materialmen whose contracts are required to be, but have not yet been,
delivered to Lender pursuant to the terms of the Agreement.
3. Attached hereto are any updates to the approved Plans and
Specifications for the Work being financed in whole or in part under
the Development Loan identified above.
4. The amounts and percentages set forth on the attached schedules, along
with supporting documentation for each budgeted item and the Balance To
Finish in accordance with AIA 702 and 703 forms submitted herewith are
true and correct to the best of Borrower's knowledge.
<PAGE> 65
5. The following are included as part of this Request:
Application and Certificate for Payment (AIA G702)
Continuation Sheets (AIA G703)
Request for Advance - Indirect Costs
Check Sheet Form
6. No material adverse change has occurred in the Improvements being
financed in whole or in part by the Development Loan identified above or,
since __________________, _____, the date of the latest financial
statements given by or on behalf of such person to Lender, in the
financial condition or the business and operations of Borrower.
7. All representations and warranties of Borrower and any person other than
Lender contained in the Agreement and the other Documents executed in
connection with the Development Loan are true and correct as of the date
hereof.
8. Neither an Event of Default nor Incipient Default exists.
9. Borrower has performed and complied with all other agreements or
conditions required by the Agreement and the other Documents executed in
connection with the Development Loan to be performed or complied with
prior to or at the date of the requested Advance.
10. Capitalized terms not otherwise defined herein shall have the meaning
given to them in the Agreement.
BORROWER
---------------------------------------
By:
------------------------------------
Type/Print Name:
-----------------------
Title:
---------------------------------
-2-
<PAGE> 66
EXHIBIT G-4
CHECK SHEET FORM
________________________________ CONSTRUCTION DRAW NO. ______________
1. TOTAL COMPLETED & STORED TO DATE $_________________
LESS RETAINAGE $_________________
TOTAL COMPLETED LESS RETAINAGE $_________________
LESS PREVIOUS PAYMENTS $_________________
CURRENT PAYMENTS DUE $_________________
2. WORK COMPLETED THIS APP. (WORK IN PLACE) $_________________
WORK COMPLETED THIS APP. (STORED MATERIALS) $_________________
INCREASE IN RETAINAGE - CURRENT PERIOD $_________________
AMOUNT OF DISBURSEMENT $_________________
3. TOTAL OF BORROWER/
GENERAL CONTRACTOR CHECKS $_________________
4. PREVIOUS APPLICATIONS $_________________
PLUS WORK IN PLACE $_________________
PLUS STORED MATERIALS $_________________
TOTAL COMPLETED & STORED TO DATE (A) $_________________
SCHEDULED VALUE (B) $_________________
PERCENTAGE COMPLETED (A) DIVIDED BY (B) $_________________
SCHEDULED VALUE $_________________
MINUS TOTAL COMPL. & STORED TO DATE $_________________
BALANCE TO FINISH $_________________
State/Commonwealth of ____________________
County of __________, to wit:
Subscribed and sworn to before me on
this _____ day of _____________, _____.
- ----------------------------------
Notary Public
My commission expires:
- ----------------------
(Notary Seal)
<PAGE> 67
EXHIBIT G-5
WAIVER OF LIEN
<PAGE> 68
EXHIBIT G-6
AIA FORM G714
<PAGE> 69
EXHIBIT I
CERTIFICATE AND AGREEMENT OF BORROWER
REGARDING CONSTRUCTION-RELATED MATTERS
The undersigned ("Borrower"), in order (A) to induce FINOVA CAPITAL
CORPORATION, a Delaware corporation ("Lender"), to make or commit to make a loan
("Development Loan") in a maximum principal amount not to exceed _______________
$________________ pursuant to the Amended and Restated Credit Facility Agreement
between such parties dated as of April 16, 1998 (with any amendments,
"Agreement") and (B) to satisfy certain conditions precedent to the initial
Advance of the Subject Development Loan, hereby represents, warrants, covenants
and agrees with Lender as follows:
1. Except as otherwise defined herein or the context otherwise requires,
all capitalized terms used herein have the meaning given to them in the
Agreement.
2. Borrower represents and warrants to Lender as follows with respect
to the Subject Development Loan and related matters:
(a) ADEQUACY OF PRINCIPAL WORK-RELATED ITEMS. The Principal
Work-Related Items delivered to Lender for the related Work are
adequate, and will continue at all times to be adequate, for
Completion of the related Work. The Principal Work-Related Items
delivered to Lender for the related Work in full force and effect
at all times necessary to assure Completion of the related Work; no
third party bound thereby is in default of its obligations
thereunder or has threatened to terminate Borrower's rights
thereunder; Borrower has paid all sums and performed all other
obligations it has under them; and no third party bound thereby has
any defense to the enforcement of Borrower's rights thereunder.
Except as disclosed to Lender in writing, no moratorium or other
legal impediment exists or, to the knowledge of Borrower, is
threatened with respect to the issuance of any permit or approval
necessary to use the related Improvements for the intended purposes
upon Completion of the related Work.
(b) ADEQUACY OF CONSTRUCTION BUDGET. Borrower will cause the related
Construction Budget to accurately and completely set forth the
types and estimated maximum amounts of all costs which must be
incurred for Completion of the related Work to occur.
(c) ADEQUACY OF STREETS AND UTILITIES. All streets, easements, and
utilities (including potable water, storm and sanitary sewer, gas,
electric, telephone and cable television facilities and garbage
removal) necessary for the Completion of the related Work and use
of the Real Property which is the subject of the Subject
Development Loan for the purposes have been completed, paid for in
full and are available at the boundaries of such Real Property; or
they are being constructed as part of the related Improvements and
upon Completion of the related Work, will be completed, paid for in
full, located within the Real Property which is the subject of the
Subject Development Loan, and adequate for the intended use of such
Real Property. All water and sewer treatment plants and power
generation
-4-
<PAGE> 70
facilities intended to serve the related Improvements have been
constructed and are operational; and upon Completion of the related
Work, will have adequate capacity and size to serve the intended
use of the related Improvements.
(d) STATUS OF WORK; BREAK IN PRIORITY. No work, equipment, materials or
services of any kind that may give rise to any mechanics or similar
statutory lien (whether for work performed prior to or after
recordation of the related Mortgage) which will have priority over
the lien of the related Mortgage, including, without limitation,
the destruction or removal of existing related Improvements, site
work, cleaning, curbing, draining or fencing of the Real Property
which is the subject of the Subject Development Loan, has been or
will be performed or commenced on the Real Property which is the
subject of the Subject Development Loan prior to recordation of the
related Mortgage. Lender may waive such condition in its
discretion; and as a condition precedent to such waiver, such work,
equipment, materials, services or work of any kind has been
performed or provided with respect to the Real Property which is
the subject of the Subject Development Loan that may give rise to
any mechanics or similar statutory lien which will have priority to
the lien of the related Mortgage (including, without limitation,
the destruction or removal of existing Improvements, site work,
clearing, grubbing, draining or fencing of the Real Property which
is the subject of the Subject Development Loan), such work,
equipment, materials and services must be fully disclosed in
writing to Lender and the applicable Title Insurer prior to
recordation of the related Mortgage, such work, equipment,
materials and services must be satisfactory to Lender and Lender's
Inspector, and the applicable Title Insurer must insure the
priority of the related Mortgage over all such liens.
3. Borrower covenants and agrees with Lender that Borrower will in
connection with the related Work:
(a) cause the progress of the Work to occur in substantial compliance
with the related Work Progress Schedule, subject to Force Majeure
Events, all in accordance with the related Plans and
Specifications, related Construction Contract(s), Legal
Requirements, the Documents, sound construction engineering and
architectural principles and commonly accepted safety standards,
lien free and free from defective materials and workmanship; and
cause Completion of the Work to occur on or before _____________
______________________________________ ("Required Completion
Date").
(b) (i) pay when due all costs, expenses and claims pertaining to the
Work; (ii) deliver to Lender during the course of the Work in order
to monitor and/or provide assurance that the Work is proceeding
lien free in accordance with the related Plans and Specifications,
the related Construction Contract(s), Legal Requirements, the
Documents, sound construction, engineering and architectural
principles and commonly accepted safety standards: bills of sale,
conveyances and paid invoices pertaining to the Work; all waivers
and releases of lien or claims on the Real Property which is the
subject of the Subject Development Loan and/or the related
Improvements in connection with the Work which Lender may determine
to be necessary or may otherwise
-5-
<PAGE> 71
reasonably request for its protection; from persons acceptable to
Lender, additional engineering or architectural studies and reports
as Lender or Lender's Inspector may reasonably require in
connection with the Work; and (iii) record all notices of
commencement/completion and similar notices permitted by Legal
Requirements which have the effect of shortening periods within
which mechanics and similar liens may be filed;
(c) allow Lender, Lender's Inspector and/or its agents and employees to
inspect the Real Property which is the subject of the Subject
Development Loan and the Work at all reasonable times, with the
costs of such inspections to be borne by Borrower;
(d) not enter into any related Architect/Engineer Agreement or related
Construction Contract except upon terms and with such parties as
Lender may approve in writing, such approval not to be unreasonably
withheld;
(e) deliver all related Principal Work-Related Items to Lender promptly
after obtaining them (or at such earlier time as may be required
pursuant to Article IV of the Agreement);
(f) not amend any of the related Principal Work-Related Items except
for change orders which (i) do not change the cost of Completion of
the Work by more than Ten Thousand Dollars ($10,000) individually
or Fifty Thousand Dollars ($50,000) in the aggregate beyond that
shown in the related Construction Budget as originally approved by
Lender, and (ii) do not affect the design, structural integrity or
quality of the related Improvements;
(g) perform all its obligations and preserve its rights under the
related Principal Work- Related Items and secure the performance of
the other parties to the related Principal Work-Related Items;
(h) deliver to Lender: (i) promptly after the pouring of a street,
material curbstone or material slab in close proximity to the
property lines of adjacent real property or the completion of
construction of a foundation for any building forming part of the
related Improvements, a survey for the Real Property which is the
subject of the Subject Development Loan certified to Lender and the
Title Insurer by a licensed surveyor or engineer acceptable to
Lender (A) showing such improvement and that the location thereof
is entirely within the property lines of the Real Property which is
the subject of the Subject Development Loan and does not encroach
upon, breach, or violate any set back line easement or similar
restriction and (B) meeting ALTA standards and other reasonable
requirements of Lender and the applicable Title Insurer; promptly
after substantial completion of the related Improvements, a survey
certified to Lender and the applicable Title Insurer by a licensed
surveyor or engineer acceptable to Lender, showing all Improvements
"as built" and otherwise meeting the criteria of items (i)(A) and
(i)(B) of this paragraph;
-6-
<PAGE> 72
(i) deliver to Lender: prior to each related Work-Related Advance, at
Lender's option, an endorsement ("date down endorsement") issued by
the applicable Title Insurer to the Title Policy insuring the
related Mortgage insuring Lender against any loss by reason of
defects in, mechanic's or similar statutory liens upon or
unmarketability of the title to the Real Property which is the
subject of the Subject Development Loan, as well as insuring that
the related Mortgage, at the time of each related Work-Related
Advance, constitutes a valid first lien upon such Real Property,
subject only to the Permitted Encumbrances; promptly after the
construction of the foundation for any building forming part of the
related Improvements, an endorsement insuring that such foundation
is located on the Real Property which is the subject of the Subject
Development Loan within all side and set-back lines and does not
encroach upon any easements, rights-of- way (public or private) or
upon any adjoining landowner's property; and promptly after
substantial completion of the related Improvements has occurred, an
endorsement insuring that the related Improvements are located upon
the Real Property which is the subject of the Subject Development
Loan within all side and set-back lines and do not encroach upon
any easements, rights-of-way (public or private) or upon any
adjoining landowner's property; and upon Completion of the Work, a
date down endorsement;
(j) after obtaining knowledge or receiving notice thereof, correct or
cause to be corrected (i) any material defect in the Work, (ii) any
material departure in the completion of the Work from the related
Plans and Specifications or the related Construction Contract(s)
(unless expressly permitted in this Agreement or consented to in
writing by Lender), any Legal Requirements, sound, construction,
engineering or architectural principles or commonly accepted safety
standards or (iii) any encroachment of any part of the related
Improvements on any building line, easement line or restricted
area, or any adjacent landowner's property;
(k) promptly deliver to Lender any and all notices received by Borrower
that it is not complying with Legal Requirements pertaining to the
Work or that the Work is not being completed in accordance with the
related Plans and Specifications, the related Construction
Contract(s), sound construction, engineering and architectural
principles and commonly accepted safety standards;
(l) if at any time there exists or appears likely to exist any
Uncovered Cost of the Work, Borrower will notify Lender within
fifteen (15) Business Days (and in any event prior to the next
Advance) after obtaining knowledge thereof; within the earlier of
such fifteen (15) Business Day period or fifteen (15) Business Days
after Lender's demand that it do so, Borrower will deliver to
Lender the Required Completion Assurance Deposit; in the event of
any dispute, the necessity for and amount of the Required
Completion Assurance Deposit shall be determined by Lender; the
Required Completion Assurance Deposit may be deposited in a
non-interest-bearing account and need not be segregated from any of
Lender's other funds, provided that Lender will disburse the
Required Completion Assurance Deposit to pay and/or reimburse
Borrower for the costs of the Work prior to any further
disbursement of the Subject Development Loan for such purpose, but
subject to the terms and conditions of this Agreement
-7-
<PAGE> 73
pertaining to the disbursement of Subject Development Loan
Advances; and Lender is hereby granted a security interest in all
Required Completion Assurance Deposits, together with interest
accruing thereon, from time to time held by Lender;
(m) cause all materials supplied for or intended to be utilized in the
Completion of the Work, but previously not affixed to or
incorporated into the Improvements, to be stored on the Real
Property which is the subject of the Subject Development Loan with
adequate safeguards, as reasonably required by Lender, to prevent
loss, theft, damage or commingling with other materials; and
(n) promptly after receipt by Borrower (but in no event later than the
Required Completion Date), deliver to Lender copies of all
marketing contracts, management contracts, service contracts,
operating agreements, equipment leases and any and all other
contracts, agreements, licenses and permits (including, without
limitation, certificates of acceptance and occupancy related to the
Work) as are necessary or desirable for the sale, operation and
intended time-share use and use of the Real Property which is the
subject of the Development Loan.
DATED: ______________________, _____.
BORROWER: _______________________________________,
a _____________________________ corporation
By:
--------------------------------------
Type/Print Name:
-------------------------
Title:
------------------------------------
ACCEPTED:
FINOVA CAPITAL CORPORATION
By:
--------------------------------
Type/Print Name:
-------------------
Title:
-----------------------------
-8-
<PAGE> 74
EXHIBIT J
CERTIFICATE AND AGREEMENT
OF SUBSIDIARY BORROWER (BASIC)
The undersigned ("Borrower"), in order (A) to induce FINOVA CAPITAL
CORPORATION, a Delaware corporation ("Lender"), to make or commit to make a loan
("Subject Loan") in a maximum principal amount not to exceed $________________
pursuant to the Amended and Restated Credit Facility Agreement between such
parties dated as of April 16, 1998 (with any amendments, "Agreement") and (B) to
satisfy certain conditions precedent to the initial Advance of the Subject Loan,
hereby represents, warrants, covenants and agrees with Lender as follows:
1. Except as otherwise defined herein or the context otherwise requires,
all capitalized terms used herein have the meaning given to them in the
Agreement.
2. Borrower represents, warrants and covenants to and for the benefit
of Lender as follows:
(a) INCORPORATION OF PROVISIONS OF AGREEMENT. Borrower agrees to be
bound by all the terms and conditions of the Agreement applicable generally to
Loans and Advances in connection with the Subject Loan, Borrower and the
Documents, all of which are herein incorporated by this reference.
(b) GOOD STANDING. Borrower is and will remain duly organized, validly
existing and in good standing under the laws of the state of its organization;
and is qualified to do business and in good standing in each jurisdiction in
which the location or nature of its properties or its business makes such
qualification necessary. Borrower has full authority to Perform its Obligations
and to carry on its business and own its property.
(c) POWER AND AUTHORITY; ENFORCEABILITY. Borrower has and will maintain
full power and authority to grant the Security Interest in the Real Property
which is the subject of the Subject Loan and the Personal Property related to
such Real Property, to execute Subject Loan and to Perform its Obligations under
such Documents. All action necessary and required by the Articles of
Organization of Borrower and all applicable laws for the obtaining of the
Advance and for the execution and delivery of the Documents required of it in
connection with the Advance has been duly and effectively taken. The Documents
are and shall be legal, valid, binding and enforceable against it and do not
violate the Applicable Usury Law or constitute a default or result in the
imposition of a lien under the terms or provisions of any agreement to which it
is a party. No consent of any governmental agency or any other person not a
party to the Agreement is or will be required as a condition to the execution,
delivery or enforceability by or against it of the Documents required of it in
connection with the Advance.
(d) NO LITIGATION. There is no action, litigation or other proceeding
pending or, to Borrower's knowledge, threatened before any arbitration tribunal,
court, governmental agency or administrative body against Borrower, which might
materially adversely affect the Performance of its Obligations, the business or
financial condition of Borrower, or the ability of Borrower to Perform its
Obligations. Borrower will promptly notify Lender if any action, litigation or
proceeding is pending or threatened
<PAGE> 75
against it, which might materially, adversely affect the Collateral given under
the Security Documents required of it in connection with the Subject Loan, the
business or financial condition of Borrower, or the ability of Borrower to
Perform its Obligations.
(e) COMPLIANCE WITH LAWS. Borrower has complied, and will comply, with
all applicable laws and regulations where the failure to do so might materially,
adversely affect the Collateral, the business or financial condition of Borrower
on the ability of Borrower to perform its Obligations.
(f) RESTRICTIONS ON TRANSFERS, LIENS AND CHANGE OF CONTROL. Borrower is
a wholly-owned subsidiary of Bluegreen Corporation, a Massachusetts corporation.
Unless expressly permitted in the Agreement or in any of the Security Documents,
Borrower without the prior written consent of Lender: (i) sell, convey, pledge,
hypothecate, encumber or otherwise transfer any Collateral given under the
Security Documents required of it in connection with the Subject Loan; (ii)
permit or suffer to exist any liens, security interests or other encumbrances on
any Collateral given under the Security Documents required of it in connection
with the Subject Loan, except for Permitted Encumbrances and liens and security
interests expressly granted to Lender; (iii) permit or suffer the sale, lease,
transfer or disposal of all or substantially all of its assets to another
entity; or (iv) permit or suffer to exist any transfer of ownership interests in
or control of such entity.
(g) NO MISREPRESENTATIONS. The Documents and all certificates,
financial statements and written materials furnished to Lender by or on behalf
of Borrower in connection with the Subject Loan do not and will not contain any
untrue statement of a material fact or omit to state a fact which materially
adversely affects or in the future may materially adversely affect the
Collateral given under the Security Documents required of it in connection with
the Subject Loan or the business or financial condition of Borrower.
(h) RELIANCE. Lender's examination, inspection or receipt of
information pertaining to the Collateral given under the Security Documents
required of it in connection with the Subject Loan shall not in any way be
deemed to reduce the full scope and protection of the warranties,
representations and Obligations contained in the Documents required of it in
connection with the Subject Loan.
(i) RIGHT TO INSPECT. Borrower will permit Lender and its
representatives at all reasonable times to inspect, audit and copy, as
appropriate, the Collateral given under the Security Documents required of it in
connection with the Subject Loan, and their respective records.
(j) ADDITIONAL INFORMATION. Borrower will make available to Lender such
further information as Lender may from time to time reasonably request.
(k) SUBORDINATION OF INDEBTEDNESS. Borrower will cause any and all
indebtedness owing by it to its shareholders, directors or officers, Parent, or
the Affiliates of Borrower or the foregoing and all liens, security interests
and other charges on the assets of Borrower, including, without limitation, the
Collateral granted under the Security Documents required of it in connection
with the Subject Loan, to be fully subordinated in all aspects to the
Obligations of Borrower pursuant to written agreements satisfactory to Lender;
PROVIDED, HOWEVER, that such subordination shall not extend to reasonable
salaries and fees at normal and customary rates for services actually rendered
or, if neither
-2-
<PAGE> 76
an Event of Default nor an Incipient Default is outstanding, to payments or
distributions of any kind to Parent. Any such creditor shall execute a
subordination agreement in form and substance satisfactory to Lender.
(l) NO DEFAULT FOR THIRD PARTY OBLIGATIONS. Borrower is not in default
under any other agreement evidencing, guaranteeing or securing borrowed money or
a receivables purchase financing involving an obligation in excess of the
Threshold Amount to make a payment of principal or interest or to repurchase
receivables or any other material default by Borrower permitting the
acceleration of the payment or repurchase obligations of Borrower, which payment
or repurchase obligations entitled to be accelerated are in excess of the
Threshold Amount in the aggregate. Borrower is not in violation of or in default
under any material term in any other material agreement, instrument, order,
decree or judgment of any court, arbitration or government authority to which it
is a party or by which it is bound.
(m) PAYMENT OF TAXES. Borrower has filed all tax returns, and Borrower
has paid or will pay all taxes, assessments, levies and penalties, if any,
required to be filed by it or paid by it to any governmental or
quasi-governmental authority or subdivision, including real estate taxes and
assessments relating to the Collateral granted under the Security Documents
required of it in connection with the Subject Loan, unless and only to the
extent the item shall be contested in good faith and by appropriate proceedings
by Borrower, Borrower shall set aside and cause on its books adequate reserves
with respect to the contested item and, in connection with any tax assessment,
levy or penalty levied against the Collateral, Borrower shall comply with the
terms of Security documents pertaining to such contest.
(n) CREDIT FACILITY MODIFICATION FEE AND OTHER FEES AND EXPENSES.
Borrower will pay to Lender the Credit Facility Modification Fee Installment
Payment (if any) payable in connection with the initial Advance of the Subject
Loan pursuant to the terms of the Agreement. Borrower will pay on demand any and
all reasonable costs and expenses incurred by Lender in connection with the
initiation, documentation and closing of the Subject Loan, the making of the
Subject Loan, the protection of the Collateral granted by it under the Documents
required of it in connection with the Subject Loan, or the enforcement of
Borrower's Obligations under the Documents against Borrower, including, without
limitation: all reasonable attorneys' (except as provided in the following
sentence) and other professionals' fees and charges (including, without
limitation, normal charges for photocopy, telecopy and computer services); the
costs of credit reports and UCC, lien, litigation, judgment and bankruptcy
searches, and revenue, documentary stamp and intangible taxes.
(o) INDEMNIFICATION. Borrower will INDEMNIFY, PROTECT, HOLD HARMLESS,
and defend Lender, its successors, assigns and shareholders (including corporate
shareholders), and the directors, officers, employees, agents and servants of
the foregoing, for, from and against, except to the extent arising from the
indemnitee's gross negligence or willful misconduct, any and all losses, costs,
expenses (including, without limitation, court costs and attorneys' fees),
demands, claims, suits, proceedings (whether civil or criminal), orders,
judgments, penalties, fines and other sanctions arising from or brought in
connection with (a) any of the Collateral granted by it under the Documents
required of it in connection with the Subject Loan, the terms of the Documents
required of it in connection with the Subject Loan or the transactions related
thereto, or any act or omission of Borrower or its employees or agents, whether
actual or alleged, and (b) any and all brokers'
-3-
<PAGE> 77
commissions or finders' fees or other costs of similar type by any party,
engaged by Borrower in connection with the Subject Loan. On written request by a
person or other entity covered by the above agreement of indemnity, Borrower
will undertake, at its own cost and expense, on behalf of such indemnitee, using
counsel satisfactory to the indemnitee, the defense of any legal action or
proceeding to which such person or entity shall be a party and for which such
indemnitee is entitled to be indemnified pursuant to this paragraph. At Lender's
option, Lender may at Borrower's expense prosecute or defend any action
involving the priority, validity or enforceability of the Security Interests.
(p) PERFECTION OF SECURITY INTERESTS. Borrower will execute or cause to
be executed all documents, and do or cause to be done all acts, reasonably
necessary for Lender to perfect and to continue the perfection of the Security
Interest of Lender in the Collateral required of it or otherwise to effect the
intent and purposes of the Documents required of it.
(q) SURVIVAL AND ADDITIONAL REPRESENTATIONS. The representations,
warranties and covenants contained in this Certification and Agreement are in
addition to, and not in derogation of, the representations and warranties
contained elsewhere in the Documents required of it in connection with the
Subject Loan; and the representations and warranties contained herein and
elsewhere in the Documents required of it in connection with the Subject Loan
shall be deemed to be made and reaffirmed prior to the making of each Advance
under the Subject Loan.
DATED: ______________________, _____.
BORROWER: ________________________________________, a
________________________________
By:
----------------------------------------
Type/Print Name:
---------------------------
Title:
-------------------------------------
ACCEPTED:
FINOVA CAPITAL CORPORATION
By:
----------------------------------------
Type/Print Name:
---------------------------
Title:
-------------------------------------
-4-
<PAGE> 78
EXHIBIT K
STANDARD PROCEDURES PERTAINING TO
DEVELOPMENTAL MATTERS REQUESTS
A. If a Borrower desires Lender to give its consent to or to take any
other action concerning a matter affecting the zoning, platting, development or
sale of or title to such Borrower's Real Property, then such Borrower will
endeavor to deliver to Lender a written request ("Developmental Matters
Request") at least fifteen (15) Business Days prior to the date such Borrower
desires Lender to take such action.
B. The Developmental Matters Request shall contain in reasonable detail
the following: (1) a description of the action which the Borrower desires Lender
to take; (2) the date by which the Borrower desires that Lender take the action
and any special factors affecting the Borrower's desire that Lender take the
requested action by such date (such as the desire to present an amended plat to
a governmental entity on a scheduled hearing date and the length of time before
another hearing date can be scheduled); (3) the reason that the Borrower desires
the action to be taken by Lender, a description as to how the matter which is
the subject of the request for Lender's action alters the plan required to be
given by the Borrower to Lender pursuant to paragraph 4.2(b) of this Agreement
regarding the use, development or sale of the subject Real Property; and (4) a
description of any amendments or waivers required with respect to the Documents.
At the same time, it delivers the Developmental Matters Request to Lender, the
Borrower will also endeavor to deliver to Lender at least two (2) copies of all
items as would be reasonably required by a reasonable and prudent lender in
order to evaluate the request. The Borrower will in any event promptly deliver
to Lender any information which Lender may reasonably request concerning the
Developmental Matters Request.
C. To the extent Lender's consent is requested to a plat, a plat
amendment or covenants, conditions and restrictions affecting Real Property,
such consent shall specifically state, in addition to such other matters as
Lender may require, that nothing contained in the consent shall otherwise
affect, alter, or modify in any manner whatsoever the terms of the Mortgage on
the Real Property, that the lien of the Mortgage shall be prior to the lien for
all assessments, and that execution of the consent by the Lender is not intended
to and shall not diminish the obligation of the Borrower under the Mortgage,
excuse the Borrower from any liability for failure to perform any such
obligation, or impair any of the Lender's rights against the Borrower under the
Mortgage.
D. Notwithstanding the provisions of paragraph 8.5, a Developmental
Matters Request and all items delivered to Lender in connection therewith shall
be addressed to :
FINOVA CAPITAL CORPORATION
7272 East Indian School Road, Suite 410
Scottsdale, Arizona 85251
Attn: Lydia Moody-Minert
Telecopy No.: (602) 874-6445
<PAGE> 79
E. The provisions of paragraphs 6.15 and 8.14 of the Agreement shall be
applicable to each Developmental Matters Request.
F. The procedures set forth in this Exhibit shall not apply to a
request for a Partial Release of a Release Parcel or to obtain Advances, the
procedures for which are set forth elsewhere in this Agreement.
-2-
<PAGE> 1
EXHIBIT 10.130
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
BY AND BETWEEN
BLUEGREEN CORPORATION
AND
FOOTHILL CAPITAL CORPORATION
DATED AS OF SEPTEMBER 23, 1997
-------------------------------------------------------------
TABLE OF CONTENTS
-----------------
PAGE
----
1. DEFINITIONS AND CONSTRUCTION. 2
1.1 DEFINITIONS 2
1.2 ACCOUNTING TERMS 13
1.3 CODE 13
1.4 CONSTRUCTION 13
1.5 SCHEDULES AND EXHIBITS. 13
2. LOAN AND TERMS OF PAYMENT. 14
<PAGE> 2
2.1 ADVANCES AGAINST PLEDGED A NOTES 14
2.2 LAND INVENTORY ADVANCES 15
2.3 ADVANCES AGAINST PLEDGED B NOTES; TERM LOAN 16
2.4 INTEREST: RATES, PAYMENTS, AND CALCULATIONS 17
2.5 CREDITING PAYMENTS; APPLICATION OF COLLECTIONS 19
2.6 STATEMENTS OF OBLIGATIONS 19
2.7 FEES 20
3. CONDITIONS; TERM OF AGREEMENT 20
3.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE 20
3.2 CONDITIONS PRECEDENT TO ALL ADVANCES. 20
3.3 CONDITIONS PRECEDENT TO LAND INVENTORY ADVANCES. 22
3.4 CONDITIONS PRECEDENT TO A LINE AND B LINE ADVANCES. 22
3.5 TERM 22
3.6 EFFECT OF TERMINATION 22
3.7 EARLY TERMINATION BY BORROWER 23
3.8 TERMINATION UPON EVENT OF DEFAULT 23
4. CREATION OF SECURITY INTEREST 23
4.1 GRANT OF SECURITY INTEREST 23
4.2 NEGOTIABLE COLLATERAL 23
4.3 MAINTENANCE OF PORTFOLIO COLLATERAL; COLLECTION ON
ACQUIRED NOTES AND PLEDGED NOTES 24
4.4 COMPROMISE OR SETTLEMENTS WITH RESPECT TO PLEDGED NOTES;
REPURCHASE OF PLEDGED NOTES 24
4.5 EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT TO DEFAULTS
UNDER PLEDGED NOTES 25
4.6 DISTRIBUTIONS OF LOCKBOX SUMS 25
4.7 RELEASE OF PORTIONS OF REAL PROPERTY COLLATERAL 26
4.8 RELEASE OF SECURITY INTERESTS IN THE PLEDGED NOTES;
RELEASE OF SECURITY WHEN ADVANCES ARE EQUAL TO ZERO 27
4.9 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED 28
4.10 POWER OF ATTORNEY 28
4.11 RIGHT TO INSPECT 29
5. REPRESENTATIONS AND WARRANTIES. 29
5.1 NO PRIOR ENCUMBRANCES 29
5.2 BONA FIDE OBLIGATION 29
5.3 NO DEFENSES OR SETOFFS 29
5.4 ENFORCEABLE AGREEMENTS 29
5.5 CORRECT LEGAL DESCRIPTION 29
5.6 CORRECT LOAN TERMS 29
5.7 COMPLIANCE WITH LAWS 30
5.8 AUTHORITY TO ASSIGN 30
<PAGE> 3
5.9 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN 30
5.10 DUE ORGANIZATION AND QUALIFICATION 30
5.11 DUE AUTHORIZATION; NO CONFLICT 30
5.12 LITIGATION 30
5.13 NO MATERIAL ADVERSE CHANGE IN FINANCIAL CONDITION 31
5.14 SOLVENCY 31
5.15 EMPLOYEE BENEFITS 31
5.16 ENVIRONMENTAL CONDITION 32
5.17 RELIANCE BY FOOTHILL; CUMULATIVE 32
5.18 GOOD STANDING 32
6. AFFIRMATIVE COVENANTS. 33
6.1 ACCOUNTING SYSTEM 33
6.2 SCHEDULES OF PLEDGED NOTES 33
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES 33
6.4 TAX RETURNS 34
6.5 GUARANTOR REPORTS 35
6.6 TAXES 35
6.7 INSURANCE 35
6.8 FINANCIAL COVENANTS 37
6.9 NO SETOFFS OR COUNTERCLAIMS 37
6.10 COMPLIANCE WITH LAWS 37
6.11 EMPLOYEE BENEFITS 37
6.12 ENVIRONMENTAL CONDITION 38
6.13 SALE OF PORTIONS OF THE REAL PROPERTY 40
7. NEGATIVE COVENANTS 41
7.1 INTENTIONALLY DELETED 41
7.2 LIENS 41
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES 41
7.4 EXTRAORDINARY TRANSACTIONS AND DISPOSAL OF ASSETS 41
7.5 CHANGE NAME 41
7.6 INTENTIONALLY DELETED 41
7.7 RESTRUCTURE 42
7.8 INTENTIONALLY DELETED 42
7.9 CHANGE OF CONTROL 42
7.10 DISTRIBUTIONS 42
7.11 ACCOUNTING METHODS 42
7.12 INVESTMENTS 42
7.13 TRANSACTIONS WITH AFFILIATES 42
7.14 SUSPENSION 42
7.15 INTENTIONALLY DELETED 43
7.16 USE OF PROCEEDS. 43
7.17 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE 43
<PAGE> 4
7.18 USE OF FOOTHILL'S NAME 43
8. EVENTS OF DEFAULT. 43
9. FOOTHILL'S RIGHTS AND REMEDIES. 46
9.1 RIGHTS AND REMEDIES 46
9.2 REMEDIES CUMULATIVE 48
9.3 FORECLOSURE NOT A DISCHARGE 48
10. TAXES AND EXPENSES REGARDING THE COLLATERAL 49
11. WAIVERS; INDEMNIFICATION 49
11.1 DEMAND; PROTEST; ETC. 49
11.2 FOOTHILL'S LIABILITY FOR COLLATERAL 49
11.3 INDEMNIFICATION 49
12. NOTICES 50
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. 51
14. DESTRUCTION OF BORROWER'S DOCUMENTS 51
15. GENERAL PROVISIONS 52
15.1 EFFECTIVENESS 52
15.2 SUCCESSORS AND ASSIGNS 52
15.3 SECTION HEADINGS 52
15.4 INTERPRETATION 52
15.5 SEVERABILITY OF PROVISIONS 53
15.6 AMENDMENTS IN WRITING 53
15.7 COUNTERPARTS; TELEFACSIMILE EXECUTION 53
15.8 REVIVAL AND REINSTATEMENT OF OBLIGATIONS 53
15.10 INTEGRATION 54
SCHEDULES
---------
SCHEDULE P-1 PERMITTED LIENS
SCHEDULE PN-A PLEDGED A NOTES STANDARDS
SCHEDULE PN-B PLEDGED B NOTES STANDARDS
SCHEDULE R-1 REAL PROPERTY
SCHEDULE 5.9 LITIGATION
<PAGE> 5
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, IS ENTERED
INTO AS OF SEPTEMBER ___, 1997, BETWEEN FOOTHILL CAPITAL CORPORATION, A
CALIFORNIA CORPORATION ("FOOTHILL"), WITH A PLACE OF BUSINESS LOCATED AT
11111 SANTA MONICA BOULEVARD, SUITE 1500, LOS ANGELES, CALIFORNIA
90025-3333, AND BLUEGREEN CORPORATION, F/K/A PATTEN CORPORATION, A
MASSACHUSETTS
CORPORATION, WITH ITS CHIEF EXECUTIVE OFFICE LOCATED AT 5295 TOWN CENTER
ROAD, SUITE 400, BOCA RATON, FLORIDA 33486 ("BORROWER"), AND IS MADE WITH
REFERENCE TO THE FOLLOWING FACTS:
W I T N E S S E T H:
WHEREAS, ON OR ABOUT OCTOBER 29, 1993, FOOTHILL AND
BORROWER ENTERED INTO THAT CERTAIN LOAN AND SECURITY AGREEMENT WHICH
PROVIDED FOR BORROWINGS FROM TIME TO TIME BY BLUEGREEN AND PLEDGES OF
VARIOUS SECURITY INTERESTS TO SECURE THE REPAYMENTS OF SUCH BORROWINGS, ALL
ON THE TERMS AND CONDITIONS SET FORTH THEREIN; AND
WHEREAS, ON OR ABOUT DECEMBER 23, 1993, BORROWER AND
FOOTHILL ENTERED INTO THAT CERTAIN FIRST AMENDMENT TO LOAN AGREEMENT; AND
WHEREAS, ON OR ABOUT FEBRUARY 16, 1995, BORROWER AND
FOOTHILL ENTERED INTO THAT CERTAIN AMENDMENT NO. TWO TO THE LOAN AND
SECURITY AGREEMENT: PATTEN CORPORATION; AND
WHEREAS, ON OR ABOUT MARCH 28, 1995, BORROWER AND FOOTHILL
ENTERED INTO THAT CERTAIN AMENDMENT NO. THREE TO THE LOAN AND SECURITY
AGREEMENT: PATTEN CORPORATION; AND
WHEREAS, ON OR ABOUT AUGUST 21, 1995, BORROWER AND
FOOTHILL ENTERED INTO THAT CERTAIN "REVISED" AMENDMENT NO. THREE TO THE LOAN
AND SECURITY AGREEMENT: PATTEN CORPORATION; AND
WHEREAS, ON OR ABOUT JUNE 15, 1995, BORROWER AND FOOTHILL
ENTERED INTO THAT CERTAIN AMENDMENT NO. FOUR TO THE LOAN AND SECURITY
AGREEMENT: PATTEN CORPORATION ("FOURTH AMENDMENT"); AND
WHEREAS, ON OR ABOUT JUNE 26, 1995 BORROWER, BLUEGREEN
CORPORATION OF THE ROCKIES ("BLUEGREEN/ROCKIES"), AND FOOTHILL ENTERED INTO
THAT CERTAIN FOURTH [SIC] AMENDMENT TO LOAN AND SECURITY AGREEMENT ("FIFTH
AMENDMENT"); AND
<PAGE> 6
WHEREAS, ON OR ABOUT MARCH 8, 1996 BORROWER,
BLUEGREEN/ROCKIES AND FOOTHILL ENTERED INTO THAT CERTAIN SIXTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT ("SIXTH AMENDMENT") AND
WHEREAS, ON OR ABOUT MARCH 24, 1997 BORROWER,
BLUEGREEN/ROCKIES AND FOOTHILL ENTERED INTO THAT CERTAIN SEVENTH AMENDMENT
TO LOAN AND SECURITY AGREEMENT ("SEVENTH AMENDMENT"; THE LOAN AGREEMENT, AS
AMENDED BY THE FIRST AMENDMENT, THE SECOND AMENDMENT, THE THIRD AMENDMENT,
THE FOURTH AMENDMENT, THE FIFTH AMENDMENT, THE SIXTH AMENDMENT, AND THE
SEVENTH AMENDMENT, IS HEREAFTER REFERRED TO AS THE "LOAN AGREEMENT"); AND
WHEREAS, BORROWER, BLUEGREEN/ROCKIES, AND FOOTHILL DESIRE
TO AMEND AND RESTATE THE LOAN AGREEMENT IN ITS ENTIRETY, ON THE TERMS AND
CONDITIONS SPECIFICALLY SET FORTH HEREIN.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HERETO AGREE AS
FOLLOWS:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. AS USED IN THIS AGREEMENT, THE
FOLLOWING TERMS SHALL HAVE THE FOLLOWING DEFINITIONS:
"ACT" MEANS ALL PRESENT AND FUTURE LAWS, REGULATIONS,
STATUTES, COMMON LAW, RULES, ORDINANCES, CODES, LICENSES, PERMITS, ORDERS,
APPROVALS, PLANS, AUTHORIZATIONS, CONCESSIONS, FRANCHISES, AND SIMILAR ITEMS
OF ANY FEDERAL, STATE OR LOCAL GOVERNMENT, INSTRUMENTALITY OR BODY, AS THE
SAME MAY BE AMENDED, MODIFIED OR SUPPLEMENTED FROM TIME TO TIME RELATED TO
HAZARDOUS MATERIALS.
"ADJUSTED TANGIBLE NET WORTH" MEANS TANGIBLE NET WORTH
PLUS SUBORDINATED DEBT.
"AFFILIATE" MEANS, AS APPLIED TO ANY PERSON, ANY OTHER
PERSON DIRECTLY OR INDIRECTLY CONTROLLING, CONTROLLED BY, OR UNDER COMMON
CONTROL WITH, THAT PERSON. FOR PURPOSES OF THIS DEFINITION, "CONTROL" AS
APPLIED TO ANY PERSON MEANS THE POSSESSION, DIRECTLY OR INDIRECTLY, OF THE
POWER TO DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND POLICIES OF
THAT PERSON, WHETHER THROUGH THE OWNERSHIP OF VOTING SECURITIES, BY
CONTRACT, OR OTHERWISE.
"AGREEMENT" MEANS THIS LOAN AND SECURITY AGREEMENT AND
ANY EXTENSIONS, RIDERS, SUPPLEMENTS, NOTES, AMENDMENTS, OR MODIFICATIONS TO
OR IN CONNECTION WITH THIS LOAN AND SECURITY AGREEMENT.
"AUTHORIZED OFFICER" MEANS ANY OFFICER OF BORROWER.
<PAGE> 7
"A LINE ADVANCES" HAS THE MEANING SET FORTH IN SECTION
2.1 HEREOF.
"A LINE BORROWING BASE" MEANS AN AMOUNT EQUAL TO THE
SUM OF NINETY PERCENT (90%) OF THE UNPAID PRINCIPAL BALANCE, AT THE TIME OF
THE ADVANCE WITH RESPECT TO PLEDGED A NOTES, DISCOUNTED TO THIRTEEN PERCENT
(13%), AT THE TIME OF THE ADVANCE WITH RESPECT TO FIXED RATE NOTES.
"BANKRUPTCY CODE" MEANS THE UNITED STATES BANKRUPTCY
CODE (11 U.S.C. SS. 101 ET SEQ.), AS AMENDED, AND ANY SUCCESSOR STATUTE.
"B LINE ADVANCES" HAS THE MEANING SET FORTH IN SECTION
2.3 HEREOF.
"B LINE BORROWING BASE" MEANS AN AMOUNT EQUAL TO THE
SUM OF SIXTY PERCENT (60%) OF THE UNPAID PRINCIPAL BALANCE, AT THE TIME OF
THE ADVANCE WITH RESPECT TO PLEDGED B NOTES, DISCOUNTED TO THIRTEEN PERCENT
(13%), AT THE TIME OF THE ADVANCE WITH RESPECT TO FIXED RATE NOTES.
"BORROWER" HAS THE MEANING SET FORTH IN THE PREAMBLE TO
THIS AGREEMENT.
"BORROWER'S BOOKS" MEANS ALL OF BORROWER'S BOOKS AND
RECORDS RELATING TO THE COLLATERAL (OTHER THAN BORROWER'S BOOKS) INCLUDING:
LEDGERS; RECORDS INDICATING, SUMMARIZING, OR EVIDENCING BORROWER'S
PROPERTIES OR ASSETS RELATING TO THE COLLATERAL; ALL INFORMATION RELATING TO
BORROWER'S BUSINESS OPERATIONS OR FINANCIAL CONDITION RELATING TO THE
COLLATERAL; AND ALL COMPUTER PROGRAMS, DISC OR TAPE FILES, PRINTOUTS, RUNS,
OR OTHER COMPUTER PREPARED INFORMATION RELATING TO THE COLLATERAL.
"BUSINESS DAY" MEANS ANY DAY WHICH IS NOT A SATURDAY,
SUNDAY, OR OTHER DAY ON WHICH NATIONAL BANKS ARE AUTHORIZED OR REQUIRED TO
CLOSE.
"CHANGE OF CONTROL" SHALL BE DEEMED TO HAVE OCCURRED AT
SUCH TIME AS A "PERSON" OR "GROUP" (WITHIN THE MEANING OF SECTIONS 13(D) AND
14(D)(2) OF THE SECURITIES EXCHANGE ACT OF 1934) BECOMES THE "BENEFICIAL
OWNER" (AS DEFINED IN RULE 13D-3 UNDER THE SECURITIES EXCHANGE ACT OF 1934),
DIRECTLY OR INDIRECTLY, OF MORE THAN 35% OF THE TOTAL VOTING POWER OF ALL
CLASSES OF STOCK THEN OUTSTANDING OF BORROWER NORMALLY ENTITLED TO VOTE IN
THE ELECTION OF DIRECTORS.
"CODE" MEANS THE CALIFORNIA UNIFORM COMMERCIAL CODE.
"COLLATERAL" MEANS EACH OF THE FOLLOWING: THE PLEDGED
NOTES; THE REAL PROPERTY; THE COLLECTED FUNDS; BORROWER'S BOOKS; ANY MONEY,
OR OTHER ASSETS OF BORROWER WHICH NOW OR HEREAFTER COME INTO THE POSSESSION,
CUSTODY, OR CONTROL OF FOOTHILL (UNLESS THE SAME SHALL COME INTO THE
POSSESSION OF FOOTHILL BY MISTAKE OR INADVERTENCE); AND THE PROCEEDS AND
PRODUCTS, WHETHER TANGIBLE OR INTANGIBLE, OF ANY OF
<PAGE> 8
THE FOREGOING INCLUDING PROCEEDS OF INSURANCE COVERING ANY OR ALL OF THE
COLLATERAL, AND ANY AND ALL MONEY, DEPOSIT ACCOUNTS, OR OTHER TANGIBLE OR
INTANGIBLE PROPERTY RESULTING FROM THE SALE, EXCHANGE, COLLECTION, OR OTHER
DISPOSITION OF ANY OF THE FOREGOING, OR ANY PORTION THEREOF OR INTEREST
THEREIN, AND THE PROCEEDS THEREOF.
"COLLECTED FUNDS" MEANS THE DIRECT WITHDRAWAL DEPOSITS
MADE BY COLLECTING BANK AND FORWARDED TO THE LOCK BOX BANKS AS PAYMENTS ON
SOME OF THE PLEDGED NOTES.
"COLLECTING BANK" MEANS [FLEET] ______________________
, OR SUCH SUCCESSOR INSTITUTION APPROVED BY FOOTHILL.
"COMPLIANCE CERTIFICATE" HAS THE MEANING SET FORTH IN
SECTION 6.3.
"CUSTODIAL AGREEMENT" MEANS ANY CUSTODIAL AGREEMENT
ENTERED INTO BETWEEN CUSTODIAN, ON THE ONE HAND, AND FOOTHILL, ON THE OTHER
HAND, (THE FORM OF WHICH IS ACCEPTABLE TO BORROWER) RESPECTING THE AGREEMENT
OF SUCH INSTITUTION TO ACT AS CUSTODIAN AND BAILEE ON BEHALF OF FOOTHILL
RESPECTING SOME OR ALL OF THE COLLATERAL.
"CUSTODIAN" MEANS THE FINANCIAL OR OTHER INSTITUTION
ACTING AS FOOTHILL'S CUSTODIAN RESPECTING SOME OR ALL OF THE COLLATERAL,
WHOSE IDENTITY IS REASONABLY ACCEPTABLE TO BORROWER.
"DAILY BALANCE" MEANS THE AMOUNT OF AN OBLIGATION OWED
AT THE END OF A GIVEN DAY.
"EARLY TERMINATION FEE" HAS THE MEANING SET FORTH IN
SECTION 3.7.
"EFFECTIVE DATE" MEANS THE DATE SET FORTH ON THE FIRST
PAGE OF THIS AGREEMENT.
"ERISA" MEANS THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED FROM TIME TO TIME, OR ANY PREDECESSOR, SUCCESSOR, OR
SUPERSEDING LAWS OF THE UNITED STATES OF AMERICA, TOGETHER WITH ALL
REGULATIONS PROMULGATED THEREUNDER.
"ERISA AFFILIATE" MEANS ANY TRADE OR BUSINESS (WHETHER
OR NOT INCORPORATED) WHICH, WITHIN THE MEANING OF SECTION 414 OF THE IRC,
IS: (I) UNDER COMMON CONTROL WITH BORROWER; (II) TREATED, TOGETHER WITH
BORROWER, AS A SINGLE EMPLOYER; (III) TREATED AS A MEMBER OF AN AFFILIATED
SERVICE GROUP OF WHICH BORROWER IS ALSO TREATED AS A MEMBER; OR (IV) IS
OTHERWISE AGGREGATED WITH THE BORROWER FOR PURPOSES OF THE EMPLOYEE BENEFITS
REQUIREMENTS LISTED IN IRC SECTION 414(M)(4).
"ERISA EVENT" SHALL MEAN ANY ONE OR MORE OF THE
FOLLOWING: (I) A REPORTABLE EVENT WITH RESPECT TO A QUALIFIED PLAN OR A
MULTIEMPLOYER PLAN; (II) A
<PAGE> 9
PROHIBITED TRANSACTION WITH RESPECT TO ANY PLAN; (III) A COMPLETE OR PARTIAL
WITHDRAWAL BY BORROWER OR ANY ERISA AFFILIATE FROM A MULTIEMPLOYER PLAN;
(IV) THE COMPLETE OR PARTIAL WITHDRAWAL OF BORROWER OR AN ERISA AFFILIATE
FROM A QUALIFIED PLAN DURING A PLAN YEAR IN WHICH IT WAS, OR WAS TREATED AS,
A "SUBSTANTIAL EMPLOYER" AS DEFINED IN SECTION 4001(A)(2) OF ERISA; (V) A
FAILURE TO MAKE FULL PAYMENT WHEN DUE OF ALL AMOUNTS WHICH, UNDER THE
PROVISIONS OF ANY PLAN OR APPLICABLE LAW, BORROWER OR ANY ERISA AFFILIATE IS
REQUIRED TO MAKE; (VI) THE FILING OF A NOTICE OF INTENT TO TERMINATE, OR THE
TREATMENT OF A PLAN AMENDMENT AS A TERMINATION, UNDER SECTIONS 4041 OR 4041A
OF ERISA; (VII) AN EVENT OR CONDITION WHICH MIGHT REASONABLY BE EXPECTED TO
CONSTITUTE GROUNDS UNDER SECTION 4042 OF ERISA FOR THE TERMINATION OF, OR
THE APPOINTMENT OF A TRUSTEE TO ADMINISTER, ANY QUALIFIED PLAN OR
MULTIEMPLOYER PLAN; (VIII) THE IMPOSITION OF ANY LIABILITY UNDER TITLE IV OF
ERISA, OTHER THAN PBGC PREMIUMS DUE BUT NOT DELINQUENT UNDER SECTION 4007 OF
ERISA, UPON BORROWER OR ANY ERISA AFFILIATE; AND (IX) A VIOLATION OF THE
APPLICABLE REQUIREMENTS OF SECTIONS 404 OR 405 OF ERISA, OR THE EXCLUSIVE
BENEFIT RULE UNDER SECTION 403(C) OF ERISA, BY ANY FIDUCIARY OR DISQUALIFIED
PERSON WITH RESPECT TO ANY PLAN FOR WHICH BORROWER OR ANY ERISA AFFILIATE
MAY BE DIRECTLY OR INDIRECTLY LIABLE.
"EVENT OF DEFAULT" HAS THE MEANING SET FORTH IN
SECTION 8.
"FEIN" MEANS FEDERAL EMPLOYER IDENTIFICATION NUMBER.
"FOOTHILL" HAS THE MEANING SET FORTH IN THE PREAMBLE TO
THIS AGREEMENT.
"FOOTHILL EXPENSES" MEANS ALL: COSTS OR EXPENSES
(INCLUDING TAXES, PHOTOCOPYING, NOTARIZATION, TELECOMMUNICATION AND
INSURANCE PREMIUMS) REQUIRED TO BE PAID BY BORROWER UNDER ANY OF THE LOAN
DOCUMENTS THAT ARE PAID OR ADVANCED BY FOOTHILL; DOCUMENTATION, FILING,
RECORDING, PUBLICATION, REAL ESTATE SURVEY, ENVIRONMENTAL AUDIT, LOCK-BOX,
FEES INCURRED PURSUANT TO THE CUSTODIAL AGREEMENT, SEARCH FEES, AND
APPRAISAL FEES RESPECTING THE REAL PROPERTY, (OR PROPERTY PROPOSED BY
BORROWER TO BECOME REAL PROPERTY) AND THE PROPERTIES SUBJECT TO THE NOTE
MORTGAGES, WHICH ARE ASSESSED, PAID, OR INCURRED BY FOOTHILL IN CONNECTION
WITH FOOTHILL'S TRANSACTIONS WITH BORROWER; REASONABLE COSTS AND EXPENSES
INCURRED BY FOOTHILL IN THE DISBURSEMENT OF FUNDS TO BORROWER (BY WIRE
TRANSFER OR OTHERWISE); REASONABLE CHARGES PAID OR INCURRED BY FOOTHILL
RESULTING FROM THE DISHONOR OF CHECKS; REASONABLE COSTS AND EXPENSES PAID OR
INCURRED BY FOOTHILL TO CORRECT ANY DEFAULT OR ENFORCE ANY PROVISION OF THE
LOAN DOCUMENTS, OR IN GAINING POSSESSION OF, MAINTAINING, HANDLING,
PRESERVING, STORING, SHIPPING, SELLING, PREPARING FOR SALE, OR ADVERTISING
TO SELL THE COLLATERAL, OR ANY PORTION THEREOF, IRRESPECTIVE OF WHETHER A
SALE IS CONSUMMATED; COSTS AND EXPENSES PAID OR INCURRED BY FOOTHILL IN
EXAMINING BORROWER'S BOOKS; REASONABLE COSTS AND EXPENSES OF THIRD PARTY
CLAIMS OR ANY OTHER SUIT PAID OR INCURRED BY FOOTHILL IN ENFORCING OR
DEFENDING THE LOAN DOCUMENTS; AND FOOTHILL'S REASONABLE ATTORNEYS FEES AND
EXPENSES INCURRED IN ADVISING, STRUCTURING, DRAFTING, REVIEWING,
ADMINISTERING, AMENDING, TERMINATING, ENFORCING, DEFENDING, OR CONCERNING
THE LOAN DOCUMENTS, IRRESPECTIVE OF
<PAGE> 10
WHETHER SUIT IS BROUGHT, (INCLUDING ATTORNEYS FEES AND EXPENSES INCURRED IN
CONNECTION WITH A "WORKOUT," A "RESTRUCTURING," OR AN INSOLVENCY PROCEEDING
CONCERNING BORROWER OR ANY GUARANTOR OF THE OBLIGATIONS).
"GAAP" MEANS GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
AS IN EFFECT FROM TIME TO TIME IN THE UNITED STATES, CONSISTENTLY APPLIED.
"HAZARDOUS MATERIALS" MEANS:
(A) THOSE SUBSTANCES AS DEFINED AS "HAZARDOUS
SUBSTANCES," "HAZARDOUS MATERIALS," "TOXIC SUBSTANCES," OR "SOLID WASTE" IN
CERCLA, RCRA, AND THE HAZARDOUS MATERIALS TRANSPORTATION ACT, 49 U.S.C.
SECTION 1801 ET SEQ., AND IN THE REGULATIONS PROMULGATED PURSUANT THERETO;
(B) THOSE SUBSTANCES DESIGNATED AS A "HAZARDOUS
SUBSTANCE" UNDER OR PURSUANT TO THE FEDERAL WATER POLLUTION CONTROL ACT, 33
U.S.C. SS.1257 ET SEQ., OR DEFINED AS A "HAZARDOUS WASTE" UNDER OR PURSUANT
TO THE RESOURCE CONSERVATION AND RECOVERY ACT, 42 U.S.C. SS.6901 ET SEQ. AND
IN THE REGULATIONS PROMULGATED PURSUANT THERETO;
(C) THOSE SUBSTANCES LISTED IN THE UNITED STATES
DEPARTMENT OF TRANSPORTATION TABLE (40 CFR 172.101 AND AMENDMENTS THERETO)
OR BY THE ENVIRONMENTAL PROTECTION AGENCY (OR ANY SUCCESSOR AGENCY) AS
HAZARDOUS SUBSTANCES (40 CFR PART 302 AND AMENDMENTS THERETO); AND
(D) SUCH OTHER SUBSTANCES, MATERIALS AND WASTES WHICH
ARE REGULATED OR WHICH ARE CLASSIFIED AS HAZARDOUS OR TOXIC UNDER ANY ACT.
"INDEBTEDNESS" SHALL MEAN: (A) ALL OBLIGATIONS OF
BORROWER FOR BORROWED MONEY; (B) ALL OBLIGATIONS OF BORROWER EVIDENCED BY
BONDS, DEBENTURES, NOTES, OR OTHER SIMILAR INSTRUMENTS AND ALL REIMBURSEMENT
OR OTHER OBLIGATIONS OF BORROWER IN RESPECT OF LETTERS OF CREDIT, LETTER OF
CREDIT GUARANTIES, BANKERS ACCEPTANCES, INTEREST RATE SWAPS, CONTROLLED
DISBURSEMENT ACCOUNTS, OR OTHER FINANCIAL PRODUCTS; (C) ALL OBLIGATIONS
UNDER CAPITALIZED LEASES; (D) ALL OBLIGATIONS OR LIABILITIES OF OTHERS
SECURED BY A LIEN OR SECURITY INTEREST ON ANY PROPERTY OR ASSET OF BORROWER,
IRRESPECTIVE OF WHETHER SUCH OBLIGATION OR LIABILITY IS ASSUMED; AND (E) ANY
OBLIGATION OF BORROWER GUARANTEEING OR INTENDED TO GUARANTEE (WHETHER
GUARANTEED, ENDORSED, CO-MADE, DISCOUNTED, OR SOLD WITH RECOURSE TO
BORROWER) ANY INDEBTEDNESS, LEASE, DIVIDEND, LETTER OF CREDIT, OR OTHER
OBLIGATION OF ANY OTHER PERSON.
"INDEMNIFIED PERSONS" MEANS FOOTHILL AND ITS PARENTS,
SUBSIDIARIES AND AFFILIATES, ATTORNEYS AND EACH OF THEIR OFFICERS,
DIRECTORS, AGENTS, EMPLOYEES, TRUSTEES, RECEIVERS, EXECUTORS AND
ADMINISTRATORS, AND THE HEIRS, SUCCESSORS AND ASSIGNS OF ALL OF THE
FOREGOING.
<PAGE> 11
"INITIAL CLOSING DATE" MEANS OCTOBER 29, 1993.
"INSOLVENCY PROCEEDING" MEANS ANY PROCEEDING COMMENCED
BY OR AGAINST ANY PERSON UNDER ANY PROVISION OF THE BANKRUPTCY CODE OR UNDER
ANY OTHER BANKRUPTCY OR INSOLVENCY LAW, INCLUDING ASSIGNMENTS FOR THE
BENEFIT OF CREDITORS, FORMAL OR INFORMAL MORATORIA, COMPOSITIONS, EXTENSIONS
GENERALLY WITH ITS CREDITORS, OR PROCEEDINGS SEEKING REORGANIZATION,
ARRANGEMENT, OR OTHER SIMILAR RELIEF.
"IRC" MEANS THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, AND THE REGULATIONS THEREUNDER.
"LAND INVENTORY ADVANCES" HAS THE MEANING SET FORTH IN
SECTION 2.2 HEREOF.
"LAND INVENTORY BORROWING BASE" MEANS AN AMOUNT EQUAL
TO THE LESSER OF (A) EIGHT MILLION DOLLARS ($8,000,000.00), (B) SEVENTY-FIVE
PERCENT (75%) OF THE SUM OF ACQUISITION COSTS OF REAL PROPERTY PLUS
SIXTY-FIVE PERCENT (65%) OF BORROWER'S ACTUAL COSTS OF IMPROVEMENTS TO BE
ERECTED THEREON, OR (C) FOOTHILL'S IN-HOUSE APPRAISAL OF THE REAL PROPERTY.
THE FOREGOING PROVISION OF (B) NOTWITHSTANDING, THE COMPUTATION OF THE LAND
INVENTORY BORROWING BASE SHALL BE FURTHER LIMITED FOR EACH SUCH SUBSECTION
BY A PROJECT TO PROJECT LIMITATION OF SEVENTY PERCENT (70%) OF THE ORDERLY
LIQUIDATION VALUE OF EACH PROJECT.
"LOAN DOCUMENTS" MEANS THIS AGREEMENT, THE PLEDGE
AGREEMENT, THE LOCK BOX AGREEMENTS, THE MORTGAGES, THE TERM NOTE, THE C-TERM
NOTE, ANY OTHER NOTE OR NOTES EXECUTED BY BORROWER AND PAYABLE TO FOOTHILL,
AND ANY OTHER AGREEMENT ENTERED INTO IN CONNECTION WITH THIS AGREEMENT.
"LOCK BOX" SHALL HAVE THE MEANING PROVIDED IN THE
RESPECTIVE LOCK BOX AGREEMENTS.
"LOCK BOX AGREEMENTS" MEANS THOSE CERTAIN LOCKBOX
OPERATING PROCEDURAL AGREEMENTS AND DEPOSITORY ACCOUNT AGREEMENTS, IN FORM
AND SUBSTANCE SATISFACTORY TO BORROWER AND FOOTHILL, EACH OF WHICH IS AMONG
BORROWER, FOOTHILL, AND ONE OF THE LOCK BOX BANKS.
"LOCK BOX BANKS" MEANS BANKERS TRUST COMPANY.
"LOSSES" SHALL MEAN (I) ANY AND ALL LOSSES,
LIABILITIES, CONTINGENT LIABILITIES, DAMAGES, OBLIGATIONS, CLAIMS,
CONTINGENT CLAIMS, ACTIONS, SUITS, PROCEEDINGS, DISBURSEMENTS, PENALTIES,
REASONABLE COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEYS' FEES AND COSTS OF COUNSEL RETAINED BY FOOTHILL TO MONITOR THE
PROCEEDINGS AND ACTIONS OF BORROWER IN SATISFYING ITS OBLIGATIONS
HEREUNDER); AND (II) ANY AND ALL LOSSES, LIABILITIES, CONTINGENT
LIABILITIES, DAMAGES, OBLIGATIONS, CLAIMS, CONTINGENT
<PAGE> 12
CLAIMS, ACTIONS, SUITS, PROCEEDINGS, DISBURSEMENTS, PENALTIES, REASONABLE
COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS'
FEES AND COSTS OF COUNSEL RETAINED BY FOOTHILL TO MONITOR THE PROCEEDINGS
AND ACTIONS OF BORROWER IN ANY AND ALL MATTERS RELATING TO HAZARDOUS
MATERIALS AFFECTING THE REAL PROPERTY, THE PROPERTY SUBJECT TO THE NOTE
MORTGAGES AND ANY PROPERTY IN THE VICINITY CONTAMINATED BY RELEASES OF
HAZARDOUS MATERIALS FROM SUCH PROPERTY); AND COSTS OF COUNSEL RETAINED BY
FOOTHILL TO ADVISE AND REPRESENT FOOTHILL WITH RESPECT TO MATTERS RELATED
HERETO, INCLUDING, WITHOUT LIMITATION, FEES INCURRED PURSUANT TO 11 U.S.C.)
AND ALL OTHER REASONABLE PROFESSIONAL OR CONSULTANTS' FEES AND EXPENSES,
WHETHER OR NOT AN ACTION OR PROCEEDING IS COMMENCED OR THREATENED.
"MAXIMUM AMOUNT" MEANS THE SUM OF TWENTY MILLION
DOLLARS ($20,000,000).
"MORTGAGES" MEANS ONE OR MORE MORTGAGES, DEEDS OF
TRUST, OR DEEDS TO SECURE DEBT, EXECUTED BY BORROWER IN FAVOR OF FOOTHILL,
THE FORM AND SUBSTANCE OF WHICH SHALL BE SATISFACTORY TO FOOTHILL, THAT
ENCUMBER THE REAL PROPERTY AND THE RELATED IMPROVEMENTS THERETO.
"MULTIEMPLOYER PLAN" SHALL MEAN A MULTIEMPLOYER PLAN AS
DEFINED IN SECTIONS 3(37) OR 4001(A)(3) OF ERISA OR SECTION 414 OF THE IRC
IN WHICH EMPLOYEES OF BORROWER OR AN ERISA AFFILIATE PARTICIPATE OR TO WHICH
BORROWER OR ANY ERISA AFFILIATE CONTRIBUTE OR ARE REQUIRED TO CONTRIBUTE.
"NOTE MORTGAGE(S)" MEANS THOSE CERTAIN DEEDS OF TRUST,
MORTGAGES OR SECURITY INTERESTS ENCUMBERING CERTAIN REAL PROPERTY, WHICH
SERVES AS COLLATERAL FOR THE REPAYMENT OF THE PLEDGED A NOTES AND THE
PLEDGED B NOTES.
"OBLIGATIONS" MEANS ALL LOANS, ADVANCES, DEBTS,
PRINCIPAL, INTEREST (INCLUDING ANY INTEREST THAT, BUT FOR THE PROVISIONS OF
THE BANKRUPTCY CODE, WOULD HAVE ACCRUED), PREMIUMS, LIABILITIES (INCLUDING
ALL AMOUNTS CHARGED TO BORROWER'S LOAN ACCOUNT PURSUANT TO ANY AGREEMENT
AUTHORIZING FOOTHILL TO CHARGE BORROWER'S LOAN ACCOUNT), OBLIGATIONS, FEES
(INCLUDING EARLY TERMINATION FEE), LEASE PAYMENTS, GUARANTIES, COVENANTS,
AND DUTIES OWING BY BORROWER TO FOOTHILL OF ANY KIND AND DESCRIPTION
(WHETHER PURSUANT TO OR EVIDENCED BY THE LOAN DOCUMENTS, BY ANY NOTE OR
OTHER INSTRUMENT (INCLUDING THE TERM NOTE), OR PURSUANT TO ANY OTHER
AGREEMENT BETWEEN FOOTHILL AND BORROWER, AND IRRESPECTIVE OF WHETHER FOR THE
PAYMENT OF MONEY), WHETHER DIRECT OR INDIRECT, ABSOLUTE OR CONTINGENT, DUE
OR TO BECOME DUE, NOW EXISTING OR HEREAFTER ARISING, AND INCLUDING ALL
INTEREST NOT PAID WHEN DUE AND ALL FOOTHILL EXPENSES THAT BORROWER IS
REQUIRED TO PAY OR REIMBURSE BY THE LOAN DOCUMENTS, BY LAW, OR OTHERWISE.
"ORDERLY LIQUIDATION VALUE" MEANS THE VALUE WHICH
FOOTHILL IN ITS BUSINESS JUDGMENT ASCRIBES TO EACH ITEM OF REAL PROPERTY
COLLATERAL, OR POTENTIAL REAL PROPERTY COLLATERAL, AND WHICH INCLUDES, AMONG
OTHER FACTORS, (I) THE PROJECTED
<PAGE> 13
LIQUIDATION RECOVERY FOR EACH ITEM OF REAL PROPERTY COLLATERAL COMPUTED AS
IF BUILT OUT IN ACCORDANCE WITH THE LOWER OF (X) THE ESTIMATED VALUE BASED
ON THE HIGHEST AND BEST USE OF SUCH ITEM OF REAL PROPERTY COLLATERAL; OR (Y)
THE ESTIMATED VALUE BASED ON THE ACTUAL INTENDED IMPROVEMENTS TO BE
CONSTRUCTED ON SUCH PROPERTY, (II) ANY ENVIRONMENTAL CONDITIONS ASSOCIATED
WITH THE REAL PROPERTY COLLATERAL, AND (III) THE SIZE OF EACH INDIVIDUAL
ITEM OF REAL PROPERTY COLLATERAL RELATIVE TO THE TOTAL COLLATERAL.
"PARTICIPANT" MEANS ANY PERSON, OTHER THAN FOOTHILL,
THAT HAS COMMITTED TO PROVIDE A PORTION OF THE FINANCING CONTEMPLATED
HEREIN.
"PBGC" MEANS THE PENSION BENEFIT GUARANTY CORPORATION
AS DEFINED IN TITLE IV OF ERISA, OR ANY SUCCESSOR THERETO.
"PERMITTED LIENS" MEANS: (A) LIENS AND SECURITY
INTERESTS HELD BY FOOTHILL; (B) LIENS RELATING TO THE COLLATERAL FOR UNPAID
TAXES THAT ARE NOT YET DUE AND PAYABLE; (C) LIENS AND SECURITY INTERESTS SET
FORTH ON SCHEDULE P-1 ATTACHED HERETO; (D) PURCHASE MONEY SECURITY INTERESTS
FOR PERSONAL PROPERTY, AND FOR LAND AND IMPROVEMENTS ACQUIRED, AND LIENS OF
LESSORS UNDER CAPITALIZED LEASES TO THE EXTENT THAT THE ACQUISITION OR LEASE
OF THE UNDERLYING ASSET WAS PERMITTED UNDER SECTION 7.10, AND SO LONG AS THE
SECURITY INTEREST OR LIEN ONLY SECURES THE PURCHASE PRICE OF THE ASSET; (E)
EASEMENTS, RIGHTS OF WAY, RESERVATIONS, COVENANTS, CONDITIONS, RESTRICTIONS,
ZONING VARIANCES, AND OTHER SIMILAR ENCUMBRANCES THAT DO NOT MATERIALLY
INTERFERE WITH THE USE OR VALUE OF THE PROPERTY SUBJECT THERETO; (F)
OBLIGATIONS AND DUTIES AS LESSEE UNDER ANY LEASE EXISTING ON THE DATE OF
THIS AGREEMENT; (G) MECHANICS', MATERIALMEN'S, WAREHOUSEMEN'S, OR SIMILAR
LIENS; AND (H) EXCEPTIONS LISTED IN THE TITLE INSURANCE OR COMMITMENT
THEREFOR TO BE DELIVERED BY BORROWER HEREUNDER IN RESPECT OF THE REAL
PROPERTY, (I) NON CONSENSUAL LIENS ON PROPERTY OTHER THAN THE REAL PROPERTY,
AND (J) REFINANCINGS (AT THE SAME PRINCIPAL BALANCE) OF ALL OF THE ABOVE.
"PERSON" MEANS AND INCLUDES NATURAL PERSONS,
CORPORATIONS, LIMITED PARTNERSHIPS, GENERAL PARTNERSHIPS, JOINT VENTURES,
TRUSTS, LAND TRUSTS, BUSINESS TRUSTS, OR OTHER ORGANIZATIONS, IRRESPECTIVE
OF WHETHER THEY ARE LEGAL ENTITIES, AND GOVERNMENTS AND AGENCIES AND
POLITICAL SUBDIVISIONS THEREOF.
"PLAN" MEANS AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN
SECTION 3(3) OF ERISA) WHICH BORROWER OR ANY ERISA AFFILIATE SPONSORS OR
MAINTAINS OR TO WHICH BORROWER OR ANY ERISA AFFILIATE MAKES, IS MAKING, OR
IS OBLIGATED TO MAKE CONTRIBUTIONS, INCLUDING ANY MULTIEMPLOYER PLAN OR
QUALIFIED PLAN.
"PLEDGE AGREEMENT" MEANS THAT CERTAIN PLEDGE AND
SECURITY AGREEMENT ENTERED INTO BETWEEN BORROWER AND FOOTHILL WHICH
EVIDENCES THE PLEDGE OF THE PLEDGED NOTES.
<PAGE> 14
"PLEDGED A NOTES" MEANS A NOTE OR NOTES WHICH CONFORMS
TO THE STANDARDS SET FORTH IN SCHEDULE PN-A ATTACHED HERETO AND INCORPORATED
BY REFERENCE HEREBY, AND WHICH IS PLEDGED TO SECURE ADVANCES UNDER THE A
LINE ADVANCES.
"PLEDGED B NOTES" MEANS A NOTE OR NOTES WHICH CONFORMS
TO THE STANDARDS SET FORTH IN SCHEDULE PN-B ATTACHED HERETO AND INCORPORATED
BY REFERENCE HEREBY, AND WHICH IS PLEDGED TO SECURE ADVANCES UNDER THE B
LINE ADVANCES.
"PLEDGED NOTE(S)" MEANS COLLECTIVELY THE PLEDGED A
NOTES AND THE PLEDGED B NOTES.
"PROHIBITED TRANSACTION" MEANS ANY TRANSACTION
DESCRIBED IN SECTION 406 OF ERISA WHICH IS NOT EXEMPT BY REASON OF SECTION
408 OF ERISA, AND ANY TRANSACTION DESCRIBED IN SECTION 4975(C) OF THE IRC
WHICH IS NOT EXEMPT BY REASON OF SECTION 4975(C) OF THE IRC.
"REAL PROPERTY" MEANS (I) THE PARCEL OR PARCELS OF REAL
PROPERTY AND THE RELATED IMPROVEMENTS THERETO IDENTIFIED ON SCHEDULE R-1,
AND; (II) ANY PARCELS OF REAL PROPERTY HEREAFTER OFFERED BY BORROWER AND
ACCEPTED BY FOOTHILL TO SERVE AS COLLATERAL FOR THE OBLIGATIONS AND THE
COMPUTATION OF THE LAND INVENTORY BORROWING BASE; AND (III) ALL PARCELS OF
REAL PROPERTY ACQUIRED IN WHOLE OR IN PART WITH LAND INVENTORY ADVANCES.
"QUALIFIED PLAN" MEANS A PENSION PLAN (AS DEFINED IN
SECTION 3(2) OF ERISA) INTENDED TO BE TAX-QUALIFIED UNDER SECTION 401(A) OF
THE IRC WHICH BORROWER OR ANY ERISA AFFILIATE SPONSORS, MAINTAINS, OR TO
WHICH ANY SUCH PERSON MAKES, IS MAKING, OR IS OBLIGATED TO MAKE,
CONTRIBUTIONS, OR, IN THE CASE OF A MULTIPLE-EMPLOYER PLAN (AS DESCRIBED IN
SECTION 4064(A) OF ERISA), HAS MADE CONTRIBUTIONS AT ANY TIME DURING THE
IMMEDIATELY PRECEDING PERIOD COVERING AT LEAST FIVE (5) PLAN YEARS, BUT
EXCLUDING ANY MULTIEMPLOYER PLAN.
"REFERENCE RATE" MEANS THE VARIABLE RATE OF INTEREST,
PER ANNUM, MOST RECENTLY ANNOUNCED BY NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, OR ANY SUCCESSOR INSTITUTION, AS ITS "BASE RATE," "PRIME RATE"
OR "REFERENCE RATE," AS THE CASE MAY BE, IRRESPECTIVE OF WHETHER SUCH
ANNOUNCED RATE IS THE BEST RATE AVAILABLE FROM SUCH FINANCIAL INSTITUTION.
"RELEASE PRICE" MEANS AN AMOUNT SET BY FOOTHILL IN ITS
REASONABLE BUSINESS JUDGEMENT FOR THE RELEASE OF EACH LOT PLEDGED AS
COLLATERAL, WHICH SUCH AMOUNT IS DETERMINED AND POSSIBLY RE-DETERMINED
QUARTERLY AND/OR FOLLOWING AN APPRAISAL OF THE PROJECT, ON A PROJECT BY
PROJECT BASIS, OF WHICH EACH SUCH LOT IS A COMPONENT.
"REMEDIATE" AND "REMEDIATION" SHALL INCLUDE, BUT NOT BE
LIMITED TO, THE INVESTIGATION OF THE ENVIRONMENTAL CONDITION OF THE REAL
PROPERTY AND PROPERTY SUBJECT TO THE NOTE MORTGAGES, THE PREPARATION OF ANY
FEASIBILITY STUDIES, REPORTS OR REMEDIAL
<PAGE> 15
PLANS, AND THE PERFORMANCE OF ANY CLEANUP, ABATEMENT, REMOVAL, REMEDIATION,
CONTAINMENT, OPERATION, MAINTENANCE, MONITORING OR RESTORATION WORK, WHETHER
ON OR OFF OF THE REAL PROPERTY AND PROPERTY SUBJECT TO THE NOTE MORTGAGES.
"REPORTABLE EVENT" SHALL MEAN ANY EVENT DESCRIBED IN
SECTION 4043 (OTHER THAN SUBSECTIONS (B)(7) AND (B)(9)) OF ERISA.
"SOLVENT" MEANS, WITH RESPECT TO ANY PERSON ON A
PARTICULAR DATE, THAT ON SUCH DATE (A) AT FAIR VALUATIONS, ALL OF THE
PROPERTIES AND ASSETS OF SUCH PERSON ARE GREATER THAN THE SUM OF THE DEBTS,
INCLUDING CONTINGENT LIABILITIES, OF SUCH PERSON, (B) THE PRESENT FAIR
SALABLE VALUE OF THE PROPERTIES AND ASSETS OF SUCH PERSON IS NOT LESS THAN
THE AMOUNT THAT WILL BE REQUIRED TO PAY THE PROBABLE LIABILITY OF SUCH
PERSON ON ITS DEBTS AS THEY BECOME ABSOLUTE AND MATURED, (C) SUCH PERSON IS
ABLE TO REALIZE UPON ITS PROPERTIES AND ASSETS AND PAY ITS DEBTS AND OTHER
LIABILITIES, CONTINGENT OBLIGATIONS AND OTHER COMMITMENTS AS THEY MATURE IN
THE NORMAL COURSE OF BUSINESS, (D) SUCH PERSON DOES NOT INTEND TO, AND DOES
NOT BELIEVE THAT IT WILL, INCUR DEBTS BEYOND SUCH PERSON'S ABILITY TO PAY AS
SUCH DEBTS MATURE, AND (E) SUCH PERSON IS NOT ENGAGED IN BUSINESS OR A
TRANSACTION, AND IS NOT ABOUT TO ENGAGE IN BUSINESS OR A TRANSACTION, FOR
WHICH SUCH PERSON'S PROPERTIES AND ASSETS WOULD CONSTITUTE UNREASONABLY
SMALL CAPITAL AFTER GIVING DUE CONSIDERATION TO THE PREVAILING PRACTICES IN
THE INDUSTRY IN WHICH SUCH PERSON IS ENGAGED. IN COMPUTING THE AMOUNT OF
CONTINGENT LIABILITIES AT ANY TIME, IT IS INTENDED THAT SUCH LIABILITIES
WILL BE COMPUTED AT THE AMOUNT THAT, IN LIGHT OF ALL THE FACTS AND
CIRCUMSTANCES EXISTING AT SUCH TIME, REPRESENTS THE AMOUNT THAT REASONABLY
CAN BE EXPECTED TO BECOME AN ACTUAL OR MATURED LIABILITY.
"TANGIBLE NET WORTH" MEANS, AS OF THE DATE ANY
DETERMINATION THEREOF IS TO BE MADE, NET WORTH LESS GOODWILL, ALL IN
ACCORDANCE WITH GAAP.
"TERM NOTE" HAS THE MEANING SET FORTH IN SECTION 2.3
HEREOF.
"UNFUNDED BENEFIT LIABILITY" MEANS THE EXCESS OF A
PLAN'S BENEFIT LIABILITIES (AS DEFINED IN SECTION 4001(A)(16) OF ERISA) OVER
THE CURRENT VALUE OF SUCH PLAN'S ASSETS, DETERMINED IN ACCORDANCE WITH THE
ASSUMPTIONS USED BY THE PLAN'S ACTUARIES FOR FUNDING THE PLAN PURSUANT TO
SECTION 412 OF THE IRC FOR THE APPLICABLE PLAN YEAR.
"VOIDABLE TRANSFER" HAS THE MEANING SET FORTH IN
SECTION 15.8.
"WORKING CAPITAL" MEANS THE RESULT OF SUBTRACTING
CONSOLIDATED CURRENT LIABILITIES FROM CONSOLIDATED CURRENT ASSETS.
1.2 ACCOUNTING TERMS. ALL ACCOUNTING TERMS NOT
SPECIFICALLY DEFINED HEREIN SHALL BE CONSTRUED IN ACCORDANCE WITH GAAP. WHEN
USED HEREIN, THE TERM "FINANCIAL STATEMENTS" SHALL INCLUDE THE NOTES AND
SCHEDULES THERETO. WHENEVER THE TERM
<PAGE> 16
"BORROWER" IS USED IN RESPECT OF A FINANCIAL COVENANT OR A RELATED
DEFINITION, IT SHALL BE UNDERSTOOD TO MEAN BORROWER ON A CONSOLIDATED BASIS
UNLESS THE CONTEXT CLEARLY REQUIRES OTHERWISE.
1.3 CODE. ANY TERMS USED IN THIS AGREEMENT WHICH ARE
DEFINED IN THE CODE SHALL BE CONSTRUED AND DEFINED AS SET FORTH IN THE CODE
UNLESS OTHERWISE DEFINED HEREIN.
1.4 CONSTRUCTION. UNLESS THE CONTEXT OF THIS AGREEMENT
CLEARLY REQUIRES OTHERWISE, REFERENCES TO THE PLURAL INCLUDE THE SINGULAR,
REFERENCES TO THE SINGULAR INCLUDE THE PLURAL, THE TERM "INCLUDING" IS NOT
LIMITING, AND THE TERM "OR" HAS, EXCEPT WHERE OTHERWISE INDICATED, THE
INCLUSIVE MEANING REPRESENTED BY THE PHRASE "AND/OR." THE WORDS "HEREOF,"
"HEREIN," "HEREBY," "HEREUNDER," AND SIMILAR TERMS IN THIS AGREEMENT REFER
TO THIS AGREEMENT AS A WHOLE AND NOT TO ANY PARTICULAR PROVISION OF THIS
AGREEMENT. SECTION, SUBSECTION, CLAUSE, SCHEDULE, AND EXHIBIT REFERENCES ARE
TO THIS AGREEMENT UNLESS OTHERWISE SPECIFIED. ANY REFERENCE IN THIS
AGREEMENT OR IN THE LOAN DOCUMENTS TO THIS AGREEMENT OR ANY OF THE LOAN
DOCUMENTS SHALL INCLUDE ALL ALTERATIONS, AMENDMENTS, CHANGES, EXTENSIONS,
MODIFICATIONS, RENEWALS, REPLACEMENTS, SUBSTITUTIONS, AND SUPPLEMENTS,
THERETO AND THEREOF, AS APPLICABLE.
1.5 SCHEDULES AND EXHIBITS. ALL OF THE SCHEDULES AND
EXHIBITS ATTACHED TO THIS AGREEMENT SHALL BE DEEMED INCORPORATED HEREIN BY
REFERENCE.
2. LOAN AND TERMS OF PAYMENT.
2.1 ADVANCES AGAINST PLEDGED A NOTES.
(A) IN ADDITION TO THE LAND INVENTORY
ADVANCES SET FORTH IN SECTION 2.2 HEREOF, AND THE TERM LOAN AND B LINE
ADVANCES SET FORTH IN SECTION 2.3 HEREOF, SUBJECT TO THE TERMS AND
CONDITIONS OF THIS AGREEMENT, AND FURTHER FOR A PERIOD THROUGH AND INCLUDING
SEPTEMBER ___, 2000 ONLY, AND FURTHER PROVIDED BORROWER IS NOT IN DEFAULT
HEREUNDER (SUBJECT TO GRACE PERIODS, IF ANY), INCLUDING, SPECIFICALLY,
SECTION 6.13 HEREOF, FOOTHILL AGREES TO MAKE ADVANCES TO BORROWER UPON THE
PLEDGE TO FOOTHILL OF THE PLEDGED A NOTES ("A LINE ADVANCES") IN AN AMOUNT
NOT TO EXCEED THE A LINE BORROWING BASE.
(B) ANYTHING TO THE CONTRARY IN SUBSECTION
(A) ABOVE NOTWITH STANDING, FOOTHILL MAY REDUCE ITS ADVANCE RATES WITHOUT
DECLARING AN EVENT OF DEFAULT IF IT DETERMINES, IN ITS REASONABLE
DISCRETION, THAT THERE IS A MATERIAL IMPAIRMENT OF THE PROSPECT OF REPAYMENT
OF ANY OR ALL OR ANY PORTION OF ITS OBLIGATIONS, OR A MATERIAL IMPAIRMENT OF
THE VALUE OR PRIORITY OF FOOTHILL'S SECURITY INTERESTS IN THE COLLATERAL.
<PAGE> 17
(C) FOOTHILL SHALL HAVE NO OBLIGATION TO
MAKE A LINE ADVANCES TO THE EXTENT THAT TOTAL LENDING TO BORROWER WOULD
EXCEED THE MAXIMUM AMOUNT.
(D) BORROWER AGREES TO ESTABLISH AND
MAINTAIN A DESIGNATED DEPOSIT ACCOUNT FOR THE PURPOSE OF RECEIVING THE
PROCEEDS OF THE ADVANCES MADE BY FOOTHILL HEREUNDER. UNLESS OTHERWISE AGREED
TO IN WRITING BY FOOTHILL AND BORROWER, ANY ADVANCE REQUESTED BY BORROWER
AND MADE BY FOOTHILL HEREUNDER SHALL BE MADE TO SUCH DESIGNATED DEPOSIT
ACCOUNT.
(E) A LINE ADVANCES MADE PURSUANT TO THIS
SECTION 2.1 SHALL NOT BE MADE MORE FREQUENTLY THAN MONTHLY, OR IN AMOUNTS
LESS THAN $100,000 PER ADVANCE.
(F) ON EACH ANNUAL ANNIVERSARY DATE,
BORROWER MAY REQUEST THAT FOOTHILL MAKE AN ADDITIONAL ADVANCE AGAINST THE
THEN PLEDGED A NOTES IN AN AMOUNT SUCH THAT THE AGGREGATE OF THE A LINE
ADVANCES EQUALS NINETY PERCENT (90%) OF THE OUTSTANDING PRINCIPAL BALANCES
OF THE PLEDGED A NOTES (DISCOUNTED TO THIRTEEN (13) PERCENT FOR FIXED RATE
NOTES). FOOTHILL WILL AGREE TO SUCH REQUEST UNLESS IT, ACTING IN GOOD FAITH
AND EXERCISING ITS REASONABLE JUDGMENT, BELIEVES THAT THERE IS A MATERIAL
RISK OF THE IMPAIRMENT OF THE PROSPECT OF REPAYMENT OF ANY OR ALL OF ANY
PORTION OF BORROWER'S OBLIGATIONS. IN SUCH AN EVENT, BORROWER MAY TERMINATE
THIS AGREEMENT WITHOUT THE IMPOSITION OF AN EARLY TERMINATION FEE.
2.2 LAND INVENTORY ADVANCES.
(A) IN ADDITION TO THE ADVANCES SET FORTH IN
SECTIONS 2.1 AND 2.3 HEREOF, SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT, AND FOR A PERIOD THROUGH AND INCLUDING SEPTEMBER ___, 2000 ONLY,
AND FURTHER PROVIDED BORROWER IS NOT IN DEFAULT HEREUNDER (SUBJECT TO GRACE
PERIODS, IF ANY), INCLUDING, SPECIFICALLY, SECTION 6.13 HEREOF, FOOTHILL
AGREES TO MAKE ADVANCES TO BORROWER IN AN AMOUNT NOT TO EXCEED THE LAND
INVENTORY BORROWING BASE ("LAND INVENTORY ADVANCES") TO ENABLE IT TO BUY AND
DEVELOP LAND FOR SUBSEQUENT RESALE TO THE PUBLIC. LAND INVENTORY ADVANCES
SHALL BE USED FOR THIS AND FOR NO OTHER PURPOSE. ALL SUCH ACQUIRED ASSETS
SHALL BECOME COLLATERAL.
(B) ANYTHING TO THE CONTRARY IN SUBSECTION
(A) ABOVE NOTWITHSTANDING, FOOTHILL MAY REDUCE ITS ADVANCE RATES IF IT
DETERMINES, IN ITS REASONABLE DISCRETION, THAT THERE IS A MATERIAL
IMPAIRMENT OF THE PROSPECT OF REPAYMENT OF ALL OR ANY PORTION OF THE
OBLIGATIONS OR A MATERIAL IMPAIRMENT OF THE VALUE OR PRIORITY OF FOOTHILL'S
SECURITY INTEREST IN THE COLLATERAL.
(C) ANYTHING TO THE CONTRARY IN SUBSECTIONS
(A) & (B) ABOVE NOTWITHSTANDING, FOOTHILL MAY REDUCE ITS ADVANCE RATES IF IT
DETERMINES, IN ITS SOLE AND
<PAGE> 18
ABSOLUTE DISCRETION, THAT WHEN EACH PROJECT IS VIEWED INDIVIDUALLY ON A
PROJECT BY PROJECT BASIS, THAT THERE IS AN OVEREXPOSURE OF ADVANCES AGAINST
ANY SUCH PROJECT.
(D) FOOTHILL SHALL HAVE NO OBLIGATION TO
MAKE LAND INVENTORY ADVANCES TO THE EXTENT THAT TOTAL LENDING TO BORROWER
WOULD EXCEED THE MAXIMUM AMOUNT.
(E) BORROWER AGREES TO ESTABLISH AND
MAINTAIN A DESIGNATED DEPOSIT ACCOUNT FOR THE PURPOSE OF RECEIVING THE
PROCEEDS OF THE ADVANCES MADE BY FOOTHILL HEREUNDER. UNLESS OTHERWISE AGREED
TO IN WRITING BY FOOTHILL AND BORROWER, ANY ADVANCE REQUESTED BY BORROWER
AND MADE BY FOOTHILL HEREUNDER SHALL BE MADE TO SUCH DESIGNATED DEPOSIT
ACCOUNT.
(F) LAND INVENTORY ADVANCES MADE PURSUANT TO
THIS SECTION 2.2 SHALL NOT BE MADE MORE FREQUENTLY THAN MONTHLY OR IN
AMOUNTS LESS THAN $100,000 PER ADVANCE.
2.3 ADVANCES AGAINST PLEDGED B NOTES; TERM LOAN.
(A) IN ADDITION TO THE A LINE ADVANCES SET
FORTH IN SECTION 2.1 HEREOF AND THE LAND INVENTORY ADVANCES SET FORTH IN
SECTION 2.2 HEREOF, SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT,
AND FOR A PERIOD THROUGH AND INCLUDING SEPTEMBER ___, 2000 ONLY, AND FURTHER
PROVIDED BORROWER IS NOT IN DEFAULT HEREUNDER (SUBJECT TO GRACE PERIODS, IF
ANY), INCLUDING, SPECIFICALLY, SECTION 6.13 HEREOF, FOOTHILL AGREES TO MAKE
ADVANCES TO BORROWER UPON THE PLEDGE TO FOOTHILL OF THE PLEDGED B NOTES ("B
LINE ADVANCES") IN AN AMOUNT NOT TO EXCEED THE LESSER OF (I) FIVE MILLION
DOLLARS ($5,000,000); OR (II) THE B LINE BORROWING BASE.
(B) ANYTHING TO THE CONTRARY IN SUBSECTION
(A) ABOVE NOTWITH STANDING, FOOTHILL MAY REDUCE ITS ADVANCE RATES WITHOUT
DECLARING AN EVENT OF DEFAULT IF IT DETERMINES, IN ITS REASONABLE
DISCRETION, THAT THERE IS A MATERIAL IMPAIRMENT OF THE PROSPECT OF REPAYMENT
OF ANY OR ALL OR ANY PORTION OF ITS OBLIGATIONS, OR A MATERIAL IMPAIRMENT OF
THE VALUE OR PRIORITY OF FOOTHILL'S SECURITY INTERESTS IN THE COLLATERAL.
(C) FOOTHILL SHALL HAVE NO OBLIGATION TO
MAKE B LINE ADVANCES TO THE EXTENT THAT TOTAL LENDING TO BORROWER WOULD
EXCEED THE MAXIMUM AMOUNT.
(D) BORROWER AGREES TO ESTABLISH AND
MAINTAIN A DESIGNATED DEPOSIT ACCOUNT FOR THE PURPOSE OF RECEIVING THE
PROCEEDS OF THE ADVANCES MADE BY FOOTHILL HEREUNDER. UNLESS OTHERWISE AGREED
TO IN WRITING BY FOOTHILL AND BORROWER, ANY ADVANCE REQUESTED BY BORROWER
AND MADE BY FOOTHILL HEREUNDER SHALL BE MADE TO SUCH DESIGNATED DEPOSIT
ACCOUNT.
<PAGE> 19
(E) B LINE ADVANCES MADE PURSUANT TO THIS
SECTION 2.1 SHALL NOT BE MADE MORE FREQUENTLY THAN MONTHLY, OR IN AMOUNTS
LESS THAN $100,000 PER ADVANCE.
(F) ON EACH ANNUAL ANNIVERSARY DATE,
BORROWER MAY REQUEST THAT FOOTHILL MAKE AN ADDITIONAL ADVANCE AGAINST THE
THEN PLEDGED B NOTES IN AN AMOUNT SUCH THAT THE AGGREGATE OF THE B LINE
ADVANCES EQUALS SIXTY PERCENT (60%) OF THE OUTSTANDING PRINCIPAL BALANCES OF
THE PLEDGED B NOTES (DISCOUNTED TO THIRTEEN (13) PERCENT FOR FIXED RATE
NOTES). FOOTHILL WILL AGREE TO SUCH REQUEST UNLESS IT, ACTING IN GOOD FAITH
AND EXERCISING ITS REASONABLE JUDGMENT, BELIEVES THAT THERE IS A MATERIAL
RISK OF THE IMPAIRMENT OF THE PROSPECT OF REPAYMENT OF ANY OR ALL OF ANY
PORTION OF BORROWER'S OBLIGATIONS. IN SUCH AN EVENT, BORROWER MAY TERMINATE
THIS AGREEMENT WITHOUT THE IMPOSITION OF AN EARLY TERMINATION FEE.
(G) FOOTHILL HAS ALREADY MADE A LOAN TO
BORROWER IN THE ORIGINAL PRINCIPAL AMOUNT OF SIX HUNDRED EIGHTY THOUSAND
DOLLARS ($680,000), WHICH WAS EVIDENCED BY AND REPAYABLE IN ACCORDANCE WITH
THE TERMS AND CONDITIONS OF A PROMISSORY NOTE DATED AS OF MARCH 24, 1997,
EXECUTED BY BORROWER IN FAVOR OF FOOTHILL. ALL AMOUNTS EVIDENCED BY THE
MARCH 24, 1997 NOTE CONSTITUTE B-LINE ADVANCES AND OBLIGATIONS.
2.4 INTEREST: RATES, PAYMENTS, AND CALCULATIONS.
(A) INTEREST RATE. ALL OBLIGATIONS (OTHER
THAN OBLIGATIONS INCURRED PURSUANT TO SECTION 2.2 ABOVE) SHALL BEAR
INTEREST, ON THE ACTUAL DAILY BALANCE, COMPUTED AS FOLLOWS: (I) SHOULD THE
AVERAGE MONTHLY OUTSTANDING LOAN BALANCE ON ADVANCES MADE PURSUANT TO
SECTION 2.1 ABOVE EQUAL OR EXCEED $5,000,000 FOR ANY MONTH, THEN THE
INTEREST RATE CHARGED ON ALL OBLIGATIONS (OTHER THAN OBLIGATIONS INCURRED
PURSUANT TO SECTION 2.2 ABOVE) FOR SUCH MONTH SHALL BE COMPUTED AT A RATE
EQUAL TO ONE-HALF (1/2) PERCENTAGE POINT ABOVE THE REFERENCE RATE; (II)
SHOULD THE AVERAGE MONTHLY OUTSTANDING LOAN BALANCE ON ADVANCES MADE
PURSUANT TO SECTION 2.1 BE LESS THAN $5,000,000 FOR ANY MONTH, THEN THE
INTEREST RATE CHARGED ON ALL OBLIGATIONS (OTHER THAN OBLIGATIONS INCURRED
PURSUANT TO SECTION 2.2 ABOVE) FOR SUCH MONTH SHALL BE COMPUTED AT A RATE
EQUAL TO ONE (1) PERCENTAGE POINT ABOVE THE REFERENCE RATE. THE OBLIGATIONS
ARISING OUT OF LAND INVENTORY ADVANCES SET FORTH IN SECTION 2.2 SHALL BEAR
INTEREST ON THE AVERAGE DAILY BALANCE, AT A RATE OF ONE AND ONE-HALF (1 1/2)
PERCENTAGE POINTS ABOVE THE REFERENCE RATE.
(B) DEFAULT RATE. ALL OBLIGATIONS SHALL BEAR
INTEREST, FROM AND AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN
EVENT OF DEFAULT AT A RATE EQUAL TO FOUR AND ONE-HALF (4-1/2) PERCENTAGE
POINTS ABOVE THE REFERENCE RATE.
(C) MINIMUM INTEREST. IN NO EVENT SHALL THE
RATE OF INTEREST CHARGEABLE HEREUNDER BE LESS THAN SEVEN PERCENT (7%) PER
ANNUM. IN ADDITION THERETO, THE AMOUNT OF INTEREST ACCRUED AND PAYABLE TO
FOOTHILL ON THE A LINE ADVANCES SHALL BE
<PAGE> 20
NO LESS THAN TWENTY FIVE THOUSAND DOLLARS PER MONTH; PROVIDED, HOWEVER, THAT
IF BORROWER SEEKS TO CAUSE ALL OF THE PLEDGED NOTES TO BE RELEASED IN
ACCORDANCE WITH THE PROVISION OF SECTION 4.8 HEREOF, THERE SHALL BE NO
MONTHLY MINIMUM INTEREST PAYMENTS AS SET FORTH IN THIS SENTENCE FOR THE TWO
MONTHS IMMEDIATELY FOLLOWING SUCH RELEASE, WITH A FIVE THOUSAND DOLLAR PER
MONTH MINIMUM FOR THE THIRD MONTH FOLLOWING RELEASE, A TEN THOUSAND DOLLAR
PER MONTH MINIMUM FOR THE FOURTH MONTH FOLLOWING RELEASE, A FIFTEEN THOUSAND
DOLLAR PER MONTH MINIMUM FOR THE FIFTH MONTH FOLLOWING RELEASE, A TWENTY
THOUSAND DOLLAR PER MONTH MINIMUM FOR THE SIXTH MONTH FOLLOWING RELEASE, AND
A TWENTY FIVE THOUSAND DOLLAR PER MONTH MINIMUM FOR EVERY MONTH THEREAFTER.
TO THE EXTENT THAT INTEREST ACCRUED HEREUNDER AT THE RATE SET FORTH HEREIN
(INCLUDING THE MINIMUM INTEREST RATE) WOULD YIELD LESS THAN THE FOREGOING
MINIMUM AMOUNT, THE INTEREST RATE CHARGEABLE HEREUNDER FOR THE PERIOD IN
QUESTION AUTOMATICALLY SHALL BE DEEMED INCREASED TO THAT RATE THAT WOULD
RESULT IN THE MINIMUM AMOUNT OF INTEREST BEING ACCRUED AND PAYABLE
HEREUNDER.
(D) PAYMENTS. INTEREST HEREUNDER SHALL BE
DUE AND PAYABLE ON THE FIRST DAY OF EACH MONTH DURING THE TERM HEREOF.
BORROWER HEREBY AUTHORIZES FOOTHILL, AT ITS OPTION, WITHOUT PRIOR NOTICE TO
BORROWER, TO CHARGE SUCH INTEREST, ALL FOOTHILL EXPENSES (AS AND WHEN
INCURRED), AND ALL INSTALLMENTS OR OTHER PAYMENTS DUE UNDER THE TERM NOTE OR
ANY OTHER NOTE OR OTHER LOAN DOCUMENT TO BORROWER'S LOAN ACCOUNT, WHICH
AMOUNTS SHALL THEREAFTER ACCRUE INTEREST AT THE RATE THEN APPLICABLE
HEREUNDER. ANY INTEREST NOT PAID WHEN DUE SHALL BE COMPOUNDED BY BECOMING A
PART OF THE OBLIGATIONS, AND SUCH INTEREST SHALL THEREAFTER ACCRUE INTEREST
AT THE RATE THEN APPLICABLE HEREUNDER.
(E) COMPUTATION. THE REFERENCE RATE AS OF
THIS DATE IS EIGHT AND ONE-HALF PERCENT (8 1/2%) PER ANNUM. IN THE EVENT THE
REFERENCE RATE IS CHANGED FROM TIME TO TIME HEREAFTER, THE APPLICABLE RATE
OF INTEREST HEREUNDER AUTOMATICALLY AND IMMEDIATELY SHALL BE INCREASED OR
DECREASED BY AN AMOUNT EQUAL TO SUCH CHANGE IN THE REFERENCE RATE. THE RATES
OF INTEREST CHARGED HEREUNDER SHALL BE BASED UPON THE AVERAGE REFERENCE RATE
IN EFFECT DURING THE MONTH. ALL INTEREST AND FEES CHARGEABLE UNDER THE LOAN
DOCUMENTS SHALL BE COMPUTED ON THE BASIS OF A THREE HUNDRED SIXTY (360) DAY
YEAR FOR THE ACTUAL NUMBER OF DAYS ELAPSED.
(F) INTENT TO LIMIT CHARGES TO MAXIMUM
LAWFUL RATE. IN NO EVENT SHALL THE INTEREST RATE OR RATES PAYABLE UNDER THIS
AGREEMENT OR THE TERM NOTE, PLUS ANY OTHER AMOUNTS PAID IN CONNECTION
HEREWITH, EXCEED THE HIGHEST RATE PERMISSIBLE UNDER ANY LAW THAT A COURT OF
COMPETENT JURISDICTION SHALL, IN A FINAL DETERMINATION, DEEM APPLICABLE.
BORROWER AND FOOTHILL, IN EXECUTING THIS AGREEMENT AND THE TERM NOTE INTEND
TO LEGALLY AGREE UPON THE RATE OR RATES OF INTEREST AND MANNER OF PAYMENT
STATED WITHIN IT; PROVIDED, HOWEVER, THAT, ANYTHING CONTAINED HEREIN OR IN
THE TERM NOTE TO THE CONTRARY NOTWITHSTANDING, IF SAID RATE OR RATES OF
INTEREST OR MANNER OF PAYMENT EXCEEDS THE MAXIMUM ALLOWABLE UNDER APPLICABLE
LAW, THEN, IPSO FACTO AS OF THE DATE OF THIS AGREEMENT AND THE TERM NOTE,
BORROWER IS AND SHALL BE LIABLE ONLY FOR THE PAYMENT OF
<PAGE> 21
SUCH MAXIMUM AS ALLOWED BY LAW, AND PAYMENT RECEIVED FROM BORROWER IN EXCESS
OF SUCH LEGAL MAXIMUM, WHENEVER RECEIVED, SHALL BE APPLIED TO REDUCE THE
PRINCIPAL BALANCE OF THE OBLIGATIONS TO THE EXTENT OF SUCH EXCESS.
2.5 CREDITING PAYMENTS; APPLICATION OF
COLLECTIONS. THE RECEIPT OF ANY WIRE TRANSFER OF FUNDS, CHECK, OR OTHER ITEM
OF PAYMENT BY FOOTHILL (WHETHER FROM TRANSFERS TO FOOTHILL BY THE LOCK BOX
BANKS PURSUANT TO THE LOCK BOX AGREEMENTS OR OTHERWISE) IMMEDIATELY SHALL BE
APPLIED TO PROVISIONALLY REDUCE THE OBLIGATIONS, BUT SHALL NOT BE CONSIDERED
A PAYMENT ON ACCOUNT UNLESS SUCH WIRE TRANSFER IS OF IMMEDIATELY AVAILABLE
FUNDS AND IS MADE TO THE APPROPRIATE DEPOSIT ACCOUNT OF FOOTHILL OR UNLESS
AND UNTIL SUCH CHECK OR OTHER ITEM OF PAYMENT IS HONORED WHEN PRESENTED FOR
PAYMENT. FOOTHILL SHALL BE ENTITLED TO CHARGE BORROWER FOR THREE (3)
BUSINESS DAYS OF `CLEARANCE' AT THE APPLICABLE RATE SET FORTH IN SECTIONS
2.4(A) AND 2.4(B) (APPLICABLE TO ADVANCES UNDER SECTION 2.1) ON ALL CHECKS,
OR OTHER ITEMS OF NON IMMEDIATELY AVAILABLE FUNDS (WHICH DOES NOT INCLUDE
WIRE TRANSFERS OF IMMEDIATELY AVAILABLE FUNDS) THAT ARE RECEIVED BY FOOTHILL
(REGARDLESS OF WHETHER FORWARDED BY THE LOCK BOX BANKS TO FOOTHILL, WHETHER
PROVISIONALLY APPLIED TO REDUCE THE OBLIGATIONS, OR OTHERWISE). THIS
ACROSS-THE-BOARD THREE (3) BUSINESS DAY CLEARANCE CHARGE ON ALL RECEIPTS IS
ACKNOWLEDGED BY THE PARTIES TO CONSTITUTE AN INTEGRAL ASPECT OF THE PRICING
OF FOOTHILL'S FACILITY TO BORROWER, AND SHALL APPLY IRRESPECTIVE OF THE
CHARACTERIZATION OF WHETHER RECEIPTS ARE OWNED BY BORROWER OR FOOTHILL, AND
IRRESPECTIVE OF THE LEVEL OF BORROWER'S OBLIGATIONS TO FOOTHILL. SHOULD ANY
CHECK OR ITEM OF PAYMENT NOT BE HONORED WHEN PRESENTED FOR PAYMENT, THEN
BORROWER SHALL BE DEEMED NOT TO HAVE MADE SUCH PAYMENT, AND INTEREST SHALL
BE RECALCULATED ACCORDINGLY. ANYTHING TO THE CONTRARY CONTAINED HEREIN
NOTWITHSTANDING, ANY WIRE TRANSFER, CHECK, OR OTHER ITEM OF PAYMENT SHALL BE
DEEMED RECEIVED BY FOOTHILL ONLY IF IT IS RECEIVED INTO FOOTHILL'S OPERATING
ACCOUNT (AS SUCH ACCOUNT IS IDENTIFIED IN THE LOCK BOX AGREEMENTS) ON OR
BEFORE 11:00 A.M. LOS ANGELES TIME. IF ANY WIRE TRANSFER, CHECK, OR OTHER
ITEM OF PAYMENT IS RECEIVED INTO FOOTHILL'S OPERATING ACCOUNT (AS SUCH
ACCOUNT IS IDENTIFIED IN THE LOCK BOX AGREEMENTS) AFTER 11:00 A.M. LOS
ANGELES TIME IT SHALL BE DEEMED TO HAVE BEEN RECEIVED BY FOOTHILL AS OF THE
OPENING OF BUSINESS ON THE IMMEDIATELY FOLLOWING BUSINESS DAY.
2.6 STATEMENTS OF OBLIGATIONS. FOOTHILL SHALL
RENDER STATEMENTS TO BORROWER OF THE OBLIGATIONS, INCLUDING PRINCIPAL,
INTEREST, FEES, AND INCLUDING AN ITEMIZATION OF ALL CHARGES AND EXPENSES
CONSTITUTING FOOTHILL EXPENSES OWING, AND SUCH STATEMENTS SHALL BE
CONCLUSIVELY PRESUMED TO BE CORRECT AND ACCURATE AND CONSTITUTE AN ACCOUNT
STATED BETWEEN BORROWER AND FOOTHILL UNLESS, WITHIN THIRTY (30) DAYS AFTER
RECEIPT THEREOF BY BORROWER, BORROWER SHALL DELIVER TO FOOTHILL BY
REGISTERED OR CERTIFIED MAIL AT ITS ADDRESS SPECIFIED IN SECTION 12, WRITTEN
OBJECTION THERETO DESCRIBING THE ERROR OR ERRORS CONTAINED IN ANY SUCH
STATEMENTS.
2.7 FEES. BORROWER SHALL PAY TO FOOTHILL THE
FOLLOWING FEES:
<PAGE> 22
(A) CLOSING FEE. A ONE TIME CLOSING FEE OF
FIFTY THOUSAND DOLLARS ($50,000) WHICH IS EARNED, IN FULL, ON THE EFFECTIVE
DATE AND IS DUE AND PAYABLE BY BORROWER TO FOOTHILL IN CONNECTION WITH THIS
AGREEMENT ON THE EFFECTIVE DATE;
(B) LAND INVENTORY FINANCING FEE. ON EACH
AND EVERY LAND INVENTORY ADVANCE MADE PURSUANT TO SECTION 2.2 HEREOF,
BORROWER SHALL PAY TO FOOTHILL A FEE IN AN AMOUNT EQUAL TO ONE PERCENT (1%)
OF THE TOTAL OF EACH SUCH ADVANCE.
(C) FINANCIAL EXAMINATION, DOCUMENTATION,
AND APPRAISAL FEES. FOOTHILL'S CUSTOMARY FEE OF SIX HUNDRED DOLLARS ($600)
PER DAY PER EXAMINER, PLUS OUT-OF-POCKET EXPENSES FOR EACH FINANCIAL
ANALYSIS AND EXAMINATION OF BORROWER PERFORMED BY FOOTHILL OR ITS AGENTS;
FOOTHILL'S CUSTOMARY APPRAISAL FEE OF SEVEN HUNDRED FIFTY DOLLARS ($750) PER
DAY PER APPRAISER, PLUS OUT-OF-POCKET EXPENSES FOR EACH APPRAISAL OF THE
COLLATERAL PERFORMED BY FOOTHILL OR ITS AGENTS; AND, ON OCTOBER 29, 1997,
AND ON EACH SUBSEQUENT ANNIVERSARY OF THE EFFECTIVE DATE THEREAFTER,
FOOTHILL'S CUSTOMARY FEE OF ONE THOUSAND DOLLARS ($1,000) FOR ITS LOAN
DOCUMENTATION REVIEW; AND
(D) SERVICING FEE. ON THE FIRST DAY OF EACH
MONTH FOLLOWING THE EFFECTIVE DATE DURING THE TERM OF THIS AGREEMENT, AND
THEREAFTER SO LONG AS ANY OBLIGATIONS ARE OUTSTANDING, A SERVICING FEE IN AN
AMOUNT EQUAL TO TWO THOUSAND DOLLARS ($2,000) PER MONTH.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE. THE
CONDITIONS PRECEDENT TO THE INITIAL ADVANCE FUNDED IN 1993 WERE EITHER
SATISFIED OR WAIVED.
3.2 CONDITIONS PRECEDENT TO ALL ADVANCES. THE
FOLLOWING SHALL BE CONDITIONS PRECEDENT TO ALL ADVANCES HEREUNDER:
(A) FOOTHILL SHALL HAVE RECEIVED AN
ACKNOWLEDGEMENT LETTER IN FORM SATISFACTORY TO IT EXECUTED BY COLLECTING
BANK IN WHICH COLLECTING BANK ACKNOWLEDGES, INTER ALIA, (I) THAT IT HOLDS
THE COLLECTED FUNDS SUBJECT TO THE SECURITY INTEREST OF FOOTHILL AND (II)
WILL FORWARD ALL COLLECTED FUNDS TO FOOTHILL UNTIL SUCH TIME AS FOOTHILL
DIRECTS OTHERWISE;
(B) FOOTHILL SHALL HAVE RECEIVED ENVIRONMENTAL
SURVEYS OF SPECIFICITY AND CONTENT ACCEPTABLE TO FOOTHILL IN ITS SOLE AND
ABSOLUTE DISCRETION (UNLESS WAIVED BY FOOTHILL ON A CASE BY CASE BASIS);
(C) FOR THOSE PLEDGED NOTES GENERATED BY
AFFILIATES OF BORROWER, FOOTHILL SHALL HAVE RECEIVED A STATEMENT OF
INTERCOMPANY INDEBTEDNESS, CERTIFIED BY THE CHIEF FINANCIAL OFFICER OF
BORROWER, IN FORM AND CONTENT SATISFACTORY TO FOOTHILL, SETTING FORTH THE
RESPECTIVE DEBTS OWING BETWEEN BORROWER AND SUCH NOTE GENERATOR;
<PAGE> 23
(D) THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRUE AND
CORRECT IN ALL RESPECTS ON AND AS OF THE DATE OF SUCH ADVANCE, AS THOUGH
MADE ON AND AS OF SUCH DATE (EXCEPT TO THE EXTENT THAT SUCH REPRESENTATIONS
AND WARRANTIES RELATE SOLELY TO AN EARLIER DATE);
(E) NO EVENT OF DEFAULT OR EVENT WHICH WITH
THE GIVING OF NOTICE OR PASSAGE OF TIME WOULD CONSTITUTE AN EVENT OF DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING ON THE DATE OF SUCH ADVANCE, NOR SHALL
EITHER RESULT FROM THE MAKING OF THE ADVANCE;
(F) NO INJUNCTION, WRIT, RESTRAINING ORDER, OR
OTHER ORDER OF ANY NATURE PROHIBITING, DIRECTLY OR INDIRECTLY, THE MAKING OF
SUCH ADVANCE SHALL HAVE BEEN ISSUED BY ANY GOVERNMENTAL AUTHORITY AGAINST
BORROWER, FOOTHILL, OR ANY OF THEIR AFFILIATES;
(G) AT THE REQUEST OF FOOTHILL, FOOTHILL SHALL
HAVE RECEIVED AN OPINION OF BORROWER'S COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO FOOTHILL IN ITS SOLE DISCRETION; AND
(H) ALL OTHER DOCUMENTS AND LEGAL MATTERS IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT SHALL HAVE
BEEN DELIVERED OR EXECUTED OR RECORDED AND SHALL BE IN FORM AND SUBSTANCE
SATISFACTORY TO FOOTHILL AND ITS COUNSEL.
3.3 CONDITIONS PRECEDENT TO LAND INVENTORY
ADVANCES. THE FOLLOWING SHALL BE ADDITIONAL CONDITIONS PRECEDENT TO ALL LAND
INVENTORY ADVANCES HEREUNDER:
(A) FOOTHILL SHALL HAVE RECEIVED EACH OF THE
MORTGAGES, DULY EXECUTED, AND EACH SHALL HAVE BEEN RECORDED IN THE
APPROPRIATE COUNTY RECORDING OFFICE WITH A STAMPED, CONFORMED COPY DELIVERED
TO FOOTHILL; AND
(B) FOOTHILL SHALL HAVE RECEIVED AN
IRREVOCABLE COMMITMENT TO ISSUE AN ALTA 1970 FORM LENDERS POLICY OF TITLE
INSURANCE, OR ITS LOCAL EQUIVALENT, IN FORM AND CONTENT ACCEPTABLE TO
FOOTHILL, IN ITS SOLE AND ABSOLUTE DISCRETION.
3.4 CONDITIONS PRECEDENT TO A LINE AND B LINE
ADVANCES. THE FOLLOWING SHALL BE ADDITIONAL CONDITIONS PRECEDENT TO ALL A
LINE AND B LINE ADVANCES HEREUNDER:
(A) FOOTHILL SHALL HAVE RECEIVED THE
ORIGINALS OF THE PLEDGED A NOTES AND/OR THE PLEDGED B NOTES, PROPERLY
ENDORSED TO FOOTHILL OR ITS AGENT;
(B) FOOTHILL SHALL HAVE RECEIVED THE
ORIGINALS (EXCEPT FOR ASSIGNMENTS OF THE NOTE MORTGAGES, FOR WHICH FOOTHILL
SHALL RECEIVE A COPY) OF ALL SECURITY WHICH SERVES AS SECURITY FOR THE
REPAYMENT OF THE PLEDGED A NOTES AND/OR THE PLEDGED
<PAGE> 24
B NOTES, INCLUDING THE NOTE MORTGAGES AND POLICIES OF TITLE INSURANCE
INSURING SAME, PROPERLY ASSIGNED TO FOOTHILL OR ITS AGENT; AND
(C) THE STANDARDS FOR PLEDGED A NOTES SET
FORTH IN SCHEDULE PN-A HEREIN SHALL BE FULLY COMPLIED WITH AND THE STANDARDS
FOR PLEDGED B NOTES SET FORTH IN SCHEDULE PN-B HEREIN SHALL BE FULLY
COMPLIED WITH.
3.5 TERM. THIS AGREEMENT SHALL BECOME EFFECTIVE
UPON THE EXECUTION AND DELIVERY HEREOF BY BORROWER AND FOOTHILL AND SHALL
CONTINUE IN FULL FORCE AND EFFECT FOR A TERM ENDING ON THE DATE THAT IS FIVE
(5) YEARS FROM THE EFFECTIVE DATE. THE FOREGOING NOTWITHSTANDING, FOOTHILL
SHALL HAVE THE RIGHT TO TERMINATE ITS OBLIGATIONS UNDER THIS AGREEMENT
IMMEDIATELY AND WITHOUT NOTICE UPON THE OCCURRENCE AND DURING THE
CONTINUATION OF AN EVENT OF DEFAULT.
3.6 EFFECT OF TERMINATION. ON THE DATE OF
TERMINATION, ALL OBLIGATIONS IMMEDIATELY SHALL BECOME DUE AND PAYABLE
WITHOUT NOTICE OR DEMAND. NO TERMINATION OF THIS AGREEMENT, HOWEVER, SHALL
RELIEVE OR DISCHARGE BORROWER OF BORROWER'S DUTIES, OBLIGATIONS, OR
COVENANTS HEREUNDER, AND FOOTHILL'S CONTINUING SECURITY INTERESTS IN THE
COLLATERAL SHALL REMAIN IN EFFECT UNTIL ALL OBLIGATIONS HAVE BEEN FULLY AND
FINALLY DISCHARGED AND FOOTHILL'S OBLIGATION TO PROVIDE ADVANCES HEREUNDER
IS TERMINATED.
3.7 EARLY TERMINATION BY BORROWER. BORROWER HAS
THE OPTION, AT ANY TIME UPON NINETY (90) DAYS PRIOR WRITTEN NOTICE TO
FOOTHILL, TO TERMINATE THIS AGREEMENT BY PAYING TO FOOTHILL, IN CASH, THE
OBLIGATIONS TOGETHER WITH A PREMIUM ("EARLY TERMINATION FEE") EQUAL TO THE
GREATER OF (A) THE TOTAL INTEREST OWED DURING THE PRIOR SIX MONTH PERIOD OR
(B) ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($125,000).
3.8 TERMINATION UPON EVENT OF DEFAULT. IF FOOTHILL
TERMINATES THIS AGREEMENT UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, IN
VIEW OF THE IMPRACTICABILITY AND EXTREME DIFFICULTY OF ASCERTAINING ACTUAL
DAMAGES AND BY MUTUAL AGREEMENT OF THE PARTIES AS TO A REASONABLE
CALCULATION OF FOOTHILL'S LOST PROFITS AS A RESULT THEREOF, BORROWER SHALL
PAY TO FOOTHILL UPON THE EFFECTIVE DATE OF SUCH TERMINATION, A PREMIUM IN AN
AMOUNT EQUAL TO THE EARLY TERMINATION FEE. THE EARLY TERMINATION FEE SHALL
BE PRESUMED TO BE THE AMOUNT OF DAMAGES SUSTAINED BY FOOTHILL AS THE RESULT
OF THE EARLY TERMINATION AND BORROWER AGREES THAT IT IS REASONABLE UNDER THE
CIRCUMSTANCES CURRENTLY EXISTING. THE EARLY TERMINATION FEE SHALL BE DEEMED
INCLUDED IN THE OBLIGATIONS.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. BORROWER HEREBY
GRANTS TO FOOTHILL A CONTINUING SECURITY INTEREST IN ALL COLLATERAL IN ORDER
TO SECURE PROMPT REPAYMENT OF ANY AND ALL OBLIGATIONS AND IN ORDER TO SECURE
PROMPT PERFORMANCE BY BORROWER OF EACH OF ITS COVENANTS AND DUTIES UNDER THE
LOAN DOCUMENTS. FOOTHILL'S SECURITY INTERESTS IN
<PAGE> 25
THE COLLATERAL SHALL ATTACH TO ALL COLLATERAL WITHOUT FURTHER ACT ON THE
PART OF FOOTHILL OR BORROWER. ANYTHING CONTAINED IN THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT TO THE CONTRARY NOTWITHSTANDING, AND OTHER THAN SALES OF
INVENTORY TO BUYERS IN THE ORDINARY COURSE OF BUSINESS, BORROWER HAS NO
AUTHORITY, EXPRESS OR IMPLIED, TO DISPOSE OF ANY ITEM OR PORTION OF THE
COLLATERAL.
4.2 NEGOTIABLE COLLATERAL. IN THE EVENT THAT ANY
COLLATERAL, INCLUDING PROCEEDS, IS EVIDENCED BY OR CONSISTS OF NEGOTIABLE
COLLATERAL, BORROWER SHALL, IMMEDIATELY UPON THE REQUEST OF FOOTHILL,
ENDORSE AND ASSIGN SUCH NEGOTIABLE COLLATERAL TO FOOTHILL AND DELIVER
PHYSICAL POSSESSION OF SUCH NEGOTIABLE COLLATERAL TO FOOTHILL.
4.3 MAINTENANCE OF PORTFOLIO COLLATERAL;
COLLECTION ON ACQUIRED NOTES AND PLEDGED NOTES.
(A) BORROWER WILL, AT FOOTHILL'S INSTRUCTION,
CAUSE TO BE DELIVERED PROMPTLY TO FOOTHILL OR AT FOOTHILL'S DIRECTION TO
CUSTODIAN: EACH OF THE ORIGINAL PLEDGED NOTES PROPERLY ENDORSED (BY ALLONGE
OR OTHERWISE) BY BORROWER, OR BORROWER'S SELLER DIRECTLY, IN FAVOR OF
FOOTHILL OR FOOTHILL'S NOMINEE, EACH ORIGINAL NOTE MORTGAGE TOGETHER WITH AN
ASSIGNMENT OF THE MORTGAGEE'S INTEREST IN EACH SUCH NOTE MORTGAGE FROM
BORROWER, OR BORROWER'S SELLER DIRECTLY, TO FOOTHILL, IN RECORDABLE FORM; A
COPY OF EACH EXISTING TITLE POLICY, ASSIGNED AND/OR ENDORSED, AS
APPROPRIATE, TO FOOTHILL, AND, WHEN THE PRINCIPAL BALANCE ON ANY PLEDGED
NOTE IS $50,000 OR GREATER, A CLTA FORM 104 ENDORSEMENT; TOGETHER WITH ANY
OTHER CHATTEL PAPER OR INSTRUMENTS EVIDENCING OR CONSTITUTING A PART OF THE
COLLATERAL. ALL ALLONGES, ENDORSEMENTS, AND ASSIGNMENTS SHALL BE IN A FORM
SATISFACTORY TO FOOTHILL.
(B) FOOTHILL HAS ESTABLISHED A LOCK BOX WITH
CUSTODIAN OR OTHER FINANCIAL INSTITUTION ACCEPTABLE TO FOOTHILL AND
BORROWER, FOR RECEIPT OF PAYMENTS ON THE PLEDGED NOTES. MAKERS OF THE
PLEDGED NOTES WHOSE PAYMENTS ARE NOT MADE BY DIRECT WITHDRAWAL THROUGH
COLLECTING BANK SHALL BE IMMEDIATELY INSTRUCTED IN WRITING BY BORROWER IN
FORM ACCEPTABLE TO FOOTHILL TO REMIT ALL PAYMENTS UNDER THE PLEDGED NOTES
DIRECTLY INTO THE LOCK BOX FOR COLLECTION BY FOOTHILL.
(C) BORROWER SHALL SERVICE ALL OF THE PLEDGED
NOTES IN ACCORDANCE WITH ALL APPLICABLE LAWS AND REGULATIONS AND SHALL
CONDUCT ITSELF IN ACCORDANCE WITH THE HIGHEST ETHICAL AND INDUSTRY PRACTICES
FOR THE SERVICING OF SIMILAR TYPES OF NOTES AND SHALL DEPOSIT INTO THE LOCK
BOX ALL COLLECTIONS IT MAY RECEIVE ON SUCH PLEDGED NOTES, AND ANY AMOUNTS
RECEIVED BY BORROWER FROM THE SALE OF THE COLLATERAL, AND ANY AMOUNTS
RECEIVED IN SETTLEMENT OF ANY OF THE PLEDGED NOTES OR IN RESPECT OF ANY NOTE
MORTGAGE OR ANY TITLE POLICY.
(D) FOOTHILL SHALL APPLY ALL COLLECTIONS AS
AND WHEN RECEIVED FROM THE LOCK BOX ACCOUNT IN ACCORDANCE WITH SECTION 4.6
HEREOF. ALL COSTS AND EXPENSES
<PAGE> 26
OF THE CUSTODIAN OR ANY THIRD PARTY HOLDING THE COLLATERAL OR ARISING IN
CONNECTION WITH THE LOCK BOX SHALL BE FOOTHILL EXPENSES.
4.4 COMPROMISE OR SETTLEMENTS WITH RESPECT TO
PLEDGED NOTES; REPURCHASE OF PLEDGED NOTES. PRIOR TO AN EVENT OF DEFAULT,
AND WITH FOOTHILL'S PRIOR WRITTEN CONSENT, BORROWER SHALL BE ABLE TO ADJUST,
MODIFY, FORECLOSE UPON, REPOSSESS AND OR TAKE OTHER ACTIONS IT DEEMS
NECESSARY TO ADEQUATELY MONITOR THE PLEDGED NOTES IN ORDER TO PRESERVE OR
REALIZE THE MAXIMUM POSSIBLE RECOVERY FOR EACH SUCH PLEDGED NOTE.
IN THE EVENT ANY PLEDGED NOTE BECOMES MORE THAN
SIXTY (60) DAYS DELINQUENT OF THE DUE DATE (EXCLUSIVE OF GRACE PERIODS
CONTAINED IN SUCH NOTES), OR SHOULD IT CEASE TO COMPLY WITH THE STANDARDS
SET FORTH IN SCHEDULE PN-A HEREOF, BORROWER SHALL IMMEDIATELY (I) TENDER TO
FOOTHILL NINETY PERCENT (90%) OF THE THEN OUTSTANDING PRINCIPAL BALANCE OF
SUCH NOTE(S); OR (II) TENDER TO FOOTHILL REPLACEMENT NOTE OR NOTES WITH
OUTSTANDING PRINCIPAL BALANCES AT LEAST EQUAL TO THAT OF THE DEFAULTED NOTE.
UPON RECEIPT OF EITHER THE MONEY OR REPLACEMENT NOTES, FOOTHILL SHALL RETURN
TO BORROWER THE COMPLETE NOTE FILES FOR NOTES WHICH HAD BEEN IN DEFAULT,
WITH APPROPRIATE RELEASES.
4.5 EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT
TO DEFAULTS UNDER PLEDGED NOTES. IN ADDITION TO OTHER PROVISIONS CONTAINED
HEREIN, ALL NOTICES OF DEFAULT TO BE SENT TO THE MAKERS OF THE PLEDGED
NOTES, SHALL BE SENT IN THE NAME OF BORROWER, UNLESS OTHERWISE REQUIRED BY
LAW. ALL FORECLOSURE PROCEEDINGS ARE TO BE CONDUCTED IN THE NAME OF
BORROWER, UNLESS OTHERWISE REQUIRED BY LAW. ANY NOTICES OR PROCEEDINGS
BROUGHT IN THE NAME OF FOOTHILL SHALL HAVE A NOTATION THAT SUCH PROCEEDINGS
OR ACTIONS ARE BROUGHT IN FOOTHILL'S CAPACITY AS A SECURED PARTY.
SHOULD BORROWER WITH FOOTHILL'S PRIOR WRITTEN
CONSENT FORECLOSE ON ANY OF THE COLLATERAL WHICH SERVES AS SECURITY FOR THE
PLEDGED NOTES, IN CONSIDERATION FOR FOOTHILL CONSENTING TO SUCH TRANSFER,
BORROWER SHALL EXECUTE A PROMISSORY NOTE IN FAVOR OF FOOTHILL, TO BE SECURED
BY THE TRANSFERRED COLLATERAL, IN AN AMOUNT EQUAL TO THE HIGHER OF THE
OUTSTANDING BALANCE OWING ON THE PLEDGED NOTE FOR WHICH THE TRANSFERRED
COLLATERAL WAS SECURITY, OR FAIR MARKET VALUE OF THE COLLATERAL TRANSFERRED.
4.6 DISTRIBUTIONS OF LOCKBOX SUMS. LOCKBOX
PAYMENTS SHALL BE APPLIED AGAINST THE PRINCIPAL BALANCE ON EACH APPROPRIATE
LINE AS AND WHEN RECEIVED, SUBJECT TO THE PROVISIONS OF SECTION 2.5, IF
APPLICABLE. AT THE END OF EACH MONTH, THE AMOUNT RECEIVED BY FOOTHILL FROM
THE LOCKBOX ACCOUNT SHALL BE PAID BY FOOTHILL AGAINST THE FOLLOWING ITEMS OF
INDEBTEDNESS, IN THE ORDER SET FORTH:
(I) PAYMENT OF FOOTHILL EXPENSES; THEN, THE
BALANCE, IF ANY, TO;
(II) WITH RESPECT TO PAYMENTS RECEIVED ON THE
PLEDGED NOTES,
<PAGE> 27
(1) TO PAYMENT OF INTEREST ON THE A
LINE ADVANCES AND THE B LINE
ADVANCES, THEN, THE BALANCE, IF
ANY, TO;
(2) TO THE REDUCTION OF PRINCIPAL ON
THE A LINE ADVANCES AND THE
B-LINE ADVANCES, THEN THE
BALANCE, IF ANY, TO
(3) PAY OFF OTHER OBLIGATIONS IN THE
MANNER DECIDED BY FOOTHILL;
(III) WITH RESPECT TO PAYMENTS RECEIVED ON THE
SALE OF COLLATERAL GRANTED TO FOOTHILL PURSUANT TO SECTION 2.2 HEREOF,
(1) TO PAYMENT OF INTEREST ON THE
LAND INVENTORY ADVANCES, THEN, THE
BALANCE, IF ANY, TO;
(2) TO THE REDUCTION OF PRINCIPAL
ON THE LAND INVENTORY ADVANCES, THEN
THE BALANCE, IF ANY, TO
(3) PAY OFF OTHER OBLIGATIONS IN
THE MANNER DECIDED BY FOOTHILL;
4.7 RELEASE OF PORTIONS OF REAL PROPERTY
COLLATERAL. PROVIDED THERE SHALL NOT HAVE OCCURRED AN EVENT OF DEFAULT,
FOOTHILL SHALL, FROM TIME TO TIME, PROVIDED BORROWER HAS FIRST FULFILLED AND
SATISFIED THE TERMS AND CONDITIONS ON ITS PART TO BE FULFILLED PURSUANT TO
THE TERMS OF THIS AGREEMENT AND THIS SECTION 4.7, PROVIDE FOR AND PROMPTLY
WITHIN TEN (10) BUSINESS DAYS AFTER REQUEST THEREFOR (BUT SHALL ENDEAVOR TO
DO SO MORE QUICKLY IF BORROWER REQUESTS A SHORTER TIME), DELIVER TO ESCROW
OR TO A TITLE COMPANY, A PARTIAL RECONVEYANCE OF A PORTION OF THE REAL
PROPERTY, PROVIDED ALL THE FOLLOWING CONDITIONS ARE MET:
(I) SUCH LOT SHALL BE SOLD AT A PRICE ACCEPTABLE
TO BORROWER AND FOOTHILL ACTING IN GOOD FAITH;
(II) THE SALE SHALL OCCUR ON TERMS AND CONDITIONS
SUFFICIENT THAT FOOTHILL SHALL RECEIVE IN CASH FIFTY FIVE PERCENT (55%) OF
THE SALES PRICE BUT IN NO EVENT LESS THAN THE RELEASE PRICE) AS
CONSIDERATION FOR SUCH PARTIAL RECONVEYANCE (BUT IN NO EVENT AN AMOUNT LESS
THAN THE RELEASE PRICE SET FOR EACH SUCH LOT SOUGHT TO BE RELEASED);
<PAGE> 28
(III) SUCH PARTIAL RECONVEYANCE SHALL NOT CREATE A
VIOLATION OF LAW AS TO THE REMAINDER OF THE PROJECT WHICH IS SUBJECT TO THE
MORTGAGE (INCLUDING ALL SUBDIVISION LAWS);
(IV) PRIOR TO OR AT THE TIME OF THE REQUEST FOR
SUCH PARTIAL RECONVEYANCE, BORROWER SHALL HAVE DELIVERED TO FOOTHILL A PRO
FORMA SETTLEMENT SHEET SHOWING THE SELLING PRICE OF THE LOT SOUGHT TO BE
RELEASED, THE RELEASE PAYMENT, AND SUCH OTHER INFORMATION AS FOOTHILL SHALL
REQUIRE;
(V) A DESCRIPTION SUFFICIENT TO SHOW THE LOCATION
OF THE LOT TO BE RELEASED WITH RESPECT TO THE BALANCE OF THE PROPERTY NOT
RELEASED;
(VI) AS APPLICABLE, ISSUANCE OF SUCH TITLE
ENDORSEMENTS AS FOOTHILL MAY REASONABLY REQUIRE TO ESTABLISH THE CONTINUING
PRIORITY OF THE LIEN OF THE MORTGAGES; AND
(VII) IF APPLICABLE IN FOOTHILL'S JUDGEMENT,
EXECUTION OF AN IRREVOCABLE INSTRUCTION TO THE ESCROW OR TITLE COMPANY
DIRECTING THAT THEY ARE ONLY AUTHORIZED TO RECORD THE RELEASE OF THE
RECONVEYANCE UPON PAYMENT OF THE RELEASE PRICE SET FORTH HEREIN.
4.8 RELEASE OF SECURITY INTERESTS IN THE PLEDGED
NOTES; RELEASE OF SECURITY WHEN ADVANCES ARE EQUAL TO ZERO.
(A) PROVIDED THERE SHALL NOT HAVE OCCURRED AN
EVENT OF DEFAULT, AND PROVIDED FURTHER THAT BORROWER SHALL PAY IN FULL ALL
INTEREST AND PRINCIPAL OWING ON THE A LINE ADVANCES AT THE TIME OF RELEASE,
BORROWER SHALL HAVE THE RIGHT TO CAUSE TO BE RELEASED FROM FOOTHILL'S LIEN
ALL (BUT NOT PART OF) THE PLEDGED A NOTES PROVIDED SUCH RELEASE IS TO ENABLE
BORROWER TO SECURITIZE THE PLEDGED A NOTES BY THE ISSUANCE OF NOTE BACKED
SECURITIES OR COMMERCIAL PAPER. THE EARLY TERMINATION FEE PROVIDED FOR IN
SECTION 3.7 HEREOF, SHALL NOT BE PAYABLE, HOWEVER THE MINIMUM INTEREST
PAYMENT SHALL STILL BE PAYABLE IN ACCORDANCE WITH THE PROVISIONS OF SECTION
2.4(C).
(B) PROVIDED THERE SHALL NOT HAVE OCCURRED AN
EVENT OF DEFAULT, AND PROVIDED FURTHER THAT BORROWER SHALL PAY IN FULL ALL
INTEREST AND PRINCIPAL OWING ON THE B LINE ADVANCES AT THE TIME OF RELEASE,
BORROWER SHALL HAVE THE RIGHT TO CAUSE TO BE RELEASED FROM FOOTHILL'S LIEN
ALL (BUT NOT PART OF) THE PLEDGED B NOTES PROVIDED SUCH RELEASE IS TO ENABLE
BORROWER TO SECURITIZE THE PLEDGED B NOTES BY THE ISSUANCE OF NOTE BACKED
SECURITIES OR COMMERCIAL PAPER. THE EARLY TERMINATION FEE PROVIDED FOR IN
SECTION 3.7 HEREOF, SHALL NOT BE PAYABLE, HOWEVER THE MINIMUM INTEREST
PAYMENT SHALL STILL BE PAYABLE IN ACCORDANCE WITH THE PROVISIONS OF SECTION
2.4(C).
4.9 DELIVERY OF ADDITIONAL DOCUMENTATION
REQUIRED. AT ANY TIME UPON THE REQUEST OF FOOTHILL, BORROWER SHALL EXECUTE
AND DELIVER TO FOOTHILL ALL FINANCING
<PAGE> 29
STATEMENTS, CONTINUATION FINANCING STATEMENTS, FIXTURE FILINGS, SECURITY
AGREEMENTS, CHATTEL MORTGAGES, PLEDGES, ASSIGNMENTS, AFFIDAVITS, REPORTS,
NOTICES, SCHEDULES OF ACCOUNTS, LETTERS OF AUTHORITY, AND ALL OTHER
DOCUMENTS THAT FOOTHILL MAY REASONABLY REQUEST, IN FORM SATISFACTORY TO
FOOTHILL, TO PERFECT AND CONTINUE PERFECTED FOOTHILL'S SECURITY INTERESTS IN
THE COLLATERAL AND IN ORDER TO FULLY CONSUMMATE ALL OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND UNDER THE OTHER LOAN DOCUMENTS.
4.10 POWER OF ATTORNEY. BORROWER HEREBY
IRREVOCABLY MAKES, CONSTITUTES, AND APPOINTS FOOTHILL (AND ANY OF FOOTHILL'S
OFFICERS, EMPLOYEES, OR AGENTS DESIGNATED BY FOOTHILL) AS BORROWER'S TRUE
AND LAWFUL ATTORNEY, WITH POWER TO: (A) IF BORROWER REFUSES TO, OR FAILS
TIMELY TO EXECUTE AND DELIVER ANY OF THE DOCUMENTS DESCRIBED IN SECTION 4.4,
SIGN THE NAME OF BORROWER ON ANY OF THE DOCUMENTS DESCRIBED IN SECTION 4.4;
(B) AT ANY TIME THAT AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, OR
FOOTHILL ACTING IN GOOD FAITH DEEMS ITSELF INSECURE (IN ACCORDANCE WITH
SECTION 1208 OF THE CODE), SIGN BORROWER'S NAME ON ANY DOCUMENT RELATING TO
ANY PLEDGED NOTE AND NOTICES TO MAKERS OF PLEDGED NOTES; (C) SEND REQUESTS
FOR VERIFICATION OF PLEDGED NOTES; (D) ENDORSE BORROWER'S NAME ON ANY
CHECKS, NOTICES, ACCEPTANCES, MONEY ORDERS, DRAFTS, OR OTHER ITEM OF PAYMENT
OR SECURITY THAT RELATE TO THE PLEDGED NOTES, WHICH SUCH SUMS SHALL BE
APPLIED AGAINST THE OBLIGATIONS; (E) INTENTIONALLY DELETED; (F) AT ANY TIME
THAT AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR FOOTHILL ACTING
IN GOOD FAITH DEEMS ITSELF INSECURE (IN ACCORDANCE WITH SECTION 1208 OF THE
CODE), MAKE, SETTLE, AND ADJUST ALL CLAIMS UNDER BORROWER'S POLICIES OF
INSURANCE AND MAKE ALL DETERMINATIONS AND DECISIONS WITH RESPECT TO SUCH
POLICIES OF INSURANCE; AND (G) AT ANY TIME THAT AN EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING OR FOOTHILL ACTING IN GOOD FAITH DEEMS ITSELF
INSECURE (IN ACCORDANCE WITH SECTION 1208 OF THE CODE), SETTLE AND ADJUST
DISPUTES AND CLAIMS RESPECTING THE ACCOUNTS DIRECTLY WITH ACCOUNT DEBTORS,
FOR AMOUNTS AND UPON TERMS WHICH FOOTHILL DETERMINES TO BE REASONABLE, AND
FOOTHILL MAY CAUSE TO BE EXECUTED AND DELIVERED ANY DOCUMENTS AND RELEASES
WHICH FOOTHILL DETERMINES TO BE NECESSARY. THE APPOINTMENT OF FOOTHILL AS
BORROWER'S ATTORNEY, AND EACH AND EVERY ONE OF FOOTHILL'S RIGHTS AND POWERS,
BEING COUPLED WITH AN INTEREST, IS IRREVOCABLE UNTIL ALL OF THE OBLIGATIONS
HAVE BEEN FULLY AND FINALLY REPAID AND PERFORMED AND FOOTHILL'S OBLIGATION
TO EXTEND CREDIT HEREUNDER IS TERMINATED.
4.11 RIGHT TO INSPECT. FOOTHILL (THROUGH ANY OF
ITS OFFICERS, EMPLOYEES, OR AGENTS) SHALL HAVE THE RIGHT, FROM TIME TO TIME
HEREAFTER TO INSPECT BORROWER'S BOOKS AND TO CHECK, TEST, AND APPRAISE THE
COLLATERAL IN ORDER TO VERIFY BORROWER'S FINANCIAL CONDITION OR THE AMOUNT,
QUALITY, VALUE, CONDITION OF, OR ANY OTHER MATTER RELATING TO, THE
COLLATERAL.
5. REPRESENTATIONS AND WARRANTIES.
-------------------------------
BORROWER REPRESENTS AND WARRANTS TO FOOTHILL AS
FOLLOWS:
<PAGE> 30
5.1 NO PRIOR ENCUMBRANCES. BORROWER HAS GOOD AND
INDEFEASIBLE TITLE TO THE COLLATERAL, FREE AND CLEAR OF LIENS, CLAIMS,
SECURITY INTERESTS, OR ENCUMBRANCES, EXCEPT FOR PERMITTED LIENS.
5.2 BONA FIDE OBLIGATION. EACH PLEDGED NOTE IS A
BONA FIDE, GOOD, VALID, AND SUBSISTING OBLIGATION OF THE ACCOUNT DEBTOR
THEREUNDER, AND BORROWER DOES NOT KNOW OF ANY FACT WHICH IMPAIRS OR WILL
IMPAIR THE VALIDITY OF ANY SUCH PLEDGED NOTE.
5.3 NO DEFENSES OR SETOFFS. EACH PLEDGED NOTE AND
EACH NOTE MORTGAGE WILL BE FREE OF ANY CLAIM FOR CREDIT, DEDUCTION,
DISCOUNT, ALLOWANCE, DEFENSE (INCLUDING THE DEFENSE OF USURY), DISPUTE,
COUNTER-CLAIM, OR SETOFF.
5.4 ENFORCEABLE AGREEMENTS. EACH PLEDGED NOTE AND
NOTE MORTGAGE IS ENFORCEABLE ACCORDING TO ITS TERMS AGAINST EACH NAMED
ACCOUNT DEBTOR THEREON OR TRUSTOR THEREUNDER, SUBJECT TO APPLICABLE
BANKRUPTCY LAWS AS THE SAME MAY APPLY TO ANY MAKER OF A PLEDGED NOTE WHO IS
SUBJECT TO A BANKRUPTCY PROCEEDING, AND COMPLIES WITH ALL APPLICABLE
FEDERAL, STATE, AND LOCAL LAWS, REGULATIONS, AND REQUIREMENTS.
5.5 CORRECT LEGAL DESCRIPTION. EACH NOTE MORTGAGE
CORRECTLY SETS FORTH THE LEGAL DESCRIPTION OF THE SUBJECT REAL PROPERTY.
5.6 CORRECT LOAN TERMS. EACH PLEDGED NOTE
CORRECTLY SETS FORTH THE LOAN TERMS BETWEEN BORROWER AND THE ACCOUNT DEBTOR
THEREUNDER, INCLUDING, WITHOUT LIMITATION, THE INTEREST RATE APPLICABLE
THERETO.
5.7 COMPLIANCE WITH LAWS. TO THE BEST OF
BORROWER'S KNOWLEDGE, ALL STATE AND FEDERAL LAWS (INCLUDING ANY APPLICABLE
USURY AND/OR TRUTH-IN-LENDING STATUTES) HAVE BEEN COMPLIED WITH IN
CONJUNCTION WITH THE COLLATERAL, THE NON-COMPLIANCE WITH WHICH WOULD HAVE AN
ADVERSE IMPACT ON THE VALUE, ENFORCEABILITY, OR COLLECTIBILITY OF THE
COLLATERAL.
5.8 AUTHORITY TO ASSIGN. AT THE TIME OF THE
ASSIGNMENT OF ANY PLEDGED NOTE AND NOTE MORTGAGE TO FOOTHILL BY BORROWER,
BORROWER SHALL HAVE SUCH TITLE THERETO AS IT ACQUIRED THE SAME FROM THE
MAKER THEREOF, AND FULL RIGHT AND AUTHORITY TO PLEDGE AND ASSIGN THE SAME.
5.9 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. THE
CHIEF EXECUTIVE OFFICE OF BORROWER IS LOCATED AT THE ADDRESS INDICATED IN
THE PREAMBLE TO THIS AGREEMENT.
BORROWER.
5.10 DUE ORGANIZATION AND QUALIFICATION. BORROWER
IS DULY ORGANIZED AND EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE
STATE OF ITS INCORPORATION AND QUALIFIED AND LICENSED TO DO BUSINESS IN, AND
IN GOOD STANDING IN, ANY STATE WHERE THE FAILURE TO BE SO LICENSED OR
QUALIFIED COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
<PAGE> 31
ADVERSE EFFECT ON THE BUSINESS, OPERATIONS, CONDITION (FINANCIAL OR
OTHERWISE), FINANCES, OR PROSPECTS OF BORROWER OR ON THE VALUE OF THE
COLLATERAL TO FOOTHILL.
5.11 DUE AUTHORIZATION; NO CONFLICT. THE
EXECUTION, DELIVERY, AND PERFORMANCE OF THE LOAN DOCUMENTS ARE WITHIN
BORROWER'S CORPORATE POWERS, HAVE BEEN DULY AUTHORIZED, AND ARE NOT IN
CONFLICT WITH NOR CONSTITUTE A BREACH OF ANY PROVISION CONTAINED IN
BORROWER'S ARTICLES OR CERTIFICATE OF INCORPORATION, OR BY-LAWS, NOR WILL
THEY CONSTITUTE AN EVENT OF DEFAULT UNDER ANY MATERIAL AGREEMENT TO WHICH
BORROWER IS A PARTY OR BY WHICH ITS PROPERTIES OR ASSETS MAY BE BOUND.
5.12 LITIGATION. THERE ARE NO ACTIONS OR
PROCEEDINGS PENDING BY OR AGAINST BORROWER BEFORE ANY COURT OR
ADMINISTRATIVE AGENCY AND BORROWER DOES NOT HAVE KNOWLEDGE OR BELIEF OF ANY
PENDING, THREATENED, OR IMMINENT LITIGATION, GOVERNMENTAL INVESTIGATIONS, OR
CLAIMS, COMPLAINTS, ACTIONS, OR PROSECUTIONS INVOLVING BORROWER OR ANY
GUARANTOR OF THE OBLIGATIONS, EXCEPT FOR ONGOING COLLECTION MATTERS IN WHICH
BORROWER IS THE PLAINTIFF, MATTERS DISCLOSED ON SCHEDULE 5.12, AND MATTERS
ARISING AFTER THE DATE HEREOF THAT, IF DECIDED ADVERSELY TO BORROWER, WOULD
MATERIALLY IMPAIR THE PROSPECT OF REPAYMENT OF THE OBLIGATIONS OR MATERIALLY
IMPAIR THE VALUE OR PRIORITY OF FOOTHILL'S SECURITY INTERESTS IN THE
COLLATERAL.
5.13 NO MATERIAL ADVERSE CHANGE IN FINANCIAL
CONDITION. ALL FINANCIAL STATEMENTS RELATING TO BORROWER OR ANY GUARANTOR OF
THE OBLIGATIONS THAT HAVE BEEN DELIVERED BY BORROWER TO FOOTHILL HAVE BEEN
PREPARED IN ACCORDANCE WITH GAAP AND FAIRLY PRESENT BORROWER'S (OR SUCH
GUARANTOR'S, AS APPLICABLE) FINANCIAL CONDITION AS OF THE DATE THEREOF AND
BORROWER'S RESULTS OF OPERATIONS FOR THE PERIOD THEN ENDED. THERE HAS NOT
BEEN A MATERIAL ADVERSE CHANGE IN THE FINANCIAL CONDITION OF BORROWER (OR
SUCH GUARANTOR, AS APPLICABLE) SINCE THE DATE OF THE LATEST FINANCIAL
STATEMENTS SUBMITTED TO FOOTHILL ON OR BEFORE THE EFFECTIVE DATE.
5.14 SOLVENCY. BORROWER IS SOLVENT. NO TRANSFER OF
PROPERTY IS BEING MADE BY BORROWER AND NO OBLIGATION IS BEING INCURRED BY
BORROWER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS WITH THE INTENT TO HINDER, DELAY, OR DEFRAUD
EITHER PRESENT OR FUTURE CREDITORS OF BORROWER.
5.15 EMPLOYEE BENEFITS. EACH PLAN IS COMPLIANCE IN
ALL MATERIAL RESPECTS WITH THE APPLICABLE PROVISIONS OF ERISA AND THE IRC.
EACH QUALIFIED PLAN AND MULTIEMPLOYER PLAN HAS BEEN DETERMINED BY THE
INTERNAL REVENUE SERVICE TO QUALIFY UNDER SECTION 401 OF THE IRC, AND THE
TRUSTS CREATED THEREUNDER HAVE BEEN DETERMINED TO BE EXEMPT FROM TAX UNDER
SECTION 501 OF THE IRC, AND, TO THE BEST KNOWLEDGE OF BORROWER, NOTHING HAS
OCCURRED THAT WOULD CAUSE THE LOSS OF SUCH QUALIFICATION OR TAX-EXEMPT
STATUS. THERE ARE NO OUTSTANDING LIABILITIES UNDER TITLE IV OF ERISA WITH
RESPECT TO ANY PLAN MAINTAINED OR SPONSORED BY BORROWER OR ANY ERISA
AFFILIATE, NOR WITH RESPECT TO ANY PLAN TO WHICH BORROWER OR ANY ERISA
AFFILIATE CONTRIBUTES OR IS OBLIGATED TO CONTRIBUTE WHICH COULD REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE
<PAGE> 32
EFFECT ON THE FINANCIAL CONDITION OF BORROWER. NO PLAN SUBJECT TO TITLE IV
OF ERISA HAS ANY UNFUNDED BENEFIT LIABILITY WHICH COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE FINANCIAL CONDITION OF
BORROWER. NEITHER BORROWER NOR ANY ERISA AFFILIATE HAS TRANSFERRED ANY
UNFUNDED BENEFIT LIABILITY TO A PERSON OTHER THAN BORROWER OR AN ERISA
AFFILIATE OR HAS OTHERWISE ENGAGED IN A TRANSACTION THAT COULD BE SUBJECT TO
SECTIONS 4069 OR 4212(C) OF ERISA WHICH COULD REASONABLY BE EXPECTED TO HAVE
A MATERIAL ADVERSE EFFECT ON THE FINANCIAL CONDITION OF BORROWER. NEITHER
BORROWER NOR ANY ERISA AFFILIATE HAS INCURRED NOR REASONABLY EXPECTS TO
INCUR (X) ANY LIABILITY (AND NO EVENT HAS OCCURRED WHICH, WITH THE GIVING OF
NOTICE UNDER SECTION 4219 OF ERISA, WOULD RESULT IN SUCH LIABILITY) UNDER
SECTIONS 4201 OR 4243 OF ERISA WITH RESPECT TO A MULTIEMPLOYER PLAN, OR (Y)
ANY LIABILITY UNDER TITLE IV OF ERISA (OTHER THAN PREMIUMS DUE BUT NOT
DELINQUENT UNDER SECTION 4007 OF ERISA) WITH RESPECT TO A PLAN, WHICH COULD,
IN EITHER EVENT, REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON
THE FINANCIAL CONDITION OF BORROWER. NO APPLICATION FOR A FUNDING WAIVER OR
AN EXTENSION OF ANY AMORTIZATION PERIOD PURSUANT TO SECTION 412 OF THE IRC
HAS BEEN MADE WITH RESPECT TO ANY PLAN. NO ERISA EVENT HAS OCCURRED OR IS
REASONABLY EXPECTED TO OCCUR WITH RESPECT TO ANY PLAN WHICH COULD REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE FINANCIAL CONDITION OF
BORROWER. BORROWER AND EACH ERISA AFFILIATE HAVE COMPLIED IN ALL MATERIAL
RESPECTS WITH THE NOTICE AND CONTINUATION COVERAGE REQUIREMENTS OF SECTION
4980B OF THE IRC.
5.16 ENVIRONMENTAL CONDITION.
(A) BORROWER HAS NOT USED HAZARDOUS MATERIALS
AT OR AFFECTING THE REAL PROPERTY IN ANY MANNER WHICH VIOLATES ANY ACT
GOVERNING THE USE, STORAGE, TREATMENT, TRANSPORTATION, MANUFACTURING,
REFINEMENT, HANDLING, PRODUCTION, OR DISPOSAL OF HAZARDOUS MATERIALS.
(B) TO THE BEST OF BORROWER'S KNOWLEDGE, NO
PRIOR OWNER, OCCUPANT OR OPERATOR OF THE REAL PROPERTY HAS USED HAZARDOUS
MATERIALS AT OR AFFECTING THE REAL PROPERTY IN ANY MANNER WHICH VIOLATES ANY
ACT GOVERNING THE USE, STORAGE, TREATMENT, TRANSPORTATION, MANUFACTURING,
REFINEMENT, HANDLING, PRODUCTION OR DISPOSAL OF HAZARDOUS MATERIALS.
5.17 RELIANCE BY FOOTHILL; CUMULATIVE. EACH
WARRANTY AND REPRESENTATION CONTAINED IN THIS AGREEMENT AUTOMATICALLY SHALL
BE DEEMED REPEATED WITH EACH ADVANCE AND SHALL BE CONCLUSIVELY PRESUMED TO
HAVE BEEN RELIED ON BY FOOTHILL REGARDLESS OF ANY INVESTIGATION MADE OR
INFORMATION POSSESSED BY FOOTHILL. THE WARRANTIES AND REPRESENTATIONS SET
FORTH HEREIN SHALL BE CUMULATIVE AND IN ADDITION TO ANY AND ALL OTHER
WARRANTIES AND REPRESENTATIONS THAT BORROWER NOW OR HEREAFTER SHALL GIVE, OR
CAUSE TO BE GIVEN, TO FOOTHILL.
<PAGE> 33
5.18 GOOD STANDING. BORROWER IS IN GOOD STANDING
IN EACH JURISDICTION WHERE THE CONDUCT OF ITS BUSINESS OR THE OWNERSHIP OR
OPERATION OF ITS PROPERTIES AND ASSETS MAKES QUALIFICATION NECESSARY.
5.19 INTER-COMPANY INDEBTEDNESS. THE INTERCOMPANY
INDEBTEDNESS REPORTS SUBMITTED TO FOOTHILL FROM TIME TO TIME WILL BE
ACCURATE, COMPLETE, AND TRUE IN ALL RESPECTS, AND THE FIGURES DISCLOSED
THEREIN ARE NOT, AT THE TIME OF SUBMISSION, SUBJECT TO ANY OFFSET OR
DEDUCTION OF ANY KIND WHATSOEVER.
6. AFFIRMATIVE COVENANTS.
BORROWER COVENANTS AND AGREES THAT, SO LONG AS ANY
CREDIT HEREUNDER SHALL BE AVAILABLE AND UNTIL FULL AND FINAL PAYMENT OF THE
OBLIGATIONS, AND UNLESS FOOTHILL SHALL OTHERWISE CONSENT IN WRITING,
BORROWER SHALL DO ALL OF THE FOLLOWING:
6.1 ACCOUNTING SYSTEM. BORROWER SHALL MAINTAIN A
STANDARD AND MODERN SYSTEM OF ACCOUNTING IN ACCORDANCE WITH GAAP WITH LEDGER
AND ACCOUNT CARDS OR COMPUTER TAPES, DISCS, PRINTOUTS, AND RECORDS
PERTAINING TO THE COLLATERAL WHICH CONTAIN INFORMATION AS FROM TIME TO TIME
MAY BE REQUESTED BY FOOTHILL. BORROWER ALSO SHALL KEEP PROPER BOOKS OF
ACCOUNT SHOWING ALL SALES, CLAIMS, AND ALLOWANCES ON ITS INVENTORY.
6.2 SCHEDULES OF PLEDGED NOTES. WITH SUCH
REGULARITY AS FOOTHILL SHALL REQUIRE, BORROWER SHALL PROVIDE FOOTHILL WITH
SCHEDULES DESCRIBING ALL PLEDGED NOTES. FOOTHILL'S FAILURE TO REQUEST SUCH
SCHEDULES OR BORROWER'S FAILURE TO EXECUTE AND DELIVER SUCH SCHEDULES SHALL
NOT AFFECT OR LIMIT FOOTHILL'S SECURITY INTERESTS OR OTHER RIGHTS IN AND TO
THE PLEDGED NOTES.
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
BORROWER AGREES TO DELIVER TO FOOTHILL: (A) AS SOON AS AVAILABLE, BUT IN ANY
EVENT WITHIN THIRTY (30) DAYS AFTER THE END OF EACH MONTH DURING EACH OF
BORROWER'S FISCAL YEARS, A COMPANY PREPARED BALANCE SHEET AND INCOME
STATEMENT COVERING BORROWER'S OPERATIONS DURING SUCH PERIOD; (B) QUARTERLY
CASH FLOW STATEMENTS AS SOON AS AVAILABLE, BUT IN ANY EVENT WITHIN
FORTY-FIVE (45) DAYS AFTER THE END OF BORROWER'S FISCAL QUARTERS; AND (C) AS
SOON AS AVAILABLE, BUT IN ANY EVENT WITHIN ONE HUNDRED AND TWENTY (120) DAYS
AFTER THE END OF EACH OF BORROWER'S FISCAL YEARS, FINANCIAL STATEMENTS OF
BORROWER FOR EACH SUCH FISCAL YEAR, CERTIFIED WITHOUT ANY QUALIFICATIONS, BY
BORROWER'S ACCOUNTANTS TO HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP,
TOGETHER WITH A CERTIFICATE ADDRESSED TO FOOTHILL FROM BORROWER'S CFO
STATING THAT THE CFO DOES NOT HAVE KNOWLEDGE OF THE EXISTENCE OF ANY EVENT
OR CONDITION CONSTITUTING AN EVENT OF DEFAULT, OR THAT WOULD, WITH THE
PASSAGE OF TIME OR THE GIVING OF NOTICE, CONSTITUTE AN EVENT OF DEFAULT.
SUCH CERTIFIED FINANCIAL STATEMENTS SHALL INCLUDE A BALANCE SHEET, PROFIT
AND LOSS STATEMENT, AND CASH FLOW STATEMENT. BORROWER SHALL HAVE ISSUED
WRITTEN INSTRUCTIONS TO ITS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
AUTHORIZING THEM TO COMMUNICATE WITH FOOTHILL AND TO RELEASE TO
<PAGE> 34
FOOTHILL WHATEVER FINANCIAL INFORMATION CONCERNING BORROWER THAT FOOTHILL
MAY REQUEST. BORROWER AGREES TO DELIVER FINANCIAL STATEMENTS PREPARED ON A
CONSOLIDATED BASIS FOR IT AND ITS SUBSIDIARIES AND AFFILIATES.
TOGETHER WITH THE ABOVE, BORROWER ALSO SHALL
DELIVER TO FOOTHILL BORROWER'S FORM 10-Q QUARTERLY REPORTS, FORM 10-K ANNUAL
REPORTS, AND FORM 8-K CURRENT REPORTS, AND ANY OTHER FILINGS MADE BY
BORROWER WITH THE SECURITIES AND EXCHANGE COMMISSION, IF ANY, AS SOON AS THE
SAME ARE FILED, OR ANY OTHER INFORMATION THAT IS PROVIDED BY BORROWER TO ITS
SHAREHOLDERS, AND ANY OTHER REPORT REASONABLY REQUESTED BY FOOTHILL RELATING
TO THE COLLATERAL AND FINANCIAL CONDITION OF BORROWER.
EACH MONTH, TOGETHER WITH THE FINANCIAL STATEMENTS
PROVIDED PURSUANT TO SECTION 6.3(A), BORROWER SHALL DELIVER TO FOOTHILL A
CERTIFICATE ("COMPLIANCE CERTIFICATE") SIGNED BY ITS CHIEF FINANCIAL OFFICER
TO THE EFFECT THAT: (I) ALL REPORTS, STATEMENTS, OR COMPUTER PREPARED
INFORMATION OF ANY KIND OR NATURE DELIVERED OR CAUSED TO BE DELIVERED TO
FOOTHILL HEREUNDER HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP AND FAIRLY
PRESENT THE FINANCIAL CONDITION OF BORROWER; (II) BORROWER IS IN TIMELY
COMPLIANCE WITH ALL OF ITS COVENANTS AND AGREEMENTS HEREUNDER; (III) THE
REPRESENTATIONS AND WARRANTIES OF BORROWER CONTAINED IN THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON
AND AS OF THE DATE OF SUCH CERTIFICATE, AS THOUGH MADE ON AND AS OF SUCH
DATE (EXCEPT TO THE EXTENT THAT SUCH REPRESENTATIONS AND WARRANTIES RELATE
SOLELY TO AN EARLIER DATE); AND (IV) ON THE DATE OF DELIVERY OF SUCH
CERTIFICATE TO FOOTHILL THERE DOES NOT EXIST ANY CONDITION OR EVENT THAT
CONSTITUTES AN EVENT OF DEFAULT (OR, IN EACH CASE, TO THE EXTENT OF ANY
NON-COMPLIANCE, DESCRIBING SUCH NON-COMPLIANCE AS TO WHICH HE OR SHE MAY
HAVE KNOWLEDGE AND WHAT ACTION BORROWER HAS TAKEN, IS TAKING, OR PROPOSES TO
TAKE WITH RESPECT THERETO).
BORROWER HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS
ALL AUDITORS, ACCOUNTANTS, OR OTHER THIRD PARTIES TO DELIVER TO FOOTHILL,
FOLLOWING AN EVENT OF DEFAULT, AT BORROWER'S EXPENSE, COPIES OF BORROWER'S
FINANCIAL STATEMENTS, PAPERS RELATED THERETO, AND OTHER ACCOUNTING RECORDS
OF ANY NATURE IN THEIR POSSESSION, AND TO DISCLOSE TO FOOTHILL ANY
INFORMATION THEY MAY HAVE REGARDING BORROWER'S BUSINESS AFFAIRS AND
FINANCIAL CONDITIONS. SUCH PARTIES MAY ABSOLUTELY RELY UPON A SIGNED
STATEMENT BY FOOTHILL THAT AN EVENT OF DEFAULT HAS OCCURRED.
6.4 TAX RETURNS. BORROWER AGREES TO DELIVER TO FOOTHILL COPIES
OF EACH OF BORROWER'S FUTURE FEDERAL INCOME TAX RETURNS, AND ANY AMENDMENTS
THERETO, WITHIN THIRTY (30) DAYS OF FOOTHILL'S REASONABLE REQUEST OF SAME.
6.5 GUARANTOR REPORTS. BORROWER AGREES TO CAUSE ANY GUARANTOR,
IF ANY, OF THE OBLIGATIONS TO DELIVER ITS ANNUAL FINANCIAL STATEMENTS AT THE
TIME WHEN BORROWER PROVIDES ITS AUDITED FINANCIAL STATEMENTS TO FOOTHILL AND
COPIES OF ALL FEDERAL INCOME TAX RETURNS AS SOON AS THE SAME ARE AVAILABLE
AND IN ANY EVENT NO LATER THAN THIRTY (30) DAYS AFTER THE SAME ARE REQUIRED
TO BE FILED BY LAW.
<PAGE> 35
6.6 TAXES. ALL ASSESSMENTS AND TAXES, WHETHER
REAL, PERSONAL, OR OTHERWISE, DUE OR PAYABLE BY, OR IMPOSED, LEVIED, OR
ASSESSED AGAINST BORROWER OR ANY OF ITS PROPERTY HAVE BEEN PAID, AND SHALL
HEREAFTER BE PAID IN FULL, BEFORE DELINQUENCY OR BEFORE THE EXPIRATION OF
ANY EXTENSION PERIOD. BORROWER SHALL MAKE DUE AND TIMELY PAYMENT OR DEPOSIT
OF ALL FEDERAL, STATE, AND LOCAL TAXES, ASSESSMENTS, OR CONTRIBUTIONS
REQUIRED OF IT BY LAW, AND WILL EXECUTE AND DELIVER TO FOOTHILL, ON DEMAND,
APPROPRIATE CERTIFICATES ATTESTING TO THE PAYMENT THEREOF OR DEPOSIT WITH
RESPECT THERETO. BORROWER WILL MAKE TIMELY PAYMENT OR DEPOSIT OF ALL TAX
PAYMENTS AND WITHHOLDING TAXES REQUIRED OF IT BY APPLICABLE LAWS, INCLUDING
THOSE LAWS CONCERNING F.I.C.A., F.U.T.A., STATE DISABILITY, AND LOCAL,
STATE, AND FEDERAL INCOME TAXES, AND WILL, UPON REQUEST, FURNISH FOOTHILL
WITH PROOF SATISFACTORY TO FOOTHILL INDICATING THAT BORROWER HAS MADE SUCH
PAYMENTS OR DEPOSITS.
6.7 INSURANCE.
(A) BORROWER, AT ITS EXPENSE, SHALL KEEP THE
COLLATERAL (EXCLUSIVE OF THE REAL PROPERTY) INSURED AGAINST LOSS OR DAMAGE
BY FIRE, THEFT, EXPLOSION, SPRINKLERS, AND ALL OTHER HAZARDS AND RISKS, AND
IN SUCH AMOUNTS, AS ARE ORDINARILY INSURED AGAINST BY OTHER OWNERS IN
SIMILAR BUSINESSES. BORROWER ALSO SHALL MAINTAIN PUBLIC LIABILITY, AND
PROPERTY DAMAGE INSURANCE, AS WELL AS INSURANCE AGAINST LARCENY,
EMBEZZLEMENT, AND CRIMINAL MISAPPROPRIATION.
(B) BORROWER WILL OBTAIN AND MAINTAIN (I)
INSURANCE OF THE TYPE NECESSARY TO INSURE THE IMPROVEMENTS AND CHATTELS (AS
DEFINED IN THE MORTGAGES), FOR THE FULL REPLACEMENT COST THEREOF, AGAINST
ANY LOSS BY FIRE, LIGHTING, WINDSTORM, HAIL, EXPLOSION, AIRCRAFT, SMOKE
DAMAGE, VEHICLE DAMAGE, EARTHQUAKES, ELEVATOR COLLISION, AND OTHER RISKS
FROM TIME TO TIME INCLUDED UNDER "EXTENDED COVERAGE" POLICIES, IN SUCH
AMOUNTS AS FOOTHILL MAY REQUIRE, BUT IN ANY EVENT IN AMOUNTS SUFFICIENT TO
PREVENT BORROWER FROM BECOMING A CO-INSURER UNDER SUCH POLICES, (II)
COMBINED SINGLE LIMIT BODILY INJURY AND PROPERTY DAMAGES INSURANCE AGAINST
ANY LOSS, LIABILITY OR DAMAGES ON, ABOUT OR RELATING TO THE PREMISES, IN AN
AMOUNT OF NOT LESS THAN TEN MILLION DOLLARS ($10,000,000); AND (III) SUCH
OTHER RISK AS FOOTHILL MAY REQUIRE. REPLACEMENT COSTS, AT FOOTHILL'S OPTION,
BE REDETERMINED BY AN INSURANCE APPRAISER, SATISFACTORY TO FOOTHILL, NOT
MORE FREQUENTLY THAN ONCE EVERY TWELVE MONTHS AT BORROWER'S COST.
(C) ALL INSURANCE REQUIRED HEREIN SHALL BE
WRITTEN BY COMPANIES OF RECOGNIZED FINANCIAL STANDING, SATISFACTORY TO
FOOTHILL. SUCH INSURANCE SHALL BE IN FORM SATISFACTORY TO FOOTHILL, SHALL
WITH RESPECT TO HAZARD INSURANCE AND SUCH OTHER INSURANCE AS FOOTHILL SHALL
SPECIFY, NAME AS THE LOSS PAYEE THEREUNDER BORROWER AND FOOTHILL, AS THEIR
INTERESTS MAY APPEAR, AND SHALL CONTAIN A CALIFORNIA FORM 438BFU (NS)
MORTGAGEE ENDORSEMENT, OR ITS LOCAL EQUIVALENT. EVERY POLICY OF INSURANCE
REFERRED TO IN THIS SECTION SHALL CONTAIN AN AGREEMENT BY THE INSURER THAT
IT WILL NOT CANCEL SUCH POLICY EXCEPT AFTER THIRTY (30) DAYS' PRIOR WRITTEN
NOTICE TO FOOTHILL AND THAT ANY LOSS PAYABLE THEREUNDER SHALL BE PAYABLE
NOTWITHSTANDING ANY ACT OR NEGLIGENCE OF BORROWER OR
<PAGE> 36
FOOTHILL WHICH MIGHT, ABSENCE SUCH AGREEMENT, RESULT IN A FORFEITURE OF ALL
OR A PART OF SUCH INSURANCE PAYMENT AND NOTWITHSTANDING (I) OCCUPANCY OR USE
OF THE REAL PROPERTY FOR PURPOSES MORE HAZARDOUS THAN PERMITTED BY THE TERMS
OF SUCH POLICY, (II) ANY FORECLOSURE OR OTHER ACTION OR PROCEEDING TAKEN BY
FOOTHILL PURSUANT TO THE MORTGAGES UPON THE HAPPENING OF AN EVENT OF
DEFAULT, OR (III) ANY CHANGE IN TITLE OR OWNERSHIP OF THE REAL PROPERTY.
(D) ORIGINAL POLICIES OR CERTIFICATES THEREOF
SATISFACTORY TO FOOTHILL EVIDENCING SUCH INSURANCE SHALL BE DELIVERED TO
FOOTHILL AT LEAST THIRTY (30) DAYS PRIOR TO THE EXPIRATION OF THE EXISTING
OR PRECEDING POLICIES. BORROWER SHALL GIVE FOOTHILL PROMPT NOTICE OF ANY
LOSS COVERED BY SUCH INSURANCE AND FOOTHILL SHALL HAVE THE RIGHT TO JOIN
BORROWER IN ADJUSTING ANY LOSS. IF THERE SHALL HAVE OCCURRED AN EVENT OF
DEFAULT, FOOTHILL SHALL HAVE THE EXCLUSIVE RIGHT TO ADJUST ALL LOSS PAYABLE
UNDER ANY SUCH INSURANCE POLICIES WITHOUT ANY LIABILITY TO BORROWER
WHATSOEVER IN RESPECT OF SUCH ADJUSTMENTS. ANY MONIES RECEIVED AS PAYMENT
FOR ANY LOSS OF COLLATERAL UNDER SUCH INSURANCE SHALL BE PAID OVER TO
FOOTHILL TO BE APPLIED AT THE OPTION OF FOOTHILL EITHER TO THE PREPAYMENT OF
THE OBLIGATIONS WITHOUT PREMIUM, IN SUCH ORDER OR MANNER AS FOOTHILL MAY
ELECT, OR SHALL BE DISBURSED TO BORROWER UNDER STAGE PAYMENT TERMS
SATISFACTORY TO FOOTHILL FOR APPLICATION TO THE COST OF REPAIRS,
REPLACEMENTS OR RESTORATIONS. ALL RESTORATIONS SHALL BE EFFECTED WITH
REASONABLE PROMPTNESS AND SHALL BE OF A VALUE AT LEAST EQUAL TO THE VALUE OF
THE ITEMS OR PROPERTY TO DESTROYED PRIOR TO SUCH DAMAGE OR DESTRUCTION. UPON
THE OCCURRENCE OF AN EVENT OF DEFAULT, ALL PREPAID PREMIUMS SHALL BE THE
SOLE AND ABSOLUTE PROPERTY OF FOOTHILL TO BE APPLIED BY FOOTHILL TO THE
PAYMENT OF THE OBLIGATIONS IN SUCH ORDER OR FORM AS FOOTHILL SHALL ELECT.
(E) BORROWER SHALL NOT TAKE OUT SEPARATE
INSURANCE CONCURRENT IN FORM OR CONTRIBUTING IN THE EVENT OF LOSS WITH THAT
REQUIRED TO BE MAINTAINED UNDER THIS SECTION 6.7, UNLESS FOOTHILL IS
INCLUDED THEREON AS NAMED INSURED WITH THE LOSS PAYABLE TO FOOTHILL UNDER A
STANDARD CALIFORNIA 438BFU (NS) MORTGAGEE ENDORSEMENT, OR ITS LOCAL
EQUIVALENT. BORROWER SHALL IMMEDIATELY NOTIFY FOOTHILL WHENEVER SUCH
SEPARATE INSURANCE IS TAKEN OUT, SPECIFYING THE INSURER THEREUNDER AND FULL
PARTICULARS AS TO THE POLICIES EVIDENCING THE SAME, AND ORIGINALS OF SUCH
POLICIES SHALL IMMEDIATELY THEREAFTER BE PROVIDED TO FOOTHILL.
6.8 FINANCIAL COVENANTS. BORROWER SHALL MAINTAIN:
(A) TANGIBLE NET WORTH. TANGIBLE NET WORTH OF
AT LEAST FIFTY MILLION DOLLARS ($50,000,000), MEASURED ON A FISCAL
QUARTER-END BASIS; AND
(B) TOTAL LIABILITIES TO TANGIBLE NET WORTH
RATIO. A RATIO OF BORROWER'S TOTAL LIABILITIES DIVIDED BY TANGIBLE NET WORTH
OF NOT MORE THAN THREE TO ONE (3:1.0), MEASURED ON A FISCAL QUARTER-END
BASIS;
(C) TOTAL ADJUSTED LIABILITIES TO ADJUSTED
TANGIBLE NET WORTH RATIO. A RATIO OF BORROWER'S TOTAL LIABILITIES LESS
SUBORDINATED DEBT DIVIDED BY
<PAGE> 37
ADJUSTED TANGIBLE NET WORTH OF NOT MORE THAN TWO POINT ZERO TO ONE
(2.0:1.0), MEASURED ON A FISCAL QUARTER-END BASIS.
6.9 NO SETOFFS OR COUNTERCLAIMS. ALL PAYMENTS
HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS MADE BY OR ON BEHALF OF
BORROWER SHALL BE MADE WITHOUT SETOFF OR COUNTERCLAIM AND FREE AND CLEAR OF,
AND WITHOUT DEDUCTION OR WITHHOLDING FOR OR ON ACCOUNT OF, ANY FEDERAL,
STATE, OR LOCAL TAXES.
6.10 COMPLIANCE WITH LAWS. BORROWER SHALL USE ITS
BEST EFFORTS TO COMPLY WITH THE REQUIREMENTS OF ALL APPLICABLE LAWS, RULES,
REGULATIONS, AND ORDERS OF ANY GOVERNMENTAL AUTHORITY, INCLUDING THE FAIR
LABOR STANDARDS ACT AND THE AMERICANS WITH DISABILITIES ACT.
6.11 EMPLOYEE BENEFITS.
(A) BORROWER SHALL DELIVER TO FOOTHILL A
WRITTEN STATEMENT BY THE CHIEF FINANCIAL OFFICER OF BORROWER SPECIFYING THE
NATURE OF ANY OF THE FOLLOWING EVENTS AND THE ACTIONS WHICH BORROWER
PROPOSES TO TAKE WITH RESPECT THERETO PROMPTLY, AND IN ANY EVENT WITHIN TEN
(10) DAYS OF BECOMING AWARE OF ANY OF THEM, AND WHEN KNOWN, ANY ACTION TAKEN
OR THREATENED BY THE INTERNAL REVENUE SERVICE, PBGC, DEPARTMENT OF LABOR, OR
OTHER PARTY WITH RESPECT THERETO: (I) AN ERISA EVENT WITH RESPECT TO ANY
PLAN; (II) THE INCURRENCE OF AN OBLIGATION TO PAY ADDITIONAL PREMIUM TO THE
PBGC UNDER SECTION 4006(A)(3)(E) OF ERISA WITH RESPECT TO ANY PLAN; AND
(III) ANY LIEN ON THE ASSETS OF BORROWER ARISING IN CONNECTION WITH ANY
PLAN.
(B) BORROWER SHALL ALSO PROMPTLY FURNISH TO
FOOTHILL COPIES PREPARED OR RECEIVED BY BORROWER OR AN ERISA AFFILIATE OF:
(I) AT THE REQUEST OF FOOTHILL, EACH ANNUAL REPORT (INTERNAL REVENUE SERVICE
FORM 5500 SERIES) AND ALL ACCOMPANYING SCHEDULES, ACTUARIAL REPORTS,
FINANCIAL INFORMATION CONCERNING THE FINANCIAL STATUS OF EACH PLAN, AND
SCHEDULES SHOWING THE AMOUNTS CONTRIBUTED TO EACH PLAN BY OR ON BEHALF OF
BORROWER OR ITS ERISA AFFILIATES FOR THE MOST RECENT THREE (3) PLAN YEARS;
(II) ALL NOTICES OF INTENT TO TERMINATE OR TO HAVE A TRUSTEE APPOINTED TO
ADMINISTER ANY PLAN; (III) ALL WRITTEN DEMANDS BY THE PBGC UNDER SUBTITLE D
OF TITLE IV OF ERISA; (IV) ALL NOTICES REQUIRED TO BE SENT TO EMPLOYEES OR
TO THE PBGC UNDER SECTION 302 OF ERISA OR SECTION 412 OF THE IRC; (V) ALL
WRITTEN NOTICES RECEIVED WITH RESPECT TO A MULTIEMPLOYER PLAN CONCERNING (X)
THE IMPOSITION OR AMOUNT OF WITHDRAWAL LIABILITY PURSUANT TO SECTION 4202 OF
ERISA, (Y) A TERMINATION DESCRIBED IN SECTION 4041A OF ERISA, OR (Z) A
REORGANIZATION OR INSOLVENCY DESCRIBED IN SUBTITLE E OF TITLE IV OF ERISA;
(VI) THE ADOPTION OF ANY NEW PLAN THAT IS SUBJECT TO TITLE IV OF ERISA OR
SECTION 412 OF THE IRC BY BORROWER OR ANY ERISA AFFILIATE; (VII) THE
ADOPTION OF ANY AMENDMENT TO ANY PLAN THAT IS SUBJECT TO TITLE IV OF ERISA
OR SECTION 412 OF THE IRC, IF SUCH AMENDMENT RESULTS IN A MATERIAL INCREASE
IN BENEFITS OR UNFUNDED BENEFIT LIABILITY; OR (VIII) THE COMMENCEMENT OF
CONTRIBUTIONS BY BORROWER OR ANY ERISA AFFILIATE TO ANY PLAN THAT IS SUBJECT
TO TITLE IV OF ERISA OR SECTION 412 OF THE IRC.
<PAGE> 38
6.12 ENVIRONMENTAL CONDITION.
(A) BORROWER SHALL KEEP OR CAUSE THE REAL
PROPERTY TO BE KEPT FREE OF HAZARDOUS MATERIALS AND NOT CAUSE OR PERMIT THE
REAL PROPERTY TO BE USED TO GENERATE, MANUFACTURER, REFINE, TRANSPORT,
TREAT, STORE, HANDLE, DISPOSE, PRODUCE OR PROCESS HAZARDOUS MATERIALS EXCEPT
IN COMPLIANCE WITH ALL APPLICABLE ACTS.
(B) BORROWER SHALL ENSURE COMPLIANCE BY ALL
OPERATORS AND OCCUPANTS OF THE REAL PROPERTY WITH ALL APPLICABLE ACTS AND
WILL ENSURE THAT ALL SUCH OPERATORS AND OCCUPANTS OBTAIN AND COMPLY WITH ANY
AND ALL REQUIRED APPROVALS, REGISTRATIONS OR PERMITS.
(C) UPON THE REASONABLE REQUEST OF FOOTHILL,
BORROWER SHALL CONDUCT AND COMPLETE ALL INVESTIGATIONS, STUDIES, SAMPLINGS
AND TESTINGS RELATIVE TO HAZARDOUS MATERIALS AT OR AFFECTING THE REAL
PROPERTY. UPON THE WRITTEN REQUEST OF FOOTHILL FROM TIME TO TIME, BORROWER
SHALL PROVIDE FOOTHILL AT BORROWER'S SOLE COST AND EXPENSE AND WITHOUT ANY
LIABILITY TO FOOTHILL, WITH AN ENVIRONMENTAL SITE ASSESSMENT OR AN
ENVIRONMENTAL AUDIT REPORT, OR AN UPDATE OF SUCH ASSESSMENT OR REPORT, BY AN
ENVIRONMENTAL ENGINEERING FIRM ACCEPTABLE TO FOOTHILL, ALL IN SCOPE, FORM
AND CONTENT SATISFACTORY TO FOOTHILL, TO ASSESS WITH A REASONABLE DEGREE OF
CERTAINTY THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AND THE POTENTIAL
COST IN CONNECTION WITH THE REMEDIATION OF ANY HAZARDOUS MATERIALS AT OR
RELATED TO THE REAL PROPERTY. UPON DEMAND OF FOOTHILL, AND AT BORROWER'S
SOLE COST AND EXPENSE, BORROWER SHALL PROMPTLY TAKE ALL ACTIONS TO REMEDIATE
THE REAL PROPERTY WHICH ARE REQUIRED BY FEDERAL, STATE OR LOCAL GOVERNMENTAL
AGENCY OR POLITICAL SUBDIVISION OR WHICH ARE REASONABLY NECESSARY TO
MITIGATE A SPILL OR A VIOLATION OF ANY ACT OR TO ALLOW FULL ECONOMIC USE OF
THE REAL PROPERTY. BORROWER SHALL TAKE ALL ACTIONS NECESSARY TO REMOVE ALL
HAZARDOUS MATERIALS FROM THE REAL PROPERTY NOTWITHSTANDING ANY LESSOR
STANDARD OF REMEDIATION ALLOWABLE UNDER ANY ACT. ALL SUCH WORK SHALL BE
PERFORMED BY ONE OR MORE CONTRACTOR SELECTED BY BORROWER AND APPROVED IN
ADVANCE AND IN WRITING BY FOOTHILL. BORROWER SHALL PROCEED CONTINUOUSLY AND
DILIGENTLY WITH SUCH INVESTIGATORY AND REMEDIAL ACTIONS, PROVIDED THAT IN
ALL CASES, SUCH ACTIONS SHALL BE IN ACCORDANCE WITH ALL APPLICABLE
REQUIREMENTS OF ALL ACTS. ANY SUCH ACTIONS SHALL BE PERFORMED IN A GOOD,
SAFE AND WORKMAN LIKE MANNER AND SHALL MINIMIZE ANY IMPACT ON THE BUSINESS
OR OCCUPATION AT OR NEAR THE REAL PROPERTY. BORROWER SHALL PAY ALL COSTS IN
CONNECTION WITH SUCH INVESTIGATORY AND REMEDIAL ACTIVITIES, INCLUDING BUT
NOT LIMITED TO ALL POWER AND UTILITY COSTS, AND ANY AND ALL TAXES OR FEES
THAT MAY BE APPLICABLE TO SUCH ACTIVITIES. BORROWER SHALL PROMPTLY PROVIDE
TO FOOTHILL COPIES OF TESTING RESULTS AND REPORTS THAT ARE GENERATED IN
COMPLIANCE WITH THE ABOVE ACTIVITIES. PROMPTLY UPON COMPLETION OF SUCH
INVESTIGATION AND REMEDIATION, BORROWER SHALL PERMANENTLY SEAL OR CAP ALL
MONITORING WELLS AND TEST HOLES TO INDUSTRIAL STANDARDS AND COMPLIANCE WITH
ALL ACTS, REMOVE ALL ASSOCIATED EQUIPMENT, AND RESTORE THE REAL PROPERTY TO
THE CONDITION EXISTING PRIOR TO THE COMMENCEMENT OF REMEDIATION, WHICH SHALL
INCLUDE, WITHOUT LIMITATION, THE REPAIR OF ANY SURFACE DAMAGE, INCLUDING
PAVING CAUSED BY SUCH INVESTIGATION OR REMEDIATION HEREUNDER. WITHIN TEN
<PAGE> 39
DAYS OF DEMAND THEREFOR, BORROWER SHALL PROVIDE FOOTHILL WITH A BOND, LETTER
OF CREDIT OR SIMILAR FINANCIAL INSURANCE EVIDENCING THAT THE NECESSARY FUNDS
ARE AVAILABLE FOR THE OBLIGATIONS ESTABLISHED BY THIS SUBPARAGRAPH.
(D) SHOULD ANY PROPERTY SUBJECT TO THE NOTE
MORTGAGES VIOLATE THE PROVISIONS OF SECTIONS 6.12(A) AND (B), BORROWER SHALL
IMMEDIATELY REDEEM THE PLEDGED NOTE(S) FOR WHICH THE PROPERTY IS SECURITY AT
NINETY (90) PERCENT OF ITS OUTSTANDING PRINCIPAL BALANCE.
(E) THE OBLIGATIONS OF BORROWER AND THE
RIGHTS OF FOOTHILL WITH RESPECT TO HAZARDOUS MATERIALS ARE IN ADDITION TO
AND NOT IN SUBSTITUTION OF THE OBLIGATIONS OF BORROWER AND THE RIGHTS OF
FOOTHILL UNDER ALL APPLICABLE, FEDERAL, STATE AND LOCAL LAWS, REGULATIONS
AND ORDINANCES RELATING TO HEALTH AND SAFETY, AND PROTECTION OF THE
ENVIRONMENT. THE OBLIGATIONS OF BORROWER AND THE RIGHTS OF FOOTHILL,
NOTWITHSTANDING ANYTHING CONTAINED HEREIN OR IN ANY OTHER DOCUMENT OR
AGREEMENT WHICH MAY BE CONSTRUED TO THE CONTRARY, (I) SHALL NOT BE SUBJECT
TO ANY ANTIDEFICIENCY LAWS OR PROTECTIONS, IF ANY, (II) SHALL SURVIVE (A) A
NON-JUDICIAL SALE, JUDICIAL SALE OR DEED OR OTHER TRANSACTION IN LIEU OF
SUCH SALE HEREUNDER, AND (B) THE REPAYMENT OF THE OBLIGATIONS. IN THE EVENT
BORROWER DOES NOT TIMELY PERFORM ANY OF ITS OBLIGATIONS WITH RESPECT TO
HAZARDOUS MATERIALS, FOOTHILL MAY PERFORM SUCH OBLIGATIONS, BUT IS NOT
OBLIGATED TO, AT THE EXPENSE OF BORROWER AND SUCH EXPENSE SHALL BE ADDED TO
THE OBLIGATIONS.
6.13 SALE OF PORTIONS OF THE REAL PROPERTY. AT THE
END OF EACH OF BORROWER'S FISCAL QUARTERS (FOR THE SIX MONTH PERIOD
PRECEDING SAME), BORROWER SHALL HAVE SOLD TO QUALIFIED BUYERS SUFFICIENT
LOTS FOR EACH INDIVIDUAL PROJECT WITHIN THE REAL PROPERTY, SUCH THAT THE
PROCEEDS DURING THE PRECEDING SIX MONTH PERIOD WOULD, WHEN EXTENDED OVER A
THREE YEAR PERIOD, PAY OFF THE "PRO RATA SHARE" OF ALL LAND INVENTORY
ADVANCES. AS USED IN THIS SECTION 6.13, "PRO RATA SHARE" MEANS A SUM
ATTRIBUTABLE TO EACH INDIVIDUAL PROJECT WHICH COMPRISES THE REAL PROPERTY
WHICH IS COMPUTED BY MULTIPLYING ALL REAL PROPERTY BY A FRACTION, THE
NUMERATOR OF WHICH IS THE VALUE OF EACH PROJECT (COMPUTED IN ACCORDANCE WITH
THE LAND INVENTORY BORROWING BASE FORMULA) AND THE DENOMINATOR OF WHICH IS
THE AGGREGATE VALUE OF THE REAL PROPERTY (COMPUTED IN ACCORDANCE WITH THE
LAND INVENTORY BORROWING BASE FORMULA).
6.14 ASSIGNMENTS OF NOTE MORTGAGES.
(A) WITHIN THIRTY (30) DAYS OF FOOTHILL'S
RECEIPT OF PLEDGED NOTES, BORROWER SHALL PROVIDE FOOTHILL WITH CONFORMED
COPIES OF ALL ASSIGNMENTS OF NOTE MORTGAGES, REFLECTING THE FILING AND
RECORDING INFORMATION THEREON.
(B) WITHIN SIXTY (60) DAYS OF FOOTHILL'S
RECEIPT OF PLEDGED NOTES, BORROWER SHALL DELIVER TO FOOTHILL THE ORIGINAL
POLICIES OF TITLE INSURANCE INSURING THE NOTE MORTGAGES FOR THE PLEDGED
NOTES, AND, WHEN THE PRINCIPAL BALANCE ON ANY
<PAGE> 40
PLEDGED NOTE IS $50,000 OR GREATER, A CLTA FORM 104 ENDORSEMENT, IN FORM AND
SUBSTANCE SATISFACTORY TO FOOTHILL.
7. NEGATIVE COVENANTS.
BORROWER COVENANTS AND AGREES THAT, SO LONG AS ANY
CREDIT HEREUNDER SHALL BE AVAILABLE AND UNTIL FULL AND FINAL PAYMENT OF THE
OBLIGATIONS, BORROWER WILL NOT DO ANY OF THE FOLLOWING WITHOUT FOOTHILL'S
PRIOR WRITTEN CONSENT:
7.1 INTENTIONALLY DELETED.
7.2 LIENS. CREATE, INCUR, ASSUME, OR PERMIT TO
EXIST, DIRECTLY OR INDIRECTLY, ANY LIEN ON OR WITH RESPECT TO ANY OF THE
COLLATERAL, WHETHER NOW OWNED OR HEREAFTER ACQUIRED, OR ANY INCOME OR
PROFITS THEREFROM, EXCEPT FOR PERMITTED LIENS.
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES. OTHER
THAN IN THE ORDINARY COURSE OF BORROWER'S BUSINESS, ENTER INTO ANY
ACQUISITION, MERGER, CONSOLIDATION, REORGANIZATION, OR RECAPITALIZATION, OR
RECLASSIFY ITS CAPITAL STOCK, OR LIQUIDATE, WIND UP, OR DISSOLVE ITSELF (OR
SUFFER ANY LIQUIDATION OR DISSOLUTION), OR CONVEY, SELL, ASSIGN, LEASE,
TRANSFER, OR OTHERWISE DISPOSE OF, IN ONE TRANSACTION OR A SERIES OF
TRANSACTIONS, ALL OR ANY SUBSTANTIAL PART OF ITS BUSINESS, PROPERTY, OR
ASSETS, WHETHER NOW OWNED OR HEREAFTER ACQUIRED, OR ACQUIRE BY PURCHASE OR
OTHERWISE ALL OR SUBSTANTIALLY ALL OF THE PROPERTIES, ASSETS, STOCK, OR
OTHER EVIDENCE OF BENEFICIAL OWNERSHIP OF ANY PERSON.
7.4 EXTRAORDINARY TRANSACTIONS AND DISPOSAL OF
ASSETS. ENTER INTO ANY TRANSACTION NOT IN THE ORDINARY AND USUAL COURSE OF
BORROWER'S BUSINESS, INCLUDING THE SALE, LEASE, OR OTHER DISPOSITION OF,
MOVING, RELOCATION, OR TRANSFER, WHETHER BY SALE OR OTHERWISE, OF ANY OF
BORROWER'S PROPERTIES, ASSETS.
7.5 CHANGE NAME. WITHOUT THIRTY (30) DAYS PRIOR
WRITTEN NOTICE TO FOOTHILL, CHANGE BORROWER'S NAME, FEIN, BUSINESS
STRUCTURE, OR IDENTITY, OR ADD ANY NEW FICTITIOUS NAME.
7.6 INTENTIONALLY DELETED.
7.7 RESTRUCTURE. WITHOUT THIRTY (30) DAYS PRIOR
WRITTEN NOTICE TO FOOTHILL, MAKE ANY CHANGE IN BORROWER'S FINANCIAL
STRUCTURE, THE PRINCIPAL NATURE OF BORROWER'S BUSINESS OPERATIONS, OR THE
DATE OF ITS FISCAL YEAR.
7.8 INTENTIONALLY DELETED.
7.9 CHANGE OF CONTROL. CAUSE, PERMIT, OR SUFFER,
DIRECTLY OR INDIRECTLY, ANY CHANGE OF CONTROL.
<PAGE> 41
7.10 DISTRIBUTIONS. MAKE ANY DISTRIBUTION OR
DECLARE OR PAY ANY DIVIDENDS (IN CASH OR IN STOCK) ON, OR PURCHASE, ACQUIRE,
REDEEM, OR RETIRE ANY OF BORROWER'S CAPITAL STOCK, OF ANY CLASS, WHETHER NOW
OR HEREAFTER OUTSTANDING, IN ANNUAL AMOUNTS IN EXCESS OF FIFTY (50) PERCENT
OF THE THEN CURRENT EARNINGS.
7.11 ACCOUNTING METHODS. MODIFY OR CHANGE ITS
METHOD OF ACCOUNTING OR ENTER INTO, MODIFY, OR TERMINATE ANY AGREEMENT
CURRENTLY EXISTING, OR AT ANY TIME HEREAFTER ENTERED INTO WITH ANY THIRD
PARTY ACCOUNTING FIRM OR SERVICE BUREAU FOR THE PREPARATION OR STORAGE OF
BORROWER'S ACCOUNTING RECORDS WITHOUT SAID ACCOUNTING FIRM OR SERVICE BUREAU
AGREEING TO PROVIDE FOOTHILL INFORMATION REGARDING THE COLLATERAL OR
BORROWER'S FINANCIAL CONDITION. BORROWER WAIVES THE RIGHT TO ASSERT A
CONFIDENTIAL RELATIONSHIP, IF ANY, IT MAY HAVE WITH ANY ACCOUNTING FIRM OR
SERVICE BUREAU IN CONNECTION WITH ANY INFORMATION REQUESTED BY FOOTHILL
PURSUANT TO OR IN ACCORDANCE WITH THIS AGREEMENT, AND AGREES THAT FOOTHILL
MAY CONTACT DIRECTLY ANY SUCH ACCOUNTING FIRM OR SERVICE BUREAU IN ORDER TO
OBTAIN SUCH INFORMATION.
7.12 INVESTMENTS. EXCEPT IN THE ORDINARY COURSE OF
BORROWER'S BUSINESS, DIRECTLY OR INDIRECTLY MAKE OR ACQUIRE ANY BENEFICIAL
INTEREST IN (INCLUDING STOCK, PARTNERSHIP INTEREST, OR OTHER SECURITIES OF),
OR MAKE ANY LOAN, ADVANCE, OR CAPITAL CONTRIBUTION TO, ANY PERSON.
7.13 TRANSACTIONS WITH AFFILIATES. DIRECTLY OR
INDIRECTLY ENTER INTO OR PERMIT TO EXIST ANY MATERIAL TRANSACTION WITH ANY
AFFILIATE OF BORROWER EXCEPT FOR TRANSACTIONS THAT ARE IN THE ORDINARY
COURSE OF BORROWER'S BUSINESS, UPON FAIR AND REASONABLE TERMS, THAT ARE
FULLY DISCLOSED TO FOOTHILL, AND THAT ARE NO LESS FAVORABLE TO BORROWER THAN
WOULD BE OBTAINED IN ARM'S LENGTH TRANSACTION WITH A NON-AFFILIATE.
7.14 SUSPENSION. SUSPEND OR GO OUT OF A
SUBSTANTIAL PORTION OF ITS BUSINESS.
7.15 INTENTIONALLY DELETED.
7.16 USE OF PROCEEDS. USE THE PROCEEDS OF THE
ADVANCES MADE HEREUNDER FOR ANY PURPOSE OTHER THAN: (A) TO PAY TRANSACTIONAL
COSTS, FEES AND EXPENSES INCURRED IN CONNECTION WITH THIS AGREEMENT; AND (B)
THEREAFTER, CONSISTENT WITH THE TERMS AND CONDITIONS HEREOF, FOR ITS LAWFUL
AND PERMITTED CORPORATE PURPOSES.
7.17 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE.
BORROWER WILL NOT, WITHOUT THIRTY (30) DAYS PRIOR WRITTEN NOTIFICATION TO
FOOTHILL, RELOCATE ITS CHIEF EXECUTIVE OFFICE TO A NEW LOCATION AND SO LONG
AS, AT THE TIME OF SUCH WRITTEN NOTIFICATION, BORROWER PROVIDES ANY
FINANCING STATEMENTS OR FIXTURE FILINGS NECESSARY TO PERFECT AND CONTINUE
PERFECTED FOOTHILL'S SECURITY INTERESTS AND ALSO PROVIDES TO FOOTHILL A
LANDLORD'S WAIVER IN FORM AND SUBSTANCE SATISFACTORY TO FOOTHILL.
<PAGE> 42
7.18 USE OF FOOTHILL'S NAME. USE FOOTHILL'S NAME
OR THE NAME OF ANY PERSON, FIRM, CORPORATION OR OTHER ENTITY CONTROLLING,
CONTROLLED BY, OR UNDER COMMON CONTROL WITH FOOTHILL IN CONNECTION WITH ANY
OF BORROWER'S ACTIVITIES, EXCEPT AS SUCH MAY BE REQUIRED BY APPLICABLE LAW
OR REGULATION OF ANY GOVERNMENT OR BODY.
8. EVENTS OF DEFAULT.
ANY ONE OR MORE OF THE FOLLOWING EVENTS SHALL
CONSTITUTE AN EVENT OF DEFAULT (EACH, AN "EVENT OF DEFAULT") UNDER THIS
AGREEMENT:
8.1 IF BORROWER FAILS TO PAY WITHIN FIVE (5)
BUSINESS DAYS WHEN DUE AND PAYABLE OR WHEN DECLARED DUE AND PAYABLE, ANY
PORTION OF THE OBLIGATIONS (WHETHER OF PRINCIPAL, INTEREST (INCLUDING ANY
INTEREST WHICH, BUT FOR THE PROVISIONS OF THE BANKRUPTCY CODE, WOULD HAVE
ACCRUED ON SUCH AMOUNTS), FEES AND CHARGES DUE FOOTHILL, REIMBURSEMENT OF
FOOTHILL EXPENSES, OR OTHER AMOUNTS CONSTITUTING OBLIGATIONS);
8.2 IF BORROWER FAILS OR NEGLECTS TO PERFORM,
KEEP, OR OBSERVE ANY TERM, PROVISION, CONDITION, COVENANT, OR AGREEMENT
CONTAINED IN THIS AGREEMENT, IN ANY OF THE LOAN DOCUMENTS, OR IN ANY OTHER
PRESENT OR FUTURE AGREEMENT BETWEEN BORROWER AND FOOTHILL AND THE SAME SHALL
CONTINUE FOR A PERIOD OF FIFTEEN (15) DAYS;
8.3 IF BORROWER FAILS OR NEGLECTS TO PERFORM, KEEP
OR OBSERVE ANY TERMS, PROVISIONS, CONDITIONS, OR AGREEMENTS CONTAINED IN THE
MORTGAGES AND THE SAME SHALL CONTINUE FOR A PERIOD OF FIFTEEN (15) DAYS;
8.4 IF THERE IS A MATERIAL IMPAIRMENT OF THE
PROSPECT OF REPAYMENT OF ANY PORTION OF THE OBLIGATIONS OWING TO FOOTHILL OR
A MATERIAL IMPAIRMENT OF THE VALUE OR PRIORITY OF FOOTHILL'S SECURITY
INTERESTS IN THE COLLATERAL;
8.5 IF ANY MATERIAL PORTION OF BORROWER'S
PROPERTIES OR ASSETS IS ATTACHED, SEIZED, SUBJECTED TO A WRIT OR DISTRESS
WARRANT, OR IS LEVIED UPON, OR COMES INTO THE POSSESSION OF ANY THIRD PERSON
AND ANY SUCH ACTION IS NOT SATISFACTORILY STAYED, VACATED OR SET ASIDE
WITHIN SIXTY (60) DAYS OF SUCH ACTION;
8.6 IF AN INSOLVENCY PROCEEDING IS COMMENCED BY
BORROWER;
8.7 IF AN INSOLVENCY PROCEEDING IS COMMENCED
AGAINST BORROWER AND ANY OF THE FOLLOWING EVENTS OCCUR: (A) BORROWER
CONSENTS TO THE INSTITUTION OF THE INSOLVENCY PROCEEDING AGAINST IT; (B) THE
PETITION COMMENCING THE INSOLVENCY PROCEEDING IS NOT TIMELY CONTROVERTED;
(C) THE PETITION COMMENCING THE INSOLVENCY PROCEEDING IS NOT DISMISSED
WITHIN SIXTY (60) CALENDAR DAYS OF THE DATE OF THE FILING THEREOF; PROVIDED,
HOWEVER, THAT, DURING THE PENDENCY OF SUCH PERIOD, FOOTHILL SHALL BE
RELIEVED OF ITS OBLIGA TION TO MAKE ADDITIONAL ADVANCES HEREUNDER; (D) AN
INTERIM TRUSTEE IS APPOINTED TO TAKE POSSESSION OF ALL OR A SUBSTANTIAL
PORTION OF THE PROPERTIES OR ASSETS OF, OR TO OPERATE ALL OR ANY SUBSTANTIAL
PORTION OF THE BUSINESS OF, BORROWERAND SUCH APPOINTMENT IS NOT
<PAGE> 43
VACATED WITHIN SIXTY (60) DAYS AFTER SUCH APPOINTMENT; OR (E) AN ORDER FOR
RELIEF SHALL HAVE BEEN ISSUED OR ENTERED THEREIN;
8.8 IF BORROWER IS ENJOINED, RESTRAINED, OR IN ANY
WAY PREVENTED BY COURT ORDER FROM CONTINUING TO CONDUCT ALL OR ANY MATERIAL
PART OF ITS BUSINESS AFFAIRS;
8.9 IF A NOTICE OF LIEN, LEVY, OR ASSESSMENT IS
FILED OF RECORD WITH RESPECT TO ANY OF BORROWER'S PROPERTIES OR ASSETS BY
THE UNITED STATES GOVERNMENT, OR ANY DEPARTMENT, AGENCY, OR INSTRUMENTALITY
THEREOF, OR BY ANY STATE, COUNTY, MUNICIPAL, OR GOVERNMENTAL AGENCY, OR IF
ANY TAXES OR DEBTS OWING AT ANY TIME HEREAFTER TO ANY ONE OR MORE OF SUCH
ENTITIES BECOMES A LIEN, WHETHER CHOATE OR OTHERWISE, UPON ANY OF BORROWER'S
PROPERTIES OR ASSETS; PROVIDED, THE SAME IS NOT PAID ON THE PAYMENT DATE
THEREOF OR BONDED AGAINST AND DILIGENTLY CONTESTED IN GOOD FAITH BY
APPROPRIATE PROCEEDINGS;
8.10 IF A JUDGMENT OR OTHER CLAIM BECOMES A LIEN
OR ENCUMBRANCE UPON ANY MATERIAL PORTION OF BORROWER'S PROPERTIES OR ASSETS;
PROVIDED, THE SAME IS NOT PAID ON THE PAYMENT DATE THEREOF OR BONDED AGAINST
AND DILIGENTLY CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS;
8.11 IF THERE IS A DEFAULT IN ANY AGREEMENT
CONCERNING MORE THAN FIVE HUNDRED THOUSAND DOLLARS ($500,000) TO WHICH
BORROWER IS A PARTY WITH ONE OR MORE THIRD PERSONS RESULTING IN A RIGHT BY
SUCH THIRD PERSONS, TO ACCELERATE THE MATURITY OF BORROWER'S OBLIGATIONS
THEREUNDER AND THE SAME IS NOT WAIVED WITHIN FIFTEEN (15) DAYS OF THE
EXPIRATION OF APPLICABLE CURE PERIODS, IF ANY;
8.12 IF BORROWER MAKES ANY MATERIAL PAYMENT ON
ACCOUNT OF INDEBTEDNESS THAT HAS BEEN CONTRACTUALLY SUBORDINATED IN RIGHT OF
PAYMENT TO THE PAYMENT OF THE OBLIGATIONS, EXCEPT TO THE EXTENT SUCH PAYMENT
IS PERMITTED BY THE TERMS OF THE SUBORDINATION PROVISIONS APPLICABLE TO SUCH
INDEBTEDNESS;
8.13 IF ANY MATERIAL MISSTATEMENT OR
MISREPRESENTATION EXISTS NOW OR HEREAFTER IN ANY WARRANTY, REPRESENTATION,
STATEMENT, OR REPORT MADE TO FOOTHILL BY BORROWER OR ANY OFFICER, EMPLOYEE,
AGENT, OR DIRECTOR OF BORROWER, OR IF ANY SUCH WARRANTY OR REPRESENTATION IS
WITHDRAWN;
8.14 IF THE OBLIGATION OF ANY GUARANTOR OR OTHER
THIRD PERSON UNDER ANY LOAN DOCUMENT IS LIMITED IN ANY MATERIAL RESPECT OR
TERMINATED BY OPERATION OF LAW, OR TERMINATED OR PURPORTED TO BE TERMINATED
BY THE GUARANTOR OR OTHER THIRD PERSON THEREUNDER, OR ANY SUCH GUARANTOR OR
OTHER THIRD PERSON BECOMES THE SUBJECT OF AN INSOLVENCY PROCEEDING AND THE
PETITION COMMENCING THE SAME IS NOT DISMISSED WITHIN SIXTY (60) DAYS OF ITS
FILING; OR
<PAGE> 44
8.15 (A) WITH RESPECT TO ANY PLAN, THE OCCURRENCE
OF ANY OF THE FOLLOWING WHICH COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT ON THE FINANCIAL CONDITION OF BORROWER: (I) THE
VIOLATION OF ANY OF THE PROVISIONS OF ERISA; (II) THE LOSS BY A PLAN
INTENDED TO BE A QUALIFIED PLAN OF ITS QUALIFICATION UNDER SECTION 401(A) OF
THE IRC; (III) THE INCURRENCE OF LIABILITY UNDER TITLE IV OF ERISA; (IV) A
FAILURE TO MAKE FULL PAYMENT WHEN DUE OF ALL AMOUNTS WHICH, UNDER THE
PROVISIONS OF ANY PLAN OR APPLICABLE LAW, BORROWER OR ANY ERISA AFFILIATE IS
REQUIRED TO MAKE; (V) THE FILING OF A NOTICE OF INTENT TO TERMINATE A PLAN
UNDER SECTIONS 4041 OR 4041A OF ERISA; (VI) A COMPLETE OR PARTIAL WITHDRAWAL
OF BORROWER OR AN ERISA AFFILIATE FROM ANY PLAN; (VII) THE RECEIPT OF A
NOTICE BY THE PLAN ADMINISTRATOR OF A PLAN THAT THE PBGC HAS INSTITUTED
PROCEEDINGS TO TERMINATE SUCH PLAN OR APPOINT A TRUSTEE TO ADMINISTER SUCH
PLAN; (VIII) A COMMENCEMENT OR INCREASE OF CONTRIBUTIONS TO, OR THE ADOPTION
OF OR THE AMENDMENT OF, A PLAN; AND (IX) THE ASSESSMENT AGAINST BORROWER OR
ANY ERISA AFFILIATE OF A TAX UNDER SECTION 4980B OF THE IRC.
(B) THE UNFUNDED BENEFIT LIABILITY OF ALL OF
THE PLANS OF BORROWER AND ITS ERISA AFFILIATES SHALL, IN THE AGGREGATE,
EXCEED $15,000.
8.16 (A) IF THERE SHALL OCCUR DURING ANY
CONSECUTIVE TWELVE MONTH PERIOD, ONE OR MORE UNINSURED LOSSES, THEFTS,
DAMAGE OR DESTRUCTION OF THE REAL PROPERTY, OR ANY PART THEREOF, HAVING AN
AGGREGATE VALUE IN EXCESS OF THREE MILLION DOLLARS ($3,000,000); OR
(B) IF AN EVENT OF DEFAULT SHALL OCCUR UNDER ANY
MORTGAGE ON THE REAL PROPERTY, IF ANY.
DURING ANY PERIOD IN WHICH THERE IS A DEFAULT
(INCLUDING DURING THE GRACE PERIODS SET FORTH ABOVE), FOOTHILL SHALL HAVE NO
OBLIGATION TO ADVANCE FUNDS TO BORROWER UNTIL SUCH TIME AS ALL DEFAULTS ARE
CURED.
9. FOOTHILL'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. IN ADDITION TO THE
REMEDIES SET FORTH IN THE MORTGAGE, UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT FOOTHILL MAY, AT ITS ELECTION, WITHOUT
NOTICE OF ITS ELECTION AND WITHOUT DEMAND, DO ANY ONE OR MORE OF THE
FOLLOWING, ALL OF WHICH ARE AUTHORIZED BY BORROWER:
(A) DECLARE ALL OBLIGATIONS, WHETHER
EVIDENCED BY THIS AGREEMENT, BY ANY OF THE OTHER LOAN DOCUMENTS, OR
OTHERWISE, IMMEDIATELY DUE AND PAYABLE;
(B) CEASE ADVANCING MONEY OR EXTENDING CREDIT
TO OR FOR THE BENEFIT OF BORROWER UNDER THIS AGREEMENT, UNDER ANY OF THE
LOAN DOCUMENTS, OR UNDER ANY OTHER AGREEMENT BETWEEN BORROWER AND FOOTHILL;
<PAGE> 45
(C) TERMINATE THIS AGREEMENT AND ANY OF THE
OTHER LOAN DOCUMENTS AS TO ANY FUTURE LIABILITY OR OBLIGATION OF FOOTHILL,
BUT WITHOUT AFFECTING FOOTHILL'S RIGHTS AND SECURITY INTERESTS IN THE
COLLATERAL AND WITHOUT AFFECTING THE OBLIGATIONS;
(D) WITHOUT NOTICE TO OR DEMAND UPON BORROWER
OR ANY GUARANTOR, MAKE SUCH PAYMENTS AND DO SUCH ACTS AS FOOTHILL CONSIDERS
NECESSARY OR REASONABLE TO PROTECT ITS SECURITY INTERESTS IN THE COLLATERAL.
BORROWER AUTHORIZES FOOTHILL TO PAY, PURCHASE, CONTEST, OR COMPROMISE ANY
ENCUMBRANCE, CHARGE, OR LIEN THAT IN FOOTHILL'S DETERMINATION APPEARS TO
CONFLICT WITH ITS SECURITY INTERESTS AND TO PAY ALL EXPENSES INCURRED IN
CONNECTION THEREWITH;
(E) WITHOUT NOTICE TO BORROWER (SUCH NOTICE
BEING EXPRESSLY WAIVED), AND WITHOUT CONSTITUTING A RETENTION OF ANY
COLLATERAL IN SATISFACTION OF AN OBLIGATION (WITHIN THE MEANING OF SECTION
9505 OF THE CODE), SET OFF AND APPLY TO THE OBLIGATIONS ANY AND ALL (I)
BALANCES AND DEPOSITS OF BORROWER HELD BY FOOTHILL, EXCEPT THOSE SENT AND
RECEIVED IN ERROR (INCLUDING ANY AMOUNTS RECEIVED IN THE LOCK BOXES), OR
(II) INDEBTEDNESS AT ANY TIME OWING TO OR FOR THE CREDIT OR THE ACCOUNT OF
BORROWER HELD BY FOOTHILL;
(F) HOLD, AS CASH COLLATERAL, ANY AND ALL
BALANCES AND DEPOSITS OF BORROWER HELD BY FOOTHILL, EXCEPT THAT SENT AND
RECEIVED IN ERROR, AND ANY AMOUNTS RECEIVED IN THE LOCK BOXES, TO SECURE THE
FULL AND FINAL REPAYMENT OF ALL OF THE OBLIGATIONS;
(G) SHIP, RECLAIM, RECOVER, STORE, FINISH,
MAINTAIN, REPAIR, PREPARE FOR SALE, ADVERTISE FOR SALE, AND SELL (IN THE
MANNER PROVIDED FOR HEREIN) THE COLLATERAL. FOOTHILL IS HEREBY GRANTED A
LICENSE OR OTHER RIGHT TO USE, WITHOUT CHARGE, BORROWER'S LABELS, PATENTS,
COPYRIGHTS, RIGHTS OF USE OF ANY NAME, TRADE SECRETS, TRADE NAMES,
TRADEMARKS, SERVICE MARKS, AND ADVERTISING MATTER, OR ANY PROPERTY OF A
SIMILAR NATURE, AS IT PERTAINS TO THE COLLATERAL, IN COMPLETING PRODUCTION
OF, ADVERTISING FOR SALE, AND SELLING ANY COLLATERAL AND BORROWER'S RIGHTS
UNDER ALL LICENSES AND ALL FRANCHISE AGREEMENTS SHALL INURE TO FOOTHILL'S
BENEFIT;
(H) SELL THE COLLATERAL AT EITHER A PUBLIC OR
PRIVATE SALE, OR BOTH, BY WAY OF ONE OR MORE CONTRACTS OR TRANSACTIONS, FOR
CASH OR ON TERMS, IN SUCH MANNER AND AT SUCH PLACES (INCLUDING BORROWER'S
PREMISES) AS FOOTHILL DETERMINES IS COMMERCIALLY REASONABLE. IT IS NOT
NECESSARY THAT THE COLLATERAL BE PRESENT AT ANY SUCH SALE;
(I) FOOTHILL SHALL GIVE NOTICE OF THE
DISPOSITION OF THE COLLATERAL AS FOLLOWS:
<PAGE> 46
(1) FOOTHILL SHALL GIVE BORROWER AND EACH
HOLDER OF A SECURITY INTEREST IN THE COLLATERAL WHO HAS FILED WITH FOOTHILL
A WRITTEN REQUEST FOR NOTICE, A NOTICE IN WRITING OF THE TIME AND PLACE OF
PUBLIC SALE, OR, IF THE SALE IS A PRIVATE SALE OR SOME OTHER DISPOSITION
OTHER THAN A PUBLIC SALE IS TO BE MADE OF THE COLLATERAL, THEN THE TIME ON
OR AFTER WHICH THE PRIVATE SALE OR OTHER DISPOSITION IS TO BE MADE;
(2) THE NOTICE SHALL BE PERSONALLY
DELIVERED OR MAILED, POSTAGE PREPAID, TO BORROWER AS PROVIDED IN SECTION 12,
AT LEAST TEN (10) BUSINESS DAYS BEFORE THE DATE FIXED FOR THE SALE, OR AT
LEAST TEN (10) BUSINESS DAYS BEFORE THE DATE ON OR AFTER WHICH THE PRIVATE
SALE OR OTHER DISPOSITION IS TO BE MADE; NO NOTICE NEEDS TO BE GIVEN PRIOR
TO THE DISPOSITION OF ANY PORTION OF THE COLLATERAL THAT IS PERISHABLE OR
THREATENS TO DECLINE SPEEDILY IN VALUE OR THAT IS OF A TYPE CUSTOMARILY SOLD
ON A RECOGNIZED MARKET. NOTICE TO PERSONS OTHER THAN BORROWER CLAIMING AN
INTEREST IN THE COLLATERAL SHALL BE SENT TO SUCH ADDRESSES AS THEY HAVE
FURNISHED TO FOOTHILL;
(3) IF THE SALE IS TO BE A PUBLIC SALE,
FOOTHILL ALSO SHALL GIVE NOTICE OF THE TIME AND PLACE BY PUBLISHING A NOTICE
ONE TIME AT LEAST TEN (10) BUSINESS DAYS BEFORE THE DATE OF THE SALE IN A
NEWSPAPER OF GENERAL CIRCULATION IN THE COUNTY IN WHICH THE SALE IS TO BE
HELD;
(J) FOOTHILL MAY CREDIT BID AND PURCHASE AT ANY
PUBLIC SALE;
AND
(K) ANY DEFICIENCY THAT EXISTS AFTER DISPOSITION
OF THE COLLATERAL AS PROVIDED ABOVE WILL BE PAID IMMEDIATELY BY BORROWER.
ANY EXCESS WILL BE RETURNED, WITHOUT INTEREST AND SUBJECT TO THE RIGHTS OF
THIRD PERSONS, BY FOOTHILL TO BORROWER.
9.2 REMEDIES CUMULATIVE. FOOTHILL'S RIGHTS AND
REMEDIES UNDER THIS AGREEMENT, THE LOAN DOCUMENTS, AND ALL OTHER AGREEMENTS
SHALL BE CUMULATIVE. FOOTHILL SHALL HAVE ALL OTHER RIGHTS AND REMEDIES NOT
INCONSISTENT HEREWITH AS PROVIDED UNDER THE CODE, BY LAW, OR IN EQUITY. NO
EXERCISE BY FOOTHILL OF ONE RIGHT OR REMEDY SHALL BE DEEMED AN ELECTION, AND
NO WAIVER BY FOOTHILL OF ANY EVENT OF DEFAULT SHALL BE DEEMED A CONTINUING
WAIVER. NO DELAY BY FOOTHILL SHALL CONSTITUTE A WAIVER, ELECTION, OR
ACQUIESCENCE BY IT.
9.3 FORECLOSURE NOT A DISCHARGE. FORECLOSURE SHALL NOT
OPERATE AS A DISCHARGE TO BORROWER'S OBLIGATIONS TO FOOTHILL AS TO HAZARDOUS
MATERIALS AND THE INDEMNITY PROVISIONS IN SECTION 11 HEREOF; AND IN THE
EVENT BORROWER TENDERS A DEED IN LIEU OF FORECLOSURE FOR ALL OR PART OF THE
REAL PROPERTY, BORROWER SHALL DELIVER SUCH PROPERTY TO FOOTHILL (OR ITS
DESIGNEE) FREE OF ANY AND ALL HAZARDOUS MATERIALS. THE INDEMNITY PROVISIONS
IN SECTION 11 HEREOF SHALL NOT BE DISCHARGED OR AFFECTED IN ANY WAY BY
FORECLOSURE OR BY FOOTHILL'S ACCEPTANCE OF A DEED IN LIEU THEREOF, AND THE
SAME SHALL CONTINUE FOR A PERIOD EQUAL TO THE LONGEST LIVING CHILD BORN IN
LOS ANGELES COUNTY ON JANUARY 1, 1993, PLUS TWENTY-ONE (21) YEARS.
<PAGE> 47
10. TAXES AND EXPENSES REGARDING THE COLLATERAL.
IF BORROWER FAILS TO PAY ANY MONIES (WHETHER
TAXES, RENTS, ASSESSMENTS, INSURANCE PREMIUMS, OR OTHERWISE) DUE TO THIRD
PERSONS, OR FAILS TO MAKE ANY DEPOSITS OR FURNISH ANY REQUIRED PROOF OF
PAYMENT OR DEPOSIT, ALL AS REQUIRED UNDER THE TERMS OF THIS AGREEMENT, THEN,
TO THE EXTENT THAT FOOTHILL DETERMINES THAT SUCH FAILURE BY BORROWER COULD
HAVE A MATERIAL ADVERSE EFFECT ON FOOTHILL'S INTERESTS IN THE COLLATERAL, IN
ITS DISCRETION AND WITHOUT PRIOR NOTICE TO BORROWER, FOOTHILL MAY DO ANY OR
ALL OF THE FOLLOWING: (A) MAKE PAYMENT OF THE SAME OR ANY PART THEREOF; (B)
SET UP SUCH RESERVES IN BORROWER'S LOAN ACCOUNT AS FOOTHILL DEEMS NECESSARY
TO PROTECT FOOTHILL FROM THE EXPOSURE CREATED BY SUCH FAILURE; OR (C) OBTAIN
AND MAINTAIN INSURANCE POLICIES OF THE TYPE DESCRIBED IN SECTION 6.7, AND
TAKE ANY ACTION WITH RESPECT TO SUCH POLICIES AS FOOTHILL DEEMS PRUDENT. ANY
SUCH AMOUNTS PAID BY FOOTHILL SHALL CONSTITUTE FOOTHILL EXPENSES. ANY SUCH
PAYMENTS MADE BY FOOTHILL SHALL NOT CONSTITUTE AN AGREEMENT BY FOOTHILL TO
MAKE SIMILAR PAYMENTS IN THE FUTURE OR A WAIVER BY FOOTHILL OF ANY EVENT OF
DEFAULT UNDER THIS AGREEMENT. FOOTHILL NEED NOT INQUIRE AS TO, OR CONTEST
THE VALIDITY OF, ANY SUCH EXPENSE, TAX, SECURITY INTEREST, ENCUMBRANCE, OR
LIEN AND THE RECEIPT OF THE USUAL OFFICIAL NOTICE FOR THE PAYMENT THEREOF
SHALL BE CONCLUSIVE EVIDENCE THAT THE SAME WAS VALIDLY DUE AND OWING.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. BORROWER WAIVES DEMAND,
PROTEST, NOTICE OF PROTEST, NOTICE OF DEFAULT OR DISHONOR, NOTICE OF PAYMENT
AND NONPAYMENT, NOTICE OF ANY DEFAULT, NONPAYMENT AT MATURITY, RELEASE,
COMPROMISE, SETTLEMENT, EXTENSION, OR RENEWAL OF ACCOUNTS, DOCUMENTS,
INSTRUMENTS, CHATTEL PAPER, AND GUARANTEES AT ANY TIME HELD BY FOOTHILL ON
WHICH BORROWER MAY IN ANY WAY BE LIABLE.
11.2 FOOTHILL'S LIABILITY FOR COLLATERAL. SO LONG
AS FOOTHILL COMPLIES WITH ITS OBLIGATIONS, IF ANY, UNDER SECTION 9207 OF THE
CODE, FOOTHILL SHALL NOT IN ANY WAY OR MANNER BE LIABLE OR RESPONSIBLE FOR:
(A) THE SAFEKEEPING OF THE COLLATERAL HELD BY CUSTODIAN; OR (B) ANY ACT OR
DEFAULT OF ANY CARRIER, WAREHOUSEMAN, BAILEE, FORWARDING AGENCY, OR OTHER
PERSON. ALL RISK OF LOSS, DAMAGE, OR DESTRUCTION OF THE COLLATERAL, OTHER
THAN THOSE CAUSED BY FOOTHILL'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
SHALL BE BORNE BY BORROWER.
11.3 INDEMNIFICATION. BORROWER AGREES TO DEFEND,
INDEMNIFY, SAVE, AND HOLD ANY INDEMNIFIED PERSON HARMLESS (UNLESS THE SAME
RESULTS FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED
PERSON) AGAINST: (A) ALL OBLIGATIONS, DEMANDS, CLAIMS, AND LIABILITIES
CLAIMED OR ASSERTED BY ANY OTHER PERSON ARISING OUT OF OR RELATING TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND
(B) ALL LOSSES, AND (C) ALL LOSSES (INCLUDING ATTORNEYS' FEES) SUFFERED OR
INCURRED BY ANY INDEMNIFIED PERSON, WHETHER AS A HOLDER OF SECURITY
INTERESTS IN REAL PROPERTY, AS MORTGAGEE IN POSSESSION, OR AS SUCCESSOR IN
INTEREST TO BORROWER AS OWNER OF THE REAL
<PAGE> 48
PROPERTY BY VIRTUE OF FORECLOSURE OR ACCEPTANCE OF A DEED OR OTHER
TRANSACTION IN LIEU OF FORECLOSURE, OR AFTER PARTIAL OR TOTAL RECONVEYANCE
OF THE MORTGAGE, ARISING FROM, IN RESPECT OF, AS A CONSEQUENCE OF (WHETHER
FORESEEABLE OR UNFORESEEABLE) OR IN CONNECTION WITH ANY SPILL OR WITH THE
PRESENT USE, STORAGE, DISPOSAL, GENERATION, TRANSPORTATION OR TREATMENT OF
ANY HAZARDOUS MATERIALS AT, UNDER OR RELATED TO THE REAL PROPERTY WHETHER OR
NOT ORIGINATING OR EMANATING FROM THE REAL PROPERTY. THIS PROVISION SHALL
SURVIVE THE TERMINATION OF THIS AGREEMENT.
12. NOTICES.
UNLESS OTHERWISE PROVIDED IN THIS AGREEMENT, ALL
NOTICES OR DEMANDS BY ANY PARTY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT SHALL BE IN WRITING AND (EXCEPT FOR FINANCIAL STATEMENTS AND OTHER
INFORMATIONAL DOCUMENTS WHICH MAY BE SENT BY FIRST-CLASS MAIL, POSTAGE
PREPAID) SHALL BE PERSONALLY DELIVERED OR SENT BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, OR BY PREPAID TELEX, TWX,
TELEFACSIMILE, OR TELEGRAM (WITH MESSENGER DELIVERY SPECIFIED) TO BORROWER
OR TO FOOTHILL, AS THE CASE MAY BE, AT ITS ADDRESS SET FORTH BELOW:
IF TO BORROWER: BLUEGREEN CORPORATION
5295 TOWN CENTER ROAD
SUITE 400
BOCA RATON, FLORIDA 33486
ATTN.: JOHN CHISTE
IF TO FOOTHILL: FOOTHILL CAPITAL CORPORATION
11111 SANTA MONICA BOULEVARD
SUITE 1500
LOS ANGELES, CALIFORNIA 90025-3333
ATTN.: BUSINESS FINANCE DIVISION
MANAGER
THE PARTIES HERETO MAY CHANGE THE ADDRESS AT WHICH
THEY ARE TO RECEIVE NOTICES HEREUNDER, BY NOTICE IN WRITING IN THE FOREGOING
MANNER GIVEN TO THE OTHER. ALL NOTICES OR DEMANDS SENT IN ACCORDANCE WITH
THIS SECTION 12, OTHER THAN NOTICES BY FOOTHILL IN CONNECTION WITH SECTIONS
9504 OR 9505 OF THE CODE, SHALL BE DEEMED RECEIVED ON THE EARLIER OF THE
DATE OF ACTUAL RECEIPT OR THREE (3) DAYS AFTER THE DEPOSIT THEREOF IN THE
MAIL. BORROWER ACKNOWLEDGES AND AGREES THAT NOTICES SENT BY FOOTHILL IN
CONNECTION WITH SECTIONS 9504 OR 9505 OF THE CODE SHALL BE DEEMED SENT WHEN
DEPOSITED IN THE MAIL OR TRANSMITTED BY TELEFACSIMILE OR OTHER SIMILAR
METHOD SET FORTH ABOVE.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
THE VALIDITY OF THIS AGREEMENT, ITS CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES
<PAGE> 49
HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF CALIFORNIA. THE PARTIES AGREE THAT ALL ACTIONS OR
PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF FOOTHILL, IN ANY
OTHER COURT IN WHICH FOOTHILL SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS
AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.
EACH OF BORROWER AND FOOTHILL WAIVES, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 13. BORROWER AND FOOTHILL HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWER AND FOOTHILL
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
14. DESTRUCTION OF BORROWER'S DOCUMENTS.
ALL DOCUMENTS, SCHEDULES, INVOICES, AGINGS, OR
OTHER PAPERS DELIVERED TO FOOTHILL MAY BE DESTROYED OR OTHERWISE DISPOSED OF
BY FOOTHILL FOUR (4) MONTHS AFTER THEY ARE DELIVERED TO OR RECEIVED BY
FOOTHILL, UNLESS BORROWER REQUESTS, IN WRITING, THE RETURN OF SAID
DOCUMENTS, SCHEDULES, OR OTHER PAPERS AND MAKES ARRANGEMENTS, AT BORROWER'S
EXPENSE, FOR THEIR RETURN. THE FOREGOING NOTWITHSTANDING, FOOTHILL SHALL NOT
DESTROY ANY OF THE PLEDGED NOTES. UPON SATISFACTION OF THE OBLIGATIONS,
FOOTHILL SHALL RETURN TO BORROWER ALL OF THE COLLATERAL THEN IN ITS OR
CUSTODIAN'S POSSESSION.
15. GENERAL PROVISIONS.
15.1 EFFECTIVENESS. THIS AGREEMENT SHALL BE
BINDING AND DEEMED EFFECTIVE WHEN EXECUTED BY BORROWER AND FOOTHILL.
15.2 SUCCESSORS AND ASSIGNS. THIS AGREEMENT SHALL
BIND AND INURE TO THE BENEFIT OF THE RESPECTIVE SUCCESSORS AND ASSIGNS OF
EACH OF THE PARTIES; PROVIDED, HOWEVER, THAT BORROWER MAY NOT ASSIGN THIS
AGREEMENT OR ANY RIGHTS OR DUTIES HEREUNDER
<PAGE> 50
WITHOUT FOOTHILL'S PRIOR WRITTEN CONSENT AND ANY PROHIBITED ASSIGNMENT SHALL
BE ABSOLUTELY VOID. NO CONSENT TO AN ASSIGNMENT BY FOOTHILL SHALL RELEASE
BORROWER FROM ITS OBLIGATIONS. FOOTHILL MAY ASSIGN THIS AGREEMENT AND ITS
RIGHTS AND DUTIES HEREUNDER AND NO CONSENT OR APPROVAL BY BORROWER IS
REQUIRED IN CONNECTION WITH ANY SUCH ASSIGNMENT; PROVIDED, HOWEVER, THAT
FOOTHILL SHALL BE RESPONSIBLE FOR ANY COSTS ASSOCIATED THEREWITH. FOOTHILL
RESERVES THE RIGHT TO SELL, ASSIGN, TRANSFER, NEGOTIATE, OR GRANT
PARTICIPATIONS IN ALL OR ANY PART OF, OR ANY INTEREST IN FOOTHILL'S RIGHTS
AND BENEFITS HEREUNDER. IN CONNECTION WITH ANY SUCH ASSIGNMENT OR
PARTICIPATION, FOOTHILL MAY DISCLOSE ALL DOCUMENTS AND INFORMATION WHICH
FOOTHILL NOW OR HEREAFTER MAY HAVE RELATING TO BORROWER OR BORROWER'S
BUSINESS. TO THE EXTENT THAT FOOTHILL ASSIGNS ITS RIGHTS AND OBLIGATIONS
HEREUNDER TO A THIRD PERSON, FOOTHILL SHALL THEREAFTER BE RELEASED FROM SUCH
ASSIGNED OBLIGATIONS TO BORROWER AND SUCH ASSIGNMENT SHALL EFFECT A NOVATION
BETWEEN BORROWER AND SUCH THIRD PERSON. SHOULD FOOTHILL ASSIGN ALL OF ITS
RIGHTS AND OBLIGATIONS HEREUNDER TO A THIRD PARTY, THEN FOOTHILL SHALL
REFUND A PRORATED PORTION OF THE CLOSING FEE SET FORTH IN SECTION 2.7(A),
PRORATED ON THE BASIS OF THE NUMBER OF DAYS REMAINING UNTIL THE SCHEDULED
END OF THIS AGREEMENT AS THE NUMERATOR AND THE TOTAL NUMBER OF DAYS FROM THE
EFFECTIVE DATE TO THE SCHEDULED END OF THIS AGREEMENT BEING THE DENOMINATOR,
WITH SUCH FRACTION BEING THE PORTION OF THE CLOSING FEE REFUNDED.
15.3 SECTION HEADINGS. HEADINGS AND NUMBERS HAVE
BEEN SET FORTH HEREIN FOR CONVENIENCE ONLY. UNLESS THE CONTRARY IS COMPELLED
BY THE CONTEXT, EVERYTHING CONTAINED IN EACH SECTION APPLIES EQUALLY TO THIS
ENTIRE AGREEMENT.
15.4 INTERPRETATION. NEITHER THIS AGREEMENT NOR
ANY UNCERTAINTY OR AMBIGUITY HEREIN SHALL BE CONSTRUED OR RESOLVED AGAINST
FOOTHILL OR BORROWER, WHETHER UNDER ANY RULE OF CONSTRUCTION OR OTHERWISE.
ON THE CONTRARY, THIS AGREEMENT HAS BEEN REVIEWED BY ALL PARTIES AND SHALL
BE CONSTRUED AND INTERPRETED ACCORDING TO THE ORDINARY MEANING OF THE WORDS
USED SO AS TO FAIRLY ACCOMPLISH THE PURPOSES AND INTENTIONS OF ALL PARTIES
HERETO.
15.5 SEVERABILITY OF PROVISIONS. EACH PROVISION OF
THIS AGREEMENT SHALL BE SEVERABLE FROM EVERY OTHER PROVISION OF THIS
AGREEMENT FOR THE PURPOSE OF DETERMINING THE LEGAL ENFORCEABILITY OF ANY
SPECIFIC PROVISION.
15.6 AMENDMENTS IN WRITING. THIS AGREEMENT CANNOT
BE CHANGED OR TERMINATED ORALLY. ALL PRIOR AGREEMENTS, UNDERSTANDINGS,
REPRESENTATIONS, WARRANTIES, AND NEGOTIATIONS, IF ANY, ARE MERGED INTO THIS
AGREEMENT.
15.7 COUNTERPARTS; TELEFACSIMILE EXECUTION. THIS
AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS AND BY DIFFERENT
PARTIES ON SEPARATE COUNTERPARTS, EACH OF WHICH, WHEN EXECUTED AND
DELIVERED, SHALL BE DEEMED TO BE AN ORIGINAL, AND ALL OF WHICH, WHEN TAKEN
TOGETHER, SHALL CONSTITUTE BUT ONE AND THE SAME AGREEMENT. DELIVERY OF AN
EXECUTED COUNTERPART OF THIS AGREEMENT BY TELEFACSIMILE SHALL BE EQUALLY AS
EFFECTIVE AS DELIVERY OF A MANUALLY EXECUTED COUNTERPART OF THIS AGREEMENT.
ANY PARTY DELIVERING AN EXECUTED COUNTERPART OF THIS AGREEMENT BY
TELEFACSIMILE ALSO
<PAGE> 51
SHALL DELIVER A MANUALLY EXECUTED COUNTERPART OF THIS AGREEMENT BUT THE
FAILURE TO DELIVER A MANUALLY EXECUTED COUNTERPART SHALL NOT AFFECT THE
VALIDITY, ENFORCEABILITY, AND BINDING EFFECT OF THIS AGREEMENT.
15.8 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. IF
THE INCURRENCE OR PAYMENT OF THE OBLIGATIONS BY BORROWER OR ANY GUARANTOR OF
THE OBLIGATIONS OR THE TRANSFER BY EITHER OR BOTH OF SUCH PARTIES TO
FOOTHILL OF ANY PROPERTY OF EITHER OR BOTH OF SUCH PARTIES SHOULD FOR ANY
REASON SUBSEQUENTLY BE DECLARED TO BE VOID OR VOIDABLE UNDER ANY STATE OR
FEDERAL LAW RELATING TO CREDITORS' RIGHTS, INCLUDING PROVISIONS OF THE
BANKRUPTCY CODE RELATING TO FRAUDULENT CONVEYANCES, PREFERENCES, AND OTHER
VOIDABLE OR RECOVERABLE PAYMENTS OF MONEY OR TRANSFERS OF PROPERTY
(COLLECTIVELY, A "VOIDABLE TRANSFER"), AND IF FOOTHILL IS REQUIRED TO REPAY
OR RESTORE, IN WHOLE OR IN PART, ANY SUCH VOIDABLE TRANSFER, OR ELECTS TO DO
SO UPON THE REASONABLE ADVICE OF ITS COUNSEL, THEN, AS TO ANY SUCH VOIDABLE
TRANSFER, OR THE AMOUNT THEREOF THAT FOOTHILL IS REQUIRED OR ELECTS TO REPAY
OR RESTORE, AND AS TO ALL REASONABLE COSTS, EXPENSES, AND ATTORNEYS FEES OF
FOOTHILL RELATED THERETO, THE LIABILITY OF BORROWER OR SUCH GUARANTOR
AUTOMATICALLY SHALL BE REVIVED, REINSTATED, AND RESTORED AND SHALL EXIST AS
THOUGH SUCH VOIDABLE TRANSFER HAD NEVER BEEN MADE.
15.9 TITLE POLICY ENDORSEMENTS. THE PROVISIONS OF
SECTIONS 4.3(A) AND 6.14(B) NOTWITHSTANDING, BORROWER SHALL HAVE THE RIGHT,
ON A PROJECT BY PROJECT BASIS, TO CHOOSE THE FOLLOWING ALTERNATIVE TO
PROVIDING THE CLTA FORM 104 ENDORSEMENTS CALLED FOR THEREIN. BORROWER MUST
MAKE SUCH ELECTION PRIOR TO ANY SINGLE RELEASE FOR SUCH PROJECT.
IN LIEU OF PROVIDING THE CLTA FORM 104 ENDORSEMENT
CONCURRENTLY WITH THE RELEASE, BORROWER MAY ELECT INSTEAD TO PROVIDE
CONTINUING QUARTERLY EVIDENCE, IN FORM AND SUBSTANCE SATISFACTORY TO
FOOTHILL, OF THE CONTINUED VALIDITY AND PRIORITY OF FOOTHILL'S LIEN ON THE
REMAINING PARCELS WITH SUCH PROJECT. THE FAILURE TO PROVIDE SUCH EVIDENCE,
OR SHOULD THERE BE AN IMPAIRMENT OF LIEN, SHALL CONSTITUTE AN EVENT OF
DEFAULT HEREUNDER.
15.10 INTEGRATION. THIS AGREEMENT, TOGETHER WITH
THE OTHER LOAN DOCUMENTS, REFLECTS THE ENTIRE UNDERSTANDING OF THE PARTIES
WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY AND SHALL NOT BE
CONTRADICTED OR QUALIFIED BY ANY OTHER AGREEMENT, ORAL OR WRITTEN, WHETHER
BEFORE OR AFTER THE DATE HEREOF.
<PAGE> 52
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS
AGREEMENT TO BE EXECUTED IN LOS ANGELES, CALIFORNIA.
"FOOTHILL"
OTHILL CAPITAL CORPORATION,
A CALIFORNIA CORPORATION
BY
-------------------------------------------
TITLE:
------------------------------------
"BORROWER"
BLUEGREEN CORPORATION, F/K/A PATTEN
CORPORATION, A MASSACHUSETTS CORPORATION
BY
-------------------------------------------
TITLE:
------------------------------------
<PAGE> 53
SCHEDULE P-1
PERMITTED LIENS
<PAGE> 54
SCHEDULE PN-A
-------------
PLEDGED A NOTES STANDARDS
1. FOOTHILL HAS A VALID, DIRECT AND PERFECTED FIRST
LIEN/SECURITY INTERESTS IN THE NOTE AND SECURITY THEREFORE AND AS A VALID
AND PERFECTED FIRST PRIORITY RIGHT TO PAYMENTS ARISING THEREUNDER.
2. THE MAKER OF SUCH A NOTE IS NOT A DIRECTOR, OFFICER,
THEIR AGENTS, EMPLOYEES OR CREDITORS, OR ANY RELATIVE OR AFFILIATE OF
BORROWER OR THE FOREGOING.
3. BORROWER HAS RECEIVED FROM THE PURCHASER A MINIMUM CASH
DOWN PAYMENT OF 10% OF THE TOTAL SALES PRICE, NO PART OF WHICH, TO
BORROWER'S KNOWLEDGE, HAD BEEN ADVANCED OR LOANED TO SUCH PURCHASER OR
BORROWER, DIRECTLY OR INDIRECTLY AND THE AVERAGE DOWN PAYMENT OF THE ENTIRE
PORTFOLIO OF PLEDGED NOTES MUST BE AT LEAST 20%.
4. THE NOTES MUST PROVIDE FOR CONSECUTIVE BI-WEEKLY OR
MONTHLY INSTALLMENTS OF PRINCIPAL AND INTEREST IN U.S. FUNDS OVER A TERM NOT
EXCEEDING ONE HUNDRED EIGHTY (180) MONTHS FROM THE DATE OF ITS EXECUTION;
PROVIDED, HOWEVER, THE AVERAGE REMAINING TERM OF THE ENTIRE PORTFOLIO OF
PLEDGED NOTES IS NO GREATER THAN ONE HUNDRED TWENTY MONTHS (120).
5. THE PLEDGED NOTES MUST PROVIDE FOR AN INTEREST RATE OF
AT LEAST EIGHT PERCENT (8%) PER ANNUM, IF FIXED, OR REFERENCE RATE PLUS TWO
PERCENT (2%) IF VARIABLE, PROVIDED, HOWEVER, THAT THE BLENDED RATE OF
INTEREST FOR THE ENTIRE PORTFOLIO OF PLEDGED NOTES SHALL NOT BE LESS THAN
THE REFERENCE RATE PLUS ONE POINT FIVE (1.5%).
6. NOTES GENERATED BY PURCHASERS OF REAL PROPERTY IN NEW
YORK, CONNECTICUT, RHODE ISLAND, VERMONT, NEW HAMPSHIRE, PENNSYLVANIA OR
MAINE WHICH PROVIDE FOR AN INTEREST RATE DURING THE FIRST TWO YEARS OF PRIME
PLUS TWO HUNDRED (200) BASIS POINTS, AND INTEREST THEREAFTER OF AT LEAST
PRIME PLUS THREE HUNDRED AND FORTY (340) BASIS POINTS WILL BE ACCEPTABLE, IF
ALL OTHER STANDARDS ARE MET.
7. FOOTHILL, IN ITS SOLE AND ABSOLUTE DISCRETION, MAY,
FROM TIME TO TIME, REQUIRE THAT THE INSTRUMENT IS AT LEAST THIRTY DAYS AGED
FROM THE DATE OF ITS EXECUTION, AND AT LEAST ONE MONTHLY INSTALLMENT PAYMENT
HAS BEEN MADE.
8. THE MAKER OF THE PLEDGED NOTE IS ACCEPTABLE TO FOOTHILL
FOR CREDIT PURPOSES IN ITS SOLE JUDGMENT; HAS OR WILL ACQUIRE MARKETABLE
TITLE TO A PURCHASE PARCEL FROM BORROWER; AND HAS NOT PURCHASED MORE THAN
FOUR PARCELS IN ANY PROJECT.
<PAGE> 55
9. NO NOTE WILL BE DELINQUENT MORE THAN THIRTY-ONE (31)
DAYS PAST ITS DUE DATE AT THE TIME OF THE ADVANCE.
10. THE NOTE AND THE MORTGAGE SECURING THE SAME ARE
SATISFACTORY TO FOOTHILL AND VALIDLY ENFORCEABLE IN ACCORDANCE WITH THEIR
TERMS; UPON THE OBLIGORS DEFAULT UNDER THE INSTRUMENT, SUBJECT ONLY TO
NOTICE IN A REASONABLE GRACE PERIOD, PAYMENT OF THE BALANCE OF THE
INDEBTEDNESS OWING UNDER THE NOTE MAY BE IMMEDIATELY ACCELERATED AND THE
LIEN OF THE MORTGAGE SECURING THE SAME MAY BE FORECLOSED; THE NOTE MORTGAGE
HAS BEEN RECORDED IN THE APPROPRIATE REAL ESTATE RECORDS WHERE THE PURCHASED
PARCEL IS LOCATED; AND THE LIEN OF THE PURCHASE MORTGAGE IS SUBJECT ONLY TO
PERMITTED ENCUMBRANCES AND COVENANTS, CONDITIONS, AND RESTRICTIONS, RIGHTS
OF WAY AND OTHER MATTERS OF PUBLIC RECORD ACCEPTABLE TO LENDER IN THEIR SOLE
JUDGMENT.
11. ALL LOT SITE IMPROVEMENTS, IF ANY, WHICH HAVE BEEN
COVENANTED TO BE PROVIDED TO THE MAKER OF THE NOTE SHALL HAVE BEEN PROVIDED,
COMPLETED, OR BONDED.
12. THE NOTE IN THE APPLICABLE SALES TRANSACTION COMPLIED
WITH ALL APPLICABLE LAWS AND THE PURCHASER DOES NOT HAVE ANY RIGHT OF
RESCISSION OR SETOFF, OR THE LIKE.
13. THE PLEDGED NOTES MUST BE FROM A DIVERSE GROUP OF
PROPERTIES AND FROM A DIVERSE GEOGRAPHIC AREA. AT LEAST 90% OF THE
PURCHASERS OR THE MAKERS OF THE NOTES MUST BE CITIZENS OF THE UNITED STATES
OR OF CANADA.
14. ALL PLEDGED NOTES MUST BE PAYABLE IN UNITED STATES
LEGAL TENDER.
15. NO SINGLE PLEDGED NOTE CAN BE OF A PRINCIPAL AMOUNT
SUCH THAT THE ADVANCE MADE ON SUCH NOTE WOULD EXCEED ONE MILLION DOLLARS
($1,000,000).
16. NO SINGLE PLEDGED NOTE CAN BE OF A PRINCIPAL AMOUNT
SUCH THAT THE ADVANCE MADE ON SUCH NOTE EQUALS OR EXCEEDS FIFTY PERCENT
(50%) OF THE OUTSTANDING A LINE ADVANCES AND B LINE ADVANCES THEN
OUTSTANDING, WITHOUT TAKING INTO EFFECT THE PROPOSED ADVANCE ON SUCH NOTE.
17. POLICIES OF TITLE INSURANCE, IN FORM REASONABLY
SATISFACTORY TO FOOTHILL, SHALL BE DELIVERED TO FOOTHILL WITHIN SIXTY (60)
DAYS OF DELIVERY OF EACH NOTE MORTGAGE.
18. FOR NOTES GENERATED BY AFFILIATES OF BORROWER,
FOOTHILL SHALL BE SATISFIED WITH THE ASSIGNMENT DOCUMENTS TRANSFERRING SUCH
NOTE TO BORROWER, AND THE CERTIFICATE SET FORTH IN SECTION 3.2(C) HEREOF.
<PAGE> 56
SCHEDULE PN-B
-------------
PLEDGED B NOTES STANDARDS
1. FOOTHILL HAS A VALID, DIRECT AND PERFECTED FIRST
LIEN/SECURITY INTERESTS IN THE NOTE AND SECURITY THEREFORE AND AS A VALID
AND PERFECTED FIRST PRIORITY RIGHT TO PAYMENTS ARISING THEREUNDER.
2. THE MAKER OF SUCH A NOTE IS NOT A DIRECTOR, OFFICER,
THEIR AGENTS, EMPLOYEES OR CREDITORS, OR ANY RELATIVE OR AFFILIATE OF
BORROWER OR THE FOREGOING.
3. BORROWER HAS RECEIVED FROM THE PURCHASER A MINIMUM CASH
DOWN PAYMENT OF 10% OF THE TOTAL SALES PRICE, NO PART OF WHICH, TO
BORROWER'S KNOWLEDGE, HAD BEEN ADVANCED OR LOANED TO SUCH PURCHASER OR
BORROWER, DIRECTLY OR INDIRECTLY AND THE AVERAGE DOWN PAYMENT OF THE ENTIRE
PORTFOLIO OF PLEDGED NOTES MUST BE AT LEAST 20%.
4. THE PLEDGED NOTES MUST PROVIDE FOR AN INTEREST RATE OF
AT LEAST EIGHT PERCENT (8%) PER ANNUM, IF FIXED, OR REFERENCE RATE PLUS TWO
PERCENT (2%) IF VARIABLE, PROVIDED, HOWEVER, THAT THE BLENDED RATE OF
INTEREST FOR THE ENTIRE PORTFOLIO OF PLEDGED NOTES SHALL NOT BE LESS THAN
THE REFERENCE RATE PLUS ONE POINT FIVE PERCENT (1.5%).
5. NOTES GENERATED BY PURCHASERS OF REAL PROPERTY IN NEW
YORK, CONNECTICUT, RHODE ISLAND, VERMONT, NEW HAMPSHIRE, PENNSYLVANIA OR
MAINE WHICH PROVIDE FOR AN INTEREST RATE DURING THE FIRST TWO YEARS OF PRIME
PLUS TWO HUNDRED (200) BASIS POINTS, AND INTEREST THEREAFTER OF AT LEAST
PRIME PLUS THREE HUNDRED AND FORTY (340) BASIS POINTS WILL BE ACCEPTABLE, IF
ALL OTHER STANDARDS ARE MET.
6. FOOTHILL, IN ITS SOLE AND ABSOLUTE DISCRETION, MAY,
FROM TIME TO TIME, REQUIRE THAT THE INSTRUMENT IS AT LEAST THIRTY DAYS AGED
FROM THE DATE OF ITS EXECUTION, AND AT LEAST ONE MONTHLY INSTALLMENT PAYMENT
HAS BEEN MADE.
7. THE MAKER OF THE PLEDGED NOTE IS ACCEPTABLE TO FOOTHILL
FOR CREDIT PURPOSES IN ITS SOLE JUDGMENT; HAS OR WILL ACQUIRE MARKETABLE
TITLE TO A PURCHASE PARCEL FROM BORROWER; AND HAS NOT PURCHASED MORE THAN
FOUR PARCELS IN ANY PROJECT.
8. NO NOTE WILL BE DELINQUENT MORE THAN THIRTY-ONE (31)
DAYS PAST ITS DUE DATE AT THE TIME OF THE ADVANCE.
9. THE NOTE AND THE MORTGAGE SECURING THE SAME ARE
SATISFACTORY TO FOOTHILL AND VALIDLY ENFORCEABLE IN ACCORDANCE WITH THEIR
TERMS; UPON THE OBLIGORS DEFAULT UNDER THE INSTRUMENT, SUBJECT ONLY TO
NOTICE IN A REASONABLE GRACE PERIOD, PAYMENT OF THE BALANCE OF THE
INDEBTEDNESS OWING UNDER THE NOTE MAY BE IMMEDIATELY ACCELERATED AND
<PAGE> 57
THE LIEN OF THE MORTGAGE SECURING THE SAME MAY BE FORECLOSED; THE NOTE
MORTGAGE HAS BEEN RECORDED IN THE APPROPRIATE REAL ESTATE RECORDS WHERE THE
PURCHASED PARCEL IS LOCATED; AND THE LIEN OF THE PURCHASE MORTGAGE IS
SUBJECT ONLY TO PERMITTED ENCUMBRANCES AND COVENANTS, CONDITIONS, AND
RESTRICTIONS, RIGHTS OF WAY AND OTHER MATTERS OF PUBLIC RECORD ACCEPTABLE TO
LENDER IN THEIR SOLE JUDGMENT.
10. ALL LOT SITE IMPROVEMENTS, IF ANY, WHICH HAVE BEEN
COVENANTED TO BE PROVIDED TO THE MAKER OF THE NOTE SHALL HAVE BEEN PROVIDED,
COMPLETED, OR BONDED.
11. THE NOTE IN THE APPLICABLE SALES TRANSACTION COMPLIED
WITH ALL APPLICABLE LAWS AND THE PURCHASER DOES NOT HAVE ANY RIGHT OF
RESCISSION OR SETOFF, OR THE LIKE.
12. THE PLEDGED NOTES MUST BE FROM A DIVERSE GROUP OF
PROPERTIES AND FROM A DIVERSE GEOGRAPHIC AREA. AT LEAST 90% OF THE
PURCHASERS OR THE MAKERS OF THE NOTES MUST BE CITIZENS OF THE UNITED STATES
OR OF CANADA.
13. ALL PLEDGED NOTES MUST BE PAYABLE IN UNITED STATES
LEGAL TENDER.
14. NO SINGLE PLEDGED NOTE CAN BE OF A PRINCIPAL AMOUNT
SUCH THAT THE ADVANCE MADE ON SUCH NOTE WOULD EXCEED ONE MILLION DOLLARS
($1,000,000).
15. NO SINGLE PLEDGED NOTE CAN BE OF A PRINCIPAL AMOUNT
SUCH THAT THE ADVANCE MADE ON SUCH NOTE EQUALS OR EXCEEDS FIFTY PERCENT
(50%) OF THE OUTSTANDING B LINE ADVANCES AND A LINE ADVANCES THEN
OUTSTANDING, WITHOUT TAKING INTO EFFECT THE PROPOSED ADVANCE ON SUCH NOTE.
16. POLICIES OF TITLE INSURANCE, IN FORM REASONABLY
SATISFACTORY TO FOOTHILL, SHALL BE DELIVERED TO FOOTHILL WITHIN SIXTY (60)
DAYS OF DELIVERY OF EACH NOTE MORTGAGE.
17. FOR NOTES GENERATED BY AFFILIATES OF BORROWER,
FOOTHILL SHALL BE SATISFIED WITH THE ASSIGNMENT DOCUMENTS TRANSFERRING SUCH
NOTE TO BORROWER, AND THE CERTIFICATE SET FORTH IN SECTION 3.2(C) HEREOF.
<PAGE> 58
SCHEDULE R-1
------------
REAL PROPERTY SECURITY LEGAL DESCRIPTIONS
<PAGE> 59
SCHEDULE 5.12
-------------
EXISTING OR THREATENED LITIGATION
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the captions "Experts" and
"Selected Consolidated Financial Data" and to the use of our report dated May 2,
1997, except for Note 14, as to which the date is February 17, 1998, in the
Registration Statement (Form S-4) and the related Prospectus of Bluegreen
Corporation for the registration of $110,000,000 of 10.5% senior secured notes
due 2008.
West Palm Beach, Florida
June 15, 1998
<PAGE> 1
EXHIBIT 25.1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
---------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)_________
---------------------
SUNTRUST BANK, CENTRAL FLORIDA, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
Not Applicable 59-1424500
(State of incorporation if (I.R.S. Employer
not a U.S. national bank) Identification Number)
200 South Orange Avenue
Post Office Box 3631
Orlando, Florida 32802
(Address of trustee's principal (Zip Code)
executive offices)
Jonathan D. Rich, Esq.
Maguire, Voorhis & Wells, P.A.
200 South Orange Avenue, Suite 3000, Orlando, FL 32801
(407) 244-1105
(Name, address and telephone number of agent for service)
---------------------
BLUEGREEN CORPORATION
(Exact name of obligor as specified in its charter)
Massachusetts 03-0300793
(State of incorporation) (I.R.S. Employer
Identification No.)
5295 Town Center Road 33486
Boca Raton, Florida (Zip Code)
(Address of principal executive offices)
---------------------
10-1/2% SENIOR SECURED NOTES DUE 2008
(TITLE OF INDENTURE SECURITIES)
================================================================================
<PAGE> 2
Item 1. GENERAL INFORMATION. Furnish the following information
as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
NAME ADDRESS
---- -------
Comptroller of Currency Washington, D.C.
The Board of Governors of Washington, D.C.
the Federal Reserve System
Corporation Washington, D.C.
Federal Deposit Insurance Washington, D.C.
Corporation
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. AFFILIATIONS WITH THE OBLIGOR. If the obligor or any underwriter for
the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of
eligibility.
Exhibit 1 - Copy of the articles of association of the Trustee as now
in effect (see Exhibit 1 to Form T-1 filed in connection with
Registration Statement No. 33-34738, which is incorporated by
reference).
Exhibit 2 - Copy of the certificate of authority of the Trustee to
commence business (see Exhibit 2 to Form T-1 filed in connection with
Registration Statement No. 33- 34738, which is incorporated by
reference).
Exhibit 3 - Copy of the authorization of the Trustee to exercise
corporate trust powers (see Exhibit 3 to Form T- 1 filed in connection
with Registration Statement No. 33- 34738, which is incorporated by
reference).
Exhibit 4 - Copy of the existing bylaws of the Trustee (see Exhibit 4
to Form T-1 filed in connection with Registration Statement No.
33-34738, which is incorporated by reference).
Exhibit 5 - Not applicable.
Exhibit 6 - Not applicable.
Exhibit 7 - Copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or
examining authority.
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
- 2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, SunTrust Bank, Central Florida, National Association, a national
banking association organized and existing under the laws of the United States
of America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Orlando, State of Florida, on the 16th day of April, 1998.
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
By: /s/ Theresa Hawkins
---------------------------------
Vice President
- 3 -
<PAGE> 4
EXHIBIT 7
Report of Condition of
SunTrust Bank, Central Florida, National Association
<PAGE> 5
CONSOLIDATED REPORT OF INCOME
FOR THE PERIOD JANUARY 1, 1998 - MARCH 31, 1998
All Report of Income schedules are to be reported on a calendar year-to-date
basis in thousands of dollars.
SCHEDULE RI - INCOME STATEMENT
<TABLE>
<CAPTION>
I380 <-
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Interest Income:
a. Interest and fee income on loans:
(1) Loans secured by real estate ........................................................ 39,233 1.a.1
(2) Loans to finance agricultural production and other loans to farmers ................. 1,317 1.a.2
(3) Commercial and industrial loans ..................................................... 45,969 1.a.3
(4) Loans to individuals for household, family, and other personal expenditures:
(a) Credit cards and related plans .................................................. 774 1.a.4.a
(b) Other ........................................................................... 11,105 1.a.4.b
(5) Loans to foreign governments and official institutions .............................. 0 1.a.5
(6) Obligations (other than securities and leases) of states and political subdivisions
in the U.S.:
(a) Taxable obligations ............................................................. 161 1.a.6.a
(b) Tax-exempt obligations .......................................................... 2,610 1.a.6.b
(7) All other loans ..................................................................... 7,193 1.a.7
b. Income from lease financing receivables:
(1) Taxable leases ...................................................................... 2,669 1.b.1
(2) Tax-exempt leases ................................................................... 73 1.b.2
c. Interest income on balances due from depository institutions (1) ........................ 57 1.c
d. Interest and dividend income on securities:
(1) U.S. Treasury securities and U.S. Government agency obligations .................... 11,388 1.d.1
(2) Securities issued by states and political subdivisions in the U.S.:
(a) Taxable securities ............................................................. 0 1.d.2.a
(b) Tax-exempt securities .......................................................... 467 1.d.2.b
(3) Other domestic debt securities ..................................................... 0 1.d.3
(4) Foreign debt securities ............................................................ 4 1.d.4
(5) Equity securities (including investments in mutual funds) .......................... 323 1.d.5
e. Interest income from trading assets ..................................................... 0 1.e
f. Interest income on federal funds sold and securities purchased under agreements to resell 8,398 1.f
g. Total interest income (sum of items 1.a through 1.f) .................................... 131,741 1.g
</TABLE>
- ----------
(1) Includes interest income on time certificates of deposits not held for
trading.
<PAGE> 6
SCHEDULE RI - CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2. Interest expense:
a. Interest on deposits:
(1) Transaction accounts (NOW accounts, ATS accounts, and YEAR-TO-DATE
telephone and preauthorized transfer accounts) ....................... 383 2.a.1
(2) Nontransaction accounts:
(a) Money market deposit accounts (MMDAs) ........................... 3,518 2.a.2a
(b) Other savings deposits .......................................... 9,355 2.a.2b
(c) Time deposits of $100,000 or more ............................... 4,528 2.a.2c
(d) Time deposits of less than $100,000 ............................. 8,870 2.a.2d
b. Expense of federal funds purchased and securities sold under
agreements to repurchase ................................................... 36,968 2.b
c. Interest on demand notes issued to the U.S. Treasury, trading liabilities,
and on other borrowed money ................................................ 4,367 2.c
d. Not applicable
e. Interest on subordinated notes and debentures .............................. 1,744 2.e
f. Total interest expense (sum of items 2.a through 2.e) ...................... 69,733 2.f
3. Net interest income (item 1.g minus 2.f) ...................................... 62,008 3.
4. Provisions:
a. Provision for credit losses ................................................. 1,400 4.a
b. Provision for allocated transfer risk ....................................... 0 4.b
5. Noninterest income:
a. Income from fiduciary activities ........................................... 7,309 5.a
b. Service charges on deposit accounts ........................................ 9,145 5.b
c. Trading revenue (must equal Schedule RI, sum of
Memorandum items 8.a through 8.d) .......................................... 0 5.c
d. - e. Not applicable
f. Other noninterest income:
(1) Other fee income ...................................................... 18,622 5.f.1
(2) All other noninterest income * ........................................ 2,687 5.f.2
g. Total noninterest income (sum of items 5.a through 5.f) .................... 37,763 5.g
6. a. Realized gains (losses) on held-to-maturity securities ..................... 0 6.a
b. Realized gains (losses) on available-for-sale securities ................... 16 6.b
7. Noninterest expense:
a. Salaries and employee benefits ............................................. 18,691 7.a
b. Expenses of premises and fixed assets (net of rental income)
(excluding salaries and employee benefits and mortgage interest) ............ 6,038 7.b
c. Other noninterest expense * ................................................ 33,814 7.c
d. Total noninterest expense (sum of items 7.a through 7.c) ................... 58,543 7.d
8. Income (loss) before income taxes and extraordinary items and other
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d) ..... 39,844 8.
9. Applicable income taxes (on item 8) ........................................... 14,237 9.
10. Income (loss) before extraordinary items and other adjustments (item 8 minus 9) 25,607 10.
11. Extraordinary items and other adjustments, net of income taxes * ............... 0 11.
12. Net income (loss) (sum of items 10 and 11) ..................................... 25,607 12.
</TABLE>
- ----------
* Describe on Schedule RI-E - Explanations.
<PAGE> 7
SCHEDULE RI - CONTINUED
<TABLE>
<CAPTION>
I381 <-
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MEMORANDA
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after YEAR TO DATE
August 7, 1986, that is not deductible for federal income tax purposes ................... 496 M.1
2. Income from the sale and servicing of mutual funds and annuities (included in
Schedule RI, item 8) ..................................................................... 1,774 M.2
3. Not applicable
4. Number of full-time equivalent employees on payroll at end of current period (round to NUMBER
nearest whole number) .................................................................... 1,556 M.4
5. -6. Not applicable
7. If the reporting bank has restated its balance sheet as a result of applying push CCYY/MM/DD
down accounting this calendar year, report the date of the bank's acquisition (1) ........ N/A M.7
8. Trading revenue (from cash instruments and off-balance sheet derivative instruments)
(sum of Memorandum items 8.a through 8.d must equal Schedule RI, item 5.c):
a. Interest rate exposures ............................................................... 0 M.8.a
b. Foreign exchange exposures ............................................................ 0 M.8.b
c. Equity security and index exposures ................................................... 0 M.8.c
d. Commodity and other exposures ......................................................... 0 M.8.d
9. Impact on income of off-balance sheet derivatives held for purposes other than trading:
a. Net increase (decrease) to interest income ............................................ 0 M.9.a
b. Net (increase) decrease to interest expense ........................................... 144 M.9.b
c. Other (noninterest) allocations ....................................................... 0 M.9.c
10. Credit losses on off-balance sheet derivatives (see instructions) ....................... 0 M.10
11. Does the reporting bank have a Subchapter S election in effect for YES/NO
federal income tax purposes for the current tax year ? .................................. N/A M.11
12. Deferred portion of total applicable income taxes included in Schedule RI,
items 9 and 11 (to be reported with the December Report of Income) ...................... N/A M.12
</TABLE>
- ----------
(1) For example, a bank acquired on June 1, 1997, would report 1997/06/01
SCHEDULE RI-A - CHANGES IN EQUITY CAPITAL
<TABLE>
<CAPTION>
Indicate decreases and losses in parentheses. I383 <-
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Total equity capital originally reported in the December 31, 1997, Reports of Condition and Income 525,378 1.
2. Equity capital adjustments from amended Reports of Income, net * ................................. 0 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2) ............................. 525,378 3.
4. Net income (loss) (must equal Schedule RI, item 12) .............................................. 25,607 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net ............................... 0 5.
6. Changes incident to business combinations, net ................................................... 0 6.
7. LESS: Cash dividends declared on preferred stock ................................................. 0 7.
8. LESS: Cash dividends declared on common stock .................................................... 6,000 8.
9. Cumulative effect of changes in accounting principles from prior years * (see instructions for
this schedule) ................................................................................... 0 9.
10. Corrections of material accounting errors from prior years * (see instructions for this schedule) 0 10.
11. Change in net unrealized holding gains (losses) on available-for-sale securities ................. 624 11.
12. Other transactions with parent holding company * (not included in item 5, 7, or 8 above) ......... (676) 12.
13. Total equity capital end of current period (sum of items 3 through 12) (must equal
Schedule RC item 28) ............................................................................ 544,933 13.
</TABLE>
- ----------
* Describe on Schedule RI-E - Explanations.
<PAGE> 8
SCHEDULE RI-B - CHARGE-OFFS AND RECOVERIES ON LOANS AND LEASES
AND CHANGES IN ALLOWANCE FOR CREDIT LOSSES
PART I. CHARGE-OFFS AND RECOVERIES ON LOANS AND LEASES (1)
<TABLE>
<CAPTION>
Part I excludes charge-offs and recoveries through the
allocated transfer risk reserve. I386 <-
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------
----CALENDAR YEAR-TO-DATE----
(Column A) (olumn B)
CHARGE-OFFS RECOVERIES
<S> <C> <C> <C>
1. Loans secured by real estate: .....................................
a. To U.S. addressees (domicile) ................................. 433 51 1.a
b. To non-U.S. addressees (domicile) ............................. 0 0 1.b
2. Loans to depository institutions and acceptances of other banks:
a. To U.S. banks and other U.S. depository institutions .......... 0 0 2.a
b. To foreign banks .............................................. 0 0 2.b
3. Loans to finance agricultural production and other loans to farmers 0 0 3
4. Commercial and industrial loans:
a. To U.S. addressees (domicile) ................................. 25 699 4.a
b. To non-U.S. addressees (domicile) ............................. 0 0 4.b
5. Loans to individuals for household, family, and other personal
expenditures:
a. Credit cards and related plans ................................ 205 28 5.a.
b. Other (includes single payment, installment, and all student
loans) ........................................................ 1,199 241 5.b.
6. Loans to foreign governments and official institutions ............ 0 0 6
7. All other loans ................................................... 80 32 7
8. Lease financing receivables:
a. Of U.S. addressees (domicile) ................................. 750 3 8.a.
b. Of non-U.S. addressees (domicile) ............................. 0 0 8.b.
9. Total (sum of items 1 through 8) .................................. 2,692 1,054 9
</TABLE>
<TABLE>
<CAPTION>
MEMORANDA
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------
----CALENDAR YEAR-TO-DATE----
<S> <C> <C>
1. - 3. Not applicable.
4. Loans to finance commercial real estate, construction, and land (Column A) (Column B)
development activities (not secured by real estate) included in Charge-offs Recoveries
Schedule RI-B, part I, items 4 and 7, above ................................. 0 0 M.4
5. Loans secured by real estate (sum of Memorandum items 5.a
through 5.e must equal sum of Schedule RI-B, part I, item 1.a
and 1.b, above):
a. Construction and land development ........................................ 20 4 M.5.a
b. Secured by farmland ...................................................... 0 0 M.5.b
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family residential
properties and extended under lines of credit .................. 20 0 M.5.c1
(2) All other loans secured by 1-4 family residential properties.... 36 1 M.5.c2
d. Secured by multifamily (5 or more) residential properties ................ 0 0 M.5.d
e. Secured by nonfarm nonresidential properties ............................. 357 46 M.5.e
</TABLE>
<PAGE> 9
SCHEDULE RI-B - CONTINUED
PART II. CHANGES IN ALLOWANCE FOR CREDIT LOSSES
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------
<C> <C> <C>
1. Balance originally reported in the December 31, 1997, Reports of Condition and Income 89,443 1.
2. Recoveries (must equal or exceed part I, item 9, column B above) ..................... 1,054 2.
3. LESS: Charge-offs (must equal or exceed part I, item 9, column A above) .............. 2,692 3.
4. Provision for credit losses (must equal Schedule RI, item 4.a) ....................... 1,400 4.
5. Adjustments * (see instructions for this schedule) ................................... 0 5.
6. Balance end of current period (sum of items 1 through 5)
(must equal or exceed Schedule RC, item 4.b) ......................................... 89,205 6.
</TABLE>
- ----------
* Describe on Schedule RI-E - Explanations.
SCHEDULE RI-E - EXPLANATIONS
SCHEDULE RI-E IS TO BE COMPLETED EACH QUARTER ON A CALENDAR YEAR-TO-DATE BASIS.
Detail all adjustments in Schedules RI-A and RI-B, all extraordinary items and
other adjustments in Schedule RI, and all significant items of other noninterest
income and other noninterest expense in Schedule RI.
(See instructions for details)
I395 <-
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. All other noninterest income (from Schedule RI, item 5.f.(2))
Report amounts that exceed 10% of Schedule RI, item 5.f.(2): YEAR TO DATE
a. Net gains (losses) on other real estate owned ...................................... 321 1.a
b. Net gains (losses) on sales of loans ............................................... 1,064 1.b
c. Net gains (losses) on sales of premises and fixed assets ........................... 0 1.c
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
item 5.f.(2):
TEXT
d. FOREIGN EXCHG-GAIN/LOSS 461 1.d
e. SALE OF CUSTOMER CHECKS 402 1.e
f. OTHER INCOME 367 1.f
2. Other noninterest expense (from Schedule RI, item 7.c): YEAR TO DATE
a. Amortization expense of intangible assets ........................................... 0 2.a
Report amounts that exceed 10% of Schedule RI, item 7.c:
b. Net (gains) losses on other real estate owned ....................................... 0 2.b
c. Net (gains) losses on sales of loans ................................................ 0 2.c
d. Net (gains) losses on sales of premises and fixed assets ............................ 0 2.d
Itemize and describe the three largest other amounts that exceed 10% of Schedule RI,
item 7.c:
TEXT
e. I/C DATA PROCESSING FEE 10,999 2.e
f. CR-CD-INTERCHANGE EXP 7,012 2.f
g. 0 2.g
</TABLE>
<PAGE> 10
SCHEDULE RI-E - CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) and applicable
income tax effect (from Schedule RI, item 11.b) (itemize and describe all extraordinary
items and other adjustments): Year-to-Date
TEXT
a. (1) 0 3.a.1
(2) Applicable income tax effect............................................................ 0 3.a.2
b. (1) 0 3.b.1
(2) Applicable income tax effect............................................................ 0 3.b.2
c. (1) 0 3.c.1
(2) Applicable income tax effect............................................................ 0 3.c.2
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, item 2)
(itemize and describe all adjustments):
TEXT
a. 0 4.a
b. 0 4.b
5. Cumulative effect of changes in accounting principles from prior years
(from Schedule RI-A, item 9) (itemize and describe all changes in accounting principles):
TEXT
a. 0 5.a
b. 0 5.b
6. Corrections of material accounting errors from prior years (from Schedule RI-A, item 10)
(itemize and describe all corrections):
TEXT
a. 0 6.a
b. 0 6.b
7. Other transactions with parent holding company (from Schedule RI-A, item 12)
(itemize and describe all such transactions):
TEXT
a. FIXED ASSET DIVIDEND (676)7.a
b. 0 7.b
8. Adjustments to allowance for credit losses (from Schedule RI-B, part II, item 5)
(itemize and describe all adjustments):
TEXT
a. 0 8.a
b. 0 8.b
I398 I399 <-
9. Other explanations (the space below is provided for bank to briefly describe, at its option,
any other significant items affecting the Report of Income):
X = NO COMMENT - Y = COMMENT...................... X
Other explanations (please type or print clearly):
TEXT 4769 ( 70 CHARACTERS PER LINE )
</TABLE>
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<PAGE> 11
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC - BALANCE SHEET
C300 <-
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
1. Cash and balances due from depository institutions(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin (1)...................................................... 547,696 1.a
b. Interest-bearing balances (2)............................................................................... 4,167 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) ................................................. 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) ............................................... 725,998 2.b
3. Federal funds sold and securities purchased under agreements to resell......................................... 574,904 3
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C)..................................... 6,058,046 4.a
b. LESS: Allowance for loan and lease losses......................................................... 89,205 4.b
c. LESS: Allocated transfer risk reserve............................................................. 0 4.c
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c)........................................................ 5,968,841 4.d
5. Trading assets (from Schedule RC-D)............................................................................ 0 5.
6. Premises and fixed assets (including capitalized leases)....................................................... 52,965 6.
7. Other real estate owned (from Schedule RC-M)................................................................... 2,071 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)....................... 7,804 8.
9. Customers' liability to this bank on acceptances outstanding................................................... 1,847 9.
10. Intangible assets (from Schedule RC-M)......................................................................... 0 10.
11. Other assets (from Schedule RC-F).............................................................................. 82,572 11.
12. Total assets (sum of items 1 through 11)....................................................................... 7,968,865 12.
</TABLE>
- -----------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 12
SCHEDULE RC - CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E)................................. 4,184,594 13.a
(1) Noninterest-bearing (1)..................................................................... 1,272,935 13.a.1
(2) Interest-bearing............................................................................ 2,911,659 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs
(1) Noninterest-bearing...................................................................................
(2) Interest-bearing......................................................................................
14. Federal funds purchased and securities sold under agreements to repurchase .................................. 2,524,575 14
15. a. Demand notes issued to the U.S. Treasury.................................................................. 0 15.a
b. Trading liabilities (from Schedule RC-D) ................................................................. 0 15.b
16. Other borrowed money(includes mortgage indebetedness and obligations under capitalized leases):
a. With a remaining maturity of one year or less ............................................................ 502,732 16.a
b. With a remaining maturity of more than one year through three years ...................................... 0 16.b
c. With a remaining maturity of more than three years ....................................................... 0 16.c
17. Not applicable
18. Bank's liability on acceptances executed and outstanding..................................................... 1,847 18
19. Subordinated notes and debentures (2) ....................................................................... 160,000 19
20. Other liabilities (from Schedule RC-G)....................................................................... 50,184 20
21. Total liabilities (sum of items 13 through 20) .............................................................. 7,423,932 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus................................................................ 0 23
24. Common stock................................................................................................. 5,098 24
25. Surplus (exclude all surplus related to preferred stock)..................................................... 124,125 25
26. a. Undivided profits and capital reserves.................................................................... 411,373 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities ................................... 4,337 26.b
27. Cumulative foreign currency translation adjustments.......................................................... 27
28. Total equity capital (sum of items 23 through 27)............................................................ 544,933 28
29. Total liabilities and equity capital (sum of items 21 and 28) ............................................... 7,968,865 29
MEMORANDUM
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that best describes the
most comprehensive level of auditing work performed for the bank by independent external
auditors as of any date during 1997 ......................................................................... 2 M. 1
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company (but external auditors
not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in accordance 8 = No external audit work
with generally accepted auditing standards by a certified
public accounting firm (may be required by state chartering
authority)
</TABLE>
- ----------------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE> 13
SCHEDULE RC-A - CASH AND BALANCES DUE FROM DEPOSITORY INSTITUTIONS
Exclude assets held for trading.
C305 <-
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Cash items in process of collection, unposted debits, and currency and coin:
a. Cash items in process of collection and unposted debits....................................................... 362,625 1.a
b. Currency and coin............................................................................................. 93,726 1.b
2. Balance due from depository institutions in the U.S.:
a. U.S. branches and agencies of foreign banks................................................................... 0 2.a
b. Other commercial banks in the U.S. and other depository institutions in the U.S............................... 23,569 2.b
3. Balances due from banks in foreign countries and foreign central banks:
a. Foreign branches of other U.S. banks.......................................................................... 0 3.a
b. Other banks in foreign countries and foreign central banks.................................................... 886 3.b
4. Balances due from Federal Reserve Banks.......................................................................... 71,057 4
5. Total (sum of items 1 through 4) (must equal Schedule RC, sum of items 1.a and 1.b).............................. 551,863 5
</TABLE>
MEMORANDUM
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Noninterest-bearing balances due from commercial banks in the U.S. (included in items 2.a and
2.b above)....................................................................................................... 19,402 M.1
</TABLE>
SCHEDULE RC-B - SECURITIES
Exclude assets held for trading.
C310 <-
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
---------HELD-TO-MATURITY------- --------AVAILABLE-FOR-SALE--------
(Column A) (Column B) (Column A) (Column B)
Amortized Cost Fair Value Amortized Cost Fair Value(1)
<S> <C> <C> <C> <C>
1. U.S. Treasury securities...................... 0 0 364,317 367,892 1
2. U.S. Government agency obligations
(exclude mortgage-backed securities):
a. Issued by U.S. Government................. 0 0 0 0 2.a
b. Issued by U.S. Government-sponsored
agencies (3).............................. 0 0 69,595 70,837 2.b
</TABLE>
- ----------------------------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.b, column D.
(2) Includes Small Business Administration 'Guaranteed Loan Pool Certificates,'
U.S. Maritime Administration obligations, and Export - Import Bank
participation certificates.
(3) Includes obligations (other than mortgage-backed securities) issued by the
Farm Credit System, the Federal Home Loan Bank System, The Federal Home
Loan Mortgage Corporation, the Federal National Mortgage Association, the
Financing Corporation, the Resolution Funding Corporation, the Student
Loan Marketing Association, and the Tennessee Valley Authority.
<PAGE> 14
SCHEDULE RC-B CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------------
---------HELD-TO-MATURITY------- -------AVAILABLE-FOR-SALE-------
(Column A) (Column B) (Column A) (Column B)
<S> <C> <C> <C> <C>
3. Securities issued by states and political Amortized Cost Fair Value Amortized Cost Fair Value(1)
subdivisions in the U.S.:
a. General obligations......................... 0 0 30,479 31,517 3.a
b. Revenue obligations......................... 0 0 3,993 4,235 3.b
c. Industrial development
and similar obligations..................... 0 0 0 0 3.c
4. Mortgage-backed securities (MBS):
a. Pass-through securities:
(1) Guaranteed by GNMA...................... 0 0 53,032 53,734 4.a.(1)
(2) Issued by FNMA and FHLMC................ 0 0 74,000 74,193 4.a.(2)
(3) Other pass-through securities........... 0 0 0 0 4.a.(3)
b. Other mortgage-backed securities (include
CMOs, REMICs and stripped MBS):
(1) Issued or guaranteed by FNMA,
FHLMC, or GNMA.......................... 0 0 90,800 90,917 4.b(1)
(2) Collaterized by MBS issued or guaranteed
by FNMA, FHLMC, or GNMA................. 0 0 0 0 4.b.(2)
(3) All other mortgage-backed securities.... 0 0 0 0 4.b.(3)
5. Other debt securities:
a. Other domestic debt securities.............. 0 0 0 0 5.a
b. Foreign debt securities..................... 0 0 250 250 5.b
6. Equity securities:
a. Investments in mutual funds and
other equity securities with
readily determinable fair values .......................................................... 28,546 28,546 6.a
b. All other equity securities(1) ............................................................ 3,877 3,877 6.b
7. Total (sum of items 1 through 6) (total of
Column A must equal Schedule RC item 2.a)
(total of column D must equal Schedule RC,
item 2.b)...................................... 0 0 718,889 725,998 7
</TABLE>
- -----------------
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.b, column D.
<PAGE> 15
SCHEDULE RC-B - CONTINUED
<TABLE>
<CAPTION>
C321<-
Memoranda Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Pledged securities(1) ........................................................................................ 552,145 M.1
2. Maturity and repricing data for debt securities (1,2)(excluding those in nonaccrual status):
a. Securities issued by the U.S. Treasury, U.S. Government agencies, and states
and political subdivisions in the U.S.; other non-mortgage debt securities; and
mortgage pass-through securities other than those backed by closed-end
first lien 1-4 family residential mortgages with a remaining maturity or repricing
frequency of: (3,4)
(1) Three months or less.................................................................................. 54,983 M.2.a1
(2) Over three months through 12 months................................................................... 173,145 M.2.a2
(3) Over one year through three years..................................................................... 187,290 M.2.a3
(4) Over three years through five years .................................................................. 43,702 M.2.a4
(5) Over five years through 15 years ..................................................................... 15,611 M.2.a5
(6) Over 15 years ........................................................................................ 0 M.2.a6
b. Mortgage pass-through securities backed by closed-end first lien 1-4 family
residential mortgages with a remaining maturity or repricing frequency of: (3,5)
(1) Three months or less.................................................................................. 12,895 M.2.b1
(2) Over three months through 12 months................................................................... 102,303 M.2.b2
(3) Over one year through three years..................................................................... 184 M.2.b3
(4) Over three years through five years .................................................................. 8,003 M.2.b4
(5) Over five years through 15 years ..................................................................... 4,396 M.2.b5
(6) Over 15 years ........................................................................................ 146 M.2.b6
c. Other mortgage-backed securities (include CMOs, REMICs, and stripped MBS;
exclude mortgage pass-through securities) with an expected average life of: (6)
(1) Three years or less .................................................................................. 89,119 M.2.c1
(2) Over three years .................................................................................... 1,798 M.2.c2
d. Fixed rate AND floating rate debt securities with a REMAINING MATURITY of one
year or less (included in Memorandum items 2.a through 2.c above) ........................................ 272,656 M.2.d
3.- 6. Not applicable
7. Amortized cost of held-to-maturity securities sold or transferred to available-for-sale or
trading securities during the calendar year-to-date (report the amortized cost at date
of sale or transfer).......................................................................................... 0 M.7
8. High-risk mortgage securities (included in the held-to-maturity and available-for-sale
accounts in Schedule RC-B, item 4.b):
a. Amortized cost............................................................................................. 0 M.8.a
b. Fair value................................................................................................. 0 M.8.b
9. Structured notes (included in the held-to-maturity and available-for-sale
accounts in Schedule RC-B, items 2, 3, and 5):
a. Amortized cost............................................................................................. 0 M.9.a
b. Fair value................................................................................................. 0 M.9.b
</TABLE>
- -----------------------
(1) Includes held-to-maturity securities at amortized cost and
available-for-sale securities at fair value.
(2) Exclude equity securities, e.g., investments in mutual funds, Federal
Reserve stock, common stock, and preferred stock.
(3) Report fixed rate debt securities by remaining maturity and floating rate
debt securities by repricing frequency.
(4) Sum of Memorandum items 2.a.(1) through 2.a.(6) plus any nonaccrual debt
securities in the categories of debt securities reported in Memorandum item
2.a that are included in Schedule RC-N, item 9, column C, must equal
Schedule RC-B, sum of items 1, 2, 3 and 5, columns A and D, plus mortgage
pass-through securities other than those backed by closed-end first lien 1-4
family residential mortgages included in Schedule RC-B, item 4.a, columns A
and D.
(5) Sum of Memorandum items 2.b.(1) through 2.b.(6) plus any nonaccrual
mortgage pass-through securities backed by closed-end first lien 1-4 family
residential mortgages included in Schedule RC-N, item 9, column C, must
equal Schedule RC-B, item 4.a, sum of columns A and D, less the amount of
mortgage pass-through securities other than those backed by closed-end
first lien 1-4 family residential mortgages included in Schedule RC-B, Item
4a., columns A and D.
(6) Sum of Memorandum items 2.c.(1) and 2.c.(2) plus any nonaccrual "Other
mortgage-backed securities" included in Schedule RC-N, item 9, column C,
must equal Schedule RC-B, item 4.b, sum of columns A and D.
<PAGE> 16
SCHEDULE RC-C - LOANS AND LEASE FINANCING RECEIVABLES
PART I. LOANS AND LEASES
Do not deduct the allowance for loan and lease losses from amounts reported in
this schedule. Report total loans and leases, net of unearned income. Exclude
assets held for trading and commercial paper.
<TABLE>
<CAPTION>
C315 <-
Dollar Amounts in Thousands
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Loans secured by real estate:
a. Construction and land development.................................................................. 164,655 1.a
b. Secured by farmland (including farm residential and other improvements)............................ 25,299 1.b
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by 1-4 family residential properties and
extended under lines of credit................................................................. 95,842 1.c.1
(2) All other loans secured by 1-4 family residential properties:
(a) Secured by first liens..................................................................... 1,107,288 1.c.2a
(b) Secured by junior liens.................................................................... 104,244 1.c.2b
d. Secured by multifamily (5 or more) residential properties.......................................... 33,125 1.d
e. Secured by nonfarm nonresidential properties....................................................... 429,959 1.e
2. Loans to depository institutions:
a. To commercial banks in the U.S.:
(1) To U.S. branches and agencies of foreign banks............................................... 0 2.a1
(2) To other commercial banks in the U.S......................................................... 218,185 2.a2
b. To other depository institutions in the U.S........................................................ 107 2.b
c. To banks in foreign countries:
(1) To foreign branches of other U.S. banks........................................................ 0 2.c1
(2) To other banks in foreign countries............................................................ 0 2.c2
3. Loans to finance agricultural production and other loans to farmers................................... 55,372 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile)...................................................................... 2,684,665 4.a
b. To non-U.S. addressees (domicile).................................................................. 25,440 4.b
5. Acceptances of other banks:
a. Of U.S. banks...................................................................................... 345 5.a
b. Of foreign banks................................................................................... 379 5.b
6. Loans to individuals for household, family, and other personal expenditures
(i.e., consumer loans) (includes purchased paper):
a. Credit cards and related plans (includes check credit and other revolving credit plans)............ 23,255 6.a
b. Other (includes single payment, installment, and all student loans)................................ 514,726 6.b
7. Loans to foreign government and official institutions (including foreign central banks)............... 0 7
8. Obligations (other than securities and leases) of states and political subdivisions
in the U.S. (includes nonrated industrial development obligations).................................. 196,190 8
9. Other Loans:
a. Loans for purchasing or carrying securities (secured and unsecured)................................ 89,259 9.a
b. All other loans (exclude consumer loans)........................................................... 133,675 9.b
10. Lease financing receivables (net of unearned income):
a. Of U.S. addressees (domicile)...................................................................... 156,036 10.a
b. Of non-U.S. addressees (domicile).................................................................. 0 10.b
11. LESS: Any unearned income on loans reflected in items 1-9 above....................................... 0 11.
12. Total loans and leases, net of unearned income (sum of items 1 through 10
minus item 11) (must equal Schedule RC, item 4.a)..................................................... 6,058,046 12
</TABLE>
<PAGE> 17
SCHEDULE RC-C - CONTINUED
PART I. CONTINUED
<TABLE>
<CAPTION>
MEMORANDA Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Not applicable
2. Loans and Leases restructured and in compliance with modified terms (included in
Schedule RC-C, part I, above, and not reported as past due or nonaccrual in Schedule RC-N,
Memorandum item 1):
a. Loans secured by real estate:
(1) To U.S. addressees (domicile)......................................................................... 0 M.2.a.1
(2) To non-U.S. addressees (domicile)..................................................................... 0 M.2.a.2
b. All other loans and lease financing receivables (exclude loans to individuals for
household, family, and other personal expenditures)....................................................... 0 M.2.b
c. Commercial and industrial loans to and lease financing receivables of
non-U.S. addressees (domicile) included in Memorandum item 2.b above...................................... 0 M.2.c
3. Maturity and repricing data for loans and leases (excluding those in nonaccrual status):
a. Closed-end loans secured by first liens on 1-4 family residential properties (reported in Schedule RC-C,
part I, item 1.c.(2).(a)) with a remaining maturity or repricing frequency of: (1, 2)
(1) Three months or less ................................................................................. 11,043 M.3.a1
(2) Over three months through 12 months................................................................... 353,723 M.3.a2
(3) Over one year through three years..................................................................... 124,647 M.3.a3
(4) Over three years through five years .................................................................. 404,586 M.3.a4
(5) Over five years through 15 years ..................................................................... 155,402 M.3.a5
(6) Over 15 years ........................................................................................ 55,886 M.3.a6
b. All loans and leases (reported in Schedule RC-C, part I, items 1 through 10) excluding closed-end
loans secured by first liens on 1-4 family residential properties (reported in Schedule RC-C, part I,
item 1.c.(2).(a)) with a remaining maturity or repricing frequency of: (1, 3)
(1) Three months or less ................................................................................. 2,857,166 M.3.b1
(2) Over three months through 12 months................................................................... 329,074 M.3.b2
(3) Over one year through three years..................................................................... 454,912 M.3.b3
(4) Over three years through five years .................................................................. 777,883 M.3.b4
(5) Over five years through 15 years ..................................................................... 472,847 M.3.b5
(6) Over 15 years ........................................................................................ 49,386 M.3.b6
c. Fixed rate AND floating rate loans and leases (reported in Schedule RC-C, part I,
items 1 through 10) with a REMAINING MATURITY of one year or less ....................................... 5,544 M.3.c
d. Fixed rate AND floating rate loans secured by nonfarm nonresidential properties (reported in
Schedule RC-C, part I, item 1.a ) with a REMAINING MATURITY of over five years
(included in Memorandum item 3.b above) .................................................................. 142,830 M.3.d
e. Fixed rate AND floating rate commercial and industrial loans (reported in Schedule RC-C, part I, item 4)
with a REMAINING MATURITY of over three years ............................................................ 1,376,632 M.3.e
</TABLE>
- -------------
(1) Report fixed rate loans and leases by remaining maturity and floating rate
loans by repricing frequency.
(2) Sum of Memorandum items 3.a.(1) through 3.a.(6) plus total nonaccrual
closed-end loans secured by first liens on 1-4 family residential properties
included in Schedule RC-N, Memorandum item 3.c.(2), column C, must equal
total closed-end loans secured by first liens on 1-4 family residential
properties from Schedule RC-C, part I, item 1.c.(2)(a).
(3) Sum of Memorandum items 3.b.(1) through 3.b.(6) plus total nonaccrual loans
and leases from Schedule RC-N, sum of items 1 through 8, column C, minus
nonaccrual closed-end loans secured by first liens on 1-4 family residential
properties included in Schedule RC-N, Memorandum item 3.c.(2), column C,
must equal total loans and leases from Schedule RC-C, Part I, sum of items 1
through 10, minus total closed-end loans secured by first liens on 1-4
family residential properties in domestic offices from Schedule RC-C, part
I, item 1.c.(2)(a).
<PAGE> 18
SCHEDULE RC-C - CONTINUED
PART I. CONTINUED
<TABLE>
<CAPTION>
MEMORANDA Dollar Amounts in Thousands
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
4. Loans to finance commercial real estate, construction, and land development activities
(not secured by real estate) included in Schedule RC-C, part I, items 4 and 9.b,
page RC-6 (1) ............................................................................................... 66,181 M.4
5. Loans and leases held for sale (included in Schedule RC-C, part I, page RC-C) ............................... 23,900 M.5
6. Adjustable rate closed-end loans secured by first liens on 1-4 family residential properties
(included in Schedule RC-C, part I, item 1.c.(2)(a), page RC-6).............................................. 908,813 M.6
</TABLE>
- -------------
(1) Exclude loans secured by real estate that are included in Schedule RC-C,
part I, items 1.a through 1.e.
SCHEDULE RC-D TRADING ASSETS AND LIABILITIES
Schedule RC-D is to be completed by banks with $1 billion or more in total
assets or with $2 billion or more in par/notional amount of off-balance sheet
derivative contracts (as reported in Schedule RC-L, items 14.a through 14.e,
columns A through D).
<TABLE>
<CAPTION>
C320 <-
Dollar Amounts in Thousands
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
1. U.S. Treasury securities.................................................................................. 0 1
2. U.S. Government agency obligations (exclude mortgage-backed securities) .................................. 0 2
3. Securities issued by states and political subdivisions in the U.S......................................... 0 3
4. Mortgage-backed securities (MBS):
a. Pass-through securities issued or guaranteed by FNMA, FHLMC, or GNMA................................... 0 4.a
b. Other mortgage-backed securities issued or guaranteed by FNMA, FHLMC, or GNMA
(include CMOs, REMICs, and stripped MBS)............................................................... 0 4.b
c. All other mortgage-backed securities................................................................... 0 4.c
5. Other debt securities..................................................................................... 0 5
6. - 8. Not applicable
9. Other trading assets...................................................................................... 0 9
10. Not applicable
11. Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity
contracts.................................................................................................. 0 11
12. Total trading assets (sum of items 1 through 11) (must equal Schedule RC, item 5).......................... 0 12
LIABILITIES
13. Liability for short positions.............................................................................. 0 13
14. Revaluation losses on interest rate, foreign exchange rate, and other commodity and equity
contracts.................................................................................................. 0 14
15. Total trading liabilities (sum of items 13 and 14) (must equal Schedule RC, item 15.b)..................... 0 15
</TABLE>
<PAGE> 19
SCHEDULE RC-E - DEPOSIT LIABILITIES
<TABLE>
<CAPTION>
C325 <-
-------Transaction Accounts----- -Nontransaction-
Accounts
(Column A) (Column B) (Column C)
Total Memo: Total Total
Transaction Demand nontransaction
Dollar Amounts in Thousands accounts Deposits Accounts
- ----------------------------------------------------------- (including total (included in (including
demand deposits) column A) MMDAs)
<S> <C> <C> <C>
DEPOSITS OF:
1. Individuals, partnerships and corporations..................................1,064,892 892,164 2,789,783 1
2. U.S. Government............................................................. 829 829 0 2
3. States and political subdivisions in the U.S................................ 32,313 28,551 86,949 3
4. Commercial banks in the U.S................................................. 197,510 197,510 0 4
5. Other depository institutions in the U.S.................................... 6,992 6,992 0 5
6. Banks in foreign countries.................................................. 421 421 0 6
7. Foreign governments, and official institutions
(including foreign central banks)........................................... 0 0 0 7
8. Certified and official checks............................................... 4,905 4,905 8
9. Total (sum of items 1 through 8) (sum of
columns A and C must equal Schedule RC,
item 13.a).................................................................1,307,862 1,131,372 2,876,732 9
</TABLE>
<TABLE>
<CAPTION>
MEMORANDA Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Selected components of total deposits (i.e., sum of item 9, columns A and C):
a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts........................................ 141,869 M.1.a
b. Total brokered deposits.................................................................................... 4,000 M.1.b
c. Fully insured brokered deposits (included in Memorandum item 1.b above):
(1) Issued in denominations of less than $100,000......................................................... 0 M.1.c1
(2) Issued either in denominations of $100,000 or in denominations greater than
$100,000 and participated out by the broker in shares of $100,000 or less............................. 0 M.1.c2
d. Maturity data for brokered deposits:
(1) Brokered deposits issued in denominations of less than $100,000 with a remaining
maturity of one year or less (included in Memorandum item 1.c.(1) above) ............................. 0 M.1.d1
(2) Brokered deposits issued in denominations of $100,000 or more with a remaining
maturity of one year or less (included in Memorandum item 1.b above) ................................. 4,000 M.1.d2
e. Preferred deposits (uninsured deposits of states and political subdivisions in the U.S.
reported in item 3 above which are secured or collateralized as required under state law)
(TO BE COMPLETED FOR THE DECEMBER REPORT ONLY) ............................................................ N/A M.1.e
2. Components of total nontransaction accounts (sum of Memorandum items 2.a through 2.d
must equal item 9, column C, above):
a. Savings deposits:
(1) Money market deposit accounts (MMDAs)................................................................... 871,820 M.2.a1
(2) Other savings deposits (excludes MMDAs)................................................................. 995,983 M.2.a2
b. Total time deposits of less than $100,000................................................................... 691,673 M.2.b
c. Total time deposits of $100,000 or more .................................................................... 317,256 M.2.c
3. All NOW accounts (included in column A above).................................................................. 176,490 M.3
4. Not applicable
</TABLE>
<PAGE> 20
SCHEDULE RC-E - CONTINUED
<TABLE>
<CAPTION>
MEMORANDA (CONTINUED) Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
5. Maturity and repricing data for time deposits of less than $100,000 :
a. Time deposits of less than $100,000 with a remaining maturity or
repricing frequency of: (1, 2)
(1) Three months or less .................................................................................. 200,559 M.5.a1
(2) Over three months through 12 months.................................................................... 295,403 M.5.a2
(3) Over one year through three years ..................................................................... 171,895 M.5.a3
(4) Over three years ...................................................................................... 23,816 M.5.a4
b. Fixed rate AND floating rate time deposits of less than $100,000 with a REMAINING
MATURITY of one year or less (included in Memorandum items 5.a.(1)
through 5.a.(4) above) .................................................................................... 483,160 M.5.b
6. Maturity and repricing data for time deposits of $100,000 or more:
a. Time deposits of $100,000 or more with a remaining maturity or repricing
frequency of: (1, 3)
(1) Three months or less ................................................................................... 94,581 M.6.a1
(2) Over three months through 12 months..................................................................... 119,942 M.6.a2
(3) Over one year through three years ...................................................................... 93,803 M.6.a3
(4) Over three years ....................................................................................... 8,930 M.6.a4
b. Fixed rate AND floating rate time deposits of $100,000 or more with a REMAINING
MATURITY of one year or less (included in Memorandum items 6.a.(1)
through 6.a.(4) above) ..................................................................................... 211,876 M.6.b
</TABLE>
- -------------
(1) Report fixed rate time deposits by remaining maturity and floating rate
time deposits by repricing frequency.
(2) Sum of Memorandum items 5.a.(1) through 5.a.(4) must equal Schedule RC-E
Memorandum item 2.b above.
(3) Sum of Memorandum items 6.a.(1) through 6.b.(4) must equal Schedule RC-E
Memorandum item 2.c above.
<PAGE> 21
SCHEDULE RC-F - OTHER ASSETS
<TABLE>
<CAPTION>
C330 <-
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Income earned, not collected on loans ....................................................................... 36,167 1
2. Net deferred tax assets (1).................................................................................. 25,477 2
3. Interest-only strips receivable (not in the form of a security)(2) on:
a. Mortgage loans ........................................................................................... 0 3.a
b. Other financial assets ................................................................................... 0 3.b
4. Other (itemize and describe amounts that exceed 25% of this item)............................................ 20,928 4
TEXT
a. SECURITIES-ACCRD INC 7,422 4.a
b. 0 4.b
c. 0 4.c
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11)........................................... 82,572 5
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
MEMORANDUM
1. Deferred tax assets disallowed for regulatory capital purposes............................................... 0 M.1
</TABLE>
SCHEDULE RC-G - OTHER LIABILITIES
<TABLE>
<CAPTION>
C335 <-
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. a. Interest accrued and unpaid on deposits (3) .............................................................. 11,414 1.a
b. Other expenses accrued and unpaid (includes accrued income taxes payable)................................. 32,581 1.b
2. Net deferred tax liabilities (1)............................................................................. 0 2
3. Minority interest in consolidated subsidiaries............................................................... 0 3
4. Other (itemize and describe amounts that exceed 25% of this item)............................................ 6,189 4
TEXT
a. ACCOUNTS PAYABLE 1,955 4.a
b. 0 4.b
c. 0 4.c
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20)........................................... 50,184 5
</TABLE>
- -------------
(1) See discussion of deferred income taxes in Glossary entry on 'income
taxes.'
(2) Report interest-only strips receivable in the form of a security as
available-for sale securities in Schedule RC, item 2.b, or as trading
assets in Schedule RC, item 5, as appropriate.
(3) For savings banks, includes 'dividends' accrued and unpaid on deposits.
<PAGE> 22
SCHEDULE RC-K - QUARTERLY AVERAGES (1)
<TABLE>
<CAPTION>
C355 <-
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
1. Interest-bearing balances due from depository institutions.................................................. 4,166 1
2. U.S. Treasury securities, U.S. Government agency obligations (2) ........................................... 737,291 2
3. Securities issued by states and political subdivisions in the U.S.(2)....................................... 34,750 3
4. a. Other debt securities (2)................................................................................ 250 4.a
b. Equity securities (3) (includes investments in mutual funds and Federal Reserve stock)................... 26,341 4.b
5. Federal funds sold and securities purchased under agreements to resell...................................... 612,819 5
6. Loans:
a. Total loans.............................................................................................. 5,790,884 6.a
b. Loans secured by real estate............................................................................. 1,937,514 6.b
c. Loans to finance agricultural production and other loans to farmers...................................... 69,766 6.c
d. Commercial and industrial loans.......................................................................... 2,817,159 6.d
e. Loans to individuals for household, family, and other personal expenditures.............................. 542,685 6.e
7. Trading assets ............................................................................................. 0 7
8. Lease financing receivables (net of unearned income)........................................................ 151,954 8
9. Total assets(4)............................................................................................. 7,881,082 9
LIABILITIES
10. Interest-bearing transaction accounts (NOW accounts, ATS accounts, and telephone
and preauthorized transfer accounts) (exclude demand deposits)............................................. 164,922 10
11. Nontransaction accounts:
a. Money market deposit accounts (MMDAs)..................................................................... 850,523 11.a
b. Other savings deposits.................................................................................... 985,337 11.b
c. Time deposits of $100,000 or more ........................................................................ 331,631 11.c
d. Time deposits of less than $100,000 ...................................................................... 682,242 11.d
12. Federal funds purchased and securities sold under agreements to repurchase................................... 2,729,264 12
13. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) .............. 307,044 13
</TABLE>
- ----------------
(1) For all items, banks have the option of reporting either (1) an average of
daily figures for the quarter or (2) an average of weekly figures (i.e.,
the Wednesday of each week of the quarter).
(2) Quarterly averages for all debt securities should be based on amortized
cost.
(3) Quarterly averages for all equity securities should be based on historical
cost.
(4) The quarterly averages for total assets should reflect all debt securities
(not held for trading) at amortized cost, equity securities with readily
determinable fair values at the lower of cost or fair value, and equity
securities without readily determinable fair values at historical cost.
<PAGE> 23
SCHEDULE RC-L - OFF-BALANCE SHEET ITEMS
Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume indicators
and not necessarily as measures of risk.
<TABLE>
<CAPTION>
C360 <-
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Unused commitments:
a. Revolving, open-end lines secured by 1-4 family residential properties,
e.g., home equity lines................................................................................. 158,679 1.a
b. Credit card lines....................................................................................... 0 1.b
c. Commercial real estate, construction, and land development:
(1) Commitments to fund loans secured by real estate.................................................... 230,524 1.c.1
(2) Commitments to fund loans not secured by real estate................................................ 81,347 1.c.2
d. Securities underwriting................................................................................. 0 1.d
e. Other unused commitments................................................................................ 4,976,171 1.e
2. Financial standby letters of credit........................................................................ 837,363 2.
a. Amount of financial standby letters of credit conveyed to others............................... 293,348 2.a
3. Performance standby letters of credit...................................................................... 33,291 3.
a. Amount of performance standby letters of credit conveyed to others............................. 7,104 3.a
4. Commercial and similar letters of credit .................................................................. 10,563 4.
5. Participations in acceptances (as described in the instructions) conveyed to others by the
reporting bank............................................................................................. 21 5.
6. Participations in acceptances (as described in the instructions) acquired by the reporting
(nonaccepting) bank........................................................................................ 0 6.
7. Securities borrowed........................................................................................ 0 7.
8. Securities lent (including customers' securities lent where the customer is indemnified
against loss by the reporting bank)........................................................................ 0 8.
9. Financial assets transferred with recourse that have been treated as
sold for Call Report purposes :
a. First lien 1-to-4 family residential mortgage loans :
(1) Outstanding principal balance of mortgages transferred as of the report date ...................... 0 9.a.1
(2) Amount of recourse exposure on these mortgages as of the report date .............................. 0 9.a.2
b. Other financial assets (excluding small business obligations reported in item 9.c) :
(1) Outstanding principal balance of assets transferred as of the report date ......................... 0 9.b.1
(2) Amount of recourse exposure on these assets as of the report date ................................. 0 9.b.2
c. Small business obligations transferred with recourse under Section 208 of the Riegle
Community Development and Regulatory Improvement Act of 1994:
(1) Outstanding principal balance of small business obligations transferred as of the report date....... 0 9.c.1
(2) Amount of retained recourse on these obligations as of the report date.............................. 0 9.c.2
10. Notional amount of credit derivatives :
a. Credit derivatives on which the reporting bank is the guarantor ........................................ 0 10.a
b. Credit derivatives on which the reporting bank is the beneficiary ...................................... 0 10.b
11. Spot foreign exchange contracts............................................................................ 0 11
12. All other off-balance sheet liabilities (exclude off-balance sheet derivatives) (itemize and describe
each component of this item over 25% of Schedule RC, item 28, 'Total equity capital')...................... 0 12
TEXT
a. 0 12.a
b. 0 12.b
c. 0 12.c
d. 0 12.d
</TABLE>
<PAGE> 24
SCHEDULE RC-L CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
13. All other off-balance sheet assets (exclude off-balance sheet derivatives)(itemize and describe
each component of this item over 25% Schedule RC, item 28., 'Total equity capital').......................... 0 13
TEXT
a. 0 13.a
b. 0 13.b
c. 0 13.c
d. 0 13.d
</TABLE>
<TABLE>
<CAPTION>
C361 <-
(Column A) (Column B) (Column C) (Column D)
OFF-BALANCE SHEET DERIVATIVES Interest Foreign Equity Commodity
POSITION INDICATORS Rate Exchange Derivative and other
Contracts Contracts Contracts Contracts
<S> <C> <C> <C> <C>
14. Gross amounts (e.g., notional amounts) (for each
column, sum of items 14.a through 14.e
must equal sum of items 15, 16.a and 16.b):
a. Futures contracts................................ 0 0 0 0 14.a
b. Forward contracts................................ 0 0 0 0 14.b
c. Exchange-traded option contracts:
(1) Written options.............................. 0 0 0 0 14.c1
(2) Purchased Options............................ 0 0 0 0 14.c2
d. Over-the-counter options contracts:
(1) Written options.............................. 0 0 0 0 14.d1
(2) Purchased options............................ 0 0 0 0 14.d2
e. Swaps............................................ 155,328 0 0 0 14.e
15. Total gross notional amount of
derivative contracts held for trading............... 0 0 0 0 15
16. Total gross notional amount of
derivative contracts held for
purposes other than trading:
a. Contracts marked to market....................... 0 0 0 0 16.a
b. Contracts not marked to market................... 155,328 0 0 0 16.b
c. Interest rate swaps where the bank
has agreed to pay a fixed rate .................. 55,328 16.c
</TABLE>
<PAGE> 25
SCHEDULE RC-L CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
(Column A) (Column B) (Column C) (Column D)
OFF-BALANCE SHEET DERIVATIVES Interest Foreign Equity Commodity
POSITION INDICATORS Rate Exchange Derivative and other
Contracts Contracts Contracts Contracts
<S> <C> <C> <C> <C>
17. Total gross fair value of derivative contracts:
a. Contracts held for trading:
(1) Gross positive fair value................... 0 0 0 0 17.a1
(2) Gross negative fair value................... 0 0 0 0 17.a2
b. Contracts held for purposes other than
trading that are marked to market:
(1) Gross positive fair value................... 0 0 0 0 17.b1
(2) Gross negative fair value................... 0 0 0 0 17.b2
c. Contracts held for purposes other than
trading that are not marked to market:
(1) Gross positive fair value................... 4,575 0 0 0 17.c1
(2) Gross negative fair value................... 1,592 0 0 0 17.c2
</TABLE>
<TABLE>
<CAPTION>
MEMORANDA Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. -2. Not applicable
3. Unused commitments with an original maturity exceeding one year that are
reported in Schedule RC-L, items 1.a through 1.e, above (report only the
unused portions of commitments that are fee paid or otherwise legally binding)...................... 3,677,860 M.3
a. Participations in commitments with an original maturity
exceeding one year conveyed to others..................................................397,744 M.3.a
4. To be completed only by banks with $ 1 billion or more in total assets:
Standby letters of credit (both financial and performance) issued to non-U.S. addressees
(domicile) included in Schedule RC-L, items 2 and 3, above.......................................... 1,614 M.4
5. Loans to individuals for household, family, and other personal expenditures that
have been securitized and sold (with servicing retained), amounts
outstanding by type of loan:
a. Loans to purchase private passenger automobiles
(to be completed for the September report only).................................................. N/A M.5.a
b. Credit cards and related plans ( TO BE COMPLETED QUARTERLY )..................................... 0 M.5.b
c. All other consumer credit (including mobile home loans)
(to be completed for the September report only).................................................. N/A M.5.c
</TABLE>
<PAGE> 26
SCHEDULE RC-M-MEMORANDA
<TABLE>
<CAPTION>
C365 <-
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, principal
shareholders, and their related interests as of the report date:
a. Aggregate amount of all extensions of credit to all executive officers, directors, principal
shareholders, and their related interests............................................................... 111,308 1.a
b. Number of executive officers, directors, and principal shareholders to whom the amount of
all extensions of credit by the reporting bank (including extensions of credit to
related interests) equals or exceeds the lesser of $500,000 or 5 percent Number
of total capital as defined for this purpose in agency regulations................... 9 1.b
2. Federal funds sold and securities purchased under agreements to resell with U.S. branches
and agencies of foreign banks (1) (included in Schedule RC, item 3) ....................................... 0 2
3. Not applicable.
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for others
(include both retained servicing and purchased servicing):
a. Mortgages serviced under a GNMA contract............................................................... 0 4.a
b. Mortgages serviced under a FHLMC contract:
(1) Serviced with recourse to servicer................................................................. 0 4.b.1
(2) Serviced without recourse to servicer.............................................................. 0 4.b.2
c. Mortgages serviced under a FNMA contract:
(1) Serviced under a regular option contract........................................................... 0 4.c.1
(2) Serviced under a special option contract........................................................... 0 4.c.2
d. Mortgages serviced under other servicing contracts..................................................... 0 4.d
5. To be completed only by banks with $ 1 billion or more in total assets:
Customers' liability to this bank on acceptances outstanding (sum of items 5.a and 5.b must
equal Schedule RC item 9):
a. U.S. addressees (domicile).............................................................................. 1,847 5.a
b. Non-U.S. addressees (domicile).......................................................................... 0 5.b
6. Intangible assets:
a. Mortgage servicing rights............................................................................... 0 6.a
(1) Estimated fair value of mortgage servicing assets .................................................. 0 6.a.1
b. Other identifiable intangible assets:
(1) Purchased credit card relationships................................................................. 0 6.b.1
(2) All other identifiable intangible assets............................................................ 0 6.b.2
c. Goodwill................................................................................................ 0 6.c
d. Total (sum of items 6.a, 6.b.(1), 6.b.(2), and 6.c) (must equal Schedule RC, item 10) .................. 0 6.d
e. Amount of intangible assets (included in item 6.b.(2) above) that have been
grandfathered or are otherwise qualifying for regulatory capital purposes............................... 0 6.e
7. Mandatory convertible debt, net of common or perpetual preferred stock dedicated to
redeem the debt............................................................................................ 0 7
</TABLE>
- ---------
(1) Do not report federal funds sold and securities purchased under
agreements to resell with other commercial banks in the U.S. in this
item.
<PAGE> 27
SCHEDULE RC-M - CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
8. a.Other real estate owned:
(1) Direct and indirect investments in real estate ventures.............................................. 0 8.a.1
(2) All other real estate owned:
(a) Construction and land development................................................................ 0 8.a.2a
(b) Farmland......................................................................................... 0 8.a.2b
(c) 1-4 family residential properties................................................................ 2,050 8.a.2c
(d) Multifamily (5 or more) residential properties................................................... 0 8.a.2d
(e) Nonfarm nonresidential properties................................................................ 21 8.a.2e
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule RC, item 7)............................ 2,071 8.a.3
b.Investments in unconsolidated subsidiaries and associated companies:
(1) Direct and indirect investments in real estate ventures.............................................. 0 8.b.1
(2) All other investments in unconsolidated subsidiaries and associated companies........................ 7,804 8.b.2
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8)............................ 7,804 8.b.3
9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC,
item 23, "Perpetual preferred stock and related surplus"................................................... 0 9
10. Mutual fund and annuity sales during the quarter (including proprietary, private label,
and third party products):
a. Money market funds...................................................................................... 175,469 10.a
b. Equity securities funds................................................................................. 10,748 10.b
c. Debt securities funds................................................................................... 7,601 10.c
d. Other mutual funds...................................................................................... 10,591 10.d
e. Annuities............................................................................................... 3,523 10.e
f. Sales of proprietary mutual funds and annuities (included in items 10.a through
10.e above)............................................................................................. 189,641 10.f
11. Net unamortized realized deferred gains (losses) on off-balance sheet derivative
contracts included in assets and liabilities reported in Schedule RC ...................................... 0 11
12. Amount of assets netted against nondeposit liabilities on the balance sheet (Schedule RC)
in accordance with generally accepted accounting principles(1) ............................................ 0 12
13. Outstanding principal balance of loans other than 1-4 family residential mortgage loans
that are serviced for others (to be completed if this balance is more than $10 million and
exceeds ten percent of total assets) ...................................................................... 0 13
</TABLE>
<TABLE>
<CAPTION>
MEMORANDUM Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Reciprocal holdings of banking organizations' capital instruments
(to be completed for the December report only) .............................................................. N/A M.1
</TABLE>
- -----------
(1) Exclude netted on-balance sheet amounts associated with off-balance sheet
derivative contracts, deferred tax assets netted against deferred tax
liabilities, and assets netted in accounting for pensions.
<PAGE> 28
SCHEDULE RC-N - PAST DUE AND NONACCRUAL LOANS, LEASES, AND OTHER ASSETS
The FFIEC regards the information reported in all of Memorandum item 1, in items
1 through 10, column A, and in Memorandum items 2 through 4, column A, as
confidential.
C370 <-
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--(Column A)-- --(Column B)-- --(Column C)--
Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
<S> <C> <C> <C>
1. Loans secured by real estate:
a. To U.S. addressees (domicile) ............................. 23,781 408 7,699 1.a
b. To non-U.S. addressees (domicile) ......................... 0 0 0 1.b
2. Loans to depository institutions and acceptances
of other banks:
a. To U.S. banks and other U.S. depository
institutions ............................................. 0 0 0 2.a
b. To foreign banks .......................................... 0 0 0 2.b
3. Loans to finance agricultural production and
other loans to farmers ....................................... 0 0 20 3.
4. Commercial and industrial loans:
a. To U.S. addressees (domicile) ............................. 2,372 40 1,157 4.a
b. To non-U.S. addressees (domicile) ......................... 0 0 0 4.b
5. Loans to individuals for household, family, and other personal
expenditures:
a. Credit cards and related plans ............................ 28 32 7 5.a
b. Other (includes single payment, installment,
and all student loans) ................................... 3,504 414 817 5.b
6. Loans to foreign governments and official
institutions ................................................. 0 0 0 6
7. All other loans ............................................... 4,228 0 0 7
8. Lease financing receivables:
a. Of U.S. addressees (domicile) ............................. 204 0 1,791 8.a
b. Of non-U.S. addressees (domicile) ......................... 0 0 0 8.b
9. Debt securities and other assets (exclude other
real estate owned and other repossessed assets) .............. 0 0 0 9
</TABLE>
================================================================================
Amounts reported in items 1 through 8 above include guaranteed and unguaranteed
portions of past due and nonaccrual loans and leases. Report in item 10 below
certain guaranteed loans and leases that have already been included in the
amounts reported in items 1 through 8.
<TABLE>
<S> <C> <C> <C>
10. Loans and leases reported in items 1
through 8 above which are wholly or partially
guaranteed by the U.S. Government ............................ 83 0 122 10
a. Guaranteed portion of loans and leases
included in item 10 above ................................ 75 0 91 10.a
</TABLE>
<PAGE> 29
SCHEDULE RC-N CONTINUED
C373 <-
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--(Column A)-- --(Column B)-- --(Column C)--
MEMORANDA Past due Past due 90 Nonaccrual
30 through 89 days or more
days and still and still
accruing accruing
<S> <C> <C> <C>
1. Restructured loans and leases included in
Schedule RC-N, items 1 through 8, above
(and not reported in Schedule RC-C,
Memorandum item 2) .............................. 0 0 0 M.1
2. Loans to finance commercial real estate,
construction, and land development activities
(not secured by real estate) included in
Schedule RC-N, items 4 and 7, above ............. 4,210 0 0 M.2
3. Loans secured by real estate (sum of
Memorandum items 3.a through 3.e must
equal sum of Schedule RC-N items 1.a and
1.b above):
a. Construction and land development ............ 303 0 1,821 M.3a
b. Secured by farmland .......................... 0 0 2,057 M.3b
c. Secured by 1-4 family residential properties:
(1) Revolving, open-end loans secured by
1-4 family residential properties and
extended under lines of credit ......... 61 80 227 M.3.c1
(2) All other loans secured by 1-4 family
residential properties ................. 4,512 28 2,001 M.3c2
d. Secured by multifamily (5 or more) residential
properties ................................... 0 0 65 M.3d
e. Secured by nonfarm nonresidential properties . 18,905 300 1,528 M.3e
</TABLE>
<TABLE>
<CAPTION>
--(Column A)-- --(Column B)--
Past due Past due 90
30 through 89 days or more
days and still and still
accruing accruing
<S> <C> <C>
4. Interest rate, foreign exchange rate, and other
commodity and equity contracts:
a. Book value of amounts carried as assets .... 0 0 M.4.a
b. Replacement cost of contracts with a
positive replacement cost ................. 0 0 M.4.b
</TABLE>
- --------------------------------------------------------------------------------
C377 <-
PERSON TO WHOM QUESTIONS ABOUT THE REPORTS OF CONDITION AND INCOME SHOULD BE
DIRECTED:
<TABLE>
<CAPTION>
TELEPHONE:
NAME TITLE AREA CODE/PHONE NUMBER/EXTENSION
----------------------------------------------------------------------
<S> <C> <C>
KEN MUTELL VP 404-724-3833
----------------------------------------------------------------------
</TABLE>
Even though Call Reports must be filed electronically,
send my bank a sample set of paper Call Report Forms YES / NO
for the next quarter: ................................ NO
FAX: AREA CODE/PHONE NUMBER
---------------------------
---------------------------
- --------------------------------------------------------------------------------
<PAGE> 30
SCHEDULE RC-O - OTHER DATA FOR DEPOSIT INSURANCE AND FICO ASSESSMENTS
C375 <-
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Unposted debits (see instructions):
a. Actual amount of all unposted debits ....................................................... 107 1.a
OR
b. Separate amount of unposted debits:
(1) Actual amount of unposted debits to demand deposits .................................... 0 1.b.1
(2) Actual amount of unposted debits to time and savings deposits (1) ...................... 0 1.b.2
2. Unposted credits (see instructions):
a. Actual amount of all unposted credits ...................................................... 0 2.a
OR
b. Separate amount of unposted credits:
(1) Actual amount of unposted credits to demand deposits ................................... 5,909 2.b.1
(2) Actual amount of unposted credits to time and savings deposits (1) ..................... 0 2.b.2
3. Uninvested trust funds (cash) held in bank's own trust department (not included
in total deposits) ............................................................................ 0 3.
4. Deposits of consolidated subsidiaries (not included in total deposits):
a. Demand deposits of consolidated subsidiaries ............................................... 0 4.a
b. Time and savings deposits (1) of consolidated subsidiaries ................................. 0 4.b
c. Interest accrued and unpaid on deposits of consolidated subsidiaries ....................... 0 4.c
5. Not applicable ................................................................................
6. Reserve balances actually passed through to the Federal Reserve by the reporting bank on
behalf of its respondent depository institutions that are also reflected as deposit liabilities
of the reporting bank:
a. Amount reflected in demand deposits (included in Schedule RC-E,
Memorandum item 4.a) ....................................................................... 121 6.a
b. Amount reflected in time and savings deposits (1) (included in Schedule RC-E,
Memorandum item 4.b) ....................................................................... 0 6.b
7. Unamortized premiums and discounts on time and savings deposits:(1)(2)
a. Unamortized premiums ....................................................................... 0 7.a
b. Unamortized discounts ...................................................................... 0 7.b
8. To be completed by banks with " Oakar deposits "
a. Deposits purchased or acquired from other FDIC-insured
institutions during the quarter :
(1) Total deposits purchased or acquired from other
FDIC-insured institutions during the quarter ........................................... 0 8.a.1
(2) Amount of purchased or acquired deposits reported in item 8.a.(1)
above attributable to a secondary fund (i.e., BIF members report
deposits attributable to SAIF; SAIF members report deposits attributable to BIF) ....... 0 8.a.2
b. Total deposits sold or transferred to other FDIC-Insured institutions during the quarter ... 0 8.b
9. Deposits in lifeline accounts ................................................................. 9
10. Benefit-responsive 'Depository Institution Investment Contracts' (included in total
deposits) ..................................................................................... 0 10.
</TABLE>
- ----------------------------
(1) For FDIC insurance and FICO assessment purposes,'time and savings
deposits' consists of nontransaction accounts and all nontransaction
accounts and all transactions accounts other than demand deposits.
(2) Exclude core deposit intangibles.
<PAGE> 31
SCHEDULE RC-O - CONTINUED
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
11. Adjustments to demand deposits reported in Schedule RC-E for certain
reciprocal demand balances:
a. Amount by which demand deposits would be reduced if the reporting
bank's reciprocal demand balances with the domestic offices of U.S.
banks and savings associations and insured branches in Puerto Rico
and U.S. territories and possessions that were reported on a gross
basis in Schedule RC-E had been reported on a net basis .................. 0 11.a
b. Amount by which demand deposits would be increased if the reporting
bank's reciprocal demand balances with foreign banks and foreign
offices of other U.S. banks (other than insured branches in Puerto
Rico and U.S. territories and possessions) that were reported on a
net basis in Schedule RC-E had been reported on a gross basis ............ 0 11.b
c. Amount by which demand deposits would be reduced if cash items in
process of collection were included in the calculation of the
reporting bank's net reciprocal demand balances with the domestic
offices of U.S. banks and savings associations and insured branches
in Puerto Rico and U.S. territories and possessions in Schedule RC-E ..... 0 11.c
12. Amount of assets netted against deposit liabilities
on the balance sheet (Schedule RC) in accordance with generally accepted
accounting principles (exclude amounts related to reciprocal demand
balances) :
a. Amount of assets netted against demand deposits .......................... 0 12.a
b. Amount of assets netted against time and savings deposits ................ 0 12.b
</TABLE>
MEMORANDA (TO BE COMPLETED EACH QUARTER EXCEPT AS NOTED)
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
1. Total deposits of the bank (sum of Memorandum items 1.a.(1) and 1.b.(1)
must equal Schedule RC, item 13.a):
a. Deposit accounts of $100,000 or less:
(1) Amount of deposit accounts of $100,0000 or less ................................. 2,584,881 M.1.a1
(2) Number of deposit accounts of $100,000 or less NUMBER
(TO BE COMPLETED FOR THE JUNE REPORT ONLY) ...................................... N/A M.1.a2
b. Deposit accounts of more than $100,000:
(1) Amount of deposit accounts of more than $100,000 1,599,713 M.1.b1
(2) Number of deposit accounts of more than $100,000 ................................ 4,803 M.1.b2
2. Estimated amount of uninsured deposits of the bank:
a. An estimate of your bank's uninsured deposits can be determined by
multiplying the number of deposit accounts of more than $100,000
reported in Memorandum item 1.b.(2) above by $100,000 and subtracting
the result from the amount of deposit accounts of more than $100,000
reported in Memorandum item 1.b.(1) above.
Indicate in the appropriate box at right whether your bank has a method or
procedure for determining a better estimate of uninsured deposits than the YES / NO
estimate described above NO M.2.a
b. If the box marked YES has been checked, report the estimate of uninsured deposits
determined by using your bank's method or procedure 0 M.2.b
3. Has the reporting institution been consolidated with a parent bank or
savings association in that parent bank's or parent savings association's
Call Report or Thrift Financial Report ?
If so, report the legal title and FDIC Certificate Number of the
parent bank or parent savings association:
TEXT FDIC CERT NO.
N/A M.3
</TABLE>
<PAGE> 32
SCHEDULE RC-R - REGULATORY CAPITAL
This schedule must be completed by all banks as follows: Banks that reported
total assets of $1 billion or more in Schedule RC item 12, for June 30, 1997 ,
must complete items 2 through 9 and Memoranda items 1 and 2. BANKS WITH ASSETS
OF LESS THAN $1 BILLION MUST COMPLETE ITEMS 1 THROUGH 3 BELOW OR SCHEDULE RCR IN
ITS ENTIRETY, DEPENDING ON THEIR RESPONSE TO ITEM 1 BELOW.
C380 <-
<TABLE>
<S> <C>
1. TEST FOR DETERMINING THE EXTENT TO WHICH SCHEDULE RC-R MUST BE COMPLETED.
TO BE COMPLETED ONLY BY BANKS WITH TOTAL ASSETS OF LESS THAN $1 BILLION.
Indicate in the appropriate box at the right whether the bank has total YES / NO
capital greater than or equal to eight percent of adjusted total assets ............................. NO 1.
For purposes of this test, adjusted total assets equals total assets
less cash, U.S. Treasuries, U.S. Government agency obligations, and 80
percent of U.S. Government-sponsored agency obligations plus the allowance
for loan and lease losses and selected off-balance sheet items as reported
on Schedule RC-L (see instructions).
If the box marked YES has been checked, then the bank only has to
complete items 2 and 3 below. If the box marked NO has been checked, the
bank must complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual
risk-based capital ratio is less than eight percent or that the bank is not
in compliance with the risk-based capital guidelines.
</TABLE>
NOTE: ALL BANKS ARE REQUIRED TO COMPLETE
ITEMS 2 AND 3 BELOW.
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
2. Portion of qualifying limited-life capital instruments (original weighted
average maturity of at least five years) that is includible in Tier 2
capital :
a. Subordinated debt (1) and intermediate term preferred stock .................. 160,000 2.a
b. Other limited-life capital instruments ....................................... 0 2.b
3. Amounts used in calculating regulatory capital ratios (report amounts
determined by the bank for its own internal regulatory capital analyses
consistent with applicable capital standards) :
a. (1) Tier 1 capital ........................................................... 540,596 3.a.(1)
(2) Tier 2 capital ........................................................... 249,205 3.a.(2)
(3) TIER 3 CAPITAL ........................................................... 0 3.a.(3)
b. Total risk-based capital ..................................................... 789,801 3.b
c. Excess allowance for loan and lease losses
(amount that exceeds 1.25% of gross risk-weighted assets) .................... 0 3.c
d. (1) Net risk-weighted assets (gross risk-weighted assets less excess
allowance reported in item 3.c above and all other deductions) ........... 7,724,420 3.d.1
(2) MARKET RISK EQUIVALENT ASSETS ............................................ 0 3.d.2
E. MAXIMUM CONTRACTUAL DOLLAR AMOUNT OF RECOURSE EXPOSURE IN LOW LEVEL
RECOURSE TRANSACTIONS (TO BE COMPLETED ONLY IF THE BANK USES THE
"DIRECT REDUCTION METHOD" TO REPORT THESE TRANSACTIONS IN SCHEDULE RC-R) .... 0 3.e
f. "Average total assets" (quarterly average reported in Schedule RC-K,
item 9, less all assets deducted from Tier 1 capital)(2) ..................... 7,881,082 3.f
</TABLE>
Items 4-9 and Memoranda items 1 and 2 are to be completed by
banks that answered NO to item 1 above and by banks with total
assets of $1 billion or more.
<TABLE>
<CAPTION>
--(Column A)-- --(Column B)-- 3.f
Assets Credit Equiv-
Recorded valent Amount
on the of Off-Balance
Dollar Amounts in Thousands Balance Sheet Sheet Items (3)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
4. Assets and credit equivalent amount of off-balance sheet items assigned to
the Zero percent risk category:
a. Assets recorded on the balance sheet ......................................... 932,467 4.a
b. Credit equivalent amount of off-balance sheet items .......................... 0 4.b
</TABLE>
- ----------------------------
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7.
(2) Do not deduct excess allowance for loan and lease losses.
(3) Do not report in column B the risk-weighted amount of assets reported
in column A.
<PAGE> 33
SCHEDULE RC-R - CONTINUED
<TABLE>
<CAPTION>
--(Column A)-- --(Column B)--
Assets Credit Equiv-
Recorded valent Amount
on the of Off-Balance
Dollar Amounts in Thousands Balance Sheet Sheet Items (2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
5. Assets and credit equivalent amounts of off-balance sheet items assigned to
the 20 percent risk category:
a. Assets recorded on the balance sheet 1,148,491 5.a
b. Credit equivalent amount of off-balance sheet items 580,068 5.b
6. Assets and credit equivalent amounts of off-balance sheet items assigned to
the 50 percent risk category:
a. Assets recorded on the balance sheet 1,298,627 6.a
b. Credit equivalent amount of off-balance sheet items 127,269 6.b
7. Assets and credit equivalent amounts of off-balance sheet items assigned to
the 100 percent risk category:
a. Assets recorded on the balance sheet 4,671,376 7.a
b. Credit equivalent amount of off-balance sheet items 1,994,384 7.b
8. On-balance sheet asset values excluded from and deducted in
the calculation of the risk-based capital ratio(2) 7,109 8.
9. Total assets recorded on the balance sheet (sum of items 4.a, 5.a, 6.a,
7.a, and 8, column A) (must equal Schedule RC,
item 12.c plus items 4.b and 4.c) 8,058,070 9.
</TABLE>
<TABLE>
<CAPTION>
MEMORANDA Dollar Amounts in Thousands
- --------------------------------------------------------------------------------
<S> <C>
1. Current credit exposure across all off-balance sheet derivative
contracts covered by the risk-based capital standards 4,575 M.1
</TABLE>
<TABLE>
<CAPTION>
----------- WITH A REMAINING MATURITY OF ----------
--(Column A)-- --(Column B)-- --(Column C)--
One Year Over Over
or less one year five years
2. Notional principal amounts of off-balance thru five years
sheet derivative contracts:(3)
<S> <C> <C> <C>
a. Interest rate contracts ............................................... 0 23,572 131,756 M.2.a
b. Foreign exchange contracts ............................................ 0 0 0 M.2.b
c. Gold contracts ........................................................ 0 0 0 M.2.c
d. Other precious metals contracts ....................................... 0 0 0 M.2.d
e. Other commodity contracts ............................................. 0 0 0 M.2.e
f. Equity derivatives contracts ......................................... 0 0 0 M.2.f
</TABLE>
- ----------------------------
(1) Do not report in column B the risk-weighted amount of assets reported
in column A.
(2) Include the difference between the fair value and the amortized cost of
its available-for-sale securities in item 8 and report the amortized
cost of these securities in items 4 through 7 above. Item 8 also
includes on-balance sheet asset values (or portions thereof) of
off-balance sheet interest rate, foreign exchange rate, and commodity
contracts and those contracts (e.g. future contracts) not subject to
risk-based capital. item 8 margin accounts and accrued receivables not
included in the calculation of credit equivalent amounts of off-balance
sheet derivatives as well as any portion of the allowance for loan and
lease losses in excess of the amount that may be included in Tier 2
capital.
(3) Exclude foreign exchange contracts with an original maturity of 14 days
or less and all futures contracts.
<PAGE> 34
OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS
REPORTED IN THE REPORTS OF CONDITION AND INCOME
at close of business on March 31, 1998
SUNTRUST BANK,CENTRAL FLORIDA N.A. ATLANTA GA
---------------------------------- ------- --
LEGAL TITLE OF BANK CITY STATE
The management of the reporting bank may, if it wishes, submit a brief narrative
statement on the amounts reported in the Reports of Condition and Income. This
optional statement will be made available to the public, along with the publicly
available data in the Reports of Condition and Income, in response to any
request for individual bank report data. However the information reported in
column A and in all of Memorandum item 1 of Schedule RC-N is regarded as
confidential and will not be released to the public.
BANKS CHOOSING TO SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE
STATEMENT DOES NOT CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK
CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN
SCHEDULE RC-N, OR ANY OTHER INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE
PUBLIC OR THAT WOULD COMPROMISE THE PRIVACY OF THEIR CUSTOMERS.
All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy.
If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing narrative
statement will be deleted from the files, and from disclosure; the bank at its
option, may replace it with a statement appropriate to the amended area.
The optional narrative statement will appear in agency records and in release to
the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank.
THE STATEMENT WILL NOT EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES
FOR ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT
ANY FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.
- --------------------------------------------------------------------------------
C371 C372 <-
X = NO COMMENT - Y = COMMENT ........................................... X
BANK MANAGEMENT STATEMENT (please type or print clearly):
TEXT 6980 (70 CHARACTERS PER LINE)
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SIGNATURE OF EXECUTIVE OFFICER OF BANK DATE OF SIGNATURE
<PAGE> 35
THIS PAGE IS TO BE COMPLETED BY ALL BANKS
- --------------------------------------------------------------------------------
SUNTRUST BANK,CENTRAL FLORIDA N.A. OMB No. For FDIC: 1557-0081
P.O. BOX 4418 CENTER 632 OMB No. For FDIC: 3064-0052
ATLANTA, GA 30302 OMB No. For Federal Reserve: 7100-0036
Expiration Date: 3/31/2000
SPECIAL REPORT
C700 <-
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- --------------------------------------------------------------------------------
Close of Busi-
ness Date: FDIC Cert. #
<S> <C>
03/31/98 21043
</TABLE>
- --------------------------------------------------------------------------------
LOANS TO EXECUTIVE OFFICERS (COMPLETE AS OF EACH CALL REPORT DATE)
- --------------------------------------------------------------------------------
The following information is required by Public Laws 90-44 and 102-242, but does
not constitute a part of the Report of Condition. With each Report of Condition,
these Laws require all banks to furnish a report of all loans or other
extensions of credit to their executive officers made since the date of the
previous Report of Condition. Data regarding individual loans or other
extensions of credit are not required. If no such loans or other extensions of
credit were made during the period, insert "none" against subitem (a). (Exclude
the first $15,000 of indebtedness of each executive officer under bank credit
card plan.) See Section 215.2 and 215.3 of Title 12 of the Code of Federal
Regulations. (Federal Reserve Board Regulation O) for the definitions of
"executive officer" and "extension of credit", respectively. Exclude loans and
other extensions of credit to directors and principal shareholders who are not
executive officers.
The following information is required by Public Laws 90-44 and 102-242, but does
not constitute a part of the Report of
<TABLE>
<S> <C> <C>
a. Number of loans made to executive officers since the previous Call Report date ...... 0 a.
b. Total dollar amount of above loans (in thousands of dollars) ........................ 0 b.
c. Range of interest charged on above loans FROM TO
(example: 9-3/4% = 9.75) ............................................................ 0.00% 0.00% c.
</TABLE>
- --------------------------------------------------------------------------------
SIGNATURE AND TITLE OF OFFICER
AUTHORIZED TO SIGN REPORT: DATE (Month, Day, Year):
- --------------------------------------------------------------------------------
FDIC 8040/53 (3-98)
<PAGE> 36
REPORT OF CONDITION
- --------------------------------------------------------------------------------
Consolidating domestic subsidiaries of the
SUNTRUST BANK,CENTRAL FLORIDA N.A.
IN THE STATE OF GA AT THE CLOSE OF BUSINESS ON MARCH 31, 1998
published in response to call made by (Enter additional information below)
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
STATEMENT OF RESOURCES AND LIABILITIES
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin .............. 547,696
Interest-bearing balances ....................................... 4,167
Securities:
Held-to-maturity securities ..................................... 0
Available-for-sale securities ................................... 725,998
Federal funds sold and securities purchased under agreements to resell 574,904
Loans and lease financing receivables:
Loans and leases, net of unearned income ........................ 6,058,046
LESS: Allowance for loan and lease losses ....................... 89,205
LESS: Allocated transfer risk reserve ........................... 0
Loans and leases, net of unearned income, allowance, and reserve 5,968,841
Trading Assets ...................................................... 0
Premises and fixed assets (including capitalized leases) ............ 52,965
Other real estate owned ............................................. 2,071
Investments in unconsolidated subsidiaries and associated companies . 7,804
Customers' liability to this bank on acceptances outstanding ........ 1,847
Intangible assets ................................................... 0
Other assets ........................................................ 82,572
Total assets ........................................................ 7,968,865
</TABLE>
FDIC /54C (3-90)
- --------------------------------------------------------------------------------
<PAGE> 37
REPORT OF CONDITION (CONTINUED)
- --------------------------------------------------------------------------------
LIABILITIES
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DEPOSITS:
In domestic offices ........................................................ 4,184,594
Noninterest-bearing ..................................................... 1,272,935
Interest-bearing ........................................................ 2,911,659
Federal funds purchased and securities sold under agreements to repurchase ..... 2,524,575
Demand notes issued to the U.S. Treasury ....................................... 0
Trading liabilities ............................................................ 0
Other borrowed money:
With original maturity of one year or less ................................. 502,732
With a remaining maturity of more than one year through three years ........ 0
With a remaining maturity of more than three years ......................... 0
Bank's liability on acceptances executed and outstanding ....................... 1,847
Subordinated notes and debentures .............................................. 160,000
Other liabilities .............................................................. 50,184
Total liabilities .............................................................. 7,423,932
EQUITY CAPITAL
Perpetual preferred stock and related surplus .................................. 0
Common stock ................................................................... 5,098
Surplus ........................................................................ 124,125
Undivided profits and capital reserves ......................................... 411,373
Net unrealized holding gains (losses) on available-for-sale securities ......... 4,337
Total equity capital ........................................................... 544,933
Total liabilities and equity capital ........................................... 7,968,865
</TABLE>
<TABLE>
<S> <C>
I,
We, the undersigned directors, attest to the _______________________________________________
correctness of this statement of resources and liabilities. (NAME, TITLE)
We declare that is has been examined by us, and to of the above named bank do hereby declare
the best of our knowledge and belief has been that this Report of Condition is true and
prepared in conformance with the instructions correct to the best of my knowledge and belief.
and is true and correct.
</TABLE>
Director #1
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Director #2
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Director #3
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FDIC 8040/54B (Page 2)
PRINTER COPY
A 1275 0
B 1275 0
06310215
12-1159
