SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended
September 30, 1998 Commission file #0-16976
ARVIDA/JMB PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 36-3507015
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Avenue., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/440-4800
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such a shorter period that
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
<PAGE>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . 24
PART II OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . 31
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 34
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- -----------
<S> <C> <C>
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . $ 33,611,102 79,411,195
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,491,627 12,444,016
Trade and other accounts receivable (net of allowance for doubtful
accounts of $1,210,935 at September 30, 1998 and $692,940 at
December 31, 1997). . . . . . . . . . . . . . . . . . . . . . . . . . 51,912,209 14,062,505
Mortgages receivable, net . . . . . . . . . . . . . . . . . . . . . . . 4,595 384,445
Real estate inventories . . . . . . . . . . . . . . . . . . . . . . . . 166,087,554 163,423,873
Property and equipment held for disposition or sale . . . . . . . . . . 7,717,749 6,484,713
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . 34,018,769 35,279,528
Investments in and advances to joint ventures, net. . . . . . . . . . . 1,198,697 2,151,694
Equity memberships. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,006,573 4,180,733
Amounts due from affiliates, net. . . . . . . . . . . . . . . . . . . . 886,124 665,134
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . 7,846,474 8,135,020
------------ ------------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . $320,781,473 326,622,856
============ ============
<PAGE>
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(UNAUDITED)
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- -----------
Liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,375,807 16,260,574
Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,438,160 21,930,275
Accrued expenses and other liabilities. . . . . . . . . . . . . . . . 17,996,080 13,057,290
Notes and mortgages payable, net. . . . . . . . . . . . . . . . . . . 66,318,334 78,136,007
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . 142,128,381 129,384,146
------------ ------------
Partners' capital accounts:
General Partner and Associate Limited Partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net income . . . . . . . . . . . . . . . . . . . . . . . 42,573,751 39,766,027
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (41,315,974) (38,508,251)
------------ ------------
1,277,777 1,277,776
------------ ------------
Limited Partners:
Capital contributions, net of offering costs. . . . . . . . . . . . 364,841,815 364,841,815
Cumulative net income . . . . . . . . . . . . . . . . . . . . . . . 110,551,071 78,613,984
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (298,017,571) (247,494,865)
------------ ------------
177,375,315 195,960,934
------------ ------------
Total partners' capital accounts. . . . . . . . . . . . . . . 178,653,092 197,238,710
------------ ------------
Total liabilities and partners' capital . . . . . . . . . . . $320,781,473 326,622,856
============ ============
<FN>
The accompanying notes are an integral part
of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ARVIDA/JMB PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1998 1997 1998 1997
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues:
Housing . . . . . . . . . . . . . . . . . . . . $53,110,915 56,850,265 152,689,387 134,740,429
Homesites . . . . . . . . . . . . . . . . . . . 4,570,600 6,109,836 9,491,598 14,841,540
Land and property . . . . . . . . . . . . . . . 9,039,152 633,940 25,135,478 3,914,289
Operating properties. . . . . . . . . . . . . . 4,801,538 7,509,103 15,295,804 24,289,366
Brokerage and other operations. . . . . . . . . 8,096,875 7,085,481 22,227,882 18,774,739
----------- ----------- ----------- -----------
Total revenues. . . . . . . . . . . . . . 79,619,080 78,188,625 224,840,149 196,560,363
----------- ----------- ----------- -----------
Cost of revenues:
Housing . . . . . . . . . . . . . . . . . . . . 44,021,504 47,964,413 122,806,287 115,347,052
Homesites . . . . . . . . . . . . . . . . . . . 3,027,011 3,835,008 6,200,410 9,049,395
Land and property . . . . . . . . . . . . . . . 6,823,150 507,056 14,935,486 3,034,835
Operating properties. . . . . . . . . . . . . . 4,316,313 6,178,530 13,648,695 20,118,274
Brokerage and other operations. . . . . . . . . 6,887,423 5,828,873 19,694,190 17,005,323
----------- ----------- ----------- -----------
Total cost of revenues. . . . . . . . . . 65,075,401 64,313,880 177,285,068 164,554,879
----------- ----------- ----------- -----------
Gross operating profit. . . . . . . . . . . . . . 14,543,679 13,874,745 47,555,081 32,005,484
Selling, general and administrative expenses. . . (4,716,514) (5,044,291) (13,063,886) (17,243,606)
----------- ----------- ----------- -----------
Net operating income. . . . . . . . . . . 9,827,165 8,830,454 34,491,195 14,761,878
Interest income . . . . . . . . . . . . . . . . . 923,626 500,338 2,690,942 1,531,724
Equity in earnings (losses) of unconsolidated
ventures. . . . . . . . . . . . . . . . . . . . (24,776) 53,692 199,326 73,497
Interest and real estate taxes, net . . . . . . . (841,815) (1,640,154) (2,636,652) (3,612,204)
----------- ----------- ----------- -----------
<PAGE>
ARVIDA/JMB PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1998 1997 1998 1997
----------- ---------- ----------- ----------
Net income. . . . . . . . . . . . . . . . $ 9,884,200 7,744,330 34,744,811 12,754,895
=========== =========== =========== ===========
Net income per Limited
Partnership Interest. . . . . . . . . . $ 21.51 12.56 79.05 21.63
=========== =========== =========== ===========
Cash distributions per
Limited Partnership
Interest. . . . . . . . . . . . . . . . $ 50.00 175.00 125.06 235.04
=========== =========== =========== ===========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 34,744,811 12,754,895
Charges (credits) to net income not requiring (providing) cash:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 2,694,269 2,974,154
Equity in earnings of unconsolidated ventures . . . . . . . . . . . . . . (199,326) (73,496)
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . (3,027) 49,719
Loss on disposition of property and equipment . . . . . . . . . . . . . . 4,992 2,814
Gain on disposition of joint venture interest . . . . . . . . . . . . . . (450,546) --
Changes in:
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,047,611) (3,680,070)
Trade and other accounts receivable . . . . . . . . . . . . . . . . . . . (37,846,677) (5,391,883)
Real estate inventories:
Additions to real estate inventories. . . . . . . . . . . . . . . . . . (130,182,445) (122,775,973)
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,012,376 118,811,464
Capitalized interest. . . . . . . . . . . . . . . . . . . . . . . . . . (4,774,839) (2,517,104)
Capitalized real estate taxes . . . . . . . . . . . . . . . . . . . . . (2,868,587) (2,798,971)
Equity memberships. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,174,160 571,859
Amounts due from affiliates, net. . . . . . . . . . . . . . . . . . . . . (220,990) (343,595)
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . (194,199) (3,817,916)
Accounts payable, accrued expenses and other liabilities. . . . . . . . . 8,944,211 574,304
Deposits and unearned income. . . . . . . . . . . . . . . . . . . . . . . 15,507,885 7,558,908
------------ -----------
Net cash provided by operating activities . . . . . . . . . . . . 19,294,457 1,899,109
------------ -----------
<PAGE>
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
1998 1997
------------ -----------
Cash flows from investing activities:
Mortgages receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . 379,850 827,236
Acquisitions of property and equipment. . . . . . . . . . . . . . . . . . (2,192,008) (2,857,482)
Proceeds from disposals of property and equipment . . . . . . . . . . . . 3,215 2,739
Joint venture distributions (contributions), net. . . . . . . . . . . . . 191,519 249,699
Payments from (advances to) joint ventures. . . . . . . . . . . . . . . . -- (12)
Proceeds from sale of joint venture interest. . . . . . . . . . . . . . . 1,670,976 --
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . 53,552 (1,777,820)
------------ -----------
Cash flows from financing activities:
Proceeds from notes and mortgages payable . . . . . . . . . . . . . . . . 10,861,501 86,580,797
Payments of notes and mortgages payable . . . . . . . . . . . . . . . . . (22,679,174) (25,749,070)
Distributions to General Partner and Associate Limited Partners . . . . . (2,807,742) (4,015,966)
Distributions to Limited Partners . . . . . . . . . . . . . . . . . . . . (50,522,687) (94,955,457)
------------ -----------
Net cash used in financing activities . . . . . . . . . . . . . . (65,148,102) (38,139,696)
------------ -----------
Decrease in Cash and cash equivalents . . . . . . . . . . . . . . . . . . . (45,800,093) (38,018,407)
Cash and cash equivalents, beginning of year. . . . . . . . . . . . . . . . 79,411,195 53,635,737
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . . . . . $ 33,611,102 15,617,330
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest, net of amounts capitalized . . $ 210,072 799,794
============ ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- --
============ ===========
<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1997,
which are included in the Partnership's 1997 Annual Report on Form 10-K
(File No. 0-16976) filed on March 31, 1998, as certain footnote disclosures
which would substantially duplicate those contained in such audited
financial statements have been omitted from this report. Capitalized terms
used but not defined in this quarterly report have the same meanings as in
the Partnership's 1997 Annual Report.
GENERAL
Capitalized Interest and Real Estate Taxes
Interest, including the amortization of loan fees, of $4,774,839 and
$2,874,645 was incurred for the nine months ended September 30, 1998 and
1997, respectively, of which $4,774,839 and $2,517,104 was capitalized,
respectively. Interest payments, including amounts capitalized, of
$4,984,911 and $3,316,898 were made during the nine months ended
September 30, 1998 and 1997, respectively. Interest, including the
amortization of loan fees, of $1,565,027 and $1,558,878 was incurred for
the three months ended September 30, 1998 and 1997, respectively, of which
$1,565,027 and $1,201,337 was capitalized, respectively. Interest
payments, including amounts capitalized of $1,550,078 and $2,041,607 were
made during the three months ended September 30, 1998 and 1997,
respectively. The increase in interest incurred and paid during the nine
months ended September 30, 1998 as compared to the same period in 1997 is
due to an increase in the amount of debt outstanding during the period as
the Partnership obtained a new credit facility on July 31, 1997. This
facility is discussed in detail in the "Notes and Mortgages Payable"
section of the Notes.
Real estate taxes of $5,505,239 and $6,053,634 were incurred for the
nine months ended September 30, 1998 and 1997, respectively, of which
$2,868,587 and $2,798,971 were capitalized, respectively. Real estate tax
payments of $379,910 and $579,935 were made during the nine months ended
September 30, 1998 and 1997, respectively. In addition, real estate tax
reimbursements totaling $280,634 and $244,706 were received from the
Partnership's escrow agent during the nine months ended September 30, 1998
and 1997, respectively. Real estate taxes of $1,910,820 and $2,202,929
were incurred for the three months ended September 30, 1998 and 1997,
respectively, of which $1,069,005 and $920,316 were capitalized,
respectively. Real estate tax payments of $190,233 and $257,622 were made
during the three months ended September 30, 1998 and 1997, respectively.
In addition, real estate tax reimbursements totaling $13,528 and $0, were
received from the Partnership's escrow agent during the three months ended
September 30, 1998 and 1997, respectively. The preceding analysis of real
estate taxes does not include real estate taxes incurred or paid with
respect to the Partnership's club facilities and other operating properties
as these taxes are included in cost of revenues for operating properties.
Property and Equipment and Other Assets
Depreciation expense of $2,211,524 and $2,593,228 was incurred for the
nine months ended September 30, 1998 and 1997, respectively. The decrease
in depreciation expense for the nine months ended September 30, 1998 as
compared to the same period in 1997 resulted from the Partnership
discontinuing the recording of depreciation on its assets held for disposal
<PAGE>
in the first quarter of 1997, in accordance with FASB Statement No. 121.
Amortization of other assets, excluding loan fees, of $295,245 and $212,466
was incurred for the nine months ended September 30, 1998 and 1997,
respectively. Amortization of loan fees, which is included in interest
expense, of $187,500 and $168,460 was incurred for the nine months ended
September 30, 1998 and 1997, respectively. Depreciation expense of
$749,288 and $752,083 was incurred for the three months ended September 30,
1998 and 1997, respectively. Amortization of other assets, excluding loan
fees, of $98,415 and $130,698 was incurred for the three months ended
September 30, 1998 and 1997, respectively. Amortization of loan fees,
which is included in interest expense, of $62,500 and $60,402 was incurred
for the three months ended September 30, 1998 and 1997, respectively.
Partnership Distributions
During September 1998, the Partnership made a distribution for 1998 of
$20,200,000 to its Holders of Interests ($50.00 per Interest) and
$1,122,209 to the General Partner and Associate Limited Partners,
collectively. During February 1998, the Partnership made a distribution
for 1997 of $30,300,000 to its Holders of Interests ($75.00 per Interest)
and $1,683,313 to the General Partner and Associate Limited Partners,
collectively. These distributions are the primary cause for the decrease
in Cash and cash equivalents at September 30, 1998 as compared to
December 31, 1997. In addition, during 1998 distributions totaling $22,706
(approximately $.06 per Interest) were deemed to be paid to the Holders of
Interests, as they were remitted to North Carolina tax authorities on their
behalf for the 1997 non-resident withholding tax. Distributions totaling
$2,201 were also deemed to be made during 1998 to the General Partner and
Associate Limited Partners, collectively, as such amount was remitted to
the North Carolina tax authorities on their behalf.
Year 2000
The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define a year. Consequently, any
computer programs that have time-sensitive software may recognize a date
using "00" as the year 1900 rather than the Year 2000. This could result
in a system failure or miscalculations causing disruptions of operations
including, among other things, a temporary inability to process
transactions or engage in other normal business activities.
The Partnership has organized a team to review and prepare its
computer systems for the Year 2000 compliancy. This team has completed an
internal assessment of its information system technology and determined a
need to upgrade portions of the Partnership's hardware and software so that
its computer systems would function properly with respect to dates in the
Year 2000 and thereafter. The software upgrade was initiated in October
1997 and completed in May 1998 at an approximate cost of $110,000. A plan
has been developed to review and upgrade the Partnership's computer
hardware including its file servers and personal computers, which is
currently estimated to cost approximately $300,000. This estimate includes
the cost of testing the upgraded computer systems and replacing equipment
which is not Year 2000 compliant. The Partnership has commenced its
implementation of the hardware upgrade, which is expected to be completed
in the first quarter of 1999. The Partnership began testing its computer
systems in November 1998 to determine compliance with the Year 2000. Such
testing is estimated to take approximately four weeks. At the conclusion
of the Year 2000 testing, the Partnership will determine if it is necessary
to develop a contingency plan for any application which is not Year 2000
compliant.
<PAGE>
In addition, all third party software vendors who exchange digital
information with the Partnership have been identified and contacted
regarding their Year 2000 compliancy. The Partnership has received either
oral or written responses from these vendors, all of which are in various
stages of addressing the Year 2000 issues. Certain of these software
applications are not deemed critical to the operations of the Partnership.
The Partnership's financial, human resource and payroll applications are
classified as Year 2000 compliant by their respective software vendors, but
have not yet been tested by the Partnership. A test of their compliancy,
as well as that of certain of the Partnership's internally developed
software packages, will be included in the overall system testing scheduled
for the fourth quarter of 1998. The financial, human resource and payroll
application systems are supported by two major software vendors. In the
event the Partnership's system testing reveals that these systems are not
Year 2000 compliant, the Partnership has access to all computer source
codes for all business applications and currently believes it has the
ability to make the necessary changes through the use of internal resources
as well as utilizing third party consultants. However, the Partnership
does not have an estimate of the length of time which could potentially be
required to make these changes, nor an estimate of the costs involved to
make such changes.
The Partnership's general brokerage operation utilizes an accounting
software package for internal reporting purposes which the vendor has
indicated is not yet Year 2000 compliant. However, the vendor is currently
in the process of upgrading its software package and has indicated that
testing of this upgrade will be performed in December 1998. This vendor
has committed to providing an upgrade by no later than March 1999. There
should be no additional cost to the Partnership in connection with this
software upgrade as such upgrade is included in the annual maintenance fee
paid by the Partnership to the vendor. In the event this upgrade is not
completed or does not result in the software application being Year 2000
compliant, the Partnership would expect to utilize its financial software
application to account for its brokerage operation transactions as a
contingency plan. However, the Partnership does not have an estimate of
the length of time which could potentially be required to make these
changes, nor an estimate of the costs involved to make such changes.
The Partnership is in the planning stage to assess its non-information
technology systems (such as its telephone, sprinkler and alarm systems).
Managers of such systems have been instructed to contact the appropriate
third party vendors to determine their Year 2000 compliancy. This
assessment is currently expected to be completed in the first quarter of
1999. In addition, the Partnership has contacted the various banks,
insurance companies and state regulatory agencies with whom the Partnership
has material relationships to determine their Year 2000 readiness.
Responses have been received from some, but not all of these institutions.
The Partnership will contact any of these companies from which no response
is received during the first quarter of 1999. The Partnership does not
exchange digital information with those suppliers utilized in connection
with the development and construction of its communities, and therefore,
does not intend to contact those suppliers. To the extent such suppliers
are unable to perform services due to their Year 2000 related issues, the
Partnership would expect to seek other similar suppliers who are capable of
performing development and construction services.
If the steps taken by the Partnership and its vendors to be Year 2000
compliant are not successful, the Partnership could experience various
operational difficulties. These could include, among other things, an
inability to process transactions to the correct accounting period,
difficulties in posting general ledger interfaces, an inability to process
computer generated checks, bank transactions posted to the wrong periods,
and the failure of scheduling applications which are date sensitive.
<PAGE>
The foregoing discussion of Year 2000 issues and the Partnership's
responses thereto are based upon information presently known and certain
assumptions and estimates (including those relating to costs and timing of
remediation) currently made by the Partnership, as well as statements and
representations made to the Partnership by its third party vendors. There
are various risks that assumptions and estimates made by the Partnership
will not prove to be correct, that delays in testing or remediation may
occur and/or that significant additional remediation efforts may be
required. The Partnership is also relying on the efforts and statements
and representations of third parties, in particular its third party
software vendors. Accordingly, the information concerning the Year 2000
issues and the Partnership's responses thereto, including the nature,
extent, timing and cost of the Partnership's remediation efforts, are
subject to change and such changes could be material. In addition, there
is no assurance that the software applications and packages currently
believed to be Year 2000 compliant will prove to be so after testing or
that the upgrade for the software package used in the Partnership's general
brokerage operation will be delivered on a timely basis or will prove to be
Year 2000 compliant.
Reclassifications
Certain reclassifications have been made to the 1997 financial
statements to conform to the 1998 presentation.
INVESTMENT PROPERTIES
On August 27, 1991, the General Partner, on behalf of the Partnership,
initiated a lawsuit in the Circuit Court of Cook County (County Department,
Chancery Division), Illinois against The Walt Disney Company ("Disney").
The litigation arises out of the Partnership's acquisition of substantially
all of the real estate and other assets of Arvida Corporation, a subsidiary
of Disney, in September 1987. In the complaint filed on its behalf, the
Partnership alleges that under the terms of the contract with Disney for
the acquisition, the purchase price of the assets was to be reduced by the
amount of certain payments made prior to the closing (the "Closing") of the
transaction out of funds of Arvida Corporation in order to satisfy certain
obligations that were not assumed by the Partnership. The complaint also
alleges that the contract entitles the Partnership to (i) reimbursement by
Disney for amounts advanced by the Partnership to pay certain other claimed
obligations of Arvida Corporation, including certain post-Closing
adjustments, in connection with the acquisition and (ii) indemnification by
Disney for additional costs and expenses incurred by the Partnership
subsequent to the Closing in order to remedy certain environmental
conditions that existed prior to the Closing. The complaint further
alleges that the Partnership has made various demands on Disney for payment
of these amounts and that Disney has refused to make such payments. The
Partnership seeks declaratory judgments that the Partnership is entitled to
a purchase price reduction from Disney and reimbursements or
indemnification by Disney for amounts advanced or costs and expenses
incurred by the Partnership for certain obligations of Arvida Corporation
together with interest on all such amounts and costs. During the second
quarter of 1992, the Partnership received approximately $0.8 million in
settlement of portions of this claim. During July 1993, Disney filed an
answer denying the substantive allegations of the Partnership's complaint
and raising various affirmative defenses. The Partnership believes
Disney's defenses are without merit and will continue to pursue its claims.
In addition, Disney has filed a three count counterclaim in which it seeks
among other things: a complete accounting of liabilities allegedly assumed
but not discharged by the Partnership to ascertain whether certain funds,
not to exceed $2.9 million, are due Disney in accordance with the purchase
agreement; an unspecified amount of damages exceeding $500,000 allegedly
representing workers compensation and warranty payments made by Disney,
which Disney alleges are obligations of the Partnership; an accounting for
funds disbursed from a claims pool in the amount of $3,000,000 established
by the parties; and attorney fees and costs. The Partnership intends to
defend itself vigorously against these claims.
<PAGE>
By order dated July 29, 1998, the court granted the Partnership's
motion for summary judgment against Disney on the issue of whether the
Partnership is entitled to a purchase price reduction under the terms of
the contract with Disney for the acquisition of substantially all of the
real estate and other assets of Arvida Corporation. By an order of the
same date, the court denied Disney's motion for summary judgment on the
issue of whether the Partnership is entitled to indemnification for various
environmental issues. Disney is seeking permission to appeal the court's
ruling that the Partnership is entitled to a purchase price reduction. The
case is set for further proceedings before the court, which may include,
among other things, a ruling on Disney's request for permission to appeal
and resolution of the remaining issues in the case. There are no
assurances relating to the amount of damages that the Partnership may
receive or the amount of liability that the Partnership may incur in
connection with the remaining issues to be addressed by the court.
NOTES AND MORTGAGES PAYABLE
On July 31, 1997, the Partnership obtained a new credit facility from
certain banks, with Barnett Bank, N.A. ("Barnett") being the primary agent
on the facility. The credit facility consists of a $75 million term loan,
a $20 million revolving line of credit and a $5 million letter of credit
facility. This credit facility matures on July 31, 2001. The term loan
has annual scheduled principal repayments of $12.5 million, as well as
additional annual principal repayments based upon a specified percentage or
amount of the Partnership's available cash. The maximum required principal
repayments, including the scheduled repayments, generally will not exceed
$18.75 million per annum. The remaining outstanding balance on the
facility is due upon maturity. Prior to September 1, 1998, interest on the
facility was based, at the Partnership's option, on the relevant LIBOR plus
2.25% per annum or Barnett's prime rate (8.25% at September 30, 1998). The
Partnership also obtained interest rate swaps covering two-thirds of the
original term loan commitment which are amortized annually until
termination of the swap agreements on July 31, 2001. Loan fees totaling 1%
of the total facility were paid by the Partnership upon the closing of the
loan. Such fees have been capitalized and are being amortized over the
life of the loan. The term loan, revolving line of credit and letter of
credit facility are secured by recorded mortgages on real property of the
Partnership (including certain of its consolidated ventures) and pledges of
certain other assets. All of the loans under this facility are cross-
collateralized and cross-defaulted. At September 30, 1998, the balances
outstanding on the term loan, the revolving line of credit and the letter
of credit facility were approximately $49,000,000, $0 and $789,000,
respectively. For the nine month period ended September 30, 1998, the
combined effective interest rate for the Partnership's credit facilities,
including the amortization of loan origination fees, and the effect of the
interest rate swap agreements was approximately 8.6% per annum.
Due to the replacement of the Partnership's previous letter of credit
facility by the new credit facility in July 1997, the Partnership was
required to post approximately $4.2 million in cash as collateral with its
previous lender for the letters of credit which continue to be obligations
of that lender. Such letters of credit are expected to be replaced by
either letters of credit issued under the credit facility or by bonds.
Once the letters of credit are replaced, the cash collateral will be
released to the Partnership. As of September 30, 1998, approximately $1.9
million of such cash collateral had been released to the Partnership,
leaving a balance outstanding under this previous letter of credit facility
of approximately $2.3 million.
<PAGE>
In February 1998, the Partnership prepaid the $12.5 million principal
repayment on the term loan scheduled for July 1998. In addition, in
exchange for a rate reduction of 50 basis points on its credit facility,
the Partnership made an additional $7.25 million prepayment on the term
loan in August 1998. As a result of this transaction, interest on the
credit facility is now based, at the Partnership's option, on the relevant
LIBOR plus 1.75% per annum or the lender's prime rate. In November 1998,
the Partnership also prepaid $7,333,333 of the $12.5 million principal
repayment on the term loan scheduled for July 1999.
Effective September 1, 1998, First Union National Bank became the
successor agent on the credit facility replacing Barnett as the primary
agent by paying off the outstanding principal balances as of August 31,
1998 owed to Barnett and one of the other lenders on the facility. In
connection with this transaction, the Partnership paid all interest accrued
on the facility through August 31, 1998, as well as certain other fees and
closing costs. With the exception of the interest rate reduction discussed
above, all of the terms of the original loan agreement remain the same.
Construction of one of the two remaining buildings to be completed at
Arvida's Grand Bay commenced in 1997. Revenues recognized for this
building under the percentage of completion method of accounting are the
primary cause for the increase in housing revenues for the nine month
period ended September 30, 1998 as compared to the same period in 1997, as
well as the increase in Trade and other accounts receivable on the
accompanying consolidated balance sheets at September 30, 1998 as compared
to December 31, 1997. During 1998, the Partnership continued to borrow
against its $21 million revolving construction line of credit to fund the
construction of this building. This line of credit bears interest, at the
Partnership's option, at either the relevant LIBOR plus 2.0% per annum or
at the lender's prime rate (8.25% at September 30, 1998), and matures in
August 1999. At September 30, 1998, there was approximately $12,014,000
outstanding under this line of credit, which is expected to be repaid with
future proceeds from sales of units within this building. The Partnership
anticipates it will borrow additional funds under this line of credit
during 1998 for the remaining building to be constructed within Arvida's
Grand Bay.
INVESTMENTS IN AND ADVANCES TO JOINT VENTURES
During July 1997, the Partnership entered into a joint venture
agreement with an unaffiliated third party to form A&D Title, L.P. The
joint venture was formed to act as an agent in connection with the issuance
of title insurance, primarily related to closings in the Partnership's
Weston community. The Partnership obtained a 50% ownership interest in the
joint venture, and is accounting for its investment in accordance with the
equity method of accounting. The Partnership's recognition of its share of
this venture's earnings is the primary cause for the increase in equity in
earnings (losses) of unconsolidated ventures on the accompanying
consolidated statements of operations for the nine month period ended
September 30, 1998 as compared to the same period in 1997.
During August 1997, the remaining properties owned by the Tampa 301
Associates Joint Venture and substantially all of the remaining properties
owned by the Ocala 202 Joint Venture were sold. The net profit generated
by the sales of these properties resulted in approximately $91,000 of
earnings for the Partnership.
In January 1998, the Partnership sold its approximate 33% interest in
the H.A.E. Joint Venture to one of its venture partners. This sale is
reflected in land and property revenues and cost of revenues on the
accompanying consolidated statements of operations for the nine month
period ended September 30, 1998, and is the primary cause for the decrease
in Investments in and advances to joint ventures on the accompanying
consolidated balance sheets at September 30, 1998 as compared to
December 31, 1997.
<PAGE>
In April 1998, the Metrodrama Joint Venture closed on the sale of
approximately 29 acres of undeveloped commercial property to an
unaffiliated third party. This sale is reflected in land and property
revenues and cost of revenues on the accompanying consolidated statements
of operations for the nine month period ended September 30, 1998. This
transaction generated a profit for financial reporting and Federal income
tax purposes.
EQUITY MEMBERSHIPS
In May 1998, the Partnership sold its remaining Sawgrass Country Club
memberships to the Sawgrass Country Club, Inc. for a total sales price of
approximately $2.4 million. This transaction is reflected in land and
property revenues and cost of revenues on the accompanying consolidated
statements of operations for the nine month period ended September 30,
1998, and is the primary cause for the decrease in equity memberships on
the accompanying consolidated balance sheets at September 30, 1998 as
compared to December 31, 1997. This transaction generated a profit for
financial reporting and Federal income tax purposes.
TRANSACTIONS WITH AFFILIATES
The Partnership, subject to certain limitations, may engage affiliates
of the General Partner for property management, insurance and certain other
administrative services to be performed in connection with the
administration of the Partnership and its assets. The total of such costs
for the nine months ended September 30, 1998 was approximately $224,000,
all of which was paid as of September 30, 1998. The total of such costs
for the nine months ended September 30, 1997 was approximately $324,700.
In addition, the General Partner and its affiliates are entitled to
reimbursements for salaries and salary-related costs relating to the
administration of the Partnership and the operation of the Partnership's
properties. Such costs were approximately $195,100 and $154,500 for the
nine months ended September 30, 1998 and 1997, respectively, all of which
were paid as of September 30, 1998.
The Partnership receives reimbursements from or reimburses other
affiliates of the General Partner engaged in real estate activities for
certain general and administrative costs including, and without limitation,
salary and salary-related costs relating to work performed by employees of
the Partnership and certain out-of-pocket expenditures incurred on behalf
of such affiliates. For the nine month period ended September 30, 1998,
the amount of such costs incurred by the Partnership on behalf of these
affiliates totaled approximately $1,318,200. At September 30, 1998,
approximately $241,900 was owed to the Partnership, of which approximately
$96,900 was received as of November 4, 1998. For the nine month period
ended September 30, 1997, the Partnership was entitled to reimbursements of
approximately $914,500.
Prior to June 1996, the Partnership and Arvida/JMB Partners, L.P.-II
(a publicly-held limited partnership affiliated with the General Partner)
each employed project related and administrative personnel who performed
services on behalf of both partnerships. In addition, certain out-of-
pocket expenditures related to such services and other general and
administrative costs were incurred and charged to each partnership as
appropriate. The Partnership receives reimbursements from Arvida/JMB
Partners, L.P.-II for these costs (including salary and salary-related
costs). Subsequent to June 1996, Arvida/JMB Partners, L.P.-II no longer
employed any project-related or administrative personnel and incurred no
costs on behalf of the Partnership. For the nine month periods ended
September 30, 1998 and 1997, the Partnership was entitled to receive
approximately $60,000 and $90,800, respectively, from Arvida/JMB Partners,
L.P.-II, all of which was received as of September 30, 1998.
<PAGE>
Through December 31, 1997, Arvida Company ("Arvida"), pursuant to an
agreement with the Partnership, provided development and management
supervisory and advisory services and personnel therefor to the Partnership
for all of its projects and operations. Pursuant to such agreement, the
Partnership reimbursed Arvida for all of its out-of-pocket expenditures
(including salary and salary-related costs), subject to certain
limitations. The total of such costs for the nine month period ended
September 30, 1997 was approximately $5,141,000, all of which was paid at
September 30, 1997. In addition, the Partnership was owed approximately
$51,200 from Arvida at September 30, 1998, for overpayments of certain
salary and salary related costs from 1997 as well as services performed by
employees of the Partnership on behalf of Arvida, none of which was paid as
of November 4, 1998.
In November 1997, St. Joe Corporation, an unaffiliated third party,
completed its acquisition of a majority interest in St. Joe/Arvida Company,
L.P. ("St. Joe/Arvida"), which acquired the major assets of Arvida. In
connection with this transaction, Arvida entered into a sub-management
agreement with St. Joe/Arvida, effective January 1, 1998, whereby St.
Joe/Arvida provides (and is reimbursed for) a substantial portion of the
development and management supervisory and advisory services (and personnel
with respect thereto) to the Partnership that Arvida would otherwise
provide pursuant to its management agreement with the Partnership.
Effective January 1, 1998, St. Joe/Arvida employs most of the same
personnel previously employed by Arvida, and the services provided to the
Partnership pursuant to this sub-management agreement are provided by the
same personnel. Affiliates of JMB Realty Corporation own a minority
interest in St. Joe/Arvida. The transaction did not involve the sale of
any assets of the Partnership, nor the sale of the General Partner's
interest in the Partnership.
For the nine month period ended September 30, 1998, the Partnership
reimbursed St. Joe/Arvida or its affiliates approximately $3,930,000 for
the services provided to the Partnership by St. Joe/Arvida pursuant to the
sub-management agreement discussed above. In addition, at September 30,
1998 the Partnership owed St. Joe/Arvida approximately $107,700 for general
and administrative costs including, and without limitation, salary and
salary-related costs relating to work performed by employees of St.
Joe/Arvida on behalf of the Partnership, all of which was paid as of
November 4, 1998. The Partnership also receives reimbursement from St.
Joe/Arvida for certain general and administrative costs including, and
without limitation, salary and salary-related costs relating to work
performed by employees of the Partnership on behalf of St. Joe/Arvida. For
the nine month period ended September 30, 1998, the Partnership was
entitled to receive approximately $544,100 from St. Joe/Arvida or its
affiliates. Of this amount, approximately $73,100 was owed to the
Partnership at September 30, 1998, all of which was received as of November
4, 1998.
The Partnership pays for certain general and administrative costs on
behalf of its equity clubs, homeowners associations and maintenance
associations (including salary and salary-related costs and legal fees).
The Partnership receives reimbursements from these entities for such costs.
For the nine month periods ended September 30, 1998 and 1997, the
Partnership was entitled to receive approximately $731,800 and $1,288,300,
respectively, from these entities. At September 30, 1998, approximately
$150,800 was owed to the Partnership, all of which was received as of
November 4, 1998.
The Partnership, pursuant to certain agreements, provides management
and other personnel and services to certain of its equity clubs. Pursuant
to these agreements, the Partnership is entitled to receive management fees
for the services provided to these clubs. For the nine months ended
September 30, 1998 and 1997, the Partnership was entitled to receive
approximately $429,000 and $387,800, respectively. At September 30, 1998,
approximately $472,400 was unpaid (including amounts owed from the previous
year), of which $50,000 was received as of November 4, 1998.
<PAGE>
The Partnership funds working capital advances and operating deficits
of its equity clubs, as well as operating deficits of its homeowners
associations as required or deemed necessary. The working capital advances
are non-interest bearing, short-term in nature, and are expected to be
reimbursed from future cash flows of the equity clubs. The funding of
operating deficits is expensed by the Partnership. The Partnership also
funds, at its option, certain capital expenditures of its equity clubs. In
April 1998, control of Jacksonville Golf & Country Club ("JG&CC") was
turned over to the club members. As a result, effective April 1, 1998, the
Partnership is no longer involved in the ownership or management of JG&CC
and has no further responsibility to fund JG&CC's operations. In addition,
all outstanding balances between the Partnership and JG&CC were paid upon
the turnover of the club to its members. At September 30, 1998, the
Partnership owed one of its homeowner associations approximately $32,700
for prior year amounts funded by the association which were the
Partnership's obligation, none of which was paid as of November 4, 1998.
The Partnership periodically incurs salary and salary-related costs on
behalf of an affiliate of the General Partner of the Partnership. The
Partnership was entitled to receive approximately $366,100 and $255,700 for
such costs for the nine months ended September 30, 1998 and 1997,
respectively, of which approximately $37,100 was owed to the Partnership at
September 30, 1998 (including amounts owed from the previous year), none of
which was received as of November 4, 1998.
In accordance with the Partnership Agreement, the General Partner and
Associate Limited Partners have deferred a portion of their distributions
of net cash flow from the Partnership totaling approximately $9,005,000 as
of September 30, 1998. This amount does not bear interest and is expected
to be paid in future periods subject to certain restrictions in the
partnership agreement of the Partnership. In addition, in connection with
the settlement of certain litigation, the General Partner and the Associate
Limited Partners deferred approximately $1,259,000 of their share of the
August 1997 distribution which was otherwise distributable to them, and
such deferred distribution amount was used by the Partnership to pay a
portion of the legal fees and expenses in such litigation. The General
Partner and Associate Limited Partners will be entitled to receive such
deferred amount after the Holders of Interests have received a specified
amount of distributions from the Partnership after July 1, 1996.
All amounts receivable from or payable to the General Partner or its
affiliates do not bear interest and are expected to be paid in future
periods.
COMMITMENTS AND CONTINGENCIES
As security for performance of certain development obligations, the
Partnership is contingently liable under standby letters of credit and
performance bonds for approximately $789,000 and $15,716,000, respectively,
at September 30, 1998. In addition, certain joint ventures in which the
Partnership holds an interest are also contingently liable under
performance bonds for approximately $1,020,000 at September 30, 1998.
On or about September 27, 1996, a lawsuit entitled Vanderbilt Income
and Growth Associates, L.L.C. and Raleigh Capital Associates L.P.,
individually and derivatively on behalf of Arvida/JMB Partners, L.P. v.
Arvida/JMB Managers, Inc., Judd D. Malkin, Neil G. Bluhm, Burton E. Glazov,
Stuart C. Nathan, A. Lee Sacks, John G. Schreiber, BSS Capital II, L.L.C.,
Starwood Capital Group I, L.P., Starwood/Florida Funding, L.L.C., Starwood
Opportunity Fund, IV, L.P. and Barry Sternlicht, Defendants, and Arvida/JMB
Partners, L.P., nominal defendant, was filed in the Court of Chancery of
the State of Delaware in and for New Castle County, Civil Action No. 15238
("Raleigh action"). The Raleigh action was filed as a verified complaint
for declaratory and injunctive relief. Plaintiffs claimed that the
defendants, in entering into a financing commitment letter for a proposed
$160 million term loan from Starwood/Florida Funding L.L.C. (the "Starwood
<PAGE>
financing"), violated, or aided and abetted, or participated in the
violation of, fiduciary duties owed to the Partnership and the Holders of
Interests, and put their personal interests ahead of the interests of the
Partnership and the Holders of Interests. In the first claim for relief,
plaintiffs sought a declaratory judgment that the terms of the Starwood
financing be declared null, void and unenforceable. In the second claim
for relief, plaintiffs asserted a claim derivatively on behalf of the
Partnership alleging, among other things, that the financing commitment
letter for the Starwood financing was not the product of a valid exercise
of business judgment. In addition to relief described above, plaintiffs
sought to preliminarily and permanently enjoin any actions in furtherance
of the financing commitment letter, an award of compensatory damages,
interest, costs and disbursements, including reasonable attorneys' and
experts' fees and such other relief as the Court might deem just and
proper. The General Partner and the Partnership filed a motion to dismiss
the Raleigh action, which motion was granted on November 7, 1996. In
granting the motion, the Court held that Raleigh was not a Limited Partner
and did not have standing to file the derivative claims. The Court further
determined that Raleigh did not have the right to vote. Plaintiffs asked
the Court to reconsider its ruling, but the Court denied the request to
change its ruling.
Plaintiffs appealed the November 7, 1996 dismissal order. On
December 12, 1996, the Delaware Supreme Court reversed the trial court
order on a procedural ground. The Delaware Supreme Court concluded that
the trial court should not have considered matters outside of the pleadings
in dismissing the Raleigh action without providing the plaintiffs some
limited discovery. Accordingly, the Delaware Supreme Court remanded the
case back to the trial court for further proceedings.
On December 16, 1996, the Partnership filed a counterclaim against
Vanderbilt Income and Growth Associates, L.L.C. and Raleigh Capital
Associates L.P. ("Raleigh"), seeking a declaratory judgment that Raleigh
had no right to vote on Partnership matters. On January 28, 1997, the
trial court granted plaintiffs leave to dismiss their own complaint
concerning the Starwood financing, leaving the Partnership's counterclaim
pending.
By letter dated January 10, 1997, Raleigh requested admission as a
Substituted Limited Partner of the Partnership. The Partnership referred
the request to a special committee (the "Special Committee") consisting of
certain directors of the General Partner. On February 11, 1997, the
Special Committee denied the request. Thereafter, the Partnership
supplemented its counterclaim, as amended, to seek a court declaration that
Raleigh is not entitled to be admitted as a Substituted Limited Partner.
On February 20, 1997, Raleigh filed a reply and counterclaim against the
Partnership, the General Partner, and the Special Committee. The reply
counterclaim sought, among other things, a declaration that Raleigh has
voting rights in the Partnership and that defendants breached their
fiduciary duties by failing to admit Raleigh as a Substituted Limited
Partner. The reply counterclaim also sought to enjoin the Partnership, the
General Partner, and the Special Committee from refusing to admit Raleigh
as a Substituted Limited Partner, an award of damages, interest, fees, and
costs.
On or about February 28, 1997, Gladys Beasley, individually and as a
representative of a class of persons similarly situated, filed an
intervenor complaint for declaratory relief against the Partnership. In
the intervenor complaint, plaintiff sought a declaration that purchasers
who obtained Interests in the Partnership in the public offering and
subsequent Holders of Interests in the Partnership by assignment from
original Holders have the same voting rights in the Partnership, among
other things, to remove and replace the General Partner. In addition,
plaintiff Gladys Beasley sought an order adjudging and decreeing that the
intervenor action was properly maintained as a class, an award of her costs
and expenses of the litigation, and such other relief as the Court deemed
appropriate.
<PAGE>
The trial of all claims in the Raleigh action was held on April 7,
1997 through April 9, 1997. In a memorandum opinion dated May 23, 1997,
the Court concluded that, while neither the partnership agreement nor the
assignment agreement of the Partnership expressly states whether subsequent
Holders of Interests have voting rights, a reasonable investor could have
read the operative agreements as providing that subsequent Holders of
Interests, such as Raleigh, have voting rights. The Partnership believed,
among other things, that the Court erred in its application of the law to
the facts on this issue and appealed the Court's decision on this aspect of
the case. On the issue of whether the Special Committee properly denied
Raleigh's request for admission as a Substituted Limited Partner, the Court
upheld the denial of Raleigh's request. By order dated June 9, 1998, and
after appeal of this matter to the Delaware Supreme Court, the Delaware
Supreme Court affirmed the trial court on all issues. The Partnership
expects counsel for Raleigh and counsel for the intervening class will seek
an award of attorneys fees, although no such application for award of fees
has been filed to date.
The Partnership was named a defendant in a number of homeowner
lawsuits, certain of which purported to be class actions, that allegedly in
part arose out of or related to Hurricane Andrew, which on August 24, 1992
resulted in damage to a former community development known as Country Walk.
The homeowner lawsuits alleged, among other things, that the damage
suffered by the plaintiffs' homes and/or condominiums within Country Walk
was beyond what could have been reasonably expected from the hurricane
and/or was a result of the defendants' alleged defective design,
construction, inspection and/or other improper conduct in connection with
the development, construction and sales of such homes and condominiums,
including alleged building code violations. The various plaintiffs sought
varying and, in some cases, unspecified amounts of compensatory damages and
other relief.
Several of these lawsuits alleged that the Partnership was liable,
among other reasons, as a result of its own alleged acts of misconduct or
as a result of the Partnership's alleged assumption of Arvida Corporation's
liabilities in connection with the Partnership's purchase of Arvida
Corporation's assets from Disney in 1987, which included certain assets
related to the Country Walk development. Pursuant to the agreement to
purchase such assets, the Partnership obtained indemnification by Disney
for certain liabilities relating to facts or circumstances arising or
occurring prior to the closing of the Partnership's purchase of the assets.
Over 80% of the Arvida-built homes in Country Walk were built prior to the
Partnership's ownership of the Community. The Partnership has tendered
each of the above-described lawsuits to Disney for defense and
indemnification in whole or in part pursuant to the Partnership's
indemnification rights. Where appropriate, the Partnership has also
tendered these lawsuits to its various insurance carriers for defense and
coverage. The Partnership is unable to determine at this time to what
extent damages in these lawsuits, if any, against the Partnership, as well
as the Partnership's cost of investigating and defending the lawsuits, will
ultimately be recoverable by the Partnership either pursuant to its rights
of indemnification by Disney or under contracts of insurance.
One of the Partnership's insurance carriers has been funding
settlements of various litigation related to Hurricane Andrew. In some,
but not all, instances, the insurance carrier has provided the Partnership
with written reservation of rights letters. The aggregate amount of the
settlements funded to date by this carrier is approximately $8.12 million.
The insurance carrier that funded these settlements pursuant to certain
reservations of rights has stated its position that it has done so pursuant
to various non-waiver agreements. The carrier's position was that these
non-waiver agreements permitted the carrier to fund settlements without
preventing the carrier from raising insurance coverage issues or waiving
such coverage issues. On May 23, 1995, the insurance carrier rescinded the
various non-waiver agreements currently in effect regarding the remainder
of the Hurricane Andrew litigation, allegedly without waiving any future
coverage defenses, conditions, limitations, or rights. For this and other
<PAGE>
reasons, the extent to which the insurance carrier may recover any of these
proceeds from the Partnership is uncertain. Therefore, the accompanying
consolidated financial statements do not reflect any accruals related to
this matter.
Currently, the Partnership is involved in three subrogation lawsuits.
On April 19, 1993, a subrogation claim entitled Village Homes at Country
Walk Master Maintenance Association, Inc. v. Arvida Corporation et al., was
filed in the 11th Judicial Circuit for Dade County. Plaintiffs filed this
suit for the use and benefit of American Reliance Insurance Company
("American Reliance"). In this suit, as amended, plaintiffs seek to
recover damages and pre- and post-judgment interest in connection with
$10,873,000 American Reliance has allegedly paid, plus amounts it may have
to pay in the future, to the condominium association at Country Walk in the
wake of Hurricane Andrew. Disney is also a defendant in this suit. The
Partnership believes that the amount of this claim that allegedly relates
to units it built and sold is approximately $3,600,000. Plaintiffs also
seek a declaratory judgment seeking to hold the Partnership and other
defendants responsible for amounts American Reliance must pay in the future
to its insured as additional damages beyond the $10,873,000 previously
paid. The Partnership has filed motions directed to the complaint, as
amended, and the litigation is in the discovery stage. The Partnership
intends to vigorously defend itself. On or about May 10, 1996, a
subrogation claim entitled Juarez et al. v. Arvida Corporation et al. was
filed in the Circuit Court of the Eleventh Judicial Circuit in and for Dade
County. Plaintiffs filed this suit for the use and benefit of American
Reliance. In this suit, plaintiffs seek to recover damages, pre-and post-
judgment interest, costs and any other relief the Court may deem just and
proper in connection with $3,200,000 American Reliance allegedly paid on
specified claims at Country Walk in the wake of Hurricane Andrew. Disney
is also a defendant in this suit. The Partnership is advised that the
amount of this claim that allegedly relates to units it sold is
approximately $350,000. The Partnership intends to defend itself
vigorously in this matter. The Partnership could be named in other
subrogation actions, and in such event, the Partnership intends to
vigorously defend itself in such actions. Due to the uncertainty of the
outcome of these subrogation actions, the accompanying consolidated
financial statements do not reflect any accruals related to these matters.
The Partnership has been advised by Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") that various investors have sought to
compel Merrill Lynch to arbitrate claims brought by certain investors of
the Partnership representing approximately 5% of the total of approximately
404,000 Interests outstanding. Merrill Lynch has asked the Partnership and
its General Partner to confirm an obligation of the Partnership and its
General Partner to indemnify Merrill Lynch in these claims against all
loss, liability, claim, damage and expense, including without limitation
attorneys' fees and expenses, under the terms of a certain Agency Agreement
dated September 15, 1987 ("Agency Agreement") with the Partnership relating
to the sale of Interests through Merrill Lynch on behalf of the
Partnership. These claimants have sought and are seeking to arbitrate
claims involving unspecified damages against Merrill Lynch based on Merrill
Lynch's alleged violation of applicable state and/or federal securities
laws and alleged violations of the rules of the National Association of
Securities Dealers, Inc., together with pendent state law claims. The
Partnership believes that Merrill Lynch has resolved some of these claims
through litigation and otherwise, and that Merrill Lynch is defending other
claims. The Agency Agreement generally provides that the Partnership and
its General Partner shall indemnify Merrill Lynch against losses occasioned
<PAGE>
by any actual or alleged misstatements or omissions of material facts in
the Partnership's offering materials used in connection with the sale of
Interests and suffered by Merrill Lynch in performing its duties under the
Agency Agreement, under certain specified conditions. The Agency Agreement
also generally provides, under certain conditions, that Merrill Lynch shall
indemnify the Partnership and its General Partner for losses suffered by
the Partnership and occasioned by certain specified conduct by Merrill
Lynch in the course of Merrill Lynch's solicitation of subscriptions for,
and sale of, Interests. The Partnership is unable to determine the
ultimate investment of investors who have filed arbitration claims as to
which Merrill Lynch might seek indemnification in the future. At this
time, and based upon the information presently available about the
arbitration statements of claims filed by some of these investors, the
Partnership and its General Partner believe that they have meritorious
defenses to demands for indemnification made by Merrill Lynch and intend to
vigorously pursue such defenses. Although there can be no assurance
regarding the outcome of the claims for indemnification, at this time,
based on information presently available about such arbitration statements
of claims, the Partnership and its General Partner do not believe that the
demands for indemnification by Merrill Lynch will have a material adverse
effect on the financial condition of the Partnership.
On or about October 16, 1995, a lawsuit was filed against the
Partnership and others in the Circuit Court of the 15th Judicial Circuit,
in and for Palm Beach County, Florida, entitled Council of Villages, Inc.
et al v. Arvida/JMB Partners, Arvida/JMB Managers, Inc., Arvida/JMB
Partners, Ltd., Broken Sound Club, Inc., and Country Club Maintenance
Association, Inc. The multi-count complaint, as amended, is brought as a
class action, and individually, on behalf of various residents of the
Broken Sound Community, and alleges that defendants engaged in various acts
of misconduct in, among other things, the establishment, operation,
management and marketing of the Broken Sound golf course and recreational
facilities, as well as the alleged improper failure to turn over such
facilities to the Broken Sound homeowners on a timely basis. Plaintiffs
seek, through various theories, including but not limited to breach of
ordinance, fiduciary duty, fraud, constructive trust and civil theft,
damages in excess of $45 million, the appointment of a receiver for the
Broken Sound Club, other unspecified compensatory damages, the right to
seek punitive damages, treble damages, prejudgment interest, attorneys'
fees and costs. The Partnership believes that the lawsuit is without merit
and intends to vigorously defend itself in this matter.
On or about July 30, 1996, Savoy v. Arvida/JMB Partners, Arvida/JMB
Managers, Inc., Arvida/JMB Partners, Ltd., and Broken Sound Club, Inc. was
filed against the Partnership and others in the Circuit Court of the 15th
Judicial Circuit, in and for Palm Beach County, Florida. The lawsuit is
filed as a three-count complaint for dissolution of the Broken Sound Club,
Inc. ("Club"), and seeks, among other things, the appointment of a
custodian or receiver for the Club, a determination that certain acts be
deemed wrongful, the return to the Club of in excess of $2.5 million in
alleged "operating profits", an injunction against the charging of certain
dues, an injunction requiring the Club to produce certain financial
statements, and such other relief as the Court deems just, fair and proper.
This action has been consolidated with the Council of Villages case. The
Partnership believes the lawsuit is without merit and intends to vigorously
defend itself.
In April 1997, the Court issued an order certifying as a class action
claims respecting the alleged violation of the Boca Raton ordinances. Both
plaintiffs and defendants appealed the certification order. On appeal, the
appellate court approved certification of a class action for the following
counts: breach of ordinance, breach of fiduciary duty, civil theft (treble
damages), breach of a constructive trust and unjust enrichment. The
Partnership has filed a motion for rehearing of the issues before the
appellate court. Plaintiffs in the Savoy action moved for an appointment
of a receiver over the Club. The Partnership moved to strike the motion
and the Court granted the Partnership's motion. The Partnership has filed
<PAGE>
a third-party complaint for indemnification and contribution against Disney
in these consolidated actions in the event the Partnership is held liable
for acts taken by a subsidiary of Disney prior to the Partnership's
involvement in the Club and property.
The Partnership owns a 50% joint venture interest in 31 commercial/
industrial acres in Pompano Beach, Florida, which is encumbered by a
mortgage loan in the principal amount of approximately $3.4 million at
September 30, 1998. During April 1992, as a result of the Partnership's
previous determination that the development of the land was no longer
economically profitable, the Partnership and its joint venture partner each
tendered payment in the amount of approximately $3.1 million to the lender
for their respective shares of the guarantee payment required under the
loan agreement and certain other holding costs, the majority of which
reduced the outstanding mortgage loan to its current balance. The venture
also intended at that time to convey title to the property to the lender;
however, such conveyance was deferred until resolution of certain general
development obligations of the venture as well as certain environmental
issues. The joint venture had been negotiating with the lender regarding
the scope of the development work required to be done. Negotiations with
the lender were unsuccessful, and the lender filed a lawsuit entitled
Bankers' Trust Company v. Arvida/JMB Partners, L.P., et al., Case No. 95-
2780 in the Broward County Circuit Court in which the lender asserted,
among other things, that the mortgage loan was with recourse to the joint
venture partners as a result of the partners' failure to perform in
accordance with the terms of the loan agreement. The lender demanded
payment of the outstanding loan balance plus interest thereon. The lawsuit
has been resolved. On or about July 18, 1997, the parties entered into an
agreement for the settlement of the lawsuit which provided for, among other
things, the payment of $300,000 by the Partnership, $300,000 on behalf of
the joint venture partner, the payment of back taxes on the property by the
joint venture in the amount of $302,398, a commitment by the joint venture
to remediate the property on or before June 30, 2000 in accordance with the
settlement agreement, issuance of a new non-recourse note, a mortgage
modification and dismissal of the lawsuit with prejudice and without costs.
With respect to the environmental issues, the previous owner remains
obligated to undertake the clean-up. The clean-up which began in July 1994
is in a "monitoring only" phase pursuant to an informal arrangement with
state environmental officials. There are no assurances that further clean-
up will not be required. If further action is required and the previous
owner is unable to fulfill all its obligations as they relate to this
environmental issue, the joint venture and ultimately the Partnership may
be obligated for such costs. Should this occur, the Partnership does not
anticipate the cost of this clean-up to be material to its operations.
In June 1998, the joint venture entered into a contract with an
unaffiliated third party for the sale of the 31 acres of land in Pompano
Beach, Florida. The closing was contingent upon the satisfaction of
various conditions, which have not been satisfied. The contract was
terminated by the purchaser, and the joint venture is again marketing the
property.
The Partnership is also a defendant in several actions brought against
it arising in the normal course of business. It is the belief of the
General Partner, based on knowledge of facts and advice of counsel, that
the claims made against the Partnership in such actions will not result in
any material adverse effect on the Partnership's consolidated financial
position or results of operations.
The Partnership may be responsible for funding certain other ancillary
activities for related entities in the ordinary course of business which
the Partnership does not currently believe will have any material adverse
effect on its consolidated financial position or results of operations.
<PAGE>
ASSETS HELD FOR DISPOSITION
Several of the Partnership's assets which had been held for
disposition were sold during the fourth quarter of 1997. The results of
operations for the Partnership's cable operation in Weston, which continued
to be held for disposition at September 30, 1998, totaled approximately
$0.9 million for the nine months ended September 30, 1998, and are included
in operating properties revenues and cost of revenues on the accompanying
consolidated statements of operations. See further discussion regarding
this sale in the "Subsequent Events" section of the Notes. The combined
results of operations for the Partnership's assets held for disposition
during the nine months ended September 30, 1997 totaled approximately $3.6
million.
ADJUSTMENTS
In the opinion of the General Partner, all adjustments (consisting
solely of normal recurring adjustments) necessary for a fair presentation
have been made to the accompanying consolidated financial statements as of
September 30, 1998 and December 31, 1997 and for the three and nine months
ended September 30, 1998 and 1997.
SUBSEQUENT EVENTS
In July 1998, the Partnership entered into a contract with an
unaffiliated third party for the sale of the Partnership's cable operation
in Weston. The sale of the cable operation subsequently closed on October
30, 1998 for a sale price of $31.2 million, generating a profit for
financial reporting and Federal income tax purposes.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying consolidated
financial statements ("Notes") contained in this report for additional
information concerning the Partnership and its operations.
At September 30, 1998 and December 31, 1997, the Partnership had cash
and cash equivalents of approximately $33,611,000 and $79,411,000,
respectively. The decrease in Cash and cash equivalents at September 30,
1998 as compared to December 31, 1997 is due primarily to distributions to
partners and Holders of Interests made during February and September 1998
totaling approximately $53 million.
Pursuant to Section 5.5 J of the Partnership Agreement, on October 23,
1997, the Board of Directors of the General Partner met and approved a
resolution selecting the option set forth in Section 5.5 J.(i)(c) of the
Partnership Agreement for the Partnership to commence an orderly
disposition of its remaining assets that is to be completed by the end of
October 2002.
In November, the General Partner entered into an agreement (the
"Buy/Sell Agreement") with Raleigh Capital Associates, L.P. ("Raleigh") and
The St. Joe Company ("St. Joe"), which, subject to the satisfaction of
certain conditions, will result in either St. Joe acquiring all of the
Interests owned by Raleigh or Raleigh acquiring substantially all of the
assets of the General Partner, including its interest as general partner in
the Partnership, and the interests of the Associate Limited Partners in the
Partnership. Raleigh currently owns about 26% of the outstanding
Interests. St. Joe does not currently own any Interests.
Pursuant to the Buy/Sell Agreement, the General Partner and St. Joe
delivered a notice to Raleigh on November 11, 1998, that contained the
price (the "Buy/Sell Price") at which St. Joe has agreed to purchase all of
Raleigh's Interests, $430 per Interest. The General Partner has agreed
that the Buy/Sell Price would be the basis for determining the sale price
for the assets to be acquired by Raleigh from the General Partner and the
Associate Limited Partners, and this sale price was included in the notice
to Raleigh. Raleigh has until December 10, 1998 to determine whether it
will sell all of its Interests to St. Joe or purchase the assets of the
General Partner and the Associate Limited Partners. If it elects to
purchase, Raleigh is required to make a tender offer (the "Offer") for any
and all Interests not owned by Raleigh at a price equal to or greater than
the Buy/Sell Price and on other terms and conditions set forth in the
Buy/Sell Agreement. Upon acquisition of the assets from the General
Partner, Raleigh (or its affiliates) would become the successor general
partner of the Partnership. If Raleigh elects to sell, St. Joe is not
required to make a tender offer for any Interests.
Under the terms of the Buy/Sell Agreement, for a specified period of
time commencing on the date of the Buy/Sell Agreement, Raleigh has agreed
that neither it nor its affiliates will, directly or indirectly, (i)
request a meeting of, or solicit or participate in the solicitation of
proxies or consents from, Holders of Interests, except for the solicitation
of proxies or consents for purposes of effecting the consummation of the
Offer or otherwise as permitted by the Buy/Sell Agreement, or (ii)
initiate, propose or otherwise participate in a business combination or
similar transaction involving the Partnership, including a merger, tender
offer or sale or liquidation of the Partnership, other than the Offer and
the purchase of the assets of the General Partner and the Associate Limited
Partners, without the prior approval of the General Partner.
<PAGE>
Pursuant to the Buy/Sell Agreement, the General Partner has agreed
that, for a specified period of time commencing on the date of the Buy/Sell
Agreement, the General Partner will not cause or permit the Partnership to
propose or take any action outside of the ordinary course of the business
of the General Partner or the Partnership, including the refinancing of any
properties or the incurrence of any indebtedness by the Partnership, other
than in the ordinary course of its business and consistent with past
practices, the authorization or proposal of any merger or business
combination involving the Partnership, the disposition by the Partnership
of all or substantially all of its assets or a material change in the
Partnership's capitalization, except that, notwithstanding the foregoing,
the General Partner and the Partnership may take action constituting or
proposing any such transaction to the extent that the General Partner
determines in the good faith exercise of its judgment, after consultation
with counsel, that the failure to take or propose such transaction would
reasonably be expected to be a violation of its fiduciary duty to Holders
of Interest.
In connection with the Buy/Sell Agreement, Raleigh and St. Joe have
entered into separate confidentiality agreements with the Partnership
pursuant to which Raleigh or St. Joe, as the case may be, is entitled to
receive non-public information concerning the Partnership and, in return,
Raleigh or St. Joe, as the case may be, has agreed to treat such
information as confidential in accordance with the terms of the relevant
confidentiality agreement and to take or abstain from taking certain other
actions in accordance with the relevant confidentiality agreement. St. Joe
owns a majority interest in St. Joe/Arvida, which, through a sub-management
agreement, provides a substantial portion of the development and management
supervisory and advisory services (and personnel with respect thereto) to
the Partnership.
On July 31, 1997, the Partnership obtained a new credit facility from
certain banks, with Barnett being the primary agent on the facility. The
credit facility consists of a $75 million term loan, a $20 million
revolving line of credit and a $5 million letter of credit facility. This
credit facility matures on July 31, 2001. The term loan has annual
scheduled principal repayments of $12.5 million, as well as additional
annual principal repayments based upon a specified percentage or amount of
the Partnership's available cash. The maximum principal repayments,
including the scheduled repayments, generally will not exceed $18.75
million per annum. The remaining outstanding balance on the facility is
due upon maturity. Prior to September 1, 1998, interest on the facility
was based, at the Partnership's option, on the relevant LIBOR plus 2.25%
per annum or Barnett's prime rate. The Partnership also obtained interest
rate swaps covering two-thirds of the original term loan commitment which
are amortized annually until termination of the swap agreements on July 31,
2001. Loan fees totaling 1% of the total facility were paid by the
Partnership upon the closing of the loan. Such fees have been capitalized
and are being amortized over the life of the loan. In addition, due to the
replacement of the Partnership's previous letter of credit facility by the
existing credit facility, the Partnership was required to post
approximately $4.2 million cash as collateral with its previous lender for
letters of credit which continue to be obligations of that lender. The
letters of credit are expected to be replaced by either letters of credit
issued under the facility or by bonds, at which time the cash collateral
will be released to the Partnership. As of September 30, 1998,
approximately $1.9 million of such cash collateral had been released to the
Partnership, leaving a balance outstanding under this previous letter of
credit facility of approximately $2.3 million. The term loan, revolving
line of credit and letter of credit facility are secured by recorded
mortgages on real property of the Partnership (including certain of its
consolidated ventures) and pledges of certain other assets. All of the
loans under this facility are cross-collateralized and cross-defaulted. At
September 30, 1998, the balances outstanding under the term loan, the
revolving line of credit and the letter of credit facility were
approximately $49,000,000, $0 and $789,000, respectively.
<PAGE>
In February 1998, the Partnership prepaid the $12.5 million principal
repayment on the term loan scheduled for July 1998. In addition, in
exchange for a rate reduction of 50 basis points on its credit facility,
the Partnership made an additional $7.25 million prepayment on the term
loan in August 1998. As a result of this transaction, interest on the
credit facility is now based, at the Partnership's option, on the relevant
LIBOR plus 1.75% per annum or the lender's prime rate. In November 1998,
the Partnership also prepaid $7,333,333 of the $12.5 million principal
repayment on the term loan scheduled for July 1999.
Effective September 1, 1998, First Union National Bank became the
successor agent on the credit facility replacing Barnett as the primary
agent by paying off the outstanding principal balances as of August 31,
1998 owed to Barnett and one of the other lenders on the facility. In
connection with this transaction, the Partnership paid all interest accrued
on the facility through August 31, 1998, as well as certain other fees and
closing costs. With the exception of the interest rate reduction discussed
above, all of the terms of the original loan agreement remain the same.
During 1998, the Partnership borrowed against its $21 million
revolving construction line of credit to fund the construction of one of
the two remaining buildings within Arvida's Grand Bay. This line of credit
bears interest, at the Partnership's option, at either the relevant LIBOR
plus 2.0% per annum or at the lender's prime rate (8.25% at September 30,
1998), and matures in August 1999. At September 30, 1998, there was
approximately $12,014,000 outstanding under this line of credit, which is
expected to be repaid with future proceeds from sales of units within this
building. The Partnership anticipates it will borrow additional funds
under this line of credit during 1998 for the remaining building to be
constructed within Arvida's Grand Bay.
In July 1998, the Partnership entered into a contract with an
unaffiliated third party for the sale of the Partnership's cable operation
in Weston. The sale of the cable operation subsequently closed on October
30, 1998 for a sale price of 31.2 million, generating a profit for
financial reporting and Federal income tax purposes.
In accordance with the Partnership Agreement, the General Partner and
Associate Limited Partners have deferred a portion of their distributions
of net cash flow from the Partnership totaling approximately $9,005,000 as
of September 30, 1998. This amount does not bear interest and is expected
to be paid in future periods subject to certain restrictions contained in
the partnership agreement of the Partnership. In addition, in connection
with the settlement of certain litigation, the General Partner and the
Associate Limited Partners deferred approximately $1,259,000 of their share
of the August 1997 distribution which was otherwise distributable to them,
and such deferred distribution amount was used by the Partnership to pay a
portion of the legal fees and expenses in such litigation. The General
Partner and Associate Limited Partners will be entitled to receive such
deferred amount after the Holders of Interests have received a specified
amount of distributions from the Partnership after July 1, 1996.
The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define a year. Consequently, any
computer programs that have time-sensitive software may recognize a date
using "00" as the year 1900 rather than the Year 2000. This could result
in a system failure or miscalculations causing disruptions of operations
including, among other things, a temporary inability to process
transactions or engage in other normal business activities.
The Partnership has organized a team to review and prepare its
computer systems for the Year 2000 compliancy. This team has completed an
internal assessment of its information system technology and determined a
need to upgrade portions of the Partnership's hardware and software so that
its computer systems would function properly with respect to dates in the
Year 2000 and thereafter. The software upgrade was initiated in October
1997 and completed in May 1998 at an approximate cost of $110,000. A plan
<PAGE>
has been developed to review and upgrade the Partnership's computer
hardware including its file servers and personal computers, which is
currently estimated to cost approximately $300,000. This estimate includes
the cost of testing the upgraded computer systems and replacing equipment
which is not Year 2000 compliant. The Partnership has commenced its
implementation of the hardware upgrade, which is expected to be completed
in the first quarter of 1999. The Partnership began testing its computer
systems in November 1998 to determine compliance with the Year 2000. Such
testing is estimated to take approximately four weeks. At the conclusion
of the Year 2000 testing, the Partnership will determine if it is necessary
to develop a contingency plan for any application which is not Year 2000
compliant.
In addition, all third party software vendors who exchange digital
information with the Partnership have been identified and contacted
regarding their Year 2000 compliancy. The Partnership has received either
oral or written responses from these vendors, all of which are in various
stages of addressing the Year 2000 issues. Certain of these software
applications are not deemed critical to the operations of the Partnership.
The Partnership's financial, human resource and payroll applications are
classified as Year 2000 compliant by their respective software vendors, but
have not yet been tested by the Partnership. A test of their compliancy,
as well as that of certain of the Partnership's internally developed
software packages, will be included in the overall system testing scheduled
for the fourth quarter of 1998. The financial, human resource and payroll
application systems are supported by two major software vendors. In the
event the Partnership's system testing reveals that these systems are not
Year 2000 compliant, the Partnership has access to all computer source
codes for all business applications and currently believes it has the
ability to make the necessary changes through the use of internal resources
as well as utilizing third party consultants. However, the Partnership
does not have an estimate of the length of time which could potentially be
required to make these changes, nor an estimate of the costs involved to
make such changes.
The Partnership's general brokerage operation utilizes an accounting
software package for internal reporting purposes which the vendor has
indicated is not yet Year 2000 compliant. However, the vendor is currently
in the process of upgrading its software package and has indicated that
testing of this upgrade will be performed in December 1998. This vendor
has committed to providing an upgrade by no later than March 1999. There
should be no additional cost to the Partnership in connection with this
software upgrade as such upgrade is included in the annual maintenance fee
paid by the Partnership to the vendor. In the event this upgrade is not
completed or does not result in the software application being Year 2000
compliant, the Partnership would expect to utilize its financial software
application to account for its brokerage operation transactions as a
contingency plan. However, the Partnership does not have an estimate of
the length of time which could potentially be required to make these
changes, nor an estimate of the costs involved to make such changes.
The Partnership is in the planning stage to assess its non-information
technology systems (such as its telephone, sprinkler and alarm systems).
Managers of such systems have been instructed to contact the appropriate
third party vendors to determine their Year 2000 compliancy. This
assessment is currently expected to be completed in the first quarter of
1999. In addition, the Partnership has contacted the various banks,
insurance companies and state regulatory agencies with whom the Partnership
has material relationships to determine their Year 2000 readiness.
Responses have been received from some, but not all of these institutions.
The Partnership will contact any of these companies from which no response
is received during the first quarter of 1999. The Partnership does not
exchange digital information with those suppliers utilized in connection
with the development and construction of its communities, and therefore,
does not intend to contact those suppliers. To the extent such suppliers
are unable to perform services due to their Year 2000 related issues, the
Partnership would expect to seek other similar suppliers who are capable of
performing development and construction services.
<PAGE>
If the steps taken by the Partnership and its vendors to be Year 2000
compliant are not successful, the Partnership could experience various
operational difficulties. These could include, among other things, an
inability to process transactions to the correct accounting period,
difficulties in posting general ledger interfaces, an inability to process
computer generated checks, bank transactions posted to the wrong periods,
and the failure of scheduling applications which are date sensitive.
The foregoing discussion of Year 2000 issues and the Partnership's
responses thereto are based upon information presently known and certain
assumptions and estimates (including those relating to costs and timing of
remediation) currently made by the Partnership, as well as statements and
representations made to the Partnership by its third party vendors. There
are various risks that assumptions and estimates made by the Partnership
will not prove to be correct, that delays in testing or remediation may
occur and/or that significant additional remediation efforts may be
required. The Partnership is also relying on the efforts and statements
and representations of third parties, in particular its third party
software vendors. Accordingly, the information concerning the Year 2000
issues and the Partnership's responses thereto, including the nature,
extent, timing and cost of the Partnership's remediation efforts, are
subject to change and such changes could be material. In addition, there
is no assurance that the software applications and packages currently
believed to be Year 2000 compliant will prove to be so after testing or
that the upgrade for the software package used in the Partnership's general
brokerage operation will be delivered on a timely basis or will prove to be
Year 2000 compliant.
RESULTS OF OPERATIONS
The results of operations for the three and nine months ended
September 30, 1998 are primarily attributable to the development and sale
or operation of the Partnership's assets.
For the three months ended September 30, 1998, the Partnership
(including its consolidated ventures and its unconsolidated ventures
accounted for under the equity method) closed on the sale of 246 housing
units, 47 homesites, approximately 38 acres of developed and undeveloped
land, as well as the remaining Sawgrass Country Club memberships owned by
the Partnership. This compares to closings in the third quarter of 1997 of
311 housing units, 66 homesites and approximately 37 acres of developed
land. Outstanding contracts ("backlog") as of September 30, 1998, were for
892 housing units, 30 homesites and approximately 39 acres of developed and
undeveloped land tracts. This compares to a backlog as of September 30,
1997 of 674 housing units and 71 homesites.
The Partnership's Communities are in various stages of development,
with estimated remaining build-outs ranging from one to six years.
Notwithstanding the estimated duration of the build-outs, the Partnership
currently expects to complete its orderly liquidation by October 2002. The
Weston Community, located in Broward County, Florida, is the Partnership's
largest Community and is in its mid-stage of development. Also in their
mid-stages of development are the River Hills Country Club in Tampa,
Florida; the Water's Edge Community in Atlanta, Georgia; The Cullasaja
Club, near Highlands, North Carolina and the Partnership's condominium
project on Longboat Key, Florida known as Arvida's Grand Bay. The
Partnership's Jacksonville Golf & Country Club Community in Florida is in
its late stage of development. Future revenues will be impacted to the
extent that there are lower levels of inventories available for sale as the
Partnership's remaining Communities approach or undertake their final
phases.
<PAGE>
Construction of one of the two remaining buildings to be completed at
Arvida's Grand Bay commenced in 1997. Revenues recognized for this
building under the percentage of completion method of accounting are the
primary cause for the increase in housing revenues for the nine month
period ended September 30, 1998 as compared to the same period in 1997, as
well as the increase in Trade and other accounts receivable on the
accompanying consolidated balance sheets at September 30, 1998 as compared
to December 31, 1997. Such revenues also generated a favorable variance
for the three months ended September 30, 1998 as compared to the same
period in 1997. However, the favorable revenue variance generated by
Arvida's Grand Bay was offset by decreased revenues at the Partnership's
Weston and Jacksonville Golf & Country Club Communities for the three and
nine month periods ended September 30, 1998 as compared to the same periods
in 1997. Revenues generated at Weston through September 30, 1998 were
lower than those generated through September 30, 1997 due to the timing of
the availability of town homes and certain other housing products to be
sold within the Community. Revenues to be generated from closings of these
products in the fourth quarter of 1998 are expected to reverse this
unfavorable variance by year end. The decrease in revenues at Jacksonville
Golf & Country Club is attributable to decreased closings as this Community
continues to sell out its final phases.
The Partnership's current plan for the Weston Community includes an
increase in its home building operations, thereby resulting in a reduced
number of lots available for sale to third party builders. As a result,
homesite revenues decreased for the three and nine month periods ended
September 30, 1998 as compared to the same periods in 1997, and are
expected to continue to decrease in future periods. Revenues also
decreased for the three and nine months ended September 30, 1998 as
compared to the same periods in 1997 due to the close-out of one of the
Partnership's products in the River Hills Community in 1997. In addition,
the decrease in homesite revenues for the nine month period ended
September 30, 1998 as compared to the same period in 1997 is due to the
close-out of the remaining lots in Jacksonville Golf & Country Club in
February 1998.
Land and property revenues increased for the three month period ended
September 30, 1998 as compared to the same period in 1997 due primarily to
the sale of approximately 24 acres of developed land in Weston in the third
quarter of 1998. These sales as well as the sales of approximately 29
acres of undeveloped commercial property owned by the Metrodrama Joint
Venture, an additional twelve acres of developed land in Weston and the
sale of the Partnership's remaining Sawgrass Country Club memberships
earlier in the year are the primary cause for the increase in revenues for
the nine month period ended September 30, 1998 as compared to the same
period in 1997. In addition, the Partnership sold its 33% interest in the
H.A.E. Joint Venture to one of its venture partners in January 1998. These
sales compare to the sale of approximately six acres of developed land in
Weston during the nine month period ended September 30, 1997.
The decrease in revenues and the related cost of revenues from
operating properties for the three and nine months ended September 30, 1998
as compared to the same periods in 1997 is due primarily to the closings of
several of the Partnership's operating properties during the fourth quarter
of 1997. These closings included the Partnership's mixed-use center in
Boca Raton, Florida (consisting of retail shops, an office building and a
hotel), the Cabana Club located within its Sawgrass Community, and the
Partnership's two retail shopping centers in Weston. These properties
contributed to the higher profit margins recognized in previous years, and
the sale of these properties is the primary cause for the decrease in gross
operating profit margins for the three and nine month periods ended
September 30, 1998 as compared to the same periods in 1997.
Revenues from brokerage and other operations increased for the three
and nine months ended September 30, 1998 as compared to the same periods in
1997 due primarily to increased commissions generated by the Partnership's
resale operations in Weston, Boca Raton, Jacksonville and Atlanta. In
addition, the Partnership received revenue in January 1998 associated with
<PAGE>
the 1996 sale of its resale brokerage operation on Longboat Key near
Sarasota, Florida. Receipt of such revenue was contingent upon future
operations of the sales office, and therefore, was not recognized upon the
closing of the sale. This receipt also contributed to the increase in
revenues for the nine months ended September 30, 1998 as compared to the
same period in 1997.
The decrease in selling, general and administrative expenses for the
nine month period ended September 30, 1998 as compared to the same period
in 1997 is due in part to the decrease in expenses incurred in connection
with certain litigation in which the Partnership was previously involved.
The Partnership accrued approximately $1.8 million in March 1997 to reflect
expenses incurred for certain attorneys' fees and other expenses to be paid
as a result of the court-approved settlement in this litigation. Also
contributing to the decrease in selling, general and administrative
expenses for the three and nine month periods ended September 30, 1998 as
compared to the same periods in 1997 is a reduction in the amount of
expenditures incurred by the Partnership in connection with the various
unsolicited tender offers made for Partnership Interests.
The increase in interest income for the three and nine month periods
ended September 30, 1998 as compared to the same periods in 1997 is due
primarily to an increase in the average balances invested in interest
bearing accounts during 1998.
The increase in equity in earnings (losses) of unconsolidated ventures
for the nine months ended September 30, 1998 as compared to the same period
in 1997 is due to the Partnership's recognition of its share of the
earnings generated by A&D Title, L.P., a joint venture in which the
Partnership obtained a 50% ownership interest in July 1997. Third quarter
1997 equity in earnings (losses) of unconsolidated ventures includes the
Partnership's share of the profits recognized from the sale of properties
held by the Tampa 301 Associates and Ocala 202 joint ventures in August
1997. These transactions are the primary cause for the decrease in equity
in earnings (losses) of unconsolidated ventures for the three month period
ended September 30, 1998 as compared to the same period in 1997.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to the Commitments and Contingencies Section of
Notes for a detailed discussion regarding certain lawsuits which allegedly
in part arose out of or related to Hurricane Andrew, which on August 24,
1992 resulted in damage to a former community development known as Country
Walk, which discussion is hereby incorporated herein by reference.
On or about September 27, 1996, a lawsuit entitled Vanderbilt Income
and Growth Associates, L.L.C. and Raleigh Capital Associates L.P.,
individually and derivatively on behalf of Arvida/JMB Partners, L.P. v.
Arvida/JMB Managers, Inc., Judd D. Malkin, Neil G. Bluhm, Burton E. Glazov,
Stuart C. Nathan, A. Lee Sacks, John G. Schreiber, BSS Capital II, L.L.C.,
Starwood Capital Group I, L.P., Starwood/Florida Funding, L.L.C., Starwood
Opportunity Fund, IV, L.P. and Barry Sternlicht, defendants, and Arvida/JMB
Partners, L.P., nominal defendant, was filed in the Court of Chancery of
the State of Delaware in and for New Castle County, Civil Action No. 15238
("Raleigh action"). The Raleigh action was filed as a verified complaint
for declaratory and injunctive relief. Plaintiffs claimed that the
defendants, in entering into a financing commitment letter for a proposed
$160 million term loan from Starwood/Florida Funding L.L.C. (the "Starwood
financing"), violated, or aided and abetted, or participated in the
violation of, fiduciary duties owed to the Partnership and the Holders of
Interests, and put their personal interests ahead of the interests of the
Partnership and the Holders of Interests. In the first claim for relief,
plaintiffs sought a declaratory judgment that the terms of the Starwood
financing be declared null, void and unenforceable. In the second claim
for relief, plaintiffs asserted a claim derivatively on behalf of the
Partnership alleging, among other things, that the financing commitment
letter for the Starwood financing was not the product of a valid exercise
of business judgment. In addition to relief described above, plaintiffs
sought to preliminarily and permanently enjoin any actions in furtherance
of the financing commitment letter, an award of compensatory damages,
interest, costs and disbursements, including reasonable attorneys' and
experts' fees and such other relief as the Court might deem just and
proper. The General Partner and the Partnership filed a motion to dismiss
the Raleigh action, which motion was granted on November 7, 1996. In
granting the motion, the Court held that Raleigh was not a Limited Partner
and did not have standing to file the derivative claims. The Court further
determined that Raleigh did not have the right to vote. Plaintiffs asked
the Court to reconsider its ruling, but the Court denied the request to
change its ruling.
Plaintiffs appealed the November 7, 1996 dismissal order. On December
12, 1996, the Delaware Supreme Court reversed the trial court order on a
procedural ground. The Delaware Supreme Court concluded that the trial
court should not have considered matters outside of the pleadings in
dismissing the Raleigh action without providing the plaintiffs some limited
discovery. Accordingly, the Delaware Supreme Court remanded the case back
to the trial court for further proceedings.
On December 16, 1996, the Partnership filed a counterclaim against
Vanderbilt Income and Growth Associates, L.L.C. and Raleigh Capital
Associates L.P. ("Raleigh"), seeking a declaratory judgment that Raleigh
had no right to vote on Partnership matters. On January 28, 1997, the
trial court granted plaintiffs leave to dismiss their own complaint
concerning the Starwood financing, leaving the Partnership's counterclaim
pending.
By letter dated January 10, 1997, Raleigh requested admission as a
Substituted Limited Partner of the Partnership. The Partnership referred
the request to a special committee ("the Special Committee") consisting of
certain directors of the General Partner. On February 11, 1997, the
Special Committee denied the request. Thereafter, the Partnership
supplemented its counterclaim, as amended, to seek a court declaration that
<PAGE>
Raleigh is not entitled to be admitted as a Substituted Limited Partner.
On February 20, 1997, Raleigh filed a reply and counterclaim against the
Partnership, the General Partner, and the Special Committee. The reply
counterclaim, sought among other things, a declaration that Raleigh has
voting rights in the Partnership and that defendants breached their
fiduciary duties by failing to admit Raleigh as a Substituted Limited
Partner. The reply counterclaim also sought to enjoin the Partnership, the
General Partner, and the Special Committee from refusing to admit Raleigh
as a Substituted Limited Partner, an award of damages, interest, fees, and
costs.
On or about February 28, 1997, Gladys Beasley, individually and as a
representative of a class of persons similarly situated, filed an
intervenor complaint for declaratory relief against the Partnership. In
the intervenor complaint, plaintiff sought a declaration that purchasers
who obtained Interests in the Partnership in the public offering and
subsequent Holders of Interests in the Partnership by assignment from
original Holders have the same voting rights in the Partnership, among
other things, to remove and replace the General Partner. In addition,
plaintiff Gladys Beasley sought an order adjudging and decreeing that the
intervenor action was properly maintained as a class, an award of her costs
and expenses of the litigation, and such other relief as the Court deemed
appropriate.
The trial of all claims in the Raleigh action was held on April 7,
1997 through April 9, 1997. In a memorandum opinion dated may 23, 1997,
the Court concluded that, while neither the partnership agreement nor the
assignment agreement of the Partnership expressly states whether subsequent
Holders of Interests have voting rights, a reasonable investor could have
read the operative agreements as providing that subsequent Holders of
Interests, such as Raleigh, have voting rights. The Partnership believed,
among other things, that the Court erred in its application of the law to
the facts on this issue and appealed the Court's decision on this aspect of
the case. On the issue of whether the Special Committee properly denied
Raleigh's request for admission as a Substituted Limited Partner, the Court
upheld the denial of Raleigh's request. By order dated June 9, 1998, and
after appeal of this matter to the Delaware Supreme Court, the Delaware
Supreme Court affirmed the trial court on all issues. The Partnership
expects counsel for Raleigh and counsel for the intervening class will seek
an award of attorneys fees, although no such application for award of fees
has been filed to date.
On or about October 16, 1995, a lawsuit was filed against the
Partnership and others in the Circuit Court of the 15th Judicial Circuit,
in and for Palm Beach County, Florida, entitled Council of Villages, Inc.
et al v. Arvida/JMB Partners, Arvida/JMB Managers, Inc., Arvida/JMB
Partners, Ltd., Broken Sound Club, Inc., and Country Club Maintenance
Association, Inc. The multi-count lawsuit, as amended, is brought as a
class action, and individually, on behalf of various residents of the
Broken Sound Community, and alleges that defendants engaged in various acts
of misconduct in, among other things, the establishment, operation,
management and marketing of the Broken Sound golf course and recreational
facilities, as well as the alleged improper failure to turn over said
facilities to the Broken Sound homeowners on a timely basis. Plaintiffs
seek, through various theories, including but not limited to breach of
ordinance, fiduciary duty, fraud, constructive trust and civil theft,
damages in excess of $45 million, the appointment of a receiver for the
Broken Sound Club, other unspecified compensatory damages, the right to
seek punitive damages, treble damages, prejudgment interest, attorneys'
fees and costs. The Partnership believes that the lawsuit is without merit
and intends to vigorously defend itself in this matter.
On or about July 30, 1996, Savoy v. Arvida/JMB Partners, Arvida/JMB
Managers, Inc., Arvida/JMB Partners, Ltd., and Broken Sound Club, Inc. was
filed against the Partnership and others in the Circuit Court of the 15th
Judicial Circuit, in and for Palm Beach County, Florida. The lawsuit is
filed as a three-count complaint for dissolution of the Broken Sound Club,
Inc. ("Club"), and seeks, among other things, the appointment of a
custodian or receiver for the Club, a determination that certain acts be
<PAGE>
deemed wrongful, the return to the Club of in excess of $2.5 million in
alleged "operating profits", an injunction against the charging of certain
dues, an injunction requiring the Club to produce certain financial
statements, and such other relief as the Court deems just, fair and proper.
This lawsuit has been consolidated with the Council of Village case. The
Partnership believes the lawsuit is without merit and intends to vigorously
defend itself.
In April 1997, the Court issued an order certifying as a class action
claims respecting the alleged violation of the Boca Raton ordinances. Both
plaintiffs and defendants appealed the certification order. On appeal, the
appellate court approved certification of a class action for the following
counts: breach of ordinance, breach of fiduciary duty, civil theft (treble
damages), breach of a constructive trust and unjust enrichment. The
Partnership has filed a motion for rehearing of the issues before the
appellate court. Plaintiffs in the Savoy action moved for an appointment
of a receiver over the Club. The Partnership moved to strike the motion
and the Court granted the Partnership's motion. The Partnership has filed
a third-party complaint for indemnification and contribution against Disney
in these consolidated actions in the event the Partnership is held liable
for acts taken by a subsidiary of Disney prior to the Partnership's
involvement in the Club and property.
Other than as described above, the Partnership is not subject to any
material pending legal proceedings, other than ordinary routine litigation
incidental to the business of the Partnership. However, reference is made
to the Commitments and Contingencies Section of the Notes for a discussion
of certain claims asserted by Merrill Lynch for indemnification by the
Partnership and the General Partner in connection with claims for
arbitration filed by certain investors in the Partnership.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1. Amended and Restated Agreement of Limited Partnership.*
3.2. Assignment Agreement by and among the General Partner, the
Initial Limited Partner and the Partnership.*
4.1. Amendment to Credit Agreement.
Absolute Assignment of Mortgages and Other Documents for
$11,250,000 Term Loan Promissory Note, $3,000,000 Line of Credit Promissory
Note, and $750,000 Demand Note Letter of Credit Promissory Note.
Absolute Assignment of Mortgages and Other Documents for
$28,125,000 Term Loan Promissory Note, $7,500,000 Line of Credit Promissory
Note, and $1,875,000 Demand Note Letter of Credit Promissory Note.
Absolute Assignment of Deed to Secure Debt and Other
Documents.
4.2. Consolidated and Restated Term Loan Promissory Note of the
Certain term Loan Promissory Notes dated July 31, 1997 in Favor of Barnett
Bank, N.A., First Union National Bank, BankBoston, N.A., and Bank United.
Term Loan Promissory Note dated September 1, 1998 Payable to
the Order of First Union National Bank.
Consolidated and Restated Line of Credit Promissory Note of
the Certain Line of Credit Promissory Notes dated July 31, 1997 in Favor of
Barnett Bank, N.A., First Union National Bank, BankBoston, N.A., and Bank
United.
Line of Credit Promissory Note dated September 1, 1998 Payable
to the Order of First Union National Bank.
Consolidated and Restated Demand Note Letter of Credit Line
Promissory Note of the Certain Consolidated and Restated Demand Note Letter
of Credit Line Promissory Note dated July 31, 1997 in favor of Barnett
Bank, N.A., First Union National Bank, BankBoston, and Bank United.
Letter of Credit Line Demand Note dated September 1, 1998
Payable to the Order of First Union National Bank.
4.3. Bifurcation of Note Agreement of that Certain Consolidated and
Restated Term Loan Promissory Note dated September 1, 1998.
Exhibit A to Bifurcation of Note Agreement - Term Loan
Promissory Note dated September 1, 1998 Payable to the Order of First Union
National Bank.
Exhibit B to Bifurcation of Note Agreement - Term Loan
Promissory Note dated September 1, 1998 Payable to the Order of First Union
National Bank.
Bifurcation of Note Agreement of that Certain Consolidated and
Restated Line of Credit Promissory Note dated September 1, 1998.
Exhibit A to Bifurcation of Note Agreement - Line of Credit
Promissory Note dated September 1, 1998 Payable to the Order of First Union
National Bank.
<PAGE>
Exhibit B to Bifurcation of Note Agreement - Line of Credit
Promissory Note dated September 1, 1998 Payable to the Order of First Union
National Bank.
Bifurcation of Note Agreement of that Certain Consolidated and
Restated Demand Note Letter of Credit dated September 1, 1998.
Exhibit A to Bifurcation of Note Agreement - Letter of Credit
Line Demand Note dated September 1, 1998 Payable to the Order of First
Union National Bank.
Exhibit B to Bifurcation of Note Agreement - Letter of Credit
Line Demand Note dated September 1, 1998 Payable to the Order of First
Union National Bank.
4.4. Renewal Term Loan Promissory Note dated September 1, 1998.
Renewal Line of Credit Promissory Note dated September 1,
1998.
Renewal Demand Note Letter of Credit Line dated September 1,
1998.
10.1. Asset Purchase Agreement by and between Gulf and Pacific
Communications Limited Partnership and Schurz Communications, Inc. dated as
of July 15, 1998.
27. Financial Data Schedule
------------------------------
* Previously filed with the Securities and Exchange
Commission as Exhibits 3. and 4.0, respectively, to the Partnership's Form
10-K Report (File No. 0-16976) filed on March 27, 1990 and incorporated
herein by reference.
(b) No reports on Form 8-K have been filed since the beginning
of the last quarter of the period covered by this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ARVIDA/JMB PARTNERS, L.P.
BY: Arvida/JMB Managers, Inc.
(The General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Vice President
Date: November 11, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
By: GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: November 11, 1998
EXHIBIT 4.1
- - -----------
(Arvida)
AMENDMENT TO CREDIT AGREEMENT
-----------------------------
THIS AMENDMENT TO CREDIT AGREEMENT ("Amendment"), having an effective
date of the 1st day of September, 1998, by and between ARVIDA/JMB PARTNERS,
L.P., a Delaware limited partnership, ARVIDA/JMB PARTNERS, a Florida
general partnership, ARVIDA GRAND BAY LIMITED PARTNERSHIP IV, a Delaware
limited partnership, THE AOK GROUP, a Florida general partnership,
METRODRAMA JOINT VENTURE, a Florida general partnership, SOUTHEAST FLORIDA
HOLDINGS, INC., an Illinois corporation, GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP, a Delaware limited partnership and WESTON HILLS
COUNTRY CLUB LIMITED PARTNERSHIP, a Delaware limited partnership (jointly
and severally, "Borrowers"), having an address of 900 North Michigan
Avenue, Chicago, Illinois 60611 and BARNETT BANK, N.A., as Agent for the
Lenders and as Lender, a national banking association, having an address of
One East Broward Boulevard, Fort Lauderdale, Florida 33301 ("Resigning
Agent") and joined in by all other Lenders as of the original execution
date of the Credit Agreement ("Other Original Lenders").
RECITALS:
(A) On July 31, 1997, Resigning Agent, the Other Original
Lenders and Borrowers entered into a Credit Agreement ("Credit Agreement")
as to a SEVENTY-FIVE MILLION DOLLARS ($75,000,000) Term Loan, a TWENTY
MILLION DOLLARS ($20,000,000) Revolving Line of Credit and a FIVE MILLION
DOLLARS ($5,000,000) Letter of Credit Facility (collectively "Loans").
(B) Borrowers have applied to Lenders for modification of the
Credit Agreement primarily (among other modifications) in order to (i)
effect a change in the Agent from Barnett Bank, N.A. as Resigning Agent to
First Union National Bank ("Successor Agent" or "First Union"); and (ii)
effect a change in the composition of the Lenders and in the Committed
Shares of the remaining Lenders.
(C) Borrowers, Resigning Agent and Successor Agent intend to
enter into this Amendment in order to amend the Credit Agreement
accordingly, joined in by the Other Original Lenders.
NOW THEREFORE, in consideration of the sum of TEN DOLLARS ($10.00)
and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, as well as the mutual covenants herein
contained, the parties hereto agree as follows:
1. RECITALS. The above recitals are true and correct and are
incorporated herein by this reference.
2. CAPITALIZED TERMS. Capitalized terms not defined herein shall
have the meaning ascribed to them in the Credit Agreement.
3. ASSIGNMENT, RESTATEMENT, CONSOLIDATION AND BIFURCATION OF
NOTES. Simultaneously with the execution of this Amendment, Barnett Bank,
N.A., BankBoston, N.A. and Bank United have assigned their respective Term
Loan Promissory Notes, Line of Credit Promissory Notes and the Demand Note
Letter of Credit Line Promissory Notes to First Union. As of the date
hereof, Resigning Agent and BankBoston, N.A. shall no longer be Lenders and
each shall be repaid the full balance of their respective actual Committed
Shares under the Loans (together with all accrued but unpaid interest
thereon) and Resigning Agent shall be paid all Facility Fees otherwise due
and owing to it as well as any due and owing administrative fees and other
amounts due and owing to Resigning Agent in its former capacity as Agent.
First Union has consolidated all such Term Loan Promissory
Notes with the Term Loan Promissory Note originally in favor of First Union
into a Consolidated and Restated Term Loan Note executed by Borrowers in
the original principal amount of $49,000,000 dated as of even date
herewith. First Union has consolidated all such Line of Credit Promissory
Notes with the Line of Credit Promissory Note originally in favor of First
Union into a Consolidated and Restated Line of Credit Promissory Note
executed by Borrowers in the original principal amount of $20,000,000
dated as of even date herewith. First Union has consolidated all such
Demand Note Letter of Credit Line Promissory Notes with the Demand Note
Letter of Credit Line Note originally in favor of First Union into a
Consolidated and Restated Demand Note Letter of Credit Promissory Note
executed by Borrowers in the original principal amount of $5,000,000 dated
as of even date herewith.
The Consolidated and Restated Term Loan Promissory Note, the
Consolidated and Restated Line of Credit Promissory Note, and the
Consolidated and Restated Demand Note Letter of Credit Line Promissory Note
(collectively, "Consolidated Notes") have been bifurcated by Borrowers
executing Bifurcation of Note Agreements dated of even date herewith,
bifurcating each of the three Consolidated Notes into two promissory notes
(for a total of 6 promissory notes). Of the two notes created by each
Bifurcation of Note Agreement, First Union has retained the promissory note
in the amount of its Committed Share, as modified below, so that First
Union is the holder of a Renewal Term Loan Promissory Note in the original
principal amount of $30,200,000, a Renewal Line of Credit Promissory Note
in the original principal amount of $12,320,000 and a Renewal Demand Note
Letter of Credit Line Promissory Note in the amount of $3,080,000, all
executed by Borrowers as of even date hereof (collectively, "First Union
Notes"). First Union has assigned the other three (3) promissory notes
created by bifurcation to Bank United in the amount of its Committed Share,
as modified below. Borrower has executed renewal promissory notes in favor
of Bank United so that Bank United is the holder of a Renewal Term Loan
Promissory Note in the original principal amount of $18,800,000, a Renewal
Line of Credit Promissory Note in the amount of $7,680,000 and a Renewal
Demand Note Letter of Credit Line Promissory Note in the amount of
$1,920,000, all executed by Borrowers as of even date hereof (collectively,
"Bank United Notes").
4. REVISIONS TO CREDIT AGREEMENT. Effective as of the date of
this Amendment, the Credit Agreement shall be modified specifically as
follows:
1. Section 1.1.25 of the Credit Agreement is amended so that
the Committed Shares of First Union and Bank United in each of the Loans
shall be as described on Revised Schedule 1.1.25 as attached hereto.
2. Section 1.1.44 of the Credit Agreement is amended to
provide that the term "Lenders" shall mean collectively Bank United, a
Federal savings bank and First Union National Bank, a national banking
association, each a Lender. Subject to the provisions set forth below in
this Paragraph 4 and in Paragraph 9 hereof: (i) as of the date hereof,
BankBoston, N.A. and Barnett Bank, N.A. are no longer Lenders; and (ii)
BankBoston, N.A. and Barnett Bank, N.A. are hereby released and discharged
from all of their obligations as Lenders under the Credit Agreement and the
other Loan Documents, provided that each of BankBoston, N.A. and Barnett
Bank, N.A. shall retain its rights to be indemnified pursuant to all
provisions of the Loan Documents pursuant to which the Borrowers have
agreed to indemnify the Lenders (including, without limitation, Section 12
of this Amendment), in each case with respect to any claims or actions
arising prior to the date hereof.
.
3. Section 1.1.57 of the Credit Agreement is amended to
provide that the term "Notes" shall mean the First Union Notes and the Bank
United Notes.
4. Section 1.1.72 of the Credit Agreement is deleted, and
any further references in the Credit Agreement to Super-Required Lenders
shall be deleted as well so that any reference to Super-Required Lenders
shall be construed as requiring no approval greater than that of the
Required Lenders as defined in Section 1.1.66 of the Credit Agreement.
5. Section 2.2.2 of the Credit Agreement is amended to
reflect that Requests for Advances shall be sent to:
First Union National Bank
5581 West Oakland Park Blvd., 2nd Floor
Lauderhill, Florida 33313
Attn: Portfolio Management Site Manager
6. Section 2.3.2 of the Credit Agreement is amended to
reflect that requests for issuance of a Letter of Credit shall be sent to:
First Union National Bank
5581 West Oakland Park Blvd., 2nd Floor
Lauderhill, Florida 33313
Attn: Portfolio Management Site Manager
7. Section 2.4.1 of the Credit Agreement is amended to
provide that the place of payment of all payments of principal, interest,
Facility Fees, late fees, expenses and other amounts made by or on behalf
of the Borrowers pursuant to the Credit Agreement, the Notes and the other
Loan Documents shall be as follows:
First Union National Bank
301S. College Street
TW-6
Charlotte, North Carolina 28288-0166
Attn: Jane Hurley (704) 383-3812
Wiring Instructions:
First Union National Bank
301 South College Street
TW-6
Charlotte, North Carolina 28288-0166
ABA #053000219
Account No.465906 0010352
BNF: Arvida
Attn: Jane Hurley
8. Section 2.10.3 of the Credit Agreement as to Notices is
amended as provided in Paragraph 10 of this Amendment.
9. Section 6.16 of the Credit Agreement dealing with
Operating Accounts of the Borrowers is amended to delete the reference to
Barnett Bank, N.A. and substitute First Union National Bank.
5. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES BY BORROWERS.
Except as to Sections 4.3.2 and 4.17.12 which shall not be subject to being
reaffirmed as of the date hereof (as provided in Section 6.6.4) and except
for date specific representations and warranties which shall be deemed
reaffirmed and updated as of the date hereof only if listed on the attached
index of updated Schedules, Borrowers hereby reaffirm each of the
representations and warranties made by Borrowers in Section 4 of the Credit
Agreement and Borrowers represent and warrant to Lenders that all such
representations and warranties are true, correct and complete on and as of
the date hereof. Borrowers hereby release Lenders and hold Lenders
harmless from any cause or causes of action which Borrowers have or could
have against Lenders relating to the Loan Documents or the indebtedness
evidenced and secured thereby until the date hereof. To the knowledge of
Borrowers, there currently exists, as of the date hereof, no breach or
default or event of default or event, that, with the passage of time or the
giving of notice or both, would constitute a breach or default or an event
of default under the Credit Agreement or Loan Documents, or constitute a
failure of a condition precedent to the continued effect of the Commitments
or to the funding of Advances or the issuance of any Letters of Credit
pursuant to the Credit Agreement.
6. CONDITIONS TO BE SATISFIED BY BORROWERS. Notwithstanding any
other provision of this Amendment or the Credit Agreement to the contrary
and without affecting in any manner the rights of the Agent or any Lender
hereunder, the Agent and all Lenders shall not be obligated to make any
further Advances or to issue any further Letters of Credit or take or
perform any other action under the Credit Agreement until the following
conditions have been fulfilled to the satisfaction of the Agent [and, to
the extent hereinbelow specified, of the Lenders]:
1. On or prior to the date hereof, Agent and Lenders have
received this Amendment duly executed and the other Loan Documents
described on Revised Schedule 5.1.3, all in form and substance
satisfactory to Agent and the Lenders, together with all other documents
required hereunder or otherwise reasonably required by Agent to be executed
and delivered or otherwise provided by Agent.
2. Borrowers have delivered to Agent an Endorsement to the
Mortgagee Title Insurance Policy No. 82-03-021373 issued by Lawyers Title
Insurance Corporation and changing the name of the Agent to First Union
National Bank. Borrowers have delivered to Agent current Ownership and
Encumbrance Reports on all property comprising the Mortgaged Properties.
3. Borrowers shall have delivered to Agent Certificates of
Good Standing and Authority To Do Business for each corporate and limited
partnership Subsidiary and Affiliate which is a Borrower or whose ownership
interests are to be assigned to Agent hereunder and, where applicable, for
each of their respective general partners, from the states of their
respective formation and qualification, certified by the Secretaries of
State of each such state and those documents listed in 5.1.6.2, 5.1.6.3 and
5.1.6. 4 of the Credit Agreement, updated as appropriate to reflect current
status (except for those entities which are no longer in existence as a
result of ceasing to do business as of the date hereof).
4. Borrowers shall have delivered to the Agent updated
Opinions of Counsel as set forth in 5.1.7.1 and 5.1.7.2 of the Credit
Agreement.
5. Borrowers shall have furnished Agent proof of payment of
real property and personal property taxes for 1997 against each of the
Mortgaged Properties and the other Collateral.
6. Borrowers shall have furnished UCC-11 searches and other
evidence satisfactory to Agent as to the status of liens with respect to
any of the Mortgaged Properties or other Collateral.
7. Borrowers shall have delivered to Agent updated Schedules
to the Credit Agreement as appropriate to reflect the status of the
Schedules as of the date hereof.
8. Borrowers shall have delivered to Agent evidence
satisfactory to Agent that Borrowers have obtained all consents and
acknowledgments of all persons whose consents and acknowledgments may be
required in connection herewith.
9. Borrowers shall have made payment in immediately
available funds to Agent for its account and the account of the Lenders,
as the case may be, of all Facility Fees and all other fees, costs and
expenses incurred in connection with this Amendment, including, without
limitation, legal counsel to Agent.
10. Borrowers shall have furnished to Agent current evidence
of insurance in the form and content otherwise required in the Credit
Agreement.
11. All financial covenants of Borrowers specified in Section
6.13 of the Credit Agreement are currently maintained by the Borrowers.
Borrowers acknowledge and agree that as of the date hereof, Borrowers have
no offsets, defenses or counterclaims as to any of the Loans, the Loan
Documents or the Obligations evidenced and secured thereby.
12. THIS PARAGRAPH INTENTIONALLY DELETED.
13. First Union, as Agent, reserves the right to accept any
Additional Property acquired by Borrowers as Collateral for the Obligations
since July 31, 1997, notwithstanding the completion of the modifications
referred to in Recital (B) hereof has occurred.
7. RESIGNATION BY BARNETT BANK, N.A. AS AGENT AND APPOINTMENT OF
FIRST UNION NATIONAL BANK AS AGENT. Section 10.1 of the Credit Agreement
is amended to provide that Barnett Bank, N.A. hereby resigns its rights and
obligations as Agent under the Credit Agreement in accordance with Section
10.7 of the Credit Agreement. First Union is hereby duly appointed as
Agent and First Union hereby accepts appointment as Agent. All Original
Lenders and Borrowers hereby reaffirm Section 10.7 of the Credit Agreement
which provides that as to Barnett Bank, N.A. resigning as Agent, the
provisions of Section 10 of the Credit Agreement (including, without
limitation, Sections 10.1.1, 10.1.4, 10.2, 10.4, 10.5, 10.10.1 and 11.7 of
the Credit Agreement) shall survive its resignation as Agent and continue
to be in effect for its benefit in respect of any actions taken or admitted
to be taken by Barnett Bank, N.A. while it was acting as Agent.
8. ASSIGNMENT OF RIGHTS AND OBLIGATIONS AS AGENT. Barnett Bank,
N.A. hereby assigns all its right, title and interest in and to the
following unrecorded documents as "Agent" (and as to documents, d., f. and
g. below as "Proxy Holder") to First Union National Bank (and First Union
National Bank hereby accepts) such assignment (simultaneously herewith,
Barnett Bank, N.A. and BankBoston, N.A. each are executing in favor of
First Union an Absolute Assignment of Mortgages and Other Documents to be
recorded in various Public Records):
1. Security Agreement dated July 31, 1997 executed by
Borrowers;
[SPACE INTENTIONALLY LEFT BLANK]
<PAGE>
2. Collateral Assignment of Construction Contracts dated
July 31, 1997 executed by Borrowers;
3. Subordination and Intercreditor Agreement dated July 31,
1997 executed by Borrowers;
4. Limited Partnership Pledge Agreement dated July 31, 1997
executed by Arvida/JMB Partners, L.P.;
5. Stock Pledge Agreement dated July 31, 1997 executed by
Arvida/JMB Partners, L.P.;
6. General Partnership Pledge Agreement dated July 31, 1997
executed by Arvida/JMB Partners, L.P.; and
7. General Partnership Pledge Agreement dated July 31, 1997
executed by Arvida/JMB Partners, L.P.
9. ASSIGNMENT OF RIGHTS AND OBLIGATIONS AS LENDER. Effective on
and as of the date of this Amendment, each of BankBoston, N.A. and Barnett
Bank, N.A. (each an "Assignor" and together the "Assignors") hereby
irrevocably sells, transfers and assigns to First Union National Bank (the
"Assignee"), without recourse, and the Assignee hereby purchases and
acquires from each of the Assignors, respectively, all of such Assignor's
right, title and interest in and to the Term Loan Promissory Notes, Line of
Credit Promissory Notes, Demand Note Letter of Credit Line Promissory
Notes, the Loans and all other obligations of the Borrower under and in
respect of the Credit Agreement and each of the other Loan Documents
(collectively, the "Assigned Rights") and Assignee hereby assumes all
obligations accruing as of the date of this Amendment arising from the
Assigned Rights. Upon the execution of this Amendment by the parties
hereto, as full consideration for the sale, transfer and assignment by the
Assignors to the Assignee of the Assigned Rights, the Assignee shall pay to
the Assignors, respectively, the amount of all obligations owing to such
Assignor in respect of the Assigned Rights as set forth more fully in the
Lender's Estoppel Certificate executed and delivered by such Assignor to
the Assignee and the Borrowers in connection with this Amendment, in each
case in immediately available funds, by wire transfer of that amount as
instructed by such Assignor.
Effective on and as of the date hereof, each Assignor is hereby
expressly and absolutely released from all of such Assignor's obligations
arising under the Credit Agreement and each of the other Loan Documents
arising as of the date of this Amendment, including, without limitation,
such Assignor's obligations to make Advances as contemplated in the Credit
Agreement. Borrowers and all Original Lenders hereby acknowledge and agree
that other than as expressly set forth herein and in the related assignment
documentation, the Assignors make no representation or warranty, express or
implied, and assume no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement, the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, the other Loan Documents or
any other document or instrument furnished pursuant thereto, the
attachment, perfection or priority of any security interest or mortgage or
the financial condition of the Borrowers or any other person primarily or
secondarily liable of the Assigned Rights.
10. YEAR 2000 COMPATIBILITY. Borrowers shall take all action
reasonably necessary to assure that Borrowers' computer based systems will
be able to operate and process data including dates on and after January 1,
2000 so that there will not be a material adverse effect on the business
operations of Borrowers. At the request of Lender, Borrowers shall provide
Agent with evidence reasonably acceptable to Lender of Borrowers'
compliance with the preceding sentence no later than December 1, 1999.
Attached hereto as Exhibit A is a Year 2000 Questionnaire for completion by
Borrowers.
11. NOTICES. Notwithstanding any provisions to the contrary
contained in the other Loan Documents, all notices, requests and demands to
or upon the Agent and any Borrower party to this Agreement, pursuant to any
Loan Document, shall be deemed to have been given or made when delivered by
hand, delivered by nationally recognized overnight courier service next
Business Day delivery, delivered by telecopy (upon confirmation of receipt
received on a Business Day), or three (3) Business Days after deposit in
the U.S. mail, postage prepaid by registered or certified mail, return
receipt requested, addressed as follows or to such other address as may be
hereafter designated in writing by one party to the other:
[SPACE INTENTIONALLY LEFT BLANK]
<PAGE>
To Borrowers: c/o Arvida/JMB Partners, L.P.
900 North Michigan Avenue
Chicago, Illinois 60611-1575
Attn: Mr. Stephen A. Lovelette
Telecopy No. (312) 915-2310
with a copy to: White & Case
200 South Biscayne Blvd., Suite 4900
Miami, Florida 33131
Attn: H. William Walker, Jr., Esq.
Telecopy No. (305) 358-5744
and with a copy to: Arvida Company
7900 Glades Road, 2nd Floor
Boca Raton, Florida 33434
Attn: John Baric, Esq.
Telecopy No. (561) 479-1227
To Agent and First Union National Bank
Lender: 5581 West Oakland Park Blvd., 2nd Floor
Lauderhill, Florida 33313
Attn: Dana Hunter, Vice President
Telecopy No. (954) 467-4164
with a copy to: Peter D. Slavis, Esquire
Ruden, McClosky, Smith,
Schuster & Russell, P.A.
200 East Broward Boulevard
Fort Lauderdale, Florida 33301
Telecopy No. (954) 764-4996
12. LIABILITY FOR DOCUMENTARY STAMPS AND INTANGIBLE TAXES.
Borrowers agree to pay any and all documentary stamps and/or intangible
taxes and all interest and penalties associated therewith which may be
assessed on account of the transactions set forth in Paragraph 3 of this
Amendment, if any. Borrowers shall pay such sums immediately upon receipt
of notice of such amounts from Agent. In the event Borrowers fail to pay
such sums, Agent may, at its option, pay such taxes and/or documentary
stamps. Any such payment by Agent shall be added to the Obligations of
Borrowers and shall bear interest from the date advanced to the date of
recovery at the Default Rate. If Borrowers fail to pay any and all
documentary stamps and/or intangible taxes and any interest and penalties
associated therewith which may be assessed on account of the transactions
set forth in Paragraph 3 of this Amendment, it shall be deemed to be a
default by Borrowers under the Loans hereof.
13. NO CHANGE IN PRIORITY. The parties hereto intend that this
Amendment shall not disturb the existing priority of the Mortgages and
other Loan Documents. The parties hereto further intend that this
Amendment shall not constitute a novation and shall in no way adversely
affect or impair the lien priority of the Mortgages and other Loan
Documents. Borrowers agree to cooperate with Agent so that the interests
of Lenders are fully protected and the intent of this Amendment can be
effectuated.
14. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF BORROWERS.
Borrowers represent and warrant to Lender as follows:
1. All representations and warranties of the Borrowers
contained in this Amendment are true and correct.
2. Borrowers have no intention of filing any petition or
initiating any bankruptcy proceedings.
3. Borrowers have not entered into this Amendment and the
transactions contemplated hereby to provide preferential treatment to Agent
or Lenders or any other creditor of Borrowers in anticipation of seeking
relief under the federal or any state bankruptcy code or similar law, nor
have Borrowers entered into this Amendment and the transactions
contemplated hereby with the intent to hinder, delay or defraud any
creditors of Borrowers.
4. Each of the Borrowers has the full capacity, right, power
and authority to execute, deliver and perform this Amendment and all
documents to be executed by it pursuant hereto, and all formal
requirements necessary or required by any statutes, laws, ordinances,
codes, rules, regulations, orders, decrees, directives, partnership
agreements, articles of incorporation, charters or by-laws to enter into
this Amendment have been fully complied with. The individuals signing this
Amendment and all other documents executed pursuant hereto on behalf of the
Borrowers are duly authorized to sign the same on behalf of the Borrower.
The provisions of this Amendment are and shall be legal, valid and binding
upon and enforceable against the Borrowers in accordance with their
respective terms.
5. This Amendment shall not be construed more strictly
against either party by virtue of the preparation hereof.
6. Borrowers hereby agree to execute and deliver any and all
documents as may be reasonably required by Agent at any time in order to
carry out the terms of this Amendment and give effect thereto.
15. CONFLICT AND RATIFICATION. The terms of this Amendment shall
control in the event of a conflict between the provisions hereof and the
provisions of the Credit Agreement. Except as specifically amended by this
Amendment, the terms, covenants and conditions of the Credit Agreement are
hereby ratified and confirmed by Borrowers and all Original Lenders and
remain in full force and effect.
16. COUNTERPARTS. This Amendment may be executed and delivered by
one or more of the parties hereto on any number of separate counterparts
and all of such counterparts taken together shall be deemed to constitute
one and the same instrument.
<PAGE>
17. WAIVER OF JURY TRIAL
BORROWERS AND ALL ORIGINAL LENDERS HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY AND ALL RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION (INCLUDING, BUT NOT LIMITED TO,
ANY CLAIMS, CROSS-CLAIMS OR THIRD-PARTY CLAIMS) ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AMENDMENT TO CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREIN. BORROWERS HEREBY
CERTIFY THAT NO REPRESENTATIVE OR AGENT OF THE LENDERS NOR THE LENDERS'
COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDERS WOULD
NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT
TO JURY TRIAL PROVISION. BORROWERS ACKNOWLEDGE THAT THE LENDERS HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS
PARAGRAPH.
IN WITNESS WHEREOF, the parties have duly executed this Amendment to
Credit Agreement the day and year first above written.
WITNESSES: BORROWERS:
ARVIDA/JMB PARTNERS, L.P.,
Signature a Delaware limited partnership
Printed Name By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
Signature
By: /S/ STEPHEN A. LOVELETTE
Printed Name Stephen A. Lovelette, Vice President
[CORPORATE SEAL]
ARVIDA/JMB PARTNERS,
Signature a Florida general partnership
Printed Name By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, a general partner
Signature
By: /S/ STEPHEN A. LOVELETT
Printed Name Stephen A. Lovelette, Vice President
[CORPORATE SEAL]
ARVIDA GRAND BAY LIMITED PARTNERSHIP IV,
Signature a Delaware limited partnership
Printed Name By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
Signature
By: /S/ STEPHEN A. LOVELETTE
Printed Name Stephen A. Lovelette, Vice President
[CORPORATE SEAL]
<PAGE>
THE AOK GROUP,
Signature a Florida general partnership
Printed Name By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
Signature
By: ARVIDA/JMB MANAGERS, INC.,
Printed Name a Delaware corporation,
its sole general partner
By: /S/ STEPHEN A. LOVELETTE
Stephen A. Lovelette, Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS,
Signature a Florida general partnership,
a general partner
Printed Name By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
Signature
By: /S/ STEPHEN A. LOVELETTE
Printed Name Stephen A. Lovelette, Vice President
[CORPORATE SEAL]
METRODRAMA JOINT VENTURE,
Signature a Florida general partnership
Printed Name By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
Signature
By: ARVIDA/JMB MANAGERS, INC.,
Printed Name a Delaware corporation,
its sole general partner
By: /S/ STEPHEN A. LOVELETTE
Stephen A. Lovelette, Vice President
[CORPORATE SEAL]
<PAGE>
By: ARVIDA/JMB PARTNERS,
Signature a Florida general partnership,
a general partner
Printed Name By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, a general partner
Signature
By: /S/ STEPHEN A. LOVELETTE
Printed Name Stephen A. Lovelette, Vice President
[CORPORATE SEAL]
<PAGE>
SOUTHEAST FLORIDA HOLDINGS, INC.,
Signature an Illinois corporation
Printed Name By: /S/ STEPHEN A. LOVELETTE
Stephen A. Lovelette, Vice President
Signature
[CORPORATE SEAL]
Printed Name
GULF AND PACIFIC COMMUNICATIONS LIMITED,
Signature PARTNERSHIP, a Delaware limited partnership
Printed Name By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
Signature
By: /S/ STEPHEN A. LOVELETTE
Printed Name Stephen A. Lovelette, Vice President
[CORPORATE SEAL]
WESTON HILLS COUNTRY CLUB LIMITED
Signature PARTNERSHIP, a Delaware limited partnership
Printed Name By: WHCC, INC.,
an Illinois corporation, its general partner
Signature
By: /S/ STEPHEN A. LOVELETTE
Printed Name Stephen A. Lovelette, Vice President
[CORPORATE SEAL]
SUCCESSOR AGENT:
FIRST UNION NATIONAL BANK,
a national banking association
By:
Printed Name:
Title:
Printed Name
Signature
Printed Name
RESIGNING AGENT:
BARNETT BANK, N.A., a national banking association
By:
Signature Printed Name:
Title:
Printed Name
Signature
Printed Name
LENDERS:
FIRST UNION NATIONAL BANK,
a national banking association
By:
Signature Printed Name:
Title:
Printed Name
BARNETT BANK, N.A., a national banking
association
By:
Name:
Title:
BANKBOSTON, N.A., a national banking association
By:
Name:
Title:
BANK UNITED, a federal savings bank
By:
Name:
Title:
<PAGE>
REVISED SCHEDULE 1.1.25
Committed Shares
First Union National Bank: 61.6216216%
Bank United: 38.3783783%
<PAGE>
Return to: (enclose self-addressed stamped envelope)
ASSIGNMENT OF MORTGAGE FROM CORPORATION
Name: Deborah L. Fechik
Address:
P.O. Box 1900
Fort Lauderdale, Florida 33302
This Instrument Prepared by: Peter D. Slavis, Esq.
Address:
Ruden, McClosky, Smith,
Schuster & Russell, P.A.
200 East Broward Boulevard
15th Floor
Fort Lauderdale, Florida 33301
<PAGE>
ABSOLUTE ASSIGNMENT OF MORTGAGES
AND OTHER DOCUMENTS
BANKBOSTON, N.A., a national banking association, having
an address of 115 Perimeter Center Place, NE, Suite 500, Atlanta, Georgia
30346 (hereinafter called the "Assignor"), for the consideration of TEN
DOLLARS ($10.00) and other good and valuable consideration, receipt of
which is hereby acknowledged, does hereby grant, bargain, sell, assign,
transfer and set over without recourse unto and in favor of FIRST UNION
NATIONAL BANK, a national banking association, its successors and assigns,
having an address of 5581 West Oakland Park Boulevard, 2nd Floor,
Lauderhill, Florida 33313 (hereinafter called the "Assignee") (as Successor
Agent for the "Lenders" identified in the Amendment to Credit Agreement
dated on or about even date hereof), all of the rights, title and interest
of the Assignor in and to the following:
(a) All those certain Mortgage and Security Agreements
more particularly described on Exhibit AA attached hereto and made a part
hereof;
(b) All those certain Assignments of Rents and Leases
more particularly described on Exhibit AB attached hereto and made a part
hereof;
(c) All those certain UCC-1 Financing Statements more
particularly described on Exhibit AC attached hereto and made a part
hereof;
(d) Concurrently with the execution of this Absolute
Assignment of Mortgages and Other Documents, Assignor has endorsed, without
recourse and without representation or warranty except as may be
specifically provided herein, to Assignee that certain Term Loan Promissory
Note in the original principal amount of $11,250,000, that certain Line of
Credit Promissory Note in the original principal amount of $3,000,000 and
that certain Demand Note Letter of Credit Line Promissory Note in the
original principal amount of $750,000, all dated July 31, 1997
(collectively "Notes") and the monies due and to become due thereunder,
with interest from the1st day of September, 1998.
TO HAVE AND TO HOLD the same unto Assignee, its
successors and assigns forever.
1. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNOR.
(a) This Absolute Assignment of Mortgages and Other
Documents ("Assignment") is being made without recourse, and except as to
Assignor's Estoppel Certificate dated on or about even date hereof in favor
of Assignee and except in Paragraph 1(b) below, without representation or
warranty of any kind, including, but not limited to, the enforceability or
collectibility of the Notes and Mortgage.
<PAGE>
(b) The Assignor hereby represents and warrants to the Assignee
that: (i) the Assignor has full legal right, power and authority to
execute and deliver this Assignment and to consummate all of the
transaction contemplated herein; (ii) this Assignment constitutes the
authorized, valid and legally binding obligation of the Assignor
enforceable in accordance with its terms; (iii) the person who has executed
this Assignment is fully and lawfully authorized and empowered to cause the
Assignor to enter into and consummate this Assignment; and (iv) no further
consent, approval, authorization or order of Assignor is required to
consummate the transactions contemplated by this Assignment.
2. FURTHER ASSURANCES
The Assignor, for itself and its successors and assigns, further
covenants and agrees that it will, at any time and from time to time after
the date hereof upon the written request of the Assignee, execute and
deliver such further instruments of conveyance, transfer, notice, consent
or otherwise and take such other action as may reasonably be required or
advisable to evidence, or give effect to, the rights granted to the
Assignee pursuant to this Assignment and to effectively convey, transfer
and vest in the Assignee full and complete title in the Mortgages and Other
Loan Documents.
3. SUCCESSORS; NO ORAL MODIFICATION
This Assignment shall inure to the benefit of the Assignee and each
of its successors and assigns and is binding upon the Assignor and each of
its respective successors or assigns and may not be modified or terminated
except by a written agreement signed by the parties hereto.
4. GOVERNING LAW; PREVAILING PARTY
This Assignment shall be governed by, and construed in accordance
with, the laws of the State of Florida. In the event that any litigation
arises out of the execution and implementation of this Assignment, the
prevailing party shall be entitled to recover all costs incurred, including
reasonable attorneys' fees, at all levels of legal proceedings.
5. PARTIAL INVALIDITY
If part of this Assignment is contrary to, prohibited by or deemed
invalid under applicable laws or regulations, such part shall be
inapplicable and deemed omitted to the extent contrary, prohibited or
invalid, but the remainder of this Assignment shall not be invalidated
thereby and shall be given effect so far as is possible.
IN WITNESS WHEREOF, the Assignor has hereunto set its hand and seal
effective as of the 1st day of September, 1998.
Signed, sealed and delivered
in the presence of : BANKBOSTON, N.A., a national banking
association
By:
Signature
Title:
Print Name
(CORPORATE SEAL)
Signature
Print Name
<PAGE>
STATE OF FLORIDA )
) ss:
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State aforesaid and in the County aforesaid to take
acknowledgments, the foregoing instrument was acknowledged before me by
, the of BANKBOSTON, N.A., a
national banking association, freely and voluntarily under authority duly
vested in him/her by said BankBoston, N.A. and that the seal affixed
thereto is the true corporate seal of said BankBoston, N.A. He/She is
personally known to me or who has produced as
identification.
WITNESS my hand and official seal in the County and State last
aforesaid this day of , 1998 .
Notary Public
Typed, printed or stamped name of Notary Public
My Commission Expires:
<PAGE>
EXHIBIT A
Mortgage and Security Agreements
1. Mortgage and Security Agreement recorded on August 4, 1997, in
the Public Records of Broward County, Florida, in Official Records Book
26802, Page 888.
2. Mortgage and Security Agreement recorded on August 5, 1997, in
the Public Records of Palm Beach County, Florida, in Official Records Book
9922, Page 111.
3. Mortgage and Security Agreement recorded on August 6, 1997, in
the Public Records of Marion County, Florida, in Official Records Book
2395, Page 1799.
4. Mortgage and Security Agreement recorded on August 5, 1997, in
the Public Records of Sarasota County, Florida, in Official Records Book
2999, Page 123.
5. Mortgage and Security Agreement recorded on August 5, 1997, in
the Public Records of Duval County, Florida, in Official Records Book 8690,
Page 1239.
6. Mortgage and Security Agreement recorded on August 5, 1997, in
the Public Records of St. Johns County, Florida, in Official Records Book
1255, Page 1534.
7. Mortgage and Security Agreement recorded on August 5, 1997, in
the Public Records of Hillsborough County, Florida, in Official Records
Book 8663, Page 1655.
<PAGE>
EXHIBIT B
Assignment of Rents and Leases
1. Assignment of Rents and Leases recorded on August 4, 1997, in
the Public Records of Broward County, Florida, in Official Records Book
26803, Page 1.
2. Assignment of Rents and Leases recorded on September 5, 1997,
in the Public Records of Palm Beach County, Florida, in Official Records
Book 9973, Page 16.
3. Assignment of Rents and Leases recorded on August 6, 1997, in
the Public Records of Marion County, Florida, in Official Records Book
2396, Page 1.
4. Assignment of Rents and Leases recorded on August 5, 1997, in
the Public Records of Sarasota County, Florida, in Official Records Book
2999, Page 284.
5. Assignment of Rents and Leases recorded on August 5, 1997, in
the Public Records of Duval County, Florida, in Official Records Book 8690,
Page 1400.
6. Assignment of Rents and Leases recorded on August 5, 1997, in
the Public Records of St. Johns County, Florida, in Official Records Book
1255, Page 1695.
7. Assignment of Rents and Leases recorded on August 5, 1997, in
the Public Records of Hillsborough County, Florida, in Official Records
Book 8663, Page 1816.
<PAGE>
EXHIBIT C
UCC-1 Financing Statements
1. UCC-1 Financing Statement filed with the Public Records of
Broward County, Florida, in Official Records Book 26803, Page 152.
2. UCC-1 Financing Statement filed with the Public Records of Palm
Beach County, Florida, in Official Records Book 9922, Page 404.
3. UCC-1 Financing Statement filed with the Public Records of
Marion County, Florida, in Official Records Book 2396, Page 152.
4. UCC-1 Financing Statement recorded in the Public Records of
Sarasota County, Florida, in Official Records Book 3010, Page 1877.
5. UCC-1 Financing Statement filed with the Public Records of
Duval County, Florida, in Official Records Book 8690, Page 1551.
6. UCC-1 Financing Statement filed with the Public Records of St.
Johns County, Florida, in Official Records Book 1255, Page 1846.
7. UCC-1 Financing Statement filed with the Public Records of
Hillsborough County, Florida, in Official Records Book 8663, Page 1967.
<PAGE>
Return to: (enclose self-addressed stamped envelope)
ASSIGNMENT OF MORTGAGE FROM CORPORATION
Name: Deborah L. Fechik
Address:
P.O. Box 1900
Fort Lauderdale, Florida 33302
This Instrument Prepared by: Peter D. Slavis, Esq.
Address:
Ruden, McClosky, Smith,
Schuster & Russell, P.A.
200 East Broward Boulevard
15th Floor
Fort Lauderdale, Florida 33301
<PAGE>
ABSOLUTE ASSIGNMENT OF MORTGAGES
AND OTHER DOCUMENTS
BARNETT BANK, N.A., a national banking association, as a
Lender and as Resigning Agent, having an address of One East Broward
Boulevard, Fort Lauderdale, Florida 33301 (hereinafter called the
"Assignor"), for the consideration of TEN DOLLARS ($10.00) and other good
and valuable consideration, receipt of which is hereby acknowledged, does
hereby grant, bargain, sell, assign, transfer and set over without recourse
unto and in favor of FIRST UNION NATIONAL BANK, a national banking
association, its successors and assigns, having an address of 5581 West
Oakland Park Boulevard, 2nd Floor, Lauderhill, Florida 33313 (hereinafter
called the "Assignee") (as Successor Agent for the "Lenders" identified in
the Amendment to Credit Agreement dated on or about even date hereof), all
of the rights, title and interest of the Assignor in and to the following:
(a) All those certain Mortgage and Security Agreements
more particularly described on Exhibit AA attached hereto and made a part
hereof;
(b) All those certain Assignments of Rents and Leases
more particularly described on Exhibit AB attached hereto and made a part
hereof;
(c) All those certain UCC-1 Financing Statements more
particularly described on Exhibit AC attached hereto and made a part
hereof;
(d) All rights, title and interests of Assignor as
"Agent" under the Mortgages and Security Agreements identified on Exhibit
AA hereto, under the Assignments of Rents and Leases identified on Exhibit
AB hereto, under the UCC-1 Financing Statements identified on Exhibit AC
hereto, and under that certain SWAP Agreement as described in the Mortgages
and Security Agreements. The Mortgage and Security Agreements and the
other loan documents described on Exhibit AA, Exhibit AB and Exhibit AC are
referred to hereafter as "Mortgages and Other Loan Documents."
Concurrently with the execution of this Absolute Assignment of Mortgages
and Other Documents, Assignor has endorsed, without recourse and without
representation or warranty except as may be specifically provided herein,
to Assignee that certain Term Loan Promissory Note in the original
principal amount of $28,125,000, that certain Line of Credit Promissory
Note in the original principal amount of $7,500,000 and that certain Demand
Note Letter of Credit Line Promissory Note in the original principal amount
of $1,875,000, all dated July 31, 1997 (collectively "Notes") and the
monies due and to become due thereunder, with interest from the 1st day of
September, 1998.
TO HAVE AND TO HOLD the same unto Assignee, its
successors and assigns forever.
1. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNOR.
(a) This Absolute Assignment of Mortgages and Other
Documents ("Assignment") is being made without recourse, and except as to
Assignor's Estoppel Certificate dated on or about even date hereof in favor
of Assignee and except in Paragraph 1(b) below, without representation or
warranty of any kind, including, but not limited to, the enforceability or
collectibility of the Notes and Mortgage.
(b) The Assignor hereby represents and warrants to the Assignee
that: (i) the Assignor has full legal right, power and authority to
execute and deliver this Assignment and to consummate all of the
transaction contemplated herein; (ii) this Assignment constitutes the
authorized, valid and legally binding obligation of the Assignor
enforceable in accordance with its terms; (iii) the person who has executed
this Assignment is fully and lawfully authorized and empowered to cause the
Assignor to enter into and consummate this Assignment; and (iv) no further
consent, approval, authorization or order of Assignor is required to
consummate the transactions contemplated by this Assignment.
2. FURTHER ASSURANCES
The Assignor, for itself and its successors and assigns, further
covenants and agrees that it will, at any time and from time to time after
the date hereof upon the written request of the Assignee, execute and
deliver such further instruments of conveyance, transfer, notice, consent
or otherwise and take such other action as may reasonably be required or
advisable to evidence, or give effect to, the rights granted to the
Assignee pursuant to this Assignment and to effectively convey, transfer
and vest in the Assignee full and complete title in the Mortgages and Other
Loan Documents.
3. SUCCESSORS; NO ORAL MODIFICATION
This Assignment shall inure to the benefit of the Assignee and each
of its successors and assigns and is binding upon the Assignor and each of
its respective successors or assigns and may not be modified or terminated
except by a written agreement signed by the parties hereto.
4. GOVERNING LAW; PREVAILING PARTY
This Assignment shall be governed by, and construed in accordance
with, the laws of the State of Florida. In the event that any litigation
arises out of the execution and implementation of this Assignment, the
prevailing party shall be entitled to recover all costs incurred, including
reasonable attorneys' fees, at all levels of legal proceedings.
5. PARTIAL INVALIDITY
If part of this Assignment is contrary to, prohibited by or deemed
invalid under applicable laws or regulations, such part shall be
inapplicable and deemed omitted to the extent contrary, prohibited or
invalid, but the remainder of this Assignment shall not be invalidated
thereby and shall be given effect so far as is possible.
IN WITNESS WHEREOF, the Assignor has hereunto set its hand and seal
effective as of the 1st day of September, 1998.
Signed, sealed and delivered
in the presence of : BARNETT BANK, N.A.,
a national banking association
By:
Signature
Title:
Print Name
(CORPORATE SEAL)
Signature
Print Name
STATE OF FLORIDA )
) ss:
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State aforesaid and in the County aforesaid to take
acknowledgments, the foregoing instrument was acknowledged before me by
, the of BARNETT BANK, N.A., a
national banking association, freely and voluntarily under authority duly
vested in him/her by said Barnett Bank, N.A. and that the seal affixed
thereto is the true corporate seal of said Barnett Bank, N.A. He/She is
personally known to me or who has produced as
identification.
WITNESS my hand and official seal in the County and State last
aforesaid this day of , 1998 .
Notary Public
Typed, printed or stamped name of Notary Public
My Commission Expires:
<PAGE>
EXHIBIT A
Mortgage and Security Agreements
1. Mortgage and Security Agreement recorded on August 4, 1997, in
the Public Records of Broward County, Florida, in Official Records Book
26802, Page 888.
2. Mortgage and Security Agreement recorded on August 5, 1997, in
the Public Records of Palm Beach County, Florida, in Official Records Book
9922, Page 111.
3. Mortgage and Security Agreement recorded on August 6, 1997, in
the Public Records of Marion County, Florida, in Official Records Book
2395, Page 1799.
4. Mortgage and Security Agreement recorded on August 5, 1997, in
the Public Records of Sarasota County, Florida, in Official Records Book
2999, Page 123.
5. Mortgage and Security Agreement recorded on August 5, 1997, in
the Public Records of Duval County, Florida, in Official Records Book 8690,
Page 1239.
6. Mortgage and Security Agreement recorded on August 5, 1997, in
the Public Records of St. Johns County, Florida, in Official Records Book
1255, Page 1534.
7. Mortgage and Security Agreement recorded on August 5, 1997, in
the Public Records of Hillsborough County, Florida, in Official Records
Book 8663, Page 1655.
<PAGE>
EXHIBIT B
Assignment of Rents and Leases
1. Assignment of Rents and Leases recorded on August 4, 1997, in
the Public Records of Broward County, Florida, in Official Records Book
26803, Page 1.
2. Assignment of Rents and Leases recorded on September 5, 1997,
in the Public Records of Palm Beach County, Florida, in Official Records
Book 9973, Page 16.
3. Assignment of Rents and Leases recorded on August 6, 1997, in
the Public Records of Marion County, Florida, in Official Records Book
2396, Page 1.
4. Assignment of Rents and Leases recorded on August 5, 1997, in
the Public Records of Sarasota County, Florida, in Official Records Book
2999, Page 284.
5. Assignment of Rents and Leases recorded on August 5, 1997, in
the Public Records of Duval County, Florida, in Official Records Book 8690,
Page 1400.
6. Assignment of Rents and Leases recorded on August 5, 1997, in
the Public Records of St. Johns County, Florida, in Official Records Book
1255, Page 1695.
7. Assignment of Rents and Leases recorded on August 5, 1997, in
the Public Records of Hillsborough County, Florida, in Official Records
Book 8663, Page 1816.
<PAGE>
EXHIBIT C
UCC-1 Financing Statements
1. UCC-1 Financing Statement filed with the Public Records of
Broward County, Florida, in Official Records Book 26803, Page 152.
2. UCC-1 Financing Statement filed with the Public Records of Palm
Beach County, Florida, in Official Records Book 9922, Page 404.
3. UCC-1 Financing Statement filed with the Public Records of
Marion County, Florida, in Official Records Book 2396, Page 152.
4. UCC-1 Financing Statement recorded in the Public Records of
Sarasota County, Florida, in Official Records Book 3010, Page 1877.
5. UCC-1 Financing Statement filed with the Public Records of
Duval County, Florida, in Official Records Book 8690, Page 1551.
6. UCC-1 Financing Statement filed with the Public Records of St.
Johns County, Florida, in Official Records Book 1255, Page 1846.
7. UCC-1 Financing Statement filed with the Public Records of
Hillsborough County, Florida, in Official Records Book 8663, Page 1967.
<PAGE>
SPACE ABOVE LINE FOR RECORDER'S USE
Please record and return to: CROSS-REFERENCES:
Peter D. Slavis, Esq.
Ruden, McClosky, Smith Deed to Secure Debt and Security
Agreement
Schuster & Russell, P.A. recorded in Deed Book 9559, Page 124,
200 East Broward Boulevard Dekalb County, Georgia Records
15th Floor
Ft. Lauderdale, FL 33301 Assignment of Rents and Leases,
recorded
in Deed Book 9559, Page 275, aforesaid
records
UCC-2 Notice Filing for Real Estate
Related
Collateral, recorded in Deed Book 9559,
Page 416, aforesaid records
ABSOLUTE ASSIGNMENT OF
DEED TO SECURE DEBT AND OTHER DOCUMENTS
BARNETT BANK, N.A. as Resigning Agent and as a Lender, a national
banking association, having an address of One East Broward Boulevard, Ft.
Lauderdale, Florida 33301 (hereinafter called the "Assignor"), for the
consideration of TEN AND NO/100 DOLLARS ($10.00) and other good and
valuable consideration, the receipt of which is hereby acknowledged, does
hereby grant, bargain, sell, assign, transfer and set over without recourse
unto and in favor of FIRST UNION NATIONAL BANK, a national banking
association, its successors and assigns, having an address of 5581 West
Oakland Park Boulevard, 2nd Floor, Lauderhill, Florida 33313 (hereinafter
called the "Assignee"), (As Successor Agent for the "Lenders" identified in
the Amendment to the Credit Agreement dated on or about even date hereof),
all of the rights, title and interest of the Assignor in and to the
following:
(a) That certain Deed to Secure Debt and Security Agreement, more
particularly described on Exhibit AA attached hereto and made a part hereof
(the "Security Deed");
(b) That certain Assignment of Rents and Leases, more particularly
described on Exhibit AB attached hereto and made a part hereof;
(c) Those certain UCC-1 Financing Statements, more particularly
described on Exhibit AC attached hereto and made a part hereof; and
(d) That certain UCC-2 Notice Filing for Real Estate Related
Collateral, more particularly described on Exhibit AD attached hereto and
made a part hereof; and
(e) Concurrently with the execution of this Absolute Assignment of
Deed to Secure Debt and Other Documents, Assignor has endorsed, without
recourse, to Assignee that certain Term Loan Promissory Note in the
original principal amount of $28,125,000, that certain Line of Credit
Promissory Note in the original principal amount of $7,500,000 and that
certain Demand Note Letter of Credit Line Promissory Note in the original
principal amount of $1,875,000, all dated July 31, 1997 (collectively, the
"Notes") and the monies due and to become due thereunder.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns
forever.
1. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNOR
(a) This Absolute Assignment of Deed to Secure Debt and Other
Documents (this "Assignment") is being made without recourse, and except as
to Assignor's Estoppel Certificate dated on or about even date hereof in
favor of Assignee and except in Paragraph 1(b) below, without
representation or warranty of any kind, including, but not limited to, the
enforceability or collectibility of the Notes and Security Deed.
(b) The Assignor hereby represents and warrants to the Assignee
that: (ij) the Assignor has full legal right, power and authority to
execute and deliver this Assignment and to consummate all of the
transactions contemplated herein; (ii) this Assignment constitutes the
authorized, valid and legally binding obligation of the Assignor
enforceable in accordance with its terms; (iii) that the person who has
executed this Assignment is fully and lawfully authorized and empowered to
cause the Assignor to enter into and consummate this Assignment; and (iv)
no further consent, approval, authorization or order of Assignor is
required to consummate the transactions contemplated by this Assignment.
2. FURTHER ASSURANCES
The Assignor, for itself and its successors and assigns, further covenants
and agrees that it will, at any time and from time to time after the date
hereof upon the written request of the Assignee, execute and deliver such
further instruments of conveyance, transfer, notice, consent or otherwise
and take such other action as may reasonably be required or advisable to
evidence, or give effect to, the rights granted to the Assignee pursuant to
this Assignment and to effectively convey, transfer and vest in the
Assignee full and complete title in the Security Deed and Other Loan
Documents.
3. SUCCESSORS; NO ORAL MODIFICATION
This Assignment shall inure to the benefit of the Assignee and each of its
successors and assigns and is binding upon the Assignor and each of its
respective successors or assigns and may not be modified or terminated
except by a written agreement signed by the parties hereto.
4. GOVERNING LAW; PREVAILING PARTY
This Assignment shall be governed by, and construed in accordance with, the
laws of the State of Georgia. In the event that any litigation arises out
of the execution and implementation of this Assignment, the prevailing
party shall be entitled to recover all costs incurred, including reasonable
attorneys' fees, at all levels of legal proceedings.
5. PARTIAL INVALIDITY
If part of this Assignment is contrary to, prohibited by or deemed invalid
under applicable laws or regulations, such part shall be inapplicable and
deemed omitted to the extent contrary, prohibited or invalid, but the
remainder of this Assignment shall not be invalidated thereby and shall be
given effect so far as is possible.
<PAGE>
IN WITNESS WHEREOF, the Assignor has hereunto set its hand and seal
as of the 1st day of September 1998.
Signed, sealed and delivered BARNETT BANK, N.A.,
in the presence of: as Resigning Agent and as a Lender,
a national banking association,
By:
Unofficial Witness Title:
[BANK SEAL]
Notary Public
My Commission Expires:
[NOTARY SEAL]
EXHIBIT 4.2
- - -----------
(Arvida)
NOTE:THIS CONSOLIDATED AND RESTATED TERM LOAN PROMISSORY NOTE IS A
RENEWAL, CONSOLIDATION AND RESTATEMENT OF: (i) THAT CERTAIN TERM LOAN
PROMISSORY NOTE DATED JULY 31, 1997 IN FAVOR OF BARNETT BANK, N.A. IN THE
ORIGINAL PRINCIPAL AMOUNT OF TWENTY-EIGHT MILLION ONE HUNDRED TWENTY-FIVE
THOUSAND DOLLARS ($28,125,000) ("$28,125,000 Note") HAVING A PRESENT
OUTSTANDING PRINCIPAL BALANCE OF $18,375,000, A COPY OF WHICH IS ATTACHED
HERETO AND MADE A PART HEREOF; (ii) THAT CERTAIN TERM LOAN PROMISSORY NOTE
DATED JULY 31, 1997 IN FAVOR OF FIRST UNION NATIONAL BANK IN THE ORIGINAL
PRINCIPAL AMOUNT OF TWENTY-SIX MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
($26,250,000) ("$26,250,000 Note") HAVING A PRESENT OUTSTANDING PRINCIPAL
BALANCE OF $17,150,000, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART
HEREOF; (iii) THAT CERTAIN TERM LOAN PROMISSORY NOTE DATED JULY 31, 1997 IN
FAVOR OF BANKBOSTON, N.A. IN THE ORIGINAL PRINCIPAL AMOUNT OF ELEVEN
MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($11,250,000) ("$11,250,000
Note") HAVING A PRESENT OUTSTANDING PRINCIPAL BALANCE OF $7,350,000, A COPY
OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF; and (iv) THAT CERTAIN
TERM LOAN PROMISSORY NOTE DATED JULY 31, 1997 IN FAVOR OF BANK UNITED IN
THE ORIGINAL PRINCIPAL AMOUNT OF NINE MILLION THREE HUNDRED SEVENTY-FIVE
THOUSAND DOLLARS ($9,375,000) ("$9,375,000 Note") HAVING A PRESENT
OUTSTANDING PRINCIPAL BALANCE OF $6,125,000, A COPY OF WHICH IS ATTACHED
HERETO AND MADE A PART HEREOF (collectively, "Notes").
THE $28,125,000 NOTE, THE $11,250,000 NOTE AND THE $9,375,000 NOTE
HAVE BEEN ASSIGNED TO FIRST UNION NATIONAL BANK BY THE HOLDERS THEREOF
IMMEDIATELY PRIOR TO THE EXECUTION HEREOF.
DOCUMENTARY STAMPS AND/OR INTANGIBLE TAXES IN THE AMOUNT REQUIRED BY
LAW WERE PAID ON THE FULL FACE AMOUNT OF THE NOTES AT THE TIME OF THE
RECORDING OF THAT CERTAIN MORTGAGE AND SECURITY AGREEMENT IN OFFICIAL
RECORDS BOOK 26802, PAGE 888 OF THE PUBLIC RECORDS OF BROWARD COUNTY,
FLORIDA. THE NOTES ARE BEING RENEWED, CONSOLIDATED AND RESTATED BASED ON
THE CURRENT OUTSTANDING PRINCIPAL BALANCES OF THE NOTES WITHOUT ENLARGEMENT
THEREOF. NO ADDITIONAL DOCUMENTARY STAMPS OR INTANGIBLE TAXES ARE DUE.
<PAGE>
CONSOLIDATED AND RESTATED TERM LOAN PROMISSORY NOTE
THIS CONSOLIDATED AND RESTATED TERM LOAN PROMISSORY NOTE
("CONSOLIDATED AND RESTATED TERM LOAN NOTE") executed by Arvida/JMB
Partners, L.P., a Delaware limited partnership, Arvida/JMB Partners, a
Florida general partnership, Arvida Grand Bay Limited Partnership IV, a
Delaware limited partnership, The AOK Group, a Florida general partnership,
Metrodrama Joint Venture, a Florida general partnership, Southeast Florida
Holdings, Inc., an Illinois corporation, Gulf and Pacific Communications
Limited Partnership, a Delaware limited partnership, and Weston Hills
Country Club Limited Partnership, a Delaware limited partnership (jointly
and severally, the "Borrowers"), all having an office at 900 North Michigan
Avenue, Chicago, Illinois 60611, in favor of First Union National Bank
("Lender"), having an address of 5581 West Oakland Park Boulevard, 2nd
Floor, Lauderhill, Florida 33313.
1. RENEWAL AND CONSOLIDATION. The indebtedness evidenced by this
Consolidated and Restated Note renews and consolidates the aggregate
outstanding principal indebtedness evidenced by the following promissory
notes all executed by Borrowers: (i) that certain Term Loan Promissory
Note dated July 31, 1997 in the original principal amount of TWENTY-EIGHT
MILLION ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($28,125,000)
("$28,125,000 Note") in favor of Barnett Bank, N.A.; (ii) that certain Term
Loan Promissory Note dated July 31, 1997 in the original principal amount
of TWENTY-SIX MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($26,250,000)
("$26,250,000 Note") in favor of First Union National Bank; (iii) that
certain Term Loan Promissory Note dated July 31, 1997 in the original
principal amount of ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS
($11,250,000) ("$11,250,000 Note") in favor of BankBoston, N.A.; and (iv)
that certain Term Loan Promissory Note dated July 31, 1997 in the original
principal amount of NINE MILLION THREE HUNDRED SEVENTY-FIVE THOUSAND
DOLLARS ($9,375,000) ("$9,375,000 Note") in favor of Bank United. The
$28,125,000 Note, the $11,250,000 Note and the $9,375,000 Note have been
assigned to Lender by the holders thereby immediately prior to the
execution hereof. The current principal balance outstanding under the
$28,125,000 Note being renewed and consolidated hereby is $18,375,000, the
current principal balance outstanding under the $26,250,000 Note being
renewed and consolidated hereby is $17,150,000, the current principal
balance outstanding under the $11,250,000 Note being renewed and
consolidated hereby is $7,350,000, and the current principal balance
outstanding under the $9,375,000 Note being renewed hereby is $6,l25,000,
all justly due and owing. This Consolidated and Restated Term Loan Note
consolidates the $28,125,000 Note, the $26,250,000 Note, the $11,250,000
Note and the $9,375,000 Note and amends, replaces and supersedes, without
enlargement of the aggregate existing principal balances thereunder.
Accordingly, the combined current principal balance outstanding being
renewed and consolidated and evidenced by this Consolidated and Restated
Term Loan Note is $49,000,000, all justly due and owing. This Consolidated
and Restated Term Loan Note is intended to consolidate into a single
consolidated indebtedness due and owing Lender by Borrower of $49,000,000
to be repaid with interest as hereinafter provided.
2. RESTATEMENT. This Consolidated and Restated Term Loan Note
restates the $28,125,000 Note, the $26,250,000 Note, the $11,250,000 Note
and the $9,375,000 Note as follows, it being the intention to restate and
continue the obligations evidenced thereunder as also consolidated hereby,
without enlarging the aggregate outstanding principal balances. It is the
intention of Lender and Borrower that while this Consolidated and Restated
Term Loan Note consolidates, amends, replaces and supersedes the
$28,125,000 Note, the $26,250,000 Note, the $11,250,000 Note and the
$9,375,000 Note, it is not in payment or satisfaction of the $28,125,000
Note, the $26,250,000 Note, the $11,250,000 Note or the $9,375,000 Note,
but rather is the substitution of evidences of debt without any intent to
extinguish the old. Should there be any conflict between any of the terms
of the $28,125,000 Note, the $26,250,000 Note, the $11,250,000 Note or the
$9,375,000 Note, and the terms of this Consolidated and Restated Term Loan
Note, the terms of this Consolidated and Restated Term Loan Note shall
control. The $28,125,000 Note, the $26,250,000 Note, the $11,250,000 and
the $9,375,000 Note are attached hereto and shall only be negotiated with
this Consolidated and Restated Term Loan Note. The $28,125,000 Note, the
$26,250,000 Note, the $11,250,000 and the $9,375,000 Note are consolidated,
amended and renewed to read in their entirety as follows:
THIS SPACE INTENTIONALLY LEFT BLANK
<PAGE>
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE.
TERM LOAN
PROMISSORY NOTE
$49,000,000 Effective Date: September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of First Union National Bank, a national banking
association, its successors or assigns (the "Lender," or "Agent," "Agent"
having the meaning ascribed to it in the Amendment to Credit Agreement of
even date), the principal sum of FORTY-NINE MILLION DOLLARS ($49,000,000),
pursuant to and in accordance with the Credit Agreement, together with
interest on the principal balance of this Note outstanding from time to
time, as same shall accrue thereon in accordance with the terms hereof, but
not to exceed the maximum non-usurious rate permitted by law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 "Adjusted LIBO Rate" means, relative to any LIBO Rate Tranche
to be made, continued or maintained as, or converted into, a LIBO Rate
Tranche for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of one percent) equal to the quotient of
(i) the LIBO Rate applicable to the relevant Interest Period, divided by
(ii) the result of one minus the Reserve Percentage applicable to such
Interest Period.
1.2 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which the Lender is closed pursuant to authorization or
requirement of law.
1.3 "Credit Agreement" means the Credit Agreement dated July 31,
1997, between the Lender and Borrower (among others), as amended of even
date herewith, as the same may be amended, supplemented, restated, replaced
or otherwise modified from time to time.
1.4 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
1.5 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.6 "Interest Period" means, in the case of a LIBO Rate Tranche,
the period commencing on (and including) the Business Banking Day selected
by the Makers as the date on which such LIBO Rate Tranche is made or
continued as, or converted into a LIBO Rate Tranche pursuant to the terms
of this Note, and ending on (but excluding) the day which numerically
corresponds to such date one, two, three or six months thereafter (or if
such month has no numerically corresponding day, on the last Business
Banking Day of such month), in each case as the Makers may select, provided
that (a) if such Interest Period would otherwise end on a day which is not
a Business Banking Day, such Interest Period shall end on the next
following Business Banking Day (unless, in the case of a LIBO Rate Tranche,
such next following Business Banking Day is the first Business Banking Day
of the calendar month, in which case such Interest Period shall end on the
Business Banking Day next preceding such numerically corresponding day);
and (b) no Interest Period may end on a date later than the Maturity Date.
1.7 "LIBO Rate" means, relative to any Interest Period, a rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
one percent) equal to the rate for US dollar deposits with maturities
comparable to such Interest Period for delivery on the first day of such
Interest Period which appears on the Reuters Screen LIBO Page, as of
11:00 a.m. (London time) on the day that is two (2) London Banking Days
preceding the commencement date of the Interest Period. If at least two
(2) such offered rates appear on the Reuters Screen LIBO Page, the rate
will be the arithmetic mean of such offered rates. Lender may, in its
discretion, use any other publicly available index or reference rate
showing rates offered for United States dollar deposits in the London
Interbank market as of the applicable date. In addition, Lender may, in
its discretion, use rate quotations for daily or annual periods in lieu of
quotations for substantially equivalent monthly periods, in the absence of
such quotations for substantially equivalent monthly periods. Each
determination of the LIBO Rate applicable to a particular Interest Period
shall be made by Lender and shall be conclusive and binding upon the Makers
and Lender absent manifest error.
1.8 "LIBO Rate Tranche" means a Tranche bearing interest at all
times during the Interest Period applicable to such Tranche, at a fixed
rate of interest equal to the Note LIBO Rate applicable to such Interest
Period.
1.9 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
1.10 "Loan Year" means each of the twelve (12) month periods
commencing on July 31, 1997 hereof and on the first, second and third
anniversaries hereof.
1.11 "London Banking Day" means each day other than a Saturday, a
Sunday or any holiday on which commercial banks in London, England are
closed for business.
1.12 "Maturity Date" means the earlier of: (i) July 31, 2001 and
(ii) any earlier date upon which the principal balance outstanding
hereunder, together with all interest accrued thereon, shall become
immediately due and payable following an Event of Default, in accordance
with provisions of the Credit Agreement.
1.13 "Note LIBO Rate" means the Adjusted LIBO Rate applicable to a
specific LIBO Rate Tranche selected by the Makers for a relevant Interest
Period, plus 175 basis points.
1.14 "Note Prime Rate" means the Prime Rate applicable to the Prime
Rate Tranche. The Note Prime Rate shall be increased or decreased
effective on any date on which the Prime Rate shall be increased or
decreased.
1.15 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank, as its Prime Rate. The Prime
Rate is a reference rate for the information and use of Lender in
establishing the actual rates to be charged to borrowers and is not
necessarily the lowest rate charged by Lender. Should First Union National
Bank not publish a Prime Rate at any time during the term of this Note,
Lender, in its reasonable discretion, may choose a substitute Prime Rate.
The rate of interest shall change automatically and immediately as of the
date of any change in the Prime Rate without notice to Borrower or any
endorser, surety or guarantor, if any.
1.16 "Prime Rate Tranche" means a Tranche bearing interest at the
Note Prime Rate.
1.17 "Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other rule, regulation or official interpretation of said Board
of Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
1.18 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.19 "Reserve Percentage" means the stated maximum rate (expressed
as a decimal) at which reserves are required to be maintained by the Agent
during an Interest Period, including, without limitation (i) any basis,
supplemental, marginal, or emergency reserve under any regulations of any
governmental authority to which the Agent is subject, (ii) any reserve
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), including, without limitation, Regulation D, for determining
the maximum reserve requirement in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits
by reference to which the LIBO Rate is determined). Without limiting the
effect of the foregoing, the Reserve Percentage shall reflect any other
reserves required to be maintained by the Agent under any regulation of any
governmental authority to which the Agent is subject against (a) any
category of liabilities that include deposits with reference to which the
LIBO Rate is to be determined or (b) any category of extension of credit or
other assets that includes loans bearing interest at a rate based on the
LIBO Rate. Each determination of the Reserve Percentage shall be made by
the Agent and shall be conclusive and binding upon the Makers and Lenders
absent manifest error.
1.20 "Security Documents" has the meaning ascribed to such term in
the Credit Agreement.
1.21 "Term Loan Commitment" has the meaning ascribed to such term in
the Credit Agreement.
1.22 "Term Loan Note" or "Note" means this Note, as same may be
amended, supplemented, renewed, restated, replaced or otherwise modified
from time to time.
1.23 "Tranche" means any portion of the outstanding principal
balance under the Term Loan Note bearing interest at the applicable Note
LIBO Rate for a specific Interest Period, as selected by the Makers in
accordance with Section 2.1, below, and any portion of the outstanding
principal balance under the Term Loan Note which may from time to time bear
interest at the Note Prime Rate.
20 Selection and Calculation of Interest Rate.
2.1 Provided that no Event of Default or circumstance which with
the passage of time or giving of notice would become an Event of Default
then exists under the Loan Documents, and provided there shall at no time
be permitted to exist more than four LIBO Rate Tranches with respect to the
total principal balance outstanding under the Term Loan Note, the Makers
shall have the right to elect to have the Note LIBO Rate then in effect for
an Interest Period apply to a LIBO Rate Tranche, in accordance with, and
subject to the provisions of this Section 2.1. To make an election to have
such Note LIBO Rate apply to any LIBO Rate Tranche, from time to time, the
Makers shall give to the Agent irrevocable notice (a "Rate Election
Notice") not later than 11:00 a.m. (Ft. Lauderdale, Florida time) at least
three (3) Business Banking Days prior to the commencement date of each such
Interest Period, which Rate Election Notice shall be addressed as follows,
and shall be given in writing (by telecopy, hand delivery, or overnight
delivery service), in accordance with the provisions of Section 11.4 of the
Credit Agreement:
Dana Hunter, Vice President
First Union National Bank
5581 West Oakland Park Blvd., 2nd Floor
Lauderhill, Florida 33313
(954) 467-5543
Fax: (954) 467-5557
Each such Rate Election Notice shall be in the form attached hereto as
Schedule 1 and shall specify: (i) the commencement day of the Interest
Period which shall be a Business Banking Day (and, with respect to any then
existing LIBO Rate Tranche, shall not be a date prior to the termination
date of such then existing LIBO Rate Tranche), (ii) the principal amount of
the LIBO Rate Tranche which shall be subject to the application of the Note
LIBO Rate, which shall be in a minimum amount of $2,000,000.00, and in
multiples of $100,000.00 and (iii) the applicable Interest Period which
shall apply to such LIBO Rate Tranche, provided, however, that no Interest
Period may extend beyond the Maturity Date.
2.2 If the Agent determines, absent manifest error, that the
maintenance of any Note LIBO Rate would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, of if the
Agent determines that the interest rate applicable to the Note LIBO Rate
does not accurately reflect the cost of maintaining any LIBO Rate Tranche
subject to such rate, then, at the election of the Agent, the Makers shall
not be entitled thereafter to select a Note LIBO Rate to be applicable to
any portions of the total outstanding principal balance under the Term Loan
Note, and the interest rate applicable to all of the outstanding principal
balance under the this Note then subject to the Note LIBO Rate for any
applicable Interest Period, shall, upon the expiration of all such
applicable Interest Periods, be converted to the Prime Rate.
2.3 In the event that the Makers shall fail to provide a timely
Rate Election Notice for the election of the Note LIBO Rate to apply to any
Advance or to any LIBO Rate Tranche, as of the termination date of the
applicable Interest Period for such Tranche, then as the date of such
Advance, or as of such termination date of such LIBO Rate Tranche, as the
case may be, the Prime Rate shall apply to such Advance or LIBO Rate
Tranche until the next eligible effective date for which the Makers shall
have provided a timely Rate Election Notice, and such Advance or such
principal amount previously comprising a LIBO Rate Tranche, shall
thereafter be deemed to be included in the Prime Rate Tranche.
2.4 Interest shall be calculated on the daily total outstanding
balance of all Advances of Loan Proceeds under the Term Loan Commitment, as
such Advances are evidenced by the Term Loan Note, as follows: (i) interest
shall accrue on each LIBO Rate Tranche, commencing with the effective date
for each such LIBO Rate Tranche, at the applicable Note LIBO Rate for the
applicable Interest Period and (ii) interest shall accrue on the Prime Rate
Tranche, which shall comprise all of the outstanding principal balance
under the this Note not otherwise subject to a LIBO Rate Tranche, at the
Note Prime Rate, changing when and as the Prime Rate changes. Interest
shall be computed through and including the date of any payment and shall
be calculated for actual days elapsed on the basis of a 360 day year (i.e.
interest for each day on which any principal is outstanding shall be
calculated at the applicable interest rate described above, divided by
360).
30 Payment of Interest and Principal.
3.1 Interest, calculated as above provided, shall be due and
payable by the Makers to the Agent, subject to the provisions of Section
3.7 hereof, on the first Business Banking Day of the first calendar month
immediately following the Advance of Loan Proceeds under the Term Loan
Commitment and continuing on the first day of each month thereafter until
the Maturity Date.
3.2 The Makers shall make payments in reduction of the total
principal balance outstanding under the Term Loan Note, as follows:
(a) The Makers shall pay to Lender on or before the last
Business Banking Day of each Loan Year, the sum of $12,500,000.00 (the
"Minimum Required Curtailment").
(b) The Makers shall pay to Lender on each ARC Payment Date,
an amount (the "Additional Required Curtailment") calculated as follows:
(A) On the 1999 February ARC Payment Date and each
subsequent February ARC Payment Date, an amount equal to the sum of:
(x) the ARC Deficit, if any, to the extent the ARC Deficit does not exceed
the Adjusted CFAPF for the fiscal year ended on the immediately preceding
December 31, plus (y) twenty-five percent (25%) of the remainder of the
Adjusted CFAPF for the fiscal year ended on the immediately preceding
December 31, after any payment of the ARC Deficit pursuant to subparagraph
(x) hereinabove.
(B) On each August ARC Payment Date, an amount equal to
the sum of: (x) the ARC Deficit, if any, plus (y) twenty-five percent (25%)
of the remainder of any Distribution then made, after any payment of the
ARC Deficit pursuant to subparagraph (x) hereinabove.
(C) Notwithstanding anything herein to the contrary,
those portions of the Additional Required Curtailment calculated pursuant
to subpart (y) of subsection (A); and subpart (y) of subsection (B) shall
in the aggregate, in any one (1) Loan Year, not exceed $6,250,000.00.
The term "Adjusted CFAPF" means Cash Flow After Project
Financing less all Term Loan Principal Payments and all interest paid on
the Term Loan during the preceding fiscal year.
The term "Cash Flow After Project Financing" has the meaning
ascribed to such term in the Credit Agreement.
The term "Distribution" has the meaning ascribed to such term
in the Credit Agreement.
The term "ARC Deficit" means: (i) as of any ARC Payment Date in
the second Loan Year, the difference of $18,750,000.00 less the sum of all
Term Loan Payments theretofore paid, (ii) as of any ARC Payment Date in the
third Loan Year, the difference of $37,500,000.00 less the sum of all Term
Loan Payments theretofore paid and (iii) as of any ARC Payment Date in the
fourth Loan Year, the difference of $56,250,000.00 less the sum of all Term
Loan Payments theretofore paid (for the purposes of this Note, the first
"Loan Year" shall be deemed to have commenced July 31, 1997).
The term "ARC Payment Date" means: (i) any Business Banking Day
in any August of any Loan Year, on which a Distribution is made, if any (an
"August ARC Payment Date"), and (ii) the first Business Day of each
February of each Loan Year, or such later date in February on which the
Makers intend to make a Distribution, provided the Makers shall have
notified the Lender of such later date, in writing, not later than
January 15 of such year (a "February ARC Payment Date").
<PAGE>
The term "Term Loan Principal Payments" means, as of any ARC
Payment Date, all payments which have theretofore been made toward the
reduction of the outstanding principal balance under the Term Loan,
including, without limitation, all payments of Minimum Required
Curtailments made in the same Loan Year and all prior Loan Years, all
payments of Additional Required Curtailments made in the same Loan Year and
all prior Loan Years and all prior voluntary prepayments made in the same
Loan Year and all prior Loan Years.
(c) The total outstanding principal under the Term Loan Note
and all accrued but unpaid interest shall be fully due and payable on the
Maturity Date.
3.3 All payments of principal and interest under the Term Loan Note
shall be made in lawful money of the United States which shall be legal
tender in payment of all debts, public and private, at the time of payment.
3.4 The Term Loan Note may be prepaid in whole or in part at any
time and from time to time, without penalty or premium, provided: (i) any
such prepayment shall be preceded by at least three (3) Business Banking
Days' prior written notice to the Agent and (ii) any such prepayment shall
be accompanied by accrued interest to the date of prepayment and any other
obligations and payments then due under the terms of the Term Loan Note.
If the Makers shall make a payment or prepayment of all or any portion of
the principal amount outstanding then subject to a LIBO Rate Tranche, prior
to the applicable termination date thereof (including, without limitation,
upon the acceleration of the Maturity Date following an Event of Default),
or the Makers shall attempt to rescind a Rate Election Notice for a
specified LIBO Rate Tranche, after the Makers have submitted such Rate
Election Notice to the Agent, then, within three (3) Business Banking Days
following written notice from the Agent, the Makers shall pay to the Agent
the amount of any loss or cost incurred by the Lender resulting therefrom,
including, without limitation, any loss or cost resulting from the
liquidation or re-employment of deposits required to fund or maintain the
subject LIBO Rate Tranche, not to exceed the amount of interest which would
have been earned on the amount prepaid for the balance of the subject
Interest Period, at a rate equal to the difference, not less than zero, of
the LIBO Rate as of the first day of the Interest Period less the LIBO Rate
as of the date of such prepayment, for a corresponding Interest Period
commencing on the date of such prepayment. The obligations of the Makers
under this section shall survive payment of the Term Loan Note.
3.5 The Term Loan is a non-revolving loan, so that the Makers shall
not have the right to request re-advances of prepaid monies.
3.6 All payments of principal and interest under the Term Loan Note
shall be made in immediately available funds by 11:00 a.m. (Ft. Lauderdale,
Florida time) on a Business Banking Day, to the Agent for the account of
the Lenders, at the office of Lender at First Union National Bank, 301
South College Street, TW-6, Charlotte, North Carolina 28288-0166,
Attention: Jane Hurley, or by wire to ABA #053000219, Account No.465906
0010352, Reference "Arvida," Attention: Jane Hurley, or at such other place
as the Agent may instruct. Any payments of principal or interest made
after 11:00 a.m. (Ft. Lauderdale, Florida time) shall be deemed to be
payments made on the next following Business Banking Day, for all purposes,
hereof, including, without limitation, the accrual of interest. Should any
payment under the Term Loan Note become due and payable on a day other than
a Business Banking Day, the maturity thereof shall be extended to the next
succeeding Business Banking Day, and, in the case of any payment of
principal, interest shall be payable thereon as calculated pursuant hereto,
for each Business Banking Day such principal is outstanding (provided,
however, any payment of principal received on any Business Banking Day by
11:00 a.m. (Ft. Lauderdale, Florida time) shall not be deemed to be
outstanding on such Business Banking Day).
3.7 Notwithstanding anything to the contrary set forth herein, the
Agent shall provide the Makers with written notice prior to the first
Business Banking Day of each month of the interest installment with respect
to the Term Loan Note which is payable on such first Business Banking Day
of such month. With respect to each such monthly installment of interest,
Lender hereby grants to the Makers a grace period for the payment of same,
which shall extend to the later of: (a) the fifteenth (15th) day of the
month or (b) if the Makers shall not have received written notice of the
monthly interest installment from the Agent, prior to the first Business
Banking Day of any month and the Makers shall have provided written notice
to the Agent, no later than such first Business Banking Day of the month,
of such Agent's failure to provide the Makers with written notice of such
interest installment, then, the date fifteen (15) days from receipt by the
Makers of such written notice of the monthly interest installment. If the
Agent shall not receive written notice from the Makers on or before the
first Business Banking Day of a month, of the Agent's failure to provide
written notice of an interest installment, then, for all purposes of this
Note, notwithstanding that the Makers may later request such written notice
of such interest installment, such grace period shall extend to no later
than the fifteenth (15th) day of such month.
3.8 Any payment required to be paid by the Term Loan Note, the Loan
Documents or the Credit Agreement, with the exception of interest and
principal, shall be due and payable no later than fifteen (15) days from
receipt by the Makers from the Agent of written notice of the required
payment.
3.9 Provided the Agent has not exercised its right to accelerate
the Term Loan Note as provided in the Term Loan Note, the Credit Agreement
or the other Loan Documents: (a) in the event any payment of principal
required under the Term Loan Note, either pursuant to the terms hereof or
the terms of the Credit Agreement, is not received by Lender by the
fifteenth (15th) day following the day on which such payment is due, the
Makers shall pay to the Agent, for the account of the Lender and Other
Lenders, a late charge of five percent (5%) of the payment not so received,
the parties agreeing that said charge is a fair and reasonable charge for
the late payment and shall not be deemed a penalty or as compounding
interest, and (b) in the event any scheduled payment of interest required
under the Term Loan Note is not received by Lender by the later of
(i) fifteen (15) days from receipt by the Makers of written notice of the
monthly interest installment and (ii) the fifteenth (15th) day of such
month, the Makers shall pay to Lender a late charge of five percent (5%) of
the payment not so received, the parties agreeing that said charge is a
fair and reasonable charge for the late payment and shall not be deemed a
penalty or as compounding interest. Further, if any payment required to be
paid by the Term Loan Note, the Credit Agreement or the other Loan
Documents, with the exception of interest and principal, is not paid within
fifteen (15) days from receipt by the Makers from the Agent of written
notice of the required payment, the Makers shall pay to Lender a late
charge of five percent (5%) of the payment not so received, the parties
agreeing that said charge is a fair and reasonable charge for the late
payment and shall not be deemed a penalty or as compounding interest.
40 Collateral Security. This Note is issued pursuant to the Credit
Agreement. This Note is secured by the Credit Agreement, the Security
Documents and the other Loan Documents, as same may be amended through the
date hereof. Reference is hereby made to the Credit Agreement, the
Security Documents and the other Loan Documents for a description of Events
of Default and rights of acceleration of the Maturity Date upon the
occurrence of an Event of Default. It is expressly agreed that all of the
covenants, conditions and agreements contained in the Credit Agreement, the
Security Documents and the other Loan Documents are made a part of this
Note.
<PAGE>
50 Events of Default.
5.1 Upon the occurrence of an Event of Default, the Agent may
declare the entire amount of this Note, including the principal balance
then outstanding thereunder, together with all interest accrued thereon, to
be immediately due and payable, without notice, (the Makers hereby
expressly waive notice of such Event of Default), time being of the essence
of this Term Loan Note. Any Event of Default under this Note shall be an
Event of Default under all other Loan Documents and any Event of Default
under any other Loan Document shall be an Event of Default hereunder.
5.2 In the event the Agent accelerates this Note as herein provided
or the full amount of outstanding principal and interest under this Note is
not fully repaid to the Agent, for the account of the Lender on or before
the Maturity Date, then the entire unpaid principal balance under this
Note, together with all interest accrued thereon, shall bear interest from
the date of an Event of Default or from the Maturity Date, respectively, at
the Default Rate. Any late charge paid by the Makers shall be applied to
the interest charged at the Default Rate after acceleration of this Note.
5.3 The remedies of Lender, as provided herein, or in the Security
Documents, the other Loan Documents or Credit Agreement shall be cumulative
and concurrent and may be pursued singularly, successively or together, by
the Agent in accordance with the terms of the Credit Agreement, and may be
exercised as often as the occasion therefor shall arise. Notwithstanding
anything herein seemingly to the contrary, Lender shall not take any
action, including, without limitation, in connection with the enforcement
of any of its rights under this Note, the Credit Agreement or other Loan
Documents, unless such action is consistent with the action taken by the
Agent with respect to this Note and in accordance with the provisions of
the Credit Agreement.
60 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
the Note, to pay interest in an amount or at a rate greater than the
highest non-usurious rate permissible under applicable law as amended from
time to time. Should any interest or other charges paid by the Makers, or
any party liable for the payment of the Loan evidenced by the this Note,
result in the computation or earning of interest in excess of the highest
non-usurious rate permissible under applicable law, then any and all such
excess shall be and the same is hereby waived by Lender, and all such
excess shall be paid by Lender to the Makers or to any party liable for the
payment of the Loan evidenced by the Term Loan Note, it being the intent of
the parties hereto that under no circumstances shall the Makers or any
party liable for the payment of the Loan hereunder, be required to pay
interest in excess of the highest non-usurious rate permissible under
applicable law as amended from time to time. By operation of Section
687.12, Florida Statutes (1996), the interest rate charged under this Note
is authorized by Chapters 658, 665 and 687, Florida Statutes (1996) and
applicable federal law.
70 Waivers/Miscellaneous Matters.
7.1 This Note is to be construed according to the applicable laws
of the State of Florida and the United States of America. Any action
brought upon the enforcement of this Note is hereby authorized to be
instituted and prosecuted in Broward County, Florida, or at the United
States District Court for the Southern District of Florida, at the election
of the Agent, subject to and in accordance with the terms of the Credit
Agreement.
7.2 This Note may not be changed orally, but only by an agreement
in writing, signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.
7.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note hereby consents to any
extension or renewal of this Note or any part thereof, without notice, and
agrees that it will remain liable under this Note during any extension or
renewal thereof, until the indebtedness evidenced hereby and thereby is
paid in full.
7.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and Lender shall not have any recourse against any
property or assets of any such constituent partner or other person or
entity) under or in connection with this Note, the Credit Agreement, the
Security Documents, the other Loan Documents, the Loans, or any instruments
securing or otherwise executed in connection therewith, or any certificate
delivered in connection therewith, or any amendments or modifications to
any of the foregoing made at any time or times, heretofore or hereafter
(such persons as described in this sentence being herein collectively
referred to as "Non-Recourse Persons"), provided, however, Non-Recourse
Persons shall not include any Maker or any Subsidiary of a Maker that would
otherwise be liable as a general partner in a Maker. The recourse of the
Lender and its successors and assignees under or in connection with the
this Note, the Security Documents, the Credit Agreement, the other Loan
Documents, the Loans and such instruments and certificates, and any such
amendments or modifications, shall be limited to the assets of the Makers
and Lender and its successors and assignees waive and do hereby waive any
such personal liability against any such Non-Recourse Persons. For the
purposes of this Note, the Security Documents, the Credit Agreement and
each other Loan Document and any such instruments and certificates and any
such amendments or modifications, neither the negative capital account of a
constituent partner in any Maker, nor any obligation of any constituent
partner in any Maker to restore a negative capital account or to advance or
contribute capital to any Maker or any other constituent partner in any
Maker shall be deemed to be the property or the asset of any Maker or any
such other constituent partner (and neither Lender nor any of its
successors or assignees shall have any right to collect, enforce or proceed
against or with respect to any such negative capital account or partner's
obligation to restore, advance or contribute). As used in this section,
the term "constituent partner" means any direct partner in any Maker, and
any person or entity that is a partner in any partnership that, directly or
indirectly through one or more other partnerships, is a partner in any
Maker.
7.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
7.6 All sums received by the Agent for application to this Note
shall be applied by the Agent in the manner set forth in Section 2.8 of the
Credit Agreement.
7.7 The Makers are strictly liable for and hereby agree to pay or
reimburse the Agent for, and hold it harmless from and against all of its
reasonable third party costs and expenses incurred in connection with the
collection or enforcement of, or the preservation of any rights under, this
Note, the Credit Agreement or other Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel for the Agent,
including attorneys' fees out of court, in trial, on appeal, in bankruptcy
proceedings or otherwise. The Makers shall pay all such amounts in
accordance with the terms of the Credit Agreement, and until repaid, such
sums shall bear interest at the Default Rate.
<PAGE>
7.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note shall be given in accordance
with the notice provisions of Section 11.4 of the Credit Agreement.
7.9 As used herein, the terms "Makers," "Agent" and "Lender" shall
be deemed to include their respective successors and assigns.
7.10 In the event any one or more of the provisions of this Note
shall for any reason be held to be invalid, illegal, or unenforceable, in
whole or in part or in any respect, or in the event one or more of the
provisions of this Note operates or would prospectively operate to
invalidate this Note, then in any of those events, only such provision or
provisions shall be deemed null and void and shall not effect any other
provision of this Note. The remaining provisions of this Note shall remain
operative and in full force and effect and in shall no way be affected,
prejudiced or disturbed thereby. In the event any provisions of this Note
are inconsistent with any provisions of the Credit Agreement, the Security
Documents or other Loan Documents, or any other agreements or documents
executed in connection with this Note, this Note shall control.
7.11 It is expressly understood and agreed that Lender shall not
ever be construed for any purposes, to be the partner, joint venturer,
principal or associate of the Makers or any of them or any person or party
claiming by, through or under the Makers or any of them in the conduct of
their respective businesses.
7.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof (a)
severally waive presentment for payment, demand, notice of demand, notice
of nonpayment or dishonor, protest and notice of protest of this Note and
all other notices in connection with the delivery, acceptance, performance
or enforcement of the payment of this Note, (b) expressly consent to all
extensions of time, renewals, postponements of time of payment of this Note
or other modifications from time to time prior to or after the Maturity
Date, without notice, consent or consideration to any of the foregoing, (c)
expressly agree to any substitution, exchange, addition or release of any
of the other Loan Documents or the addition or release of any party or
person primarily or secondarily liable hereon, (d) expressly agree that
Lender shall not be required first to institute any suit, or to exhaust
their remedies against the Makers or any other person or party to become
liable hereunder or against the other Loan Documents in order to enforce
the payment of this Note, and (e) expressly agree that, notwithstanding the
occurrence of any of the foregoing, they shall be and remain, jointly and
severally, directly liable for all sums due under this Note, and the other
Loan Documents subject to the terms and conditions hereof and thereof.
7.13 Lender shall not be deemed, by any act of omission or
commission, to have waived any of their rights or remedies hereunder unless
such waiver is in writing given in accordance with the terms of the Credit
Agreement, and then only to the extent specifically set forth in the
writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a
subsequent event.
7.14 Neither this Note nor any provision hereof or thereof may be
changed or terminated orally, but only by an instrument in writing signed
by the party against whom enforcement of the change or termination is
sought.
7.15 Failure to accelerate this Note after an Event of Default, or
the acceptance of a past due installment, shall not be construed as a
novation of the contract or a waiver of the right of Lender to thereafter
insist upon strict compliance with the terms of this Note without previous
notice of such intention being given to the Makers.
<PAGE>
7.16 Notwithstanding anything to the contrary in this Note, the
Credit Agreement, the Security Documents or other Loan Documents, the
maximum liability of any Maker other than Arvida/JMB Partners, L.P. (herein
a "Maker Subsidiary" or "Maker Affiliate") for the Obligations created,
evidenced and secured thereby and hereby shall not exceed the maximum
amount, as such maximum amount shall be determined by a court of competent
jurisdiction of any such Maker Subsidiary's or Maker Affiliate's liability
therefor which may be incurred without rendering the Obligations, as they
relate to such Maker Subsidiary or Maker Affiliate, voidable as a
fraudulent conveyance or fraudulent transfer under the Bankruptcy Code or
under any other present or future federal or state laws or statutes
relating to bankruptcy, insolvency, assignment for the benefit of creditors
or other relief for debtors, including, without limitation, the Uniform
Fraudulent Transfer Act or the Uniform Fraudulent Conveyance Act, as in
effect in any jurisdiction wherein any such Maker Subsidiary's or Maker
Affiliate's Solvency (as defined in the Credit Agreement) is subject to
determination. For purposes of determining such liability of any Maker
Subsidiary or Maker Affiliate, due consideration shall be given to the
benefits received, directly or indirectly, by such Maker Subsidiary or
Maker Affiliate from the Loans (as defined in the Credit Agreement) made
pursuant to the Commitments (as defined in the Credit Agreement).
7.17 The section headings of this Note are for reference purposes
only and are to be given no effect in the construction or interpretation of
this Note.
THE MAKERS AND THE LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR THE CREDIT AGREEMENT OR ANY OTHER
LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY MAKERS OR LENDER.
SIGNATURE PAGES FOLLOW
<PAGE>
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
MIA3-517179.2
200570.28
<PAGE>
NOTE:THIS CONSOLIDATED AND RESTATED PROMISSORY NOTE IS A RENEWAL,
CONSOLIDATION AND RESTATEMENT OF: (i) THAT CERTAIN LINE OF CREDIT
PROMISSORY NOTE DATED JULY 31, 1997 IN FAVOR OF BARNETT BANK, N.A. IN THE
ORIGINAL PRINCIPAL AMOUNT OF SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($7,500,000) ("$7,500,000 Note") HAVING A PRESENT UNFUNDED AVAILABILITY OF
$7,500,000, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF; (ii)
THAT CERTAIN LINE OF CREDIT PROMISSORY NOTE DATED JULY 31, 1997 IN FAVOR OF
FIRST UNION NATIONAL BANK IN THE ORIGINAL PRINCIPAL AMOUNT OF SEVEN MILLION
DOLLARS ($7,000,000) ("$7,000,000 Note") HAVING A PRESENT UNFUNDED
AVAILABILITY OF $7,000,000, A COPY OF WHICH IS ATTACHED HERETO AND MADE A
PART HEREOF; (iii) THAT CERTAIN LINE OF CREDIT PROMISSORY NOTE DATED JULY
31, 1997 IN FAVOR OF BANKBOSTON, N.A. IN THE ORIGINAL PRINCIPAL AMOUNT OF
THREE MILLION DOLLARS ($3,000,000) ("$3,000,000 Note") HAVING A PRESENT
UNFUNDED AVAILABILITY OF $3,000,000, A COPY OF WHICH IS ATTACHED HERETO AND
MADE A PART HEREOF; and (iv) THAT CERTAIN LINE OF CREDIT PROMISSORY NOTE
DATED JULY 31, 1997 IN FAVOR OF BANK UNITED IN THE ORIGINAL PRINCIPAL
AMOUNT OF TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000)
("$2,500,000 Note") HAVING A PRESENT UNFUNDED AVAILABILITY OF $2,500,000, A
COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF (collectively,
"Notes").
THE $7,500,000 NOTE, THE $3,000,000 NOTE AND THE $2,500,000 NOTE HAVE
BEEN ASSIGNED TO FIRST UNION NATIONAL BANK BY THE HOLDERS THEREOF
IMMEDIATELY PRIOR TO THE EXECUTION HEREOF.
DOCUMENTARY STAMPS AND/OR INTANGIBLE TAXES IN THE AMOUNT REQUIRED BY
LAW WERE PAID ON THE FULL FACE AMOUNT OF THE NOTES AT THE TIME OF THE
RECORDING OF THAT CERTAIN MORTGAGE AND SECURITY AGREEMENT IN OFFICIAL
RECORDS BOOK 26802, PAGE 888 OF THE PUBLIC RECORDS OF BROWARD COUNTY,
FLORIDA. THE NOTES ARE BEING RENEWED, CONSOLIDATED AND RESTATED BASED ON
THE PRESENT UNFUNDED AVAILABILITY WITHOUT ENLARGEMENT THEREOF. NO
ADDITIONAL DOCUMENTARY STAMPS OR INTANGIBLE TAXES ARE DUE.
CONSOLIDATED AND RESTATED LINE OF CREDIT PROMISSORY NOTE
THIS CONSOLIDATED AND RESTATED LINE OF CREDIT PROMISSORY NOTE
("CONSOLIDATED AND RESTATED NOTE") executed by Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership (jointly and severally,
the "Borrowers"), all having an office at 900 North Michigan Avenue,
Chicago, Illinois 60611, in favor of First Union National Bank ("Lender"),
having an address of 5581 West Oakland Park Boulevard, 2nd Floor,
Lauderhill, Florida 33313.
1. RENEWAL AND CONSOLIDATION. The indebtedness evidenced by this
Consolidated and Restated Note renews and consolidates the aggregate
outstanding principal indebtedness evidenced by the following promissory
notes all executed by Borrowers: (i) that certain Line of Credit
Promissory Note dated July 31, 1997 in the original principal amount of
SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($7,500,000) ("$7,500,000
Note") in favor of Barnett Bank, N.A.; (ii) that certain Line of Credit
Promissory Note dated July 31, 1997 in the original principal amount of
SEVEN MILLION DOLLARS ($7,000,000) ("$7,000,000 Note") in favor of First
Union National Bank; (iii) that certain Promissory Note dated July 31, 1997
in the original principal amount of THREE MILLION DOLLARS ($3,000,000)
("$3,000,000 Note") in favor of BankBoston, N.A.; and (iv) that certain
Line of Credit Promissory Note dated July 31, 1997 in the original
principal amount of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000)
("$2,500,000 Note") in favor of Bank United. The $7,500,000 Note, the
$3,000,000 Note and the $2,500,000 Note have been assigned to Lender by the
holders thereby immediately prior to the execution hereof. The current
principal balance outstanding under the $7,500,000 Note being renewed and
consolidated hereby is $0 (and the current unfunded availability is
$7,500,000), the current principal balance outstanding under the $7,000,000
Note being renewed and consolidated hereby is $0 (and the current unfunded
availability is $7,000,000), and the current principal balance outstanding
under the $3,000,000 Note being renewed and consolidated hereby is $0 (and
the current unfunded availability is $3,000,000), and the current principal
balance outstanding under the $2,500,000 Note being renewed hereby is $0
(and the current unfunded availability is $2,500,000), all justly due and
owing. This Consolidated and Restated Line of Credit Note consolidates the
$7,500,000 Note, the $7,000,000 Note, the $3,000,000 Note and the
$2,500,000 Note and amends, replaces and supersedes same, without
enlargement thereof. Accordingly, the outstanding unfunded availability
being renewed and consolidated and evidenced by this Consolidated and
Restated Line of Credit Note is $20,000,000. This Consolidated and
Restated Line of Credit Note is intended to consolidate a single
consolidated maximum indebtedness of $20,000,000 at any one time to be
repaid with interest as hereinafter provided.
2. RESTATEMENT. This Consolidated and Restated Line of Credit
Note restates the $7,500,000 Note, the $7,000,000 Note, the $3,000,000 Note
and the $2,500,000 Note as follows, it being the intention to restate and
continue the obligations evidenced thereunder as also consolidated hereby,
without enlargement. It is the intention of Lender and Borrower that while
this Consolidated and Restated Line of Credit Note consolidates, amends,
replaces and supersedes the $7,500,000 Note, the $7,000,000 Note, the
$3,000,000 Note and the $2,500,000 Note, it is not in payment or
satisfaction of the $7,500,000 Note, the $7,000,000 Note, the $3,000,000
Note or the $2,500,000 Note, but rather is the substitution of evidences of
debt without any intent to extinguish the old. Should there be any
conflict between any of the terms of the $7,500,000 Note, the $7,000,000
Note, the $3,000,000 Note or the $2,500,000 Note, and the terms of this
Consolidated and Restated Line of Credit Note, the terms of this
Consolidated and Restated Line of Credit Note shall control. The
$7,500,000 Note, the $7,000,000 Note, the $3,000,000 and the $2,500,000
Note are attached hereto and shall only be negotiated with this
Consolidated and Restated Line of Credit Note. The $7,500,000 Note, the
$7,000,000 Note, the $3,000,000 and the $2,500,000 Note are consolidated,
amended and renewed to read in their entirety as follows:
THIS SPACE INTENTIONALLY LEFT BLANK
<PAGE>
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE. NON-
RECURRING INTANGIBLE TAXES SHALL BE PAID AT THE TIME OF EACH ADVANCE, ON
SUCH ADVANCE.
LINE OF CREDIT
PROMISSORY NOTE
$20,000,000 Effective Date: September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of First Union National Bank a national banking
association, its successors or assigns (the "Lender" or "Agent," "Agent
having the meaning ascribed to it in the Amendment to Credit Agreement of
even date), the principal sum of TWENTY MILLION DOLLARS ($20,000,000), or
all sums as may be advanced under the Line of Credit Commitment, pursuant
to and in accordance with the Credit Agreement, together with interest on
the principal balance of this Note outstanding from time to time, as same
shall accrue thereon in accordance with the terms hereof, but not to exceed
the maximum non-usurious rate permitted by law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 Adjusted LIBO Rate" means, relative to any LIBO Rate Tranche to
be made, continued or maintained as, or converted into, a LIBO Rate Tranche
for any Interest Period, a rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of one percent) equal to the quotient of (i) the LIBO
Rate applicable to the relevant Interest Period, divided by (ii) the result
of one minus the Reserve Percentage applicable to such Interest Period.
1.2 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which Lender is closed pursuant to authorization or
requirement of law.
1.3 "Credit Agreement" means the Credit Agreement dated July 31,
1997 between Lender and Borrower (among others), as amended of even date
herewith, as the same may be amended, supplemented, restated, replaced or
otherwise modified from time to time.
1.4 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
1.5 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.6 "Interest Period" means, in the case of a LIBO Rate Tranche,
the period commencing on (and including) the Business Banking Day selected
by the Makers as the date on which such LIBO Rate Tranche is made or
continued as, or converted into a LIBO Rate Tranche pursuant to the terms
of this Note, and ending on (but excluding) the day which numerically
corresponds to such date one, two, three or six months thereafter (or if
such month has no numerically corresponding day, on the last Business
Banking Day of such month), in each case as the Makers may select, provided
that (a) if such Interest Period would otherwise end on a day which is not
a Business Banking Day, such Interest Period shall end on the next
following Business Banking Day (unless, in the case of a LIBO Rate Tranche,
such next following Business Banking Day is the first Business Banking Day
of the calendar month, in which case such Interest Period shall end on the
Business Banking Day next preceding such numerically corresponding day);
and (b) no Interest Period may end on a date later than the Maturity Date.
1.7 "LIBO Rate" means, relative to any Interest Period, a rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
one percent) equal to the rate for US dollar deposits with maturities
comparable to such Interest Period for delivery on the first day of such
Interest Period which appears on the Reuters Screen LIBO Page as of
11:00 a.m. (London time) on the day that is two (2) London Banking Days
preceding the commencement date of the Interest Period. If at least two
(2) such offered rates appear on the Reuters Screen LIBO Page, the rate
will be the arithmetic mean of such offered rates. Lender may, in its
discretion, use any other publicly available index or reference rate
showing rates offered for United States dollar deposits in the London
Interbank market as of the applicable date. In addition, Lender may, in
its discretion, use rate quotations for daily or annual periods in lieu of
quotations for substantially equivalent monthly periods, in the absence of
such quotations for substantially equivalent monthly periods. Each
determination of the LIBO Rate applicable to a particular Interest Period
shall be made by Lender and shall be conclusive and binding upon the Makers
and Lender absent manifest error.
1.8 "LIBO Rate Tranche" means a Tranche bearing interest at all
times during the Interest Period applicable to such Tranche, at a fixed
rate of interest equal to the Note LIBO Rate applicable to such Interest
Period.
1.9 "Line of Credit Commitment" has the meaning ascribed to such
term in the Credit Agreement.
1.10 "Line of Credit Note" or "Note" means this Note as same may be
amended, supplemented, renewed, restated, replaced or otherwise modified
from time to time.
1.11 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
1.12 "Loan Year" means each of the twelve (12) month periods
commencing on July 31, 1997 and on the first, second and third
anniversaries hereof.
1.13 "London Banking Day" means each day other than a Saturday, a
Sunday or any holiday on which commercial banks in London, England are
closed for business.
1.14 "Maturity Date" means the earlier of: (i) July 31, 2001 and
(ii) any earlier date upon which the principal balance outstanding
hereunder, together with all interest accrued thereon, shall become
immediately due and payable following an Event of Default, in accordance
with provisions of the Credit Agreement.
1.15 "Note LIBO Rate" means the Adjusted LIBO Rate applicable to a
specific LIBO Rate Tranche selected by the Makers for a relevant Interest
Period, plus 175 basis points.
1.16 "Note Prime Rate" means the Prime Rate applicable to the Prime
Rate Tranche. The Note Prime Rate shall be increased or decreased
effective on any date on which the Prime Rate shall be increased or
decreased.
1.17 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank, as its Prime Rate. The Prime
Rate is a reference rate for the information and use of Lender in
establishing the actual rates to be charged to borrowers and is not
necessarily the lowest rate charged by Lender. Should First Union National
Bank not publish a Prime Rate at any time during the term of this Note,
Lender, in its reasonable discretion, may choose a substitute Prime Rate.
The rate of interest shall change automatically and immediately as of the
date of any change in the Prime Rate without notice to Borrower or any
endorser, surety or guarantor, if any.
1.18 "Prime Rate Tranche" means a Tranche bearing interest at the
Note Prime Rate.
1.19 "Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other rule, regulation or official interpretation of said Board
of Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
1.20 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.21 "Reserve Percentage" means the stated maximum rate (expressed
as a decimal) at which reserves are required to be maintained by Lender
during an Interest Period, including, without limitation (i) any basis,
supplemental, marginal, or emergency reserve under any regulations of any
governmental authority to which Lender is subject, (ii) any reserve
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), including, without limitation, Regulation D, for determining
the maximum reserve requirement in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits
by reference to which the LIBO Rate is determined). Without limiting the
effect of the foregoing, the Reserve Percentage shall reflect any other
reserves required to be maintained by Lender under any regulation of any
governmental authority to which Lender is subject against (a) any category
of liabilities that include deposits with reference to which the LIBO Rate
is to be determined or (b) any category of extension of credit or other
assets that includes loans bearing interest at a rate based on the LIBO
Rate. Each determination of the Reserve Percentage shall be made by Lender
and shall be conclusive and binding upon the Makers and Lenders absent
manifest error.
1.22 "Security Documents" has the meaning ascribed to such terms in
the Credit Agreement.
1.23 "Tranche" means any portion of the outstanding principal
balance under the Line of Credit Note bearing interest at the applicable
Note LIBO Rate for a specific Interest Period, as selected by the Makers in
accordance with Section 2.1, below, and any portion of the outstanding
principal balance under the Line of Credit Note which may from time to time
bear interest at the Note Prime Rate.
20 Selection and Calculation of Interest Rate.
2.1 Provided that no Event of Default or circumstance which with
the passage of time or giving of notice would become an Event of Default
then exists under the Loan Documents, and provided there shall at no time
be permitted to exist more than four LIBO Rate Tranches with respect to the
total principal balance outstanding under the Line of Credit Note, the
Makers shall have the right to elect to have the Note LIBO Rate then in
effect for an Interest Period apply to a LIBO Rate Tranche, in accordance
with, and subject to the provisions of this Section 2.1. To make an
election to have such Note LIBO Rate apply to any LIBO Rate Tranche, from
time to time, the Makers shall give to Lender irrevocable notice (a "Rate
Election Notice") not later than 11:00 a.m. (Ft. Lauderdale, Florida time)
at least three (3) Business Banking Days prior to the commencement date of
each such Interest Period, which Rate Election Notice shall be addressed as
follows, and shall be given in writing (by telecopy, hand delivery, or
overnight delivery service), in accordance with the provisions of Section
11.4 of the Credit Agreement:
Dana Hunter, Vice President
First Union National Bank
5581 West Oakland Park Blvd., 2nd Floor
Lauderhill, Florida 33313
(954) 467-5543
Fax: (954) 467-5557
Each such Rate Election Notice shall be in the form attached hereto as
Schedule 1 and shall specify: (i) the commencement day of the Interest
Period which shall be a Business Banking Day (and, with respect to any then
existing LIBO Rate Tranche, shall not be a date prior to the termination
date of such then existing LIBO Rate Tranche), (ii) the principal amount of
the LIBO Rate Tranche which shall be subject to the application of the Note
LIBO Rate, which shall be in a minimum amount of $2,000,000.00, and in
multiples of $100,000.00 and (iii) the applicable Interest Period which
shall apply to such LIBO Rate Tranche, provided, however, that no Interest
Period may extend beyond the Maturity Date.
2.2 If Lender determines, absent manifest error, that the
maintenance of any Note LIBO Rate would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, of if
Lender determines that the interest rate applicable to the Note LIBO Rate
does not accurately reflect the cost of maintaining any LIBO Rate Tranche
subject to such rate, then, at the election of Lender, the Makers shall not
be entitled thereafter to select a Note LIBO Rate to be applicable to any
portions of the total outstanding principal balance under the Line of
Credit Note, and the interest rate applicable to all of the outstanding
principal balance under the Line of Credit Note then subject to the Note
LIBO Rate for any applicable Interest Period, shall, upon the expiration of
all such applicable Interest Periods, be converted to the Prime Rate.
2.3 In the event that the Makers shall fail to provide a timely
Rate Election Notice for the election of the Note LIBO Rate to apply to any
Advance or to any LIBO Rate Tranche, as of the termination date of the
applicable Interest Period for such Tranche, then as the date of such
Advance, or as of such termination date of such LIBO Rate Tranche, as the
case may be, the Prime Rate shall apply to such Advance or LIBO Rate
Tranche until the next eligible effective date for which the Maker shall
have provided a timely Rate Election Notice, and such Advance or such
principal amount previously comprising a LIBO Rate Tranche, shall
thereafter be deemed to be included in the Prime Rate Tranche.
2.4 Interest shall be calculated on the daily total outstanding
balance of all Advances of Loan Proceeds under the Line of Credit
Commitment, as such Advances are evidenced by the Line of Credit Note, as
follows: (i) interest shall accrue on each LIBO Rate Tranche, commencing
with the effective date for each such LIBO Rate Tranche, at the applicable
Note LIBO Rate for the applicable Interest Period and (ii) interest shall
accrue on the Prime Rate Tranche, which shall comprise all of the
outstanding principal balance under this Note not otherwise subject to a
LIBO Rate Tranche, at the Note Prime Rate, changing when and as the Prime
Rate changes. Interest shall be computed through and including the date of
any payment and shall be calculated for actual days elapsed on the basis of
a 360 day year (i.e. interest for each day on which any principal is
outstanding shall be calculated at the applicable interest rate described
above, divided by 360).
30 Payment of Interest and Principal.
3.1 Interest, calculated as above provided, shall be due and
payable by the Makers to Lender, subject to the provisions of Section 3.7
hereof, on the first Business Banking Day of the first calendar month
immediately following the Advance of Loan Proceeds under the Line of Credit
Commitment and continuing on the first day of each month thereafter until
the Maturity Date.
3.2 The total outstanding principal balance under the Line of
Credit Note and all accrued but unpaid interest shall be fully due and
payable on the Maturity Date.
3.3 All payments of principal and interest under the Line of Credit
Note shall be made in lawful money of the United States which shall be
legal tender in payment of all debts, public and private, at the time of
payment.
3.4 The Line of Credit Note may be prepaid in whole or in part at
any time and from time to time, without penalty or premium, provided:
(i) any such prepayment shall be preceded by at least three (3) Business
Banking Days' prior written notice to Lender and (ii) any such prepayment
shall be accompanied by accrued interest to the date of prepayment and any
other obligations and payments then due under the terms of the Line of
Credit Note. If the Makers shall make a payment or prepayment of all or
any portion of the principal amount outstanding then subject to a LIBO Rate
Tranche, prior to the applicable termination date thereof (including,
without limitation, upon the acceleration of the Maturity Date following an
Event of Default), or the Makers shall attempt to rescind a Rate Election
Notice for a specified LIBO Rate Tranche, after the Makers have submitted
such Rate Election Notice to Lender, then, within three (3) Business
Banking Days following written notice from Lender, the Makers shall pay to
Lender the amount of any loss or cost incurred by Lender resulting
therefrom, including, without limitation, any loss or cost resulting from
the liquidation or re-employment of deposits required to fund or maintain
the subject LIBO Rate Tranche, not to exceed the amount of interest which
would have been earned on the amount prepaid for the balance of the subject
Interest Period, at a rate equal to the difference, not less than zero, of
the LIBO Rate as of the first day of the Interest Period less the LIBO Rate
as of the date of such prepayment, for a corresponding Interest Period
commencing on the date of such prepayment. The obligations of the Makers
under this section shall survive payment of this Note.
3.5 Prior to the Maturity Date, the Makers may borrow, repay and
reborrow hereunder, in accordance with the terms of the Credit Agreement.
The Makers shall repay the outstanding balances under the Line of Credit
Note at least once each Loan Year, provided, however, that the Makers
shall, at no point, repay the outstanding balances under this Note to the
extent that there shall be less than One Thousand Dollars and no/100
($1,000.00) outstanding thereunder at any time, and shall not reborrow
under the Line of Credit Commitment for a period of at least thirty (30)
days after such repayment (a "Cleanup Repayment"). Notwithstanding the
foregoing, however, the Maker shall be entitled to forego such Cleanup
Repayment for one Loan Year, provided, however, that the Maker shall not be
entitled to make any Distributions (as defined in the Credit Agreement)
during the Loan Year following the Loan Year as to which the Makers shall
have failed to make a Cleanup Repayment, until the Makers shall make a
Cleanup Repayment.
3.6 All payments of principal and interest under the Line of Credit
Note shall be made in immediately available funds by 11:00 a.m. (Ft.
Lauderdale, Florida time) on a Business Banking Day, to Lender, at the
office of Lender at First Union National Bank, 301 South College Street,
TW-6, Charlotte, North Carolina 28288-0166, Attention:Jane Hurley, or by
wire to ABA #053000219, Account No.465906 0010352, Reference "Arvida,"
Attention: Jane Hurley, or at such other place as Lender may instruct. Any
payments of principal or interest made after 11:00 a.m. (Ft. Lauderdale,
Florida time) shall be deemed to be payments made on the next following
Business Banking Day, for all purposes, hereof, including, without
limitation, the accrual of interest. Should any payment under the Line of
Credit Note become due and payable on a day other than a Business Banking
Day, the maturity thereof shall be extended to the next succeeding Business
Banking Day, and, in the case of any payment of principal, interest shall
be payable thereon as calculated pursuant hereto, for each Business Banking
Day such principal is outstanding (provided, however, any payment of
principal received on any Business Banking Day by 11:00 a.m. (Ft.
Lauderdale, Florida time) shall not be deemed to be outstanding on such
Business Banking Day).
3.7 Notwithstanding anything to the contrary set forth herein,
Lender shall provide the Makers with written notice prior to the first
Business Banking Day of each month of the interest installment with respect
to the Line of Credit Note which is due and payable on such first Business
Banking Day of such month. With respect to each such monthly installment
of interest, Lender hereby grants to the Makers a grace period for the
payment of same, which shall extend to the later of: (a) the fifteenth
(15th) day of the month or (b) if the Makers shall not have received
written notice of the monthly interest installment from Lender, prior to
the first Business Banking Day of any month and the Makers shall have
provided written notice to Lender, no later than such first Business
Banking Day of the month, of such Lender's failure to provide the Makers
with written notice of such interest installment, then, the date fifteen
(15) days from receipt by the Makers of such written notice of the monthly
interest installment. If Lender shall not receive written notice from the
Makers on or before the first Business Banking Day of a month, of Lender's
failure to provide written notice of an interest installment, then, for all
purposes of this Note, notwithstanding that the Makers may later request
such written notice of such interest installment, such grace period shall
extend to no later than the fifteenth (15th) day of such month.
3.8 Any payment required to be paid by the Line of Credit Note, the
Loan Documents or the Credit Agreement, with the exception of interest and
principal, shall be due and payable no later than fifteen (15) days from
receipt by the Makers from Lender of written notice of the required
payment.
3.9 Provided Lender has not exercised its right to accelerate the
Line of Credit Note as provided in the Line of Credit Note, the Credit
Agreement or the other Loan Documents: (a) in the event any payment of
principal required under the Line of Credit Note, either pursuant to the
terms hereof or the terms of the Credit Agreement, is not received by
Lender by the fifteenth (15th) day following the day on which such payment
is due, the Makers shall pay to Lender, a late charge of five percent (5%)
of the payment not so received, the parties agreeing that said charge is a
fair and reasonable charge for the late payment and shall not be deemed a
penalty or as compounding interest, and (b) in the event any scheduled
payment of interest required under the Line of Credit Note is not received
by Lender by the later of (i) fifteen (15) days from receipt by the Makers
of written notice of the monthly interest installment and (ii) the
fifteenth (15th) day of such month, the Makers shall pay to Lender a late
charge of five percent (5%) of the payment not so received, the parties
agreeing that said charge is a fair and reasonable charge for the late
payment and shall not be deemed a penalty or as compounding interest.
Further, if any payment required to be paid by the Line of Credit Note, the
Credit Agreement or the other Loan Documents, with the exception of
interest and principal, is not paid within fifteen (15) days from receipt
by the Makers from Lender of written notice of the required payment, the
Makers shall pay to Lender, for the account of Lender a late charge of five
percent (5%) of the payment not so received, the parties agreeing that said
charge is a fair and reasonable charge for the late payment and shall not
be deemed a penalty or as compounding interest.
40 Collateral Security. This Note is issued pursuant to the Credit
Agreement. This Note is secured by the Credit Agreement, the Security
Documents and the other Loan Documents, as same may be amended through the
date hereof. Reference is hereby made to the Credit Agreement, the
Security Documents and the other Loan Documents for a description of Events
of Default and rights of acceleration of the Maturity Date upon the
occurrence of an Event of Default. It is expressly agreed that all of the
covenants, conditions and agreements contained in the Credit Agreement, the
Security Documents and the other Loan Documents are made a part of this
Note.
50 Events of Default.
5.1 Upon the occurrence of an Event of Default, Lender may declare
the entire amount of this Note, including the principal balance then
outstanding thereunder, together with all interest accrued thereon, to be
immediately due and payable, without notice, (the Makers hereby expressly
waive notice of such Event of Default), time being of the essence of this
Note. Any Event of Default under this Note shall be an Event of Default
under all other Loan Documents and an Event of Default under any other Loan
Document shall be an Event of Default under this Note.
5.2 In the event Lender accelerates this Note as herein provided or
the full amount of outstanding principal and interest under this Note is
not fully repaid to Lender for the account of Lender on or before the
Maturity Date, then the entire unpaid principal balance under the Note,
together with all interest accrued thereon, shall bear interest from the
date of an Event of Default or from the Maturity Date, respectively, at the
Default Rate. Any late charge paid by the Makers shall be applied to the
interest charged at the Default Rate after acceleration of this Note.
5.3 The remedies of Lender, as provided herein, or in the Security
Documents, the other Loan Documents or Credit Agreement shall be cumulative
and concurrent and may be pursued singularly, successively or together, by
Lender in accordance with the terms of the Credit Agreement, and may be
exercised as often as the occasion therefor shall arise. Notwithstanding
anything herein seemingly to the contrary Lender shall not take any action,
including, without limitation, in connection with the enforcement of any of
its rights under this Note, the Credit Agreement or other Loan Documents,
unless such action is consistent with the action taken by Lender with
respect to all of this Note and in accordance with the provisions of the
Credit Agreement.
60 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
this Note to pay interest in an amount or at a rate greater than the
highest non-usurious rate permissible under applicable law as amended from
time to time. Should any interest or other charges paid by the Makers, or
any party liable for the payment of the Loan evidenced by this Note, result
in the computation or earning of interest in excess of the highest non-
usurious rate permissible under applicable law, then any and all such
excess shall be and the same is hereby waived by Lender, and all such
excess shall be paid by Lender to the Makers or to any party liable for the
payment of the Loan evidenced by this Note, it being the intent of the
parties hereto that under no circumstances shall the Makers or any party
liable for the payment of the Loan hereunder, be required to pay interest
in excess of the highest non-usurious rate permissible under applicable law
as amended from time to time. By operation of Section 687.12, Florida
Statutes (1996), the interest rate charged under this Note is authorized by
Chapters 658, 665 and 687, Florida Statutes (1996) and applicable federal
law.
70 Waivers/Miscellaneous Matters.
7.1 This Note is to be construed according to the applicable laws
of the State of Florida and the United States of America. Any action
brought upon the enforcement of this Note is hereby authorized to be
instituted and prosecuted in Broward County, Florida, or at the United
States District Court for the Southern District of Florida, at the election
of Lender, subject to and in accordance with the terms of the Credit
Agreement.
7.2 This Note may not be changed orally, but only by an agreement
in writing, signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.
7.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note hereby consents to any
extension or renewal of this Note or any part thereof, without notice, and
agrees that it will remain liable under this Note during any extension or
renewal thereof, until the indebtedness evidenced hereby and thereby is
paid in full.
7.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and Lender shall not have any recourse against any
property or assets of any such constituent partner or other person or
entity) under or in connection with this Note, the Credit Agreement, the
Security Documents, the other Loan Documents, the Loans, or any instruments
securing or otherwise executed in connection therewith, or any certificate
delivered in connection therewith, or any amendments or modifications to
any of the foregoing made at any time or times, heretofore or hereafter
(such persons as described in this sentence being herein collectively
referred to as "Non-Recourse Persons"), provided, however, Non-Recourse
Persons shall not include any Maker or any Subsidiary of a Maker that would
otherwise be liable as a general partner in a Maker. The recourse of Lender
and its successors and assignees under or in connection with this Note, the
Security Documents, the Credit Agreement, the other Loan Documents, the
Loans and such instruments and certificates, and any such amendments or
modifications, shall be limited to the assets of the Makers, and Lender and
its successors and assignees waive and do hereby waive any such personal
liability against any such Non-Recourse Persons. For the purposes of this
Note, the Security Documents, the Credit Agreement and each other Loan
Document and any such instruments and certificates and any such amendments
or modifications, neither the negative capital account of a constituent
partner in any Maker, nor any obligation of any constituent partner in any
Maker to restore a negative capital account or to advance or contribute
capital to any Maker or any other constituent partner in any Maker shall be
deemed to be the property or the asset of any Maker or any such other
constituent partner (and neither Lender nor any of its successors or
assignees shall have any right to collect, enforce or proceed against or
with respect to any such negative capital account or partner's obligation
to restore, advance or contribute). As used in this section, the term
"constituent partner" means any direct partner in any Maker, and any person
or entity that is a partner in any partnership that, directly or indirectly
through one or more other partnerships, is a partner in any Maker.
7.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
7.6 All sums received by Lender for application to this Note shall
be applied by Lender in the manner set forth in Section 2.8 of the Credit
Agreement.
7.7 The Makers are strictly liable for and hereby agree to pay or
reimburse Lender for, and hold it harmless from and against all of its
reasonable third party costs and expenses incurred in connection with the
collection or enforcement of, or the preservation of any rights under, this
Note, the Credit Agreement or other Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel for Lender,
including attorneys' fees out of court, in trial, on appeal, in bankruptcy
proceedings or otherwise. The Makers shall pay all such amounts in
accordance with the terms of the Credit Agreement, and until repaid, such
sums shall bear interest at the Default Rate.
7.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note shall be given in accordance
with the notice provisions of Section 11.4 of the Credit Agreement.
7.9 As used herein, the terms "Makers," "Agent" and "Lender" shall
be deemed to include their respective successors and assigns.
7.10 In the event any one or more of the provisions of this Note
shall for any reason be held to be invalid, illegal, or unenforceable, in
whole or in part or in any respect, or in the event one or more of the
provisions of this Note operates or would prospectively operate to
invalidate this Note, then in any of those events, only such provision or
provisions shall be deemed null and void and shall not effect any other
provision of this Note. The remaining provisions of this Note shall remain
operative and in full force and effect and in shall no way be affected,
prejudiced or disturbed thereby. In the event any provisions of this Note
is inconsistent with any provisions of the Credit Agreement, the Security
Documents or other Loan Documents, or any other agreements or documents
executed in connection with this Note, this Note shall control.
7.11 It is expressly understood and agreed that Lender shall not be
construed for any purposes, to be the partner, joint venturer, principal or
associate of the Makers or any of them or any person or party claiming by,
through or under the Makers or any of them in the conduct of their
respective businesses.
7.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof (a)
severally waive presentment for payment, demand, notice of demand, notice
of nonpayment or dishonor, protest and notice of protest of this Note, and
all other notices in connection with the delivery, acceptance, performance
or enforcement of the payment of this Note, (b) expressly consent to all
extensions of time, renewals, postponements of time of payment of this Note
or other modifications from time to time prior to or after the Maturity
Date, without notice, consent or consideration to any of the foregoing, (c)
expressly agree to any substitution, exchange, addition or release of any
of the other Loan Documents or the addition or release of any party or
person primarily or secondarily liable hereon, (d) expressly agree that
Lender shall not be required first to institute any suit, or to exhaust
their remedies against the Makers or any other person or party to become
liable hereunder or against the other Loan Documents in order to enforce
the payment of this Note, and (e) expressly agree that, notwithstanding the
occurrence of any of the foregoing, they shall be and remain, jointly and
severally, directly liable for all sums due under this Note and the other
Loan Documents subject to the terms and conditions hereof and thereof.
7.13 Lender shall not be deemed, by any act of omission or
commission, to have waived any of their rights or remedies hereunder unless
such waiver is in writing given in accordance with the terms of the Credit
Agreement, and then only to the extent specifically set forth in the
writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a
subsequent event.
7.14 Neither this Note nor any provision hereof or thereof may be
changed or terminated orally, but only by an instrument in writing signed
by the party against whom enforcement of the change or termination is
sought.
7.15 Failure to accelerate this Note after an Event of Default, or
the acceptance of a past due installment, shall not be construed as a
novation of the contract or a waiver of the right of Lender to thereafter
insist upon strict compliance with the terms of this Note without previous
notice of such intention being given to the Makers.
7.16 Notwithstanding anything to the contrary in this Note, the
Credit Agreement, the Security Documents or other Loan Documents, the
maximum liability of any Maker other than Arvida/JMB Partners, L.P. (herein
a "Maker Subsidiary" or "Maker Affiliate") for the Obligations created,
evidenced and secured thereby and hereby shall not exceed the maximum
amount, as such maximum amount shall be determined by a court of competent
jurisdiction of any such Maker Subsidiary's or Maker Affiliate's liability
therefor which may be incurred without rendering the Obligations, as they
relate to such Maker Subsidiary or Maker Affiliate, voidable as a
fraudulent conveyance or fraudulent transfer under the Bankruptcy Code or
under any other present or future federal or state laws or statutes
relating to bankruptcy, insolvency, assignment for the benefit of creditors
or other relief for debtors, including, without limitation, the Uniform
Fraudulent Transfer Act or the Uniform Fraudulent Conveyance Act, as in
effect in any jurisdiction wherein any such Maker Subsidiary's or Maker
Affiliate's Solvency (as defined in the Credit Agreement) is subject to
determination. For purposes of determining such liability of any Maker
Subsidiary or Maker Affiliate, due consideration shall be given to the
benefits received, directly or indirectly, by such Maker Subsidiary or
Maker Affiliate from the Loans (as defined in the Credit Agreement) made
pursuant to the Commitments (as defined in the Credit Agreement).
7.17 The section headings of this Note are for reference purposes
only and are to be given no effect in the construction or interpretation of
this Note.
THE MAKERS AND LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR THE CREDIT AGREEMENT OR ANY OTHER
LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY MAKERS OR LENDER.
SIGNATURE PAGES FOLLOW
<PAGE>
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
MIA3-517167.2
<PAGE>
NOTE:THIS CONSOLIDATED AND RESTATED PROMISSORY NOTE IS A RENEWAL,
CONSOLIDATION AND RESTATEMENT OF: (i) THAT CERTAIN DEMAND NOTE LETTER OF
CREDIT LINE PROMISSORY NOTE DATED JULY 31, 1997 IN FAVOR OF BARNETT BANK,
N.A. IN THE ORIGINAL PRINCIPAL AMOUNT OF ONE MILLION EIGHT HUNDRED SEVENTY-
FIVE THOUSAND DOLLARS ($1,875,000) ("$1,875,000 Note") HAVING A PRESENT
UNFUNDED AVAILABILITY OF $1,875,000, A COPY OF WHICH IS ATTACHED HERETO AND
MADE A PART HEREOF; (ii) THAT CERTAIN DEMAND NOTE LETTER OF CREDIT LINE
PROMISSORY NOTE DATED JULY 31, 1997 IN FAVOR OF FIRST UNION NATIONAL BANK
IN THE ORIGINAL PRINCIPAL AMOUNT OF ONE MILLION SEVEN HUNDRED FIFTY
THOUSAND DOLLARS ($1,750,000) ("$1,750,000 Note") HAVING A PRESENT UNFUNDED
AVAILABILITY OF $1,750,000, A COPY OF WHICH IS ATTACHED HERETO AND MADE A
PART HEREOF; (iii) THAT CERTAIN DEMAND NOTE LETTER OF CREDIT LINE
PROMISSORY NOTE DATED JULY 31, 1997 IN FAVOR OF BANKBOSTON, N.A. IN THE
ORIGINAL PRINCIPAL AMOUNT OF SEVEN HUNDRED FIFTY THOUSAND DOLLARS
($750,000) ("$750,000 Note") HAVING A PRESENT UNFUNDED AVAILABILITY OF
$750,000, A COPY OF WHICH IS ATTACHED HERETO AND MADE A PART HEREOF; and
(iv) THAT CERTAIN DEMAND NOTE LETTER OF CREDIT LINE PROMISSORY NOTE DATED
JULY 31, 1997 IN FAVOR OF BANK UNITED IN THE ORIGINAL PRINCIPAL AMOUNT OF
SIX HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($625,000) ("$625,000 Note")
HAVING A PRESENT UNFUNDED AVAILABILITY OF $625,000, A COPY OF WHICH IS
ATTACHED HERETO AND MADE A PART HEREOF (collectively, "Notes").
THE $1,875,000 NOTE, THE $750,000 NOTE AND THE $625,000 NOTE HAVE
BEEN ASSIGNED TO FIRST UNION NATIONAL BANK BY THE HOLDERS THEREOF
IMMEDIATELY PRIOR TO THE EXECUTION HEREOF.
DOCUMENTARY STAMPS AND/OR INTANGIBLE TAXES IN THE AMOUNT REQUIRED BY
LAW WERE PAID ON THE FULL FACE AMOUNT OF THE NOTES AT THE TIME OF THE
RECORDING OF THAT CERTAIN MORTGAGE AND SECURITY AGREEMENT IN OFFICIAL
RECORDS BOOK 26802, PAGE 888 OF THE PUBLIC RECORDS OF BROWARD COUNTY,
FLORIDA. THE NOTES ARE BEING RENEWED, CONSOLIDATED AND RESTATED BASED ON
THE PRESENT UNFUNDED AVAILABILITY WITHOUT ENLARGEMENT THEREOF. NO
ADDITIONAL DOCUMENTARY STAMPS OR INTANGIBLE TAXES ARE DUE.
<PAGE>
CONSOLIDATED AND RESTATED DEMAND NOTE
LETTER OF CREDIT LINE PROMISSORY NOTE
THIS CONSOLIDATED AND RESTATED DEMAND NOTE LETTER OF CREDIT LINE
PROMISSORY NOTE ("CONSOLIDATED AND RESTATED DEMAND NOTE") executed by
Arvida/JMB Partners, L.P., a Delaware limited partnership, Arvida/JMB
Partners, a Florida general partnership, Arvida Grand Bay Limited
Partnership IV, a Delaware limited partnership, The AOK Group, a Florida
general partnership, Metrodrama Joint Venture, a Florida general
partnership, Southeast Florida Holdings, Inc., an Illinois corporation,
Gulf and Pacific Communications Limited Partnership, a Delaware limited
partnership, and Weston Hills Country Club Limited Partnership, a Delaware
limited partnership (jointly and severally, the "Borrowers"), all having an
office at 900 North Michigan Avenue, Chicago, Illinois 60611, in favor of
First Union National Bank ("Lender"), having an address of 5581 West
Oakland Park Boulevard, 2nd Floor, Lauderhill, Florida 33313.
1. RENEWAL AND CONSOLIDATION. The indebtedness evidenced by this
Consolidated and Restated Demand Note Letter of Credit Line Promissory Note
renews and consolidates the aggregate outstanding principal indebtedness
evidenced by the following promissory notes all executed by Borrowers: (i)
that certain Demand Note Letter of Credit Line Promissory Note dated July
31, 1997 in the original principal amount of ONE MILLION EIGHT HUNDRED
SEVENTY-FIVE THOUSAND DOLLARS ($1,875,000) ("$1,875,000 Note") in favor of
Barnett Bank, N.A.; (ii) that certain Demand Note Letter of Credit Line
Promissory Note dated July 31, 1997 in the original principal amount of ONE
MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($1,750,000) ("$1,750,000
Note") in favor of First Union National Bank; (iii) that certain Demand
Note Letter of Credit Line Promissory Note dated July 31, 1997 in the
original principal amount of SEVEN HUNDRED FIFTY THOUSAND DOLLARS
($750,000) ("$750,000 Note") in favor of BankBoston, N.A.; and (iv) that
certain Demand Note Letter of Credit Line Promissory Note dated July 31,
1997 in the original principal amount of SIX HUNDRED TWENTY-FIVE THOUSAND
DOLLARS ($625,000) ("$625,000 Note") in favor of Bank United. The
$1,875,000 Note, the $750,000 Note and the $625,000 Note have been assigned
to Lender by the holders thereby immediately prior to the execution hereof.
The current principal balance outstanding under the $1,875,000 Note being
renewed and consolidated hereby is $0 (and the current unfunded
availability is $1,875,000), the current principal balance outstanding
under the $1,750,000 Note being renewed and consolidated hereby is $0 (and
the current unfunded availability is $1,750,000), and the current principal
balance outstanding under the $750,000 Note being renewed and consolidated
hereby is $0 (and the current unfunded availability is $750,000), and the
current principal balance outstanding under the $625,000 Note being
renewed hereby is $0 (and the current unfunded availability is $625,000).
This Consolidated and Restated Demand Note consolidates the $1,875,000
Note, the $1,750,000 Note, the $750,000 Note and the $625,000 Note and
amends, replaces and supersedes same, without enlargement thereof.
Accordingly, the combined outstanding unfunded availability being renewed
and consolidated and evidenced by this Consolidated and Restated Demand
Note is $5,000,000. This Consolidated and Restated Demand Note is intended
to consolidate a single consolidated indebtedness of $5,000,000 to be
repaid with interest as hereinafter provided.
2. RESTATEMENT. This Consolidated and Restated Demand Note
restates the $1,875,000 Note, the $1,750,000 Note, the $750,000 Note and
the $625,000 Note as follows, it being the intention to restate and
continue the obligations evidenced thereunder as also consolidated hereby,
without enlargement. It is the intention of Lender and Borrowers that
while this Consolidated and Restated Demand Note consolidates, amends,
replaces and supersedes the $1,875,000 Note, the $1,750,000 Note, the
$750,000 Note and the $625,000 Note, it is not in payment or satisfaction
of the $1,875,000 Note, the $1,750,000 Note, the $750,000 Note or the
$625,000 Note, but rather is the substitution of evidences of debt without
any intent to extinguish the old. Should there be any conflict between any
of the terms of the $1,875,000 Note, the $1,750,000 Note, the $750,000 Note
or the $625,000 Note, and the terms of this Consolidated and Restated
Demand Note, the terms of this Consolidated and Restated Demand Note shall
control. The $1,875,000 Note, the $1,750,000 Note, the $750,000 and the
$625,000 Note are attached hereto and shall only be negotiated with this
Consolidated and Restated Demand Note. The $1,875,000 Note, the $1,750,000
Note, the $750,000 and the $625,000 Note are consolidated, amended and
renewed to read in their entirety as follows:
THIS SPACE INTENTIONALLY LEFT BLANK
<PAGE>
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE. NON-
RECURRING INTANGIBLE TAXES SHALL BE PAID AT THE TIME OF EACH ADVANCE, ON
SUCH ADVANCE.
DEMAND NOTE
LETTER OF CREDIT LINE
$5,000,000 Effective Date:
September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of First Union National Bank, a national banking
association, its successors or assigns (the "Lender" or "Agent," "Agent"
having the meaning ascribed to it in the Amendment to Credit Agreement of
even date), the principal sum of FIVE MILLION DOLLARS ($5,000,000), or all
sums as may be advanced under the Letter of Credit Commitment, pursuant to
and in accordance with the Credit Agreement, together with interest on the
principal balance of this Note outstanding from time to time, as same shall
accrue thereon in accordance with the terms hereof, but not to exceed the
maximum non-usurious rate permitted by law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which Lender is closed pursuant to authorization or
requirement of law.
1.2 "Credit Agreement" means the Credit Agreement dated July 31,
1997 between Lender and Borrower (among others), as amended of even date
herewith, as the same may be amended, supplemented, restated, replaced or
otherwise modified from time to time.
1.3 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
1.4 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.5 "Letter of Credit Commitment" has the meaning ascribed to such
term in the Credit Agreement.
1.6 "Letter of Credit Note" or "Note" means this Note, as same may
be amended, supplemented, renewed, restated, replaced or otherwise modified
from time to time.
1.7 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
1.8 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank as its Prime Rate. The Prime
Rate is a reference rate for the information and use of Lender in
establishing the actual rates to be charged to borrowers and is not
necessarily the lowest rate charged by Lender. Should First Union National
Bank not publish a Prime Rate at any time during the term of this Note,
Lender, in its reasonable discretion, may choose a substitute Prime Rate.
The rate of interest shall change automatically and immediately as of the
date of any change in the Prime Rate without notice to Borrower or any
endorser, surety or guarantor, if any.
1.9 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.10 "Security Documents" has the meaning ascribed to such terms in
the Credit Agreement.
20 Payment of Interest and Principal.
2.1 The Maker shall pay to Lender the entire principal balance of
all Advances outstanding under the Letter of Credit Note, together with all
interest accrued thereon, at the Prime Rate, not later than three (3)
Business Banking Days following receipt of demand therefor, from Lender.
The failure of the Makers to make such payment at such time shall
constitute an Event of Default hereunder and under the Credit Agreement,
and thereafter interest shall accrue on the entire principal balance
outstanding under the Letter of Credit Note, at the Default Rate.
2.2 All payments of principal and interest under the Letter of
Credit Note shall be made in lawful money of the United States which shall
be legal tender in payment of all debts, public and private, at the time of
payment.
2.3 All payments of principal and interest under the Letter of
Credit Note shall be made in immediately available funds by 11:00 a.m. (Ft.
Lauderdale, Florida time) on a Business Banking Day to Lender, at the
office of Lender at First Union National Bank, 301 South College Street,
TW-6, Charlotte, North Carolina 28288-0166, Attention: Jane Hurley, or by
wire to ABA #053000219, Account No.465906 0010352, Reference "Arvida,"
Attention: Jane Hurley, or at such other place as Lender may instruct. Any
payments of principal or interest made after 11:00 a.m. (Ft. Lauderdale,
Florida time) shall be deemed to be payments made on the next following
Business Banking Day, for all purposes, hereof, including, without
limitation, the accrual of interest. Should any payment under the Letter
of Credit Note become due and payable on a day other than a Business
Banking Day, the maturity thereof shall be extended to the next succeeding
Business Banking Day, and, in the case of any payment of principal,
interest shall be payable thereon as calculated pursuant hereto, for each
Business Banking Day such principal is outstanding (provided, however, any
payment of principal received on any Business Banking Day by 11:00 a.m.
(Ft. Lauderdale, Florida time) shall not be deemed to be outstanding on
such Business Banking Day).
30 Collateral Security. This Note is issued pursuant to the Credit
Agreement. This Note is secured by the Credit Agreement, the Security
Documents and the other Loan Documents, as amended of even date. Reference
is hereby made to the Credit Agreement, the Security Documents and the
other Loan Documents for a description of Events of Default and rights of
acceleration of the Maturity Date upon the occurrence of an Event of
Default. It is expressly agreed that all of the covenants, conditions and
agreements contained in the Credit Agreement, the Security Documents and
the other Loan Documents are made a part of this Notes. The Letter of
Credit Commitment expires July 31, 2001, at which time, the Makers shall
either (i) cause all underlying Letters of Credit to be returned and
cancelled or (ii) if not previously paid to Lender, pay to Lender Cash
Collateral (as defined in the Credit Agreement) in an amount equal to the
maximum amount of all outstanding Letters of Credit.
40 Events of Default. The remedies of Lender, as provided herein, or in
the Security Documents, the other Loan Documents or Credit Agreement shall
be cumulative and concurrent and may be pursued singularly, successively or
together, by Lender in accordance with the terms of the Credit Agreement,
and may be exercised as often as the occasion therefor shall arise.
Notwithstanding anything herein seemingly to the contrary, Lender shall not
take any action, including, without limitation, in connection with the
enforcement of any of their rights under the Letter of Credit Note, the
Credit Agreement or other Loan Documents, unless such action is consistent
with the action taken by Lender with respect to all of the Letter of Credit
Note and in accordance with the provisions of the Credit Agreement.
50 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
the Letter of Credit Note, to pay interest in an amount or at a rate
greater than the highest non-usurious rate permissible under applicable law
as amended from time to time. Should any interest or other charges paid by
the Makers, or any party liable for the payment of the Loan evidenced by
the Letter of Credit Note, result in the computation or earning of interest
in excess of the highest non-usurious rate permissible under applicable
law, then any and all such excess shall be and the same is hereby waived by
Lender, and all such excess shall be paid by Lender to the Makers or to any
party liable for the payment of the Loan evidenced by the Letter of Credit
Note, it being the intent of the parties hereto that under no circumstances
shall the Makers or any party liable for the payment of the Loan hereunder,
be required to pay interest in excess of the highest non-usurious rate
permissible under applicable law as amended from time to time. By
operation of Section 687.12, Florida Statutes (1996), the interest rate
charged under the Letter of Credit Note is authorized by Chapters 658, 665
and 687, Florida Statutes (1996) and applicable federal law.
60 Waivers/Miscellaneous Matters.
6.1 This Letter of Credit Note is to be construed according to the
applicable laws of the State of Florida and the United States of America.
Any action brought upon the enforcement of this Note is hereby authorized
to be instituted and prosecuted in Broward County, Florida, or at the
United States District Court for the Southern District of Florida, at the
election of Lender, subject to and in accordance with the terms of the
Credit Agreement.
6.2 This Letter of Credit Note may not be changed orally, but only
by an agreement in writing, signed by the party against whom enforcement of
any waiver, change, modification or discharge is sought.
6.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note hereby consents to any
extension or renewal of this Note or any part thereof, without notice, and
agrees that it will remain liable under this Note during any extension or
renewal thereof, until the indebtedness evidenced hereby and thereby is
paid in full.
6.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and Lender shall not have any recourse against any
property or assets of any such constituent partner or other person or
entity) under or in connection with this Letter of Credit Note, the Credit
Agreement, the Security Documents, the other Loan Documents, the Loans, or
any instruments securing or otherwise executed in connection therewith, or
any certificate delivered in connection therewith, or any amendments or
modifications to any of the foregoing made at any time or times, heretofore
or hereafter (such persons as described in this sentence being herein
collectively referred to as "Non-Recourse Persons"), provided, however,
Non-Recourse Persons shall not include any Maker or any Subsidiary of a
Maker that would otherwise be liable as a general partner in a Maker. The
recourse of Lender and its successors and assignees under or in connection
with this Letter of Credit Note, the Security Documents, the Credit
Agreement, the other Loan Documents, the Loans and such instruments and
certificates, and any such amendments or modifications shall be limited to
the assets of the Makers and the Lender and its successors and assignees
waive and do hereby waive any such personal liability against any such Non-
Recourse Persons. For the purposes of the Letter of Credit Note, the
Security Documents, the Credit Agreement and each other Loan Document and
any such instruments and certificates and any such amendments or
modifications, neither the negative capital account of a constituent
partner in any Maker, nor any obligation of any constituent partner in any
Maker to restore a negative capital account or to advance or contribute
capital to any Maker or any other constituent partner in any Maker shall be
deemed to be the property or the asset of any Maker or any such other
constituent partner (and neither Lender, nor any of its successors or
assignees shall have any right to collect, enforce or proceed against or
with respect to any such negative capital account or partner's obligation
to restore, advance or contribute). As used in this section, the term
"constituent partner" means any direct partner in any Maker, and any person
or entity that is a partner in any partnership that, directly or indirectly
through one or more other partnerships, is a partner in any Maker.
6.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
6.6 All sums received by Lender for application to this Note shall
be applied by Lender in the manner set forth in Section 2.8 of the Credit
Agreement.
6.7 The Makers are strictly liable for and hereby agree to pay or
reimburse Lender for, and hold it harmless from and against all of its
reasonable third party costs and expenses incurred in connection with the
collection or enforcement of, or the preservation of any rights under, this
Note, the Credit Agreement or other Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel for Lender,
including attorneys' fees out of court, in trial, on appeal, in bankruptcy
proceedings or otherwise. The Makers shall pay all such amounts in
accordance with the terms of the Credit Agreement, and until repaid, such
sums shall bear interest at the Default Rate.
6.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note shall be given in accordance
with the notice provisions of Section 11.4 of the Credit Agreement.
6.9 As used herein, the terms "Makers," "Agent" and "Lender" shall
be deemed to include their respective successors and assigns.
6.10 In the event any one or more of the provisions of this Note
shall for any reason be held to be invalid, illegal, or unenforceable, in
whole or in part or in any respect, or in the event one or more of the
provisions of this Note operates or would prospectively operate to
invalidate this Note, then in any of those events, only such provision or
provisions shall be deemed null and void and shall not effect any other
provision of this Note. The remaining provisions of this Note shall
remain operative and in full force and effect and in shall no way be
affected, prejudiced or disturbed thereby. In the event any provisions of
this Note are inconsistent with any provisions of the Credit Agreement, the
Security Documents or other Loan Documents, or any other agreements or
documents executed in connection with this Note, this Note shall control.
6.11 It is expressly understood and agreed that Lender, shall not be
construed for any purposes, to be the partner, joint venturer, principal or
associate of the Makers or any of them or any person or party claiming by,
through or under the Makers or any of them in the conduct of their
respective businesses.
6.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof
(a) severally waive presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this
Note, and all other notices in connection with the delivery, acceptance,
performance or enforcement of the payment of this Note, (b) expressly
consent to all extensions of time, renewals, postponements of time of
payment of this Note or other modifications from time to time, without
notice, consent or consideration to any of the foregoing, (c) expressly
agree to any substitution, exchange, addition or release of any of the
other Loan Documents or the addition or release of any party or person
primarily or secondarily liable hereon, (d) expressly agree that Lender
shall not be required first to institute any suit, or to exhaust their
remedies against the Makers or any other person or party to become liable
hereunder or against the other Loan Documents in order to enforce the
payment of this Note, and (e) expressly agree that, notwithstanding the
occurrence of any of the foregoing, they shall be and remain, jointly and
severally, directly and primarily liable for all sums due under this Note
and the other Loan Documents subject to the terms and conditions hereof and
thereof.
6.13 Lender shall not be deemed, by any act of omission or
commission, to have waived any of their rights or remedies hereunder unless
such waiver is in writing given in accordance with the terms of the Credit
Agreement, and then only to the extent specifically set forth in the
writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a
subsequent event.
6.14 This Note or any provision hereof or thereof may be changed or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change or termination is sought.
6.15 Failure to accelerate this Note after an Event of Default, or
the acceptance of a past due installment, shall not be construed as a
novation of the contract or a waiver of the right of Lender to thereafter
insist upon strict compliance with the terms of this Note without previous
notice of such intention being given to the Makers.
6.16 Notwithstanding anything to the contrary in this Note, the
Credit Agreement, the Security Documents or other Loan Documents, the
maximum liability of any Maker other than Arvida/JMB Partners, L.P. (herein
a "Maker Subsidiary" or "Maker Affiliate") for the Obligations created,
evidenced and secured thereby and hereby shall not exceed the maximum
amount, as such maximum amount shall be determined by a court of competent
jurisdiction of any such Maker Subsidiary's or Maker Affiliate's liability
therefor which may be incurred without rendering the Obligations, as they
relate to such Maker Subsidiary or Maker Affiliate, voidable as a
fraudulent conveyance or fraudulent transfer under the Bankruptcy Code or
under any other present or future federal or state laws or statutes
relating to bankruptcy, insolvency, assignment for the benefit of creditors
or other relief for debtors, including, without limitation, the Uniform
Fraudulent Transfer Act or the Uniform Fraudulent Conveyance Act, as in
effect in any jurisdiction wherein any such Maker Subsidiary's or Maker
Affiliate's Solvency (as defined in the Credit Agreement) is subject to
determination. For purposes of determining such liability of any Maker
Subsidiary or Maker Affiliate, due consideration shall be given to the
benefits received, directly or indirectly, by such Maker Subsidiary or
Maker Affiliate from the Loans (as defined in the Credit Agreement) made
pursuant to the Commitments (as defined in the Credit Agreement).
6.17 The section headings of this Note are for reference purposes
only and are to be given no effect in the construction or interpretation of
this Note.
THE MAKERS AND THE LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR THE CREDIT AGREEMENT OR ANY OTHER
LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY MAKERS OR LENDER.
<PAGE>
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
EXHIBIT 4.3
- - -----------
NOTE:DOCUMENTARY STAMPS AND INTANGIBLE TAXES WERE PAID IN CONNECTION WITH
THE VARIOUS NOTES PREVIOUSLY CONSOLIDATED AND EVIDENCE OF SAME APPEARS ON
THAT CERTAIN MORTGAGE AND SECURITY AGREEMENT DATED JULY 31, 1997, AND
RECORDED IN OFFICIAL RECORDS BOOK 26802, PAGE 888 OF THE PUBLIC RECORDS OF
BROWARD COUNTY, FLORIDA. THIS BIFURCATION OF NOTE AGREEMENT BIFURCATES
EXISTING INDEBTEDNESS WITHOUT ENLARGEMENT. NO ADDITIONAL INDEBTEDNESS IS
BEING INCURRED AND NO ADDITIONAL DOCUMENTARY STAMPS OR INTANGIBLE TAXES ARE
DUE.
BIFURCATION OF NOTE AGREEMENT
THIS BIFURCATION OF NOTE AGREEMENT ("Agreement") executed
effective as of September 1, 1998 by and between ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership, ARVIDA/JMB PARTNERS, a Florida general
partnership, ARVIDA GRAND BAY LIMITED PARTNERSHIP IV, a Delaware limited
partnership, THE AOK GROUP, a Florida general partnership, METRODRAMA JOINT
VENTURE, a Florida general partnership, SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation, GULF AND PACIFIC COMMUNICATIONS LIMITED
PARTNERSHIP, a Delaware limited partnership and WESTON HILLS COUNTRY CLUB
LIMITED PARTNERSHIP, a Delaware limited partnership (jointly and severally,
"Borrowers"), having an address of 900 North Michigan Avenue, Chicago,
Illinois 60611 and FIRST UNION NATIONAL BANK, as Agent, a national banking
association, having an address of 5581 West Oakland Park Boulevard, 2nd
Floor, Lauderhill, Florida 33313 ("Lender").
W I T N E S S E T H:
WHEREAS, Lender is owner and holder of a certain Consolidated and
Restated Term Loan Promissory Note executed by Borrowers and dated of even
date herewith in the original principal amount of $49,000,000
("Consolidated Note"), subject to the terms of that certain Credit
Agreement dated July 31, 1997 ("Credit Agreement") and secured by the
"Security Documents" (as defined in the Credit Agreement); and
WHEREAS, Borrowers and Lender wish to bifurcate the Consolidated Note
into two notes to remain subject to the terms of the Credit Agreement, as
modified of even date, and to remain secured by the Security Documents, as
modified of even date.
NOW, THEREFORE, in consideration of the mutual benefit to be
obtained, the parties hereto, intending to be legally bound, do hereby
agree as follows:
1. The above recitals are true and correct and are incorporated
herein by this reference.
2. Borrowers acknowledge that the unpaid principal balance of the
Consolidated Note as of the date hereof is $49,000,000.
3. As of the date hereof, Borrowers have no defenses, rights of
set-off, claims or counterclaims against Lender under the Consolidated
Note, the Credit Agreement or the Security Documents and Borrowers hereby
reaffirm their obligations thereunder as modified hereby.
4. This Agreement is not intended by Borrowers to be a novation,
the existing indebtedness not being forgiven hereby, but merely bifurcated
into two notes.
<PAGE>
5. The Consolidated Note is hereby bifurcated to evidence two
debts, represented by: (a) a $30,200,000 Term Loan Restated Renewal
Promissory Note, attached hereto as Exhibit A, and (b) a $18,800,000 Term
Loan Restated Renewal Promissory Note, a copy of which is attached hereto
as Exhibit B. Simultaneously herewith, the $18,800,000 Term Loan Restated
Renewal Promissory Note, a copy of which is attached hereto as Exhibit B
shall be assigned by Lender to Bank United, a federal savings bank, due to
which intended assignment the bifurcated notes attached hereto as Exhibit A
and Exhibit B contain references to multiple lenders so as to be consistent
with the Credit Agreement, as modified of even date.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Bifurcation of
Note Agreement the day and year first above written.
BORROWERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA /JMB PARTNERS, a Florida general
partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, a general
partner
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA GRAND BAY LIMITED PARTNERSHIP
IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation, its sole
general partner
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
THE AOK GROUP, a Florida general
partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership, a
general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
By: ARVIDA/JMB PARTNERS, a Florida
general partnership, a general partner
By: ARVIDA/JMB MANAGERS, INC.,
Delaware corporation, a
general partner
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole
general partner
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS, a Florida
general partnership, a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, a general partner
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC., an
Illinois corporation, its sole general partners
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP, a Delaware limited partnership
By: WHCC, INC., an Illinois
corporation,
its sole general partner
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
LENDER:
FIRST UNION NATIONAL BANK,
a national banking association
By:
Print Name:
Title:
[CORPORATE SEAL]
<PAGE>
EXHIBIT "A" TO BIFURCATION OF NOTE AGREEMENT
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE.
TERM LOAN
PROMISSORY NOTE
$30,200,000 Effective Date: September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of First Union National Bank, a national banking
association, its successors or assigns (the "Lender"), the principal sum of
THIRTY MILLION TWO HUNDRED THOUSAND DOLLARS ($30,200,000), or the Lender's
Actual Share of all sums as may be advanced under the Term Loan Commitment,
pursuant to and in accordance with the Credit Agreement, together with
interest on the principal balance of this Note outstanding from time to
time, as same shall accrue thereon in accordance with the terms hereof, but
not to exceed the maximum non-usurious rate permitted by law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 "Actual Share" means the percentage interest of the Lender in
the Advance made pursuant to the Term Loan Commitment.
1.2 "Adjusted LIBO Rate" means, relative to any LIBO Rate Tranche
to be made, continued or maintained as, or converted into, a LIBO Rate
Tranche for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of one percent) equal to the quotient of
(i) the LIBO Rate applicable to the relevant Interest Period, divided by
(ii) the result of one minus the Reserve Percentage applicable to such
Interest Period.
1.3 "Agent" means First Union National Bank, a national banking
association.
1.4 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which the Agent is closed pursuant to authorization or
requirement of law.
1.5 "Committed Share" means the percentage interest of the Lender
in the Term Loan Commitment.
1.6 "Credit Agreement" means the Credit Agreement dated July 31,
1997 between Lender and the Borrower (among others), as amended, of even
date herewith, as the same may be amended, supplemented, restated, replaced
or otherwise modified from time to time.
1.7 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
1.8 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.9 "Interest Period" means, in the case of a LIBO Rate Tranche,
the period commencing on (and including) the Business Banking Day selected
by the Makers as the date on which such LIBO Rate Tranche is made or
continued as, or converted into a LIBO Rate Tranche pursuant to the terms
of this Note, and ending on (but excluding) the day which numerically
corresponds to such date one, two, three or six months thereafter (or if
such month has no numerically corresponding day, on the last Business
Banking Day of such month), in each case as the Makers may select, provided
that (a) if such Interest Period would otherwise end on a day which is not
a Business Banking Day, such Interest Period shall end on the next
following Business Banking Day (unless, in the case of a LIBO Rate Tranche,
such next following Business Banking Day is the first Business Banking Day
of the calendar month, in which case such Interest Period shall end on the
Business Banking Day next preceding such numerically corresponding day);
and (b) no Interest Period may end on a date later than the Maturity Date.
1.10 "LIBO Rate" means, relative to any Interest Period, a rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
one percent) equal to the rate for US dollar deposits with maturities
comparable to such Interest Period for delivery on the first day of such
Interest Period which appears on the Reuters Screen LIBO Page, as of
11:00 a.m. (London time) on the day that is two (2) London Banking Days
preceding the commencement date of the Interest Period. If at least two
(2) such offered rates appear on the Reuters Screen LIBO Page, the rate
will be the arithmetic mean of such offered rates. The Agent may, in its
discretion, use any other publicly available index or reference rate
showing rates offered for United States dollar deposits in the London
Interbank market as of the applicable date. In addition, the Agent may, in
its discretion, use rate quotations for daily or annual periods in lieu of
quotations for substantially equivalent monthly periods, in the absence of
such quotations for substantially equivalent monthly periods. Each
determination of the LIBO Rate applicable to a particular Interest Period
shall be made by the Agent and shall be conclusive and binding upon the
Makers and Lenders absent manifest error.
1.11 "LIBO Rate Tranche" means a Tranche bearing interest at all
times during the Interest Period applicable to such Tranche, at a fixed
rate of interest equal to the Note LIBO Rate applicable to such Interest
Period.
1.12 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
1.13 "Loan Year" means each of the twelve (12) month periods
commencing on July 31, 1997 and on the first, second and third
anniversaries hereof.
1.14 "London Banking Day" means each day other than a Saturday, a
Sunday or any holiday on which commercial banks in London, England are
closed for business.
1.15 "Maturity Date" means the earlier of: (i) July 31, 2001 and
(ii) any earlier date upon which the principal balance outstanding
hereunder, together with all interest accrued thereon, shall become
immediately due and payable following an Event of Default, in accordance
with provisions of the Credit Agreement.
1.16 "Note" means this Term Loan Promissory Note, in the amount of
the Lender's Committed Share of the Term Loan Commitment, as same maybe
amended, supplemented, restated, replaced or otherwise modified from time
to time.
1.17 "Note LIBO Rate" means the Adjusted LIBO Rate applicable to a
specific LIBO Rate Tranche selected by the Makers for a relevant Interest
Period, plus 175 basis points.
1.18 "Note Prime Rate" means the Prime Rate applicable to the Prime
Rate Tranche. The Note Prime Rate shall be increased or decreased
effective on any date on which the Prime Rate shall be increased or
decreased.
1.19 "Other Lender" means, Bank United, a federal savings bank, also
being a "Lender".
1.20 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank, as its Prime Rate. The Prime
Rate is a reference rate for the information and use of the Agent in
establishing the actual rates to be charged to borrowers and is not
necessarily the lowest rate charged by the Agent. Should First Union
National Bank not publish a Prime Rate at any time during the term of this
Note, the Agent, in its reasonable discretion, may choose a substitute
Prime Rate. The rate of interest shall change automatically and immediately
as of the date of any change in the Prime Rate without notice to Borrower
or any endorser, surety or guarantor, if any.
1.21 "Prime Rate Tranche" means a Tranche bearing interest at the
Note Prime Rate.
1.22 "Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other rule, regulation or official interpretation of said Board
of Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
1.23 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.24 "Reserve Percentage" means the stated maximum rate (expressed
as a decimal) at which reserves are required to be maintained by the Agent
during an Interest Period, including, without limitation (i) any basis,
supplemental, marginal, or emergency reserve under any regulations of any
governmental authority to which the Agent is subject, (ii) any reserve
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), including, without limitation, Regulation D, for determining
the maximum reserve requirement in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits
by reference to which the LIBO Rate is determined). Without limiting the
effect of the foregoing, the Reserve Percentage shall reflect any other
reserves required to be maintained by the Agent under any regulation of any
governmental authority to which the Agent is subject against (a) any
category of liabilities that include deposits with reference to which the
LIBO Rate is to be determined or (b) any category of extension of credit or
other assets that includes loans bearing interest at a rate based on the
LIBO Rate. Each determination of the Reserve Percentage shall be made by
the Agent and shall be conclusive and binding upon the Makers and Lenders
absent manifest error.
1.25 "Security Documents" has the meaning ascribed to such term in
the Credit Agreement.
1.26 "Term Loan Commitment" has the meaning ascribed to such term in
the Credit Agreement.
1.27 "Term Loan Notes" means this Note and the other Term Loan Note
executed by the Makers in favor of the Other Lenders, each dated of even
date herewith, in the aggregate amount of the Term Loan Commitment, as same
may be amended, supplemented, renewed, restated, replaced or otherwise
modified from time to time.
1.28 "Tranche" means any portion of the outstanding principal
balance under the Term Loan Notes bearing interest at the applicable Note
LIBO Rate for a specific Interest Period, as selected by the Makers in
accordance with Section 2.1, below, and any portion of the outstanding
principal balance under the Term Loan Notes which may from time to time
bear interest at the Note Prime Rate.
20 Selection and Calculation of Interest Rate.
2.1 Provided that no Event of Default or circumstance which with
the passage of time or giving of notice would become an Event of Default
then exists under the Loan Documents, and provided there shall at no time
be permitted to exist more than four LIBO Rate Tranches with respect to the
total principal balance outstanding under the Term Loan Notes, the Makers
shall have the right to elect to have the Note LIBO Rate then in effect for
an Interest Period apply to a LIBO Rate Tranche, in accordance with, and
subject to the provisions of this Section 2.1. To make an election to have
such Note LIBO Rate apply to any LIBO Rate Tranche, from time to time, the
Makers shall give to the Agent irrevocable notice (a "Rate Election
Notice") not later than 11:00 a.m. (Ft. Lauderdale, Florida time) at least
three (3) Business Banking Days prior to the commencement date of each such
Interest Period, which Rate Election Notice shall be addressed as follows,
and shall be given in writing (by telecopy, hand delivery, or overnight
delivery service), in accordance with the provisions of Section 11.4 of the
Credit Agreement:
Dana Hunter, Vice President
First Union National Bank
5581 West Oakland Park Blvd., 2nd Floor
Lauderhill, Florida 33313
(954) 467-5543
Fax: (954) 467-5557
Each such Rate Election Notice shall be in the form attached hereto as
Schedule 1 and shall specify: (i) the commencement day of the Interest
Period which shall be a Business Banking Day (and, with respect to any then
existing LIBO Rate Tranche, shall not be a date prior to the termination
date of such then existing LIBO Rate Tranche), (ii) the principal amount of
the LIBO Rate Tranche which shall be subject to the application of the Note
LIBO Rate, which shall be in a minimum amount of $2,000,000.00, and in
multiples of $100,000.00 and (iii) the applicable Interest Period which
shall apply to such LIBO Rate Tranche, provided, however, that no Interest
Period may extend beyond the Maturity Date.
2.2 If the Agent determines, absent manifest error, that the
maintenance of any Note LIBO Rate would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, of if the
Agent determines that the interest rate applicable to the Note LIBO Rate
does not accurately reflect the cost of maintaining any LIBO Rate Tranche
subject to such rate, then, at the election of the Agent, the Makers shall
not be entitled thereafter to select a Note LIBO Rate to be applicable to
any portions of the total outstanding principal balance under the Term Loan
Notes, and the interest rate applicable to all of the outstanding principal
balance under the Term Loan Notes then subject to the Note LIBO Rate for
any applicable Interest Period, shall, upon the expiration of all such
applicable Interest Periods, be converted to the Prime Rate.
2.3 In the event that the Makers shall fail to provide a timely
Rate Election Notice for the election of the Note LIBO Rate to apply to any
Advance or to any LIBO Rate Tranche, as of the termination date of the
applicable Interest Period for such Tranche, then as the date of such
Advance, or as of such termination date of such LIBO Rate Tranche, as the
case may be, the Prime Rate shall apply to such Advance or LIBO Rate
Tranche until the next eligible effective date for which the Makers shall
have provided a timely Rate Election Notice, and such Advance or such
principal amount previously comprising a LIBO Rate Tranche, shall
thereafter be deemed to be included in the Prime Rate Tranche.
2.4 Interest shall be calculated on the daily total outstanding
balance of all Advances of Loan Proceeds under the Term Loan Commitment, as
such Advances are evidenced by the Term Loan Notes, as follows:
(i) interest shall accrue on each LIBO Rate Tranche, commencing with the
effective date for each such LIBO Rate Tranche, at the applicable Note LIBO
Rate for the applicable Interest Period and (ii) interest shall accrue on
the Prime Rate Tranche, which shall comprise all of the outstanding
principal balance under the Term Loan Notes not otherwise subject to a LIBO
Rate Tranche, at the Note Prime Rate, changing when and as the Prime Rate
changes. Interest shall be computed through and including the date of any
payment and shall be calculated for actual days elapsed on the basis of a
360 day year (i.e. interest for each day on which any principal is
outstanding shall be calculated at the applicable interest rate described
above, divided by 360).
30 Payment of Interest and Principal.
3.1 Interest, calculated as above provided, shall be due and
payable by the Makers to the Agent, for the account of the Lender and Other
Lender, in accordance with their Actual Shares of the total outstanding
principal balance of the Term Loan Notes, subject to the provisions of
Section 3.7 hereof, on the first Business Banking Day of the first calendar
month immediately following the Advance of Loan Proceeds under the Term
Loan Commitment and continuing on the first day of each month thereafter
until the Maturity Date.
3.2 The Makers shall make payments in reduction of the total
principal balance outstanding under the Term Loan Notes, as follows:
(a) The Makers shall pay to the Agent, for the account of the
Lender and the Other Lender, on or before the last Business Banking Day of
each Loan Year, the sum of $12,500,000.00 (the "Minimum Required
Curtailment").
(b) The Makers shall pay to the Agent, for the account of the
Lender and the Other Lender, on each ARC Payment Date, an amount (the
"Additional Required Curtailment") calculated as follows:
(A) On the 1999 February ARC Payment Date and each
subsequent February ARC Payment Date, an amount equal to the sum of:
(x) the ARC Deficit, if any, to the extent the ARC Deficit does not exceed
the Adjusted CFAPF for the fiscal year ended on the immediately preceding
December 31, plus (y) twenty-five percent (25%) of the remainder of the
Adjusted CFAPF for the fiscal year ended on the immediately preceding
December 31, after any payment of the ARC Deficit pursuant to subparagraph
(x) hereinabove.
(B) On each August ARC Payment Date, an amount equal to
the sum of: (x) the ARC Deficit, if any, plus (y) twenty-five percent (25%)
of the remainder of any Distribution then made, after any payment of the
ARC Deficit pursuant to subparagraph (x) hereinabove.
(C) Notwithstanding anything herein to the contrary,
those portions of the Additional Required Curtailment calculated pursuant
to subpart (y) of subsection (A); and subpart (y) of subsection (B) shall
in the aggregate, in any one (1) Loan Year, not exceed $6,250,000.00.
The term "Adjusted CFAPF" means Cash Flow After Project
Financing less all Term Loan Principal Payments and all interest paid on
the Term Loan during the preceding fiscal year.
The term "Cash Flow After Project Financing" has the meaning
ascribed to such term in the Credit Agreement.
The term "Distribution" has the meaning ascribed to such term
in the Credit Agreement.
The term "ARC Deficit" means: (i) as of any ARC Payment Date in
the second Loan Year, the difference of $18,750,000.00 less the sum of all
Term Loan Payments theretofore paid, (ii) as of any ARC Payment Date in the
third Loan Year, the difference of $37,500,000.00 less the sum of all Term
Loan Payments theretofore paid and (iii) as of any ARC Payment Date in the
fourth Loan Year, the difference of $56,250,000.00 less the sum of all Term
Loan Payments theretofore paid (for the purpose of this Note, the first
"Loan Year" shall be deemed to have commenced July 31, 1997).
The term "ARC Payment Date" means: (i) any Business Banking Day
in any August of any Loan Year, on which a Distribution is made, if any (an
"August ARC Payment Date"), and (ii) the first Business Day of each
February of each Loan Year, or such later date in February on which the
Makers intend to make a Distribution, provided the Makers shall have
notified the Lender and the Other Lenders of such later date, in writing,
not later than January 15 of such year (a "February ARC Payment Date").
The term "Term Loan Principal Payments" means, as of any ARC
Payment Date, all payments which have theretofore been made toward the
reduction of the outstanding principal balance under the Term Loan,
including, without limitation, all payments of Minimum Required
Curtailments made in the same Loan Year and all prior Loan Years, all
payments of Additional Required Curtailments made in the same Loan Year and
all prior Loan Years and all prior voluntary prepayments made in the same
Loan Year and all prior Loan Years.
(c) The total outstanding principal under the Term Loan Notes
and all accrued but unpaid interest shall be fully due and payable on the
Maturity Date.
3.3 All payments of principal and interest under the Term Loan
Notes shall be made in lawful money of the United States which shall be
legal tender in payment of all debts, public and private, at the time of
payment.
3.4 The Term Loan Notes may be prepaid in whole or in part at any
time and from time to time, without penalty or premium, provided: (i) any
such prepayment shall be preceded by at least three (3) Business Banking
Days' prior written notice to the Agent and (ii) any such prepayment shall
be accompanied by accrued interest to the date of prepayment and any other
obligations and payments then due under the terms of the Term Loan Notes.
If the Makers shall make a payment or prepayment of all or any portion of
the principal amount outstanding then subject to a LIBO Rate Tranche, prior
to the applicable termination date thereof (including, without limitation,
upon the acceleration of the Maturity Date following an Event of Default),
or the Makers shall attempt to rescind a Rate Election Notice for a
specified LIBO Rate Tranche, after the Makers have submitted such Rate
Election Notice to the Agent, then, within three (3) Business Banking Days
following written notice from the Agent, the Makers shall pay to the Agent
the amount of any loss or cost incurred by the Agent, the Lender or the
Other Lender resulting therefrom, including, without limitation, any loss
or cost resulting from the liquidation or re-employment of deposits
required to fund or maintain the subject LIBO Rate Tranche, not to exceed
the amount of interest which would have been earned on the amount prepaid
for the balance of the subject Interest Period, at a rate equal to the
difference, not less than zero, of the LIBO Rate as of the first day of the
Interest Period less the LIBO Rate as of the date of such prepayment, for a
corresponding Interest Period commencing on the date of such prepayment.
The obligations of the Makers under this section shall survive payment of
the Term Loan Notes.
3.5 The Term Loan is a non-revolving loan, so that the Makers shall
not have the right to request re-advances of prepaid monies.
3.6 All payments of principal and interest under the Term Loan
Notes shall be made in immediately available funds by 11:00 a.m.
(Ft. Lauderdale, Florida time) on a Business Banking Day, to the Agent for
the account of the Lenders, at the office of the Agent at First Union
National Bank, 301 South College Street, TW-6, Charlotte, North Carolina
28288-0166, Attention: Jane Hurley, or by wire to ABA #053000219, Account
No.465906 0010352, Reference "Arvida," Attention: Jane Hurley, or at such
other place as the Agent may instruct. Any payments of principal or
interest made after 11:00 a.m. (Ft. Lauderdale, Florida time) shall be
deemed to be payments made on the next following Business Banking Day, for
all purposes, hereof, including, without limitation, the accrual of
interest. Should any payment under the Term Loan Notes become due and
payable on a day other than a Business Banking Day, the maturity thereof
shall be extended to the next succeeding Business Banking Day, and, in the
case of any payment of principal, interest shall be payable thereon as
calculated pursuant hereto, for each Business Banking Day such principal is
outstanding (provided, however, any payment of principal received on any
Business Banking Day by 11:00 a.m. (Ft. Lauderdale, Florida time) shall not
be deemed to be outstanding on such Business Banking Day).
3.7 Notwithstanding anything to the contrary set forth herein, the
Agent shall provide the Makers with written notice prior to the first
Business Banking Day of each month of the interest installment with respect
to the Term Loan Notes which is payable on such first Business Banking Day
of such month. With respect to each such monthly installment of interest,
the Agent and the Lenders hereby grant to the Makers a grace period for the
payment of same, which shall extend to the later of: (a) the fifteenth
(15th) day of the month or (b) if the Makers shall not have received
written notice of the monthly interest installment from the Agent, prior to
the first Business Banking Day of any month and the Makers shall have
provided written notice to the Agent, no later than such first Business
Banking Day of the month, of such Agent's failure to provide the Makers
with written notice of such interest installment, then, the date fifteen
(15) days from receipt by the Makers of such written notice of the monthly
interest installment. If the Agent shall not receive written notice from
the Makers on or before the first Business Banking Day of a month, of the
Agent's failure to provide written notice of an interest installment, then,
for all purposes of this Note, notwithstanding that the Makers may later
request such written notice of such interest installment, such grace period
shall extend to no later than the fifteenth (15th) day of such month.
3.8 Any payment required to be paid by the Term Loan Notes, the
Loan Documents or the Credit Agreement, with the exception of interest and
principal, shall be due and payable no later than fifteen (15) days from
receipt by the Makers from the Agent of written notice of the required
payment.
3.9 Provided the Agent has not exercised its right to accelerate
the Term Loan Notes as provided in the Term Loan Notes, the Credit
Agreement or the other Loan Documents: (a) in the event any payment of
principal required under the Term Loan Notes, either pursuant to the terms
hereof or the terms of the Credit Agreement, is not received by the Agent,
for the account of the Lender and Other Lender, by the fifteenth (15th) day
following the day on which such payment is due, the Makers shall pay to the
Agent, for the account of the Lender and Other Lender, a late charge of
five percent (5%) of the payment not so received, the parties agreeing that
said charge is a fair and reasonable charge for the late payment and shall
not be deemed a penalty or as compounding interest, and (b) in the event
any scheduled payment of interest required under the Term Loan Notes is not
received by the Agent, for the account of the Lender and Other Lenders, by
the later of (i) fifteen (15) days from receipt by the Makers of written
notice of the monthly interest installment and (ii) the fifteenth (15th)
day of such month, the Makers shall pay to the Agent, for the account of
the Lender and Other Lenders, a late charge of five percent (5%) of the
payment not so received, the parties agreeing that said charge is a fair
and reasonable charge for the late payment and shall not be deemed a
penalty or as compounding interest. Further, if any payment required to be
paid by the Term Loan Notes, the Credit Agreement or the other Loan
Documents, with the exception of interest and principal, is not paid within
fifteen (15) days from receipt by the Makers from the Agent of written
notice of the required payment, the Makers shall pay to the Agent, for the
account of the Lender and Other Lenders, a late charge of five percent (5%)
of the payment not so received, the parties agreeing that said charge is a
fair and reasonable charge for the late payment and shall not be deemed a
penalty or as compounding interest.
40 Collateral Security. This Note and the other Term Loan Note are
issued pursuant to the Credit Agreement. This Note and the other Term Loan
Note are secured by the Credit Agreement, the Security Documents and the
other Loan Documents. Reference is hereby made to the Credit Agreement,
the Security Documents and the other Loan Documents for a description of
Events of Default and rights of acceleration of the Maturity Date upon the
occurrence of an Event of Default. It is expressly agreed that all of the
covenants, conditions and agreements contained in the Credit Agreement, the
Security Documents and the other Loan Documents are made a part of this
Note and the other Term Loan Note.
50 Events of Default.
5.1 Upon the occurrence of an Event of Default, the Agent may, and
upon the direction of the Required Lenders, shall declare the entire amount
of this Note and the other Term Loan Note, including the principal balance
then outstanding thereunder, together with all interest accrued thereon, to
be immediately due and payable, without notice, (the Makers hereby
expressly waive notice of such Event of Default), time being of the essence
of this Term Loan Note and the other Term Loan Note. Any Event of Default
under this Note shall be an Event of Default under all other Loan Documents
and any Event of Default under any other Loan Document shall be an Event of
Default hereunder.
5.2 In the event the Agent accelerates the Term Loan Notes as
herein provided or the full amount of outstanding principal and interest
under the Term Loan Notes is not fully repaid to the Agent, for the account
of the Lenders on or before the Maturity Date, then the entire unpaid
principal balance under the Term Loan Notes, together with all interest
accrued thereon, shall bear interest from the date of an Event of Default
or from the Maturity Date, respectively, at the Default Rate. Any late
charge paid by the Makers shall be applied to the interest charged at the
Default Rate after acceleration of the Term Loan Notes.
5.3 The remedies of the Agent, the Lender and Other Lender, as
provided herein, or in the Security Documents, the other Loan Documents or
Credit Agreement shall be cumulative and concurrent and may be pursued
singularly, successively or together, by the Agent in accordance with the
terms of the Credit Agreement, and may be exercised as often as the
occasion therefor shall arise. Notwithstanding anything herein seemingly
to the contrary, neither the Agent, the Lender or the Other Lender shall
take any action, including, without limitation, in connection with the
enforcement of any of their rights under the Term Loan Notes, the Credit
Agreement or other Loan Documents, unless such action is consistent with
the action taken by the Agent, or the Other Lender, as the case may be,
with respect to all of the Term Loan Notes and in accordance with the
provisions of the Credit Agreement.
60 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
the Term Loan Notes, to pay interest in an amount or at a rate greater than
the highest non-usurious rate permissible under applicable law as amended
from time to time. Should any interest or other charges paid by the
Makers, or any party liable for the payment of the Loan evidenced by the
Term Loan Notes, result in the computation or earning of interest in excess
of the highest non-usurious rate permissible under applicable law, then any
and all such excess shall be and the same is hereby waived by the Agent,
the Lender and the Other Lender, and all such excess shall be paid by the
Agent, the Lender or the Other Lender, as the case shall be, to the Makers
or to any party liable for the payment of the Loan evidenced by the Term
Loan Notes, it being the intent of the parties hereto that under no
circumstances shall the Makers or any party liable for the payment of the
Loan hereunder, be required to pay interest in excess of the highest non-
usurious rate permissible under applicable law as amended from time to
time. By operation of Section 687.12, Florida Statutes (1996), the
interest rate charged under the Note and the other Term Loan Notes is
authorized by Chapters 658, 665 and 687, Florida Statutes (1996) and
applicable federal law.
70 Waivers/Miscellaneous Matters.
7.1 The Term Loan Notes are to be construed according to the appli-
cable laws of the State of Florida and the United States of America. Any
action brought upon the enforcement of this Note and the other Term Loan
Notes is hereby authorized to be instituted and prosecuted in Broward
County, Florida, or at the United States District Court for the Southern
District of Florida, at the election of the Agent, subject to and in
accordance with the terms of the Credit Agreement.
7.2 The Term Loan Notes may not be changed orally, but only by an
agreement in writing, signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
7.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note and the other Term Loan Note
hereby consents to any extension or renewal of this Note and the other Term
Loan Note or any part thereof, without notice, and agrees that it will
remain liable under this Note and the other Term Loan Note during any
extension or renewal thereof, until the indebtedness evidenced hereby and
thereby is paid in full.
7.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and neither the Agent, the Lender or the Other
Lender shall have any recourse against any property or assets of any such
constituent partner or other person or entity) under or in connection with
the Term Loan Notes, the Credit Agreement, the Security Documents, the
other Loan Documents, the Loans, or any instruments securing or otherwise
executed in connection therewith, or any certificate delivered in
connection therewith, or any amendments or modifications to any of the
foregoing made at any time or times, heretofore or hereafter (such persons
as described in this sentence being herein collectively referred to as
"Non-Recourse Persons"), provided, however, Non-Recourse Persons shall not
include any Maker or any Subsidiary of a Maker that would otherwise be
liable as a general partner in a Maker. The recourse of the Agent, the
Lender, the Other Lender and their successors and assignees under or in
connection with the Term Loan Notes, the Security Documents, the Credit
Agreement, the other Loan Documents, the Loans and such instruments and
certificates, and any such amendments or modifications, shall be limited to
the assets of the Makers, and the Agent, the Lender, the Other Lender and
each of their successors and assignees waive and do hereby waive any such
personal liability against any such Non-Recourse Persons. For the purposes
of the Term Loan Notes, the Security Documents, the Credit Agreement and
each other Loan Document and any such instruments and certificates and any
such amendments or modifications, neither the negative capital account of a
constituent partner in any Maker, nor any obligation of any constituent
partner in any Maker to restore a negative capital account or to advance or
contribute capital to any Maker or any other constituent partner in any
Maker shall be deemed to be the property or the asset of any Maker or any
such other constituent partner (and neither the Agent, the Lender or the
Other Lender nor any of their successors or assignees shall have any right
to collect, enforce or proceed against or with respect to any such negative
capital account or partner's obligation to restore, advance or contribute).
As used in this section, the term "constituent partner" means any direct
partner in any Maker, and any person or entity that is a partner in any
partnership that, directly or indirectly through one or more other
partnerships, is a partner in any Maker.
7.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
7.6 All sums received by the Agent for application to this Note and
the other Term Loan Note shall be applied by the Agent in the manner set
forth in Section 2.8 of the Credit Agreement.
7.7 The Makers are strictly liable for and hereby agree to pay or
reimburse the Agent (but not the Other Lender) for, and hold it harmless
from and against all of its reasonable third party costs and expenses
incurred in connection with the collection or enforcement of, or the
preservation of any rights under, this Note, the other Term Loan Note, the
Credit Agreement or other Loan Documents, including, without limitation,
the reasonable fees and disbursements of counsel for the Agent, including
attorneys' fees out of court, in trial, on appeal, in bankruptcy
proceedings or otherwise. The Makers shall pay all such amounts in
accordance with the terms of the Credit Agreement, and until repaid, such
sums shall bear interest at the Default Rate.
7.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note and the other Term Loan Note
shall be given in accordance with the notice provisions of Section 11.4 of
the Credit Agreement.
7.9 As used herein, the terms "Makers," "Agent," "Lender" and
"Other Lender" shall be deemed to include their respective successors and
assigns.
7.10 In the event any one or more of the provisions of this Note or
the other Term Loan Note shall for any reasons be held to be invalid,
illegal, or unenforceable, in whole or in part or in any respect, or in the
event one or more of the provisions of this Note or the other Term Loan
Note operates or would prospectively operate to invalidate this Note or the
other Term Loan Note, then in any of those events, only such provision or
provisions shall be deemed null and void and shall not effect any other
provision of this Note or the other Term Loan Note. The remaining
provisions of this Note and the other Term Loan Note shall remain operative
and in full force and effect and in shall no way be affected, prejudiced or
disturbed thereby. In the event any provisions of this Note or the other
Term Loan Notes are inconsistent with any provisions of the Credit
Agreement, the Security Documents or other Loan Documents, or any other
agreements or documents executed in connection with the Term Loan Notes,
the Term Loan Note shall control.
7.11 It is expressly understood and agreed that neither the Agent,
the Lender or any Other Lender shall ever be construed for any purposes, to
be the partner, joint venturer, principal or associate of the Makers or any
of them or any person or party claiming by, through or under the Makers or
any of them in the conduct of their respective businesses.
7.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof (a)
severally waive presentment for payment, demand, notice of demand, notice
of nonpayment or dishonor, protest and notice of protest of this Note and
the other Term Loan Note, and all other notices in connection with the
delivery, acceptance, performance or enforcement of the payment of this
Note and the other Term Loan Note, (b) expressly consent to all extensions
of time, renewals, postponements of time of payment of this Note and the
other Term Loan Note or other modifications from time to time prior to or
after the Maturity Date, without notice, consent or consideration to any of
the foregoing, (c) expressly agree to any substitution, exchange, addition
or release of any of the other Loan Documents or the addition or release of
any party or person primarily or secondarily liable hereon, (d) expressly
agree that the Agent and/or the Lender or Other Lender shall not be
required first to institute any suit, or to exhaust their remedies against
the Makers or any other person or party to become liable hereunder or
against the other Loan Documents in order to enforce the payment of this
Note and the other Term Loan Note, and (e) expressly agree that,
notwithstanding the occurrence of any of the foregoing, they shall be and
remain, jointly and severally, directly liable for all sums due under this
Note, the other Term Loan Note and the other Loan Documents subject to the
terms and conditions hereof and thereof.
7.13 Neither the Agent or the Lender or Other Lender shall be
deemed, by any act of omission or commission, to have waived any of their
rights or remedies hereunder unless such waiver is in writing given in
accordance with the terms of the Credit Agreement, and then only to the
extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy as to a subsequent event.
7.14 Neither this Note or the other Term Loan Note nor any provision
hereof or thereof may be changed or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change or termination is sought.
7.15 Failure to accelerate this Note or the other Term Loan Note
after an Event of Default, or the acceptance of a past due installment,
shall not be construed as a novation of the contract or a waiver of the
right of the Agent or the Lender or Other Lender to thereafter insist upon
strict compliance with the terms of this Note and the other Term Loan Note
without previous notice of such intention being given to the Makers.
7.16 Notwithstanding anything to the contrary in this Note, the
other Term Loan Notes, the Credit Agreement, the Security Documents or
other Loan Documents, the maximum liability of any Maker other than
Arvida/JMB Partners, L.P. (herein a "Maker Subsidiary" or "Maker
Affiliate") for the Obligations created, evidenced and secured thereby and
hereby shall not exceed the maximum amount, as such maximum amount shall be
determined by a court of competent jurisdiction of any such Maker
Subsidiary's or Maker Affiliate's liability therefor which may be incurred
without rendering the Obligations, as they relate to such Maker Subsidiary
or Maker Affiliate, voidable as a fraudulent conveyance or fraudulent
transfer under the Bankruptcy Code or under any other present or future
federal or state laws or statutes relating to bankruptcy, insolvency,
assignment for the benefit of creditors or other relief for debtors,
including, without limitation, the Uniform Fraudulent Transfer Act or the
Uniform Fraudulent Conveyance Act, as in effect in any jurisdiction wherein
any such Maker Subsidiary's or Maker Affiliate's Solvency (as defined in
the Credit Agreement) is subject to determination. For purposes of
determining such liability of any Maker Subsidiary or Maker Affiliate, due
consideration shall be given to the benefits received, directly or
indirectly, by such Maker Subsidiary or Maker Affiliate from the Loans (as
defined in the Credit Agreement) made pursuant to the Commitments (as
defined in the Credit Agreement).
7.17 The section headings of this Note and the other Term Loan Note
are for reference purposes only and are to be given no effect in the
construction or interpretation of this Note or the other Term Loan Note.
THE MAKERS AND THE LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER TERM LOAN NOTE OR THE
CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY MAKERS, THE AGENT,
THE LENDER OR ANY OTHER LENDER.
SIGNATURE PAGES FOLLOW
<PAGE>
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
SCHEDULE 1
<PAGE>
EXHIBIT "B" TO BIFURCATION OF NOTE AGREEMENT
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE.
TERM LOAN
PROMISSORY NOTE
$18,800,000 Effective Date: September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of First Union National Bank, a national banking
association, its successors or assigns (the "Lender"), the principal sum of
EIGHTEEN MILLION EIGHT HUNDRED THOUSAND DOLLARS ($18,800,000), or the
Lender's Actual Share of all sums as may be advanced under the Term Loan
Commitment, pursuant to and in accordance with the Credit Agreement,
together with interest on the principal balance of this Note outstanding
from time to time, as same shall accrue thereon in accordance with the
terms hereof, but not to exceed the maximum non-usurious rate permitted by
law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 "Actual Share" means the percentage interest of the Lender in
the Advance made pursuant to the Term Loan Commitment.
1.2 "Adjusted LIBO Rate" means, relative to any LIBO Rate Tranche
to be made, continued or maintained as, or converted into, a LIBO Rate
Tranche for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of one percent) equal to the quotient of
(i) the LIBO Rate applicable to the relevant Interest Period, divided by
(ii) the result of one minus the Reserve Percentage applicable to such
Interest Period.
1.3 "Agent" means First Union National Bank, a national banking
association.
1.4 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which the Agent is closed pursuant to authorization or
requirement of law.
1.5 "Committed Share" means the percentage interest of the Lender
in the Term Loan Commitment.
1.6 "Credit Agreement" means the Credit Agreement dated July 31,
1997 between Lender and the Borrower (among others), as amended, of even
date herewith, as the same may be amended, supplemented, restated, replaced
or otherwise modified from time to time.
1.7 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
1.8 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.9 "Interest Period" means, in the case of a LIBO Rate Tranche,
the period commencing on (and including) the Business Banking Day selected
by the Makers as the date on which such LIBO Rate Tranche is made or
continued as, or converted into a LIBO Rate Tranche pursuant to the terms
of this Note, and ending on (but excluding) the day which numerically
corresponds to such date one, two, three or six months thereafter (or if
such month has no numerically corresponding day, on the last Business
Banking Day of such month), in each case as the Makers may select, provided
that (a) if such Interest Period would otherwise end on a day which is not
a Business Banking Day, such Interest Period shall end on the next
following Business Banking Day (unless, in the case of a LIBO Rate Tranche,
such next following Business Banking Day is the first Business Banking Day
of the calendar month, in which case such Interest Period shall end on the
Business Banking Day next preceding such numerically corresponding day);
and (b) no Interest Period may end on a date later than the Maturity Date.
1.10 "LIBO Rate" means, relative to any Interest Period, a rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
one percent) equal to the rate for US dollar deposits with maturities
comparable to such Interest Period for delivery on the first day of such
Interest Period which appears on the Reuters Screen LIBO Page, as of
11:00 a.m. (London time) on the day that is two (2) London Banking Days
preceding the commencement date of the Interest Period. If at least two
(2) such offered rates appear on the Reuters Screen LIBO Page, the rate
will be the arithmetic mean of such offered rates. The Agent may, in its
discretion, use any other publicly available index or reference rate
showing rates offered for United States dollar deposits in the London
Interbank market as of the applicable date. In addition, the Agent may, in
its discretion, use rate quotations for daily or annual periods in lieu of
quotations for substantially equivalent monthly periods, in the absence of
such quotations for substantially equivalent monthly periods. Each
determination of the LIBO Rate applicable to a particular Interest Period
shall be made by the Agent and shall be conclusive and binding upon the
Makers and Lenders absent manifest error.
1.11 "LIBO Rate Tranche" means a Tranche bearing interest at all
times during the Interest Period applicable to such Tranche, at a fixed
rate of interest equal to the Note LIBO Rate applicable to such Interest
Period.
1.12 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
1.13 "Loan Year" means each of the twelve (12) month periods
commencing on July 31, 1997 and on the first, second and third
anniversaries hereof.
1.14 "London Banking Day" means each day other than a Saturday, a
Sunday or any holiday on which commercial banks in London, England are
closed for business.
1.15 "Maturity Date" means the earlier of: (i) July 31, 2001 and
(ii) any earlier date upon which the principal balance outstanding
hereunder, together with all interest accrued thereon, shall become
immediately due and payable following an Event of Default, in accordance
with provisions of the Credit Agreement.
1.16 "Note" means this Term Loan Promissory Note, in the amount of
the Lender's Committed Share of the Term Loan Commitment, as same maybe
amended, supplemented, restated, replaced or otherwise modified from time
to time.
1.17 "Note LIBO Rate" means the Adjusted LIBO Rate applicable to a
specific LIBO Rate Tranche selected by the Makers for a relevant Interest
Period, plus 175 basis points.
1.18 "Note Prime Rate" means the Prime Rate applicable to the Prime
Rate Tranche. The Note Prime Rate shall be increased or decreased
effective on any date on which the Prime Rate shall be increased or
decreased.
1.19 "Other Lender" means, Bank United, a federal savings bank, also
being a "Lender".
1.20 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank, as its Prime Rate. The Prime
Rate is a reference rate for the information and use of the Agent in
establishing the actual rates to be charged to borrowers and is not
necessarily the lowest rate charged by the Agent. Should First Union
National Bank not publish a Prime Rate at any time during the term of this
Note, the Agent, in its reasonable discretion, may choose a substitute
Prime Rate. The rate of interest shall change automatically and immediately
as of the date of any change in the Prime Rate without notice to Borrower
or any endorser, surety or guarantor, if any.
1.21 "Prime Rate Tranche" means a Tranche bearing interest at the
Note Prime Rate.
1.22 "Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other rule, regulation or official interpretation of said Board
of Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
1.23 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.24 "Reserve Percentage" means the stated maximum rate (expressed
as a decimal) at which reserves are required to be maintained by the Agent
during an Interest Period, including, without limitation (i) any basis,
supplemental, marginal, or emergency reserve under any regulations of any
governmental authority to which the Agent is subject, (ii) any reserve
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), including, without limitation, Regulation D, for determining
the maximum reserve requirement in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits
by reference to which the LIBO Rate is determined). Without limiting the
effect of the foregoing, the Reserve Percentage shall reflect any other
reserves required to be maintained by the Agent under any regulation of any
governmental authority to which the Agent is subject against (a) any
category of liabilities that include deposits with reference to which the
LIBO Rate is to be determined or (b) any category of extension of credit or
other assets that includes loans bearing interest at a rate based on the
LIBO Rate. Each determination of the Reserve Percentage shall be made by
the Agent and shall be conclusive and binding upon the Makers and Lenders
absent manifest error.
1.25 "Security Documents" has the meaning ascribed to such term in
the Credit Agreement.
1.26 "Term Loan Commitment" has the meaning ascribed to such term in
the Credit Agreement.
1.27 "Term Loan Notes" means this Note and the other Term Loan Note
executed by the Makers in favor of the Other Lenders, each dated of even
date herewith, in the aggregate amount of the Term Loan Commitment, as same
may be amended, supplemented, renewed, restated, replaced or otherwise
modified from time to time.
1.28 "Tranche" means any portion of the outstanding principal
balance under the Term Loan Notes bearing interest at the applicable Note
LIBO Rate for a specific Interest Period, as selected by the Makers in
accordance with Section 2.1, below, and any portion of the outstanding
principal balance under the Term Loan Notes which may from time to time
bear interest at the Note Prime Rate.
20 Selection and Calculation of Interest Rate.
2.1 Provided that no Event of Default or circumstance which with
the passage of time or giving of notice would become an Event of Default
then exists under the Loan Documents, and provided there shall at no time
be permitted to exist more than four LIBO Rate Tranches with respect to the
total principal balance outstanding under the Term Loan Notes, the Makers
shall have the right to elect to have the Note LIBO Rate then in effect for
an Interest Period apply to a LIBO Rate Tranche, in accordance with, and
subject to the provisions of this Section 2.1. To make an election to have
such Note LIBO Rate apply to any LIBO Rate Tranche, from time to time, the
Makers shall give to the Agent irrevocable notice (a "Rate Election
Notice") not later than 11:00 a.m. (Ft. Lauderdale, Florida time) at least
three (3) Business Banking Days prior to the commencement date of each such
Interest Period, which Rate Election Notice shall be addressed as follows,
and shall be given in writing (by telecopy, hand delivery, or overnight
delivery service), in accordance with the provisions of Section 11.4 of the
Credit Agreement:
Dana Hunter, Vice President
First Union National Bank
5581 West Oakland Park Blvd., 2nd Floor
Lauderhill, Florida 33313
(954) 467-5543
Fax: (954) 467-5557
Each such Rate Election Notice shall be in the form attached hereto as
Schedule 1 and shall specify: (i) the commencement day of the Interest
Period which shall be a Business Banking Day (and, with respect to any then
existing LIBO Rate Tranche, shall not be a date prior to the termination
date of such then existing LIBO Rate Tranche), (ii) the principal amount of
the LIBO Rate Tranche which shall be subject to the application of the Note
LIBO Rate, which shall be in a minimum amount of $2,000,000.00, and in
multiples of $100,000.00 and (iii) the applicable Interest Period which
shall apply to such LIBO Rate Tranche, provided, however, that no Interest
Period may extend beyond the Maturity Date.
2.2 If the Agent determines, absent manifest error, that the
maintenance of any Note LIBO Rate would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, of if the
Agent determines that the interest rate applicable to the Note LIBO Rate
does not accurately reflect the cost of maintaining any LIBO Rate Tranche
subject to such rate, then, at the election of the Agent, the Makers shall
not be entitled thereafter to select a Note LIBO Rate to be applicable to
any portions of the total outstanding principal balance under the Term Loan
Notes, and the interest rate applicable to all of the outstanding principal
balance under the Term Loan Notes then subject to the Note LIBO Rate for
any applicable Interest Period, shall, upon the expiration of all such
applicable Interest Periods, be converted to the Prime Rate.
2.3 In the event that the Makers shall fail to provide a timely
Rate Election Notice for the election of the Note LIBO Rate to apply to any
Advance or to any LIBO Rate Tranche, as of the termination date of the
applicable Interest Period for such Tranche, then as the date of such
Advance, or as of such termination date of such LIBO Rate Tranche, as the
case may be, the Prime Rate shall apply to such Advance or LIBO Rate
Tranche until the next eligible effective date for which the Makers shall
have provided a timely Rate Election Notice, and such Advance or such
principal amount previously comprising a LIBO Rate Tranche, shall
thereafter be deemed to be included in the Prime Rate Tranche.
2.4 Interest shall be calculated on the daily total outstanding
balance of all Advances of Loan Proceeds under the Term Loan Commitment, as
such Advances are evidenced by the Term Loan Notes, as follows:
(i) interest shall accrue on each LIBO Rate Tranche, commencing with the
effective date for each such LIBO Rate Tranche, at the applicable Note LIBO
Rate for the applicable Interest Period and (ii) interest shall accrue on
the Prime Rate Tranche, which shall comprise all of the outstanding
principal balance under the Term Loan Notes not otherwise subject to a LIBO
Rate Tranche, at the Note Prime Rate, changing when and as the Prime Rate
changes. Interest shall be computed through and including the date of any
payment and shall be calculated for actual days elapsed on the basis of a
360 day year (i.e. interest for each day on which any principal is
outstanding shall be calculated at the applicable interest rate described
above, divided by 360).
30 Payment of Interest and Principal.
3.1 Interest, calculated as above provided, shall be due and
payable by the Makers to the Agent, for the account of the Lender and Other
Lender, in accordance with their Actual Shares of the total outstanding
principal balance of the Term Loan Notes, subject to the provisions of
Section 3.7 hereof, on the first Business Banking Day of the first calendar
month immediately following the Advance of Loan Proceeds under the Term
Loan Commitment and continuing on the first day of each month thereafter
until the Maturity Date.
3.2 The Makers shall make payments in reduction of the total
principal balance outstanding under the Term Loan Notes, as follows:
(a) The Makers shall pay to the Agent, for the account of the
Lender and the Other Lender, on or before the last Business Banking Day of
each Loan Year, the sum of $12,500,000.00 (the "Minimum Required
Curtailment").
(b) The Makers shall pay to the Agent, for the account of the
Lender and the Other Lender, on each ARC Payment Date, an amount (the
"Additional Required Curtailment") calculated as follows:
(A) On the 1999 February ARC Payment Date and each
subsequent February ARC Payment Date, an amount equal to the sum of:
(x) the ARC Deficit, if any, to the extent the ARC Deficit does not exceed
the Adjusted CFAPF for the fiscal year ended on the immediately preceding
December 31, plus (y) twenty-five percent (25%) of the remainder of the
Adjusted CFAPF for the fiscal year ended on the immediately preceding
December 31, after any payment of the ARC Deficit pursuant to subparagraph
(x) hereinabove.
(B) On each August ARC Payment Date, an amount equal to
the sum of: (x) the ARC Deficit, if any, plus (y) twenty-five percent (25%)
of the remainder of any Distribution then made, after any payment of the
ARC Deficit pursuant to subparagraph (x) hereinabove.
(C) Notwithstanding anything herein to the contrary,
those portions of the Additional Required Curtailment calculated pursuant
to subpart (y) of subsection (A); and subpart (y) of subsection (B) shall
in the aggregate, in any one (1) Loan Year, not exceed $6,250,000.00.
The term "Adjusted CFAPF" means Cash Flow After Project
Financing less all Term Loan Principal Payments and all interest paid on
the Term Loan during the preceding fiscal year.
The term "Cash Flow After Project Financing" has the meaning
ascribed to such term in the Credit Agreement.
The term "Distribution" has the meaning ascribed to such term
in the Credit Agreement.
The term "ARC Deficit" means: (i) as of any ARC Payment Date in
the second Loan Year, the difference of $18,750,000.00 less the sum of all
Term Loan Payments theretofore paid, (ii) as of any ARC Payment Date in the
third Loan Year, the difference of $37,500,000.00 less the sum of all Term
Loan Payments theretofore paid and (iii) as of any ARC Payment Date in the
fourth Loan Year, the difference of $56,250,000.00 less the sum of all Term
Loan Payments theretofore paid (for the purpose of this Note, the first
"Loan Year" shall be deemed to have commenced July 31, 1997).
The term "ARC Payment Date" means: (i) any Business Banking Day
in any August of any Loan Year, on which a Distribution is made, if any (an
"August ARC Payment Date"), and (ii) the first Business Day of each
February of each Loan Year, or such later date in February on which the
Makers intend to make a Distribution, provided the Makers shall have
notified the Lender and the Other Lenders of such later date, in writing,
not later than January 15 of such year (a "February ARC Payment Date").
The term "Term Loan Principal Payments" means, as of any ARC
Payment Date, all payments which have theretofore been made toward the
reduction of the outstanding principal balance under the Term Loan,
including, without limitation, all payments of Minimum Required
Curtailments made in the same Loan Year and all prior Loan Years, all
payments of Additional Required Curtailments made in the same Loan Year and
all prior Loan Years and all prior voluntary prepayments made in the same
Loan Year and all prior Loan Years.
(c) The total outstanding principal under the Term Loan Notes
and all accrued but unpaid interest shall be fully due and payable on the
Maturity Date.
3.3 All payments of principal and interest under the Term Loan
Notes shall be made in lawful money of the United States which shall be
legal tender in payment of all debts, public and private, at the time of
payment.
3.4 The Term Loan Notes may be prepaid in whole or in part at any
time and from time to time, without penalty or premium, provided: (i) any
such prepayment shall be preceded by at least three (3) Business Banking
Days' prior written notice to the Agent and (ii) any such prepayment shall
be accompanied by accrued interest to the date of prepayment and any other
obligations and payments then due under the terms of the Term Loan Notes.
If the Makers shall make a payment or prepayment of all or any portion of
the principal amount outstanding then subject to a LIBO Rate Tranche, prior
to the applicable termination date thereof (including, without limitation,
upon the acceleration of the Maturity Date following an Event of Default),
or the Makers shall attempt to rescind a Rate Election Notice for a
specified LIBO Rate Tranche, after the Makers have submitted such Rate
Election Notice to the Agent, then, within three (3) Business Banking Days
following written notice from the Agent, the Makers shall pay to the Agent
the amount of any loss or cost incurred by the Agent, the Lender or the
Other Lender resulting therefrom, including, without limitation, any loss
or cost resulting from the liquidation or re-employment of deposits
required to fund or maintain the subject LIBO Rate Tranche, not to exceed
the amount of interest which would have been earned on the amount prepaid
for the balance of the subject Interest Period, at a rate equal to the
difference, not less than zero, of the LIBO Rate as of the first day of the
Interest Period less the LIBO Rate as of the date of such prepayment, for a
corresponding Interest Period commencing on the date of such prepayment.
The obligations of the Makers under this section shall survive payment of
the Term Loan Notes.
3.5 The Term Loan is a non-revolving loan, so that the Makers shall
not have the right to request re-advances of prepaid monies.
3.6 All payments of principal and interest under the Term Loan
Notes shall be made in immediately available funds by 11:00 a.m.
(Ft. Lauderdale, Florida time) on a Business Banking Day, to the Agent for
the account of the Lenders, at the office of the Agent at First Union
National Bank, 301 South College Street, TW-6, Charlotte, North Carolina
28288-0166, Attention: Jane Hurley, or by wire to ABA #053000219, Account
No.465906 0010352, Reference "Arvida," Attention: Jane Hurley, or at such
other place as the Agent may instruct. Any payments of principal or
interest made after 11:00 a.m. (Ft. Lauderdale, Florida time) shall be
deemed to be payments made on the next following Business Banking Day, for
all purposes, hereof, including, without limitation, the accrual of
interest. Should any payment under the Term Loan Notes become due and
payable on a day other than a Business Banking Day, the maturity thereof
shall be extended to the next succeeding Business Banking Day, and, in the
case of any payment of principal, interest shall be payable thereon as
calculated pursuant hereto, for each Business Banking Day such principal is
outstanding (provided, however, any payment of principal received on any
Business Banking Day by 11:00 a.m. (Ft. Lauderdale, Florida time) shall not
be deemed to be outstanding on such Business Banking Day).
3.7 Notwithstanding anything to the contrary set forth herein, the
Agent shall provide the Makers with written notice prior to the first
Business Banking Day of each month of the interest installment with respect
to the Term Loan Notes which is payable on such first Business Banking Day
of such month. With respect to each such monthly installment of interest,
the Agent and the Lenders hereby grant to the Makers a grace period for the
payment of same, which shall extend to the later of: (a) the fifteenth
(15th) day of the month or (b) if the Makers shall not have received
written notice of the monthly interest installment from the Agent, prior to
the first Business Banking Day of any month and the Makers shall have
provided written notice to the Agent, no later than such first Business
Banking Day of the month, of such Agent's failure to provide the Makers
with written notice of such interest installment, then, the date fifteen
(15) days from receipt by the Makers of such written notice of the monthly
interest installment. If the Agent shall not receive written notice from
the Makers on or before the first Business Banking Day of a month, of the
Agent's failure to provide written notice of an interest installment, then,
for all purposes of this Note, notwithstanding that the Makers may later
request such written notice of such interest installment, such grace period
shall extend to no later than the fifteenth (15th) day of such month.
3.8 Any payment required to be paid by the Term Loan Notes, the
Loan Documents or the Credit Agreement, with the exception of interest and
principal, shall be due and payable no later than fifteen (15) days from
receipt by the Makers from the Agent of written notice of the required
payment.
3.9 Provided the Agent has not exercised its right to accelerate
the Term Loan Notes as provided in the Term Loan Notes, the Credit
Agreement or the other Loan Documents: (a) in the event any payment of
principal required under the Term Loan Notes, either pursuant to the terms
hereof or the terms of the Credit Agreement, is not received by the Agent,
for the account of the Lender and Other Lender, by the fifteenth (15th) day
following the day on which such payment is due, the Makers shall pay to the
Agent, for the account of the Lender and Other Lender, a late charge of
five percent (5%) of the payment not so received, the parties agreeing that
said charge is a fair and reasonable charge for the late payment and shall
not be deemed a penalty or as compounding interest, and (b) in the event
any scheduled payment of interest required under the Term Loan Notes is not
received by the Agent, for the account of the Lender and Other Lenders, by
the later of (i) fifteen (15) days from receipt by the Makers of written
notice of the monthly interest installment and (ii) the fifteenth (15th)
day of such month, the Makers shall pay to the Agent, for the account of
the Lender and Other Lenders, a late charge of five percent (5%) of the
payment not so received, the parties agreeing that said charge is a fair
and reasonable charge for the late payment and shall not be deemed a
penalty or as compounding interest. Further, if any payment required to be
paid by the Term Loan Notes, the Credit Agreement or the other Loan
Documents, with the exception of interest and principal, is not paid within
fifteen (15) days from receipt by the Makers from the Agent of written
notice of the required payment, the Makers shall pay to the Agent, for the
account of the Lender and Other Lenders, a late charge of five percent (5%)
of the payment not so received, the parties agreeing that said charge is a
fair and reasonable charge for the late payment and shall not be deemed a
penalty or as compounding interest.
40 Collateral Security. This Note and the other Term Loan Note are
issued pursuant to the Credit Agreement. This Note and the other Term Loan
Note are secured by the Credit Agreement, the Security Documents and the
other Loan Documents. Reference is hereby made to the Credit Agreement,
the Security Documents and the other Loan Documents for a description of
Events of Default and rights of acceleration of the Maturity Date upon the
occurrence of an Event of Default. It is expressly agreed that all of the
covenants, conditions and agreements contained in the Credit Agreement, the
Security Documents and the other Loan Documents are made a part of this
Note and the other Term Loan Note.
50 Events of Default.
5.1 Upon the occurrence of an Event of Default, the Agent may, and
upon the direction of the Required Lenders, shall declare the entire amount
of this Note and the other Term Loan Note, including the principal balance
then outstanding thereunder, together with all interest accrued thereon, to
be immediately due and payable, without notice, (the Makers hereby
expressly waive notice of such Event of Default), time being of the essence
of this Term Loan Note and the other Term Loan Note. Any Event of Default
under this Note shall be an Event of Default under all other Loan Documents
and any Event of Default under any other Loan Document shall be an Event of
Default hereunder.
5.2 In the event the Agent accelerates the Term Loan Notes as
herein provided or the full amount of outstanding principal and interest
under the Term Loan Notes is not fully repaid to the Agent, for the account
of the Lenders on or before the Maturity Date, then the entire unpaid
principal balance under the Term Loan Notes, together with all interest
accrued thereon, shall bear interest from the date of an Event of Default
or from the Maturity Date, respectively, at the Default Rate. Any late
charge paid by the Makers shall be applied to the interest charged at the
Default Rate after acceleration of the Term Loan Notes.
5.3 The remedies of the Agent, the Lender and Other Lender, as
provided herein, or in the Security Documents, the other Loan Documents or
Credit Agreement shall be cumulative and concurrent and may be pursued
singularly, successively or together, by the Agent in accordance with the
terms of the Credit Agreement, and may be exercised as often as the
occasion therefor shall arise. Notwithstanding anything herein seemingly
to the contrary, neither the Agent, the Lender or the Other Lender shall
take any action, including, without limitation, in connection with the
enforcement of any of their rights under the Term Loan Notes, the Credit
Agreement or other Loan Documents, unless such action is consistent with
the action taken by the Agent, or the Other Lender, as the case may be,
with respect to all of the Term Loan Notes and in accordance with the
provisions of the Credit Agreement.
60 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
the Term Loan Notes, to pay interest in an amount or at a rate greater than
the highest non-usurious rate permissible under applicable law as amended
from time to time. Should any interest or other charges paid by the
Makers, or any party liable for the payment of the Loan evidenced by the
Term Loan Notes, result in the computation or earning of interest in excess
of the highest non-usurious rate permissible under applicable law, then any
and all such excess shall be and the same is hereby waived by the Agent,
the Lender and the Other Lender, and all such excess shall be paid by the
Agent, the Lender or the Other Lender, as the case shall be, to the Makers
or to any party liable for the payment of the Loan evidenced by the Term
Loan Notes, it being the intent of the parties hereto that under no
circumstances shall the Makers or any party liable for the payment of the
Loan hereunder, be required to pay interest in excess of the highest non-
usurious rate permissible under applicable law as amended from time to
time. By operation of Section 687.12, Florida Statutes (1996), the
interest rate charged under the Note and the other Term Loan Notes is
authorized by Chapters 658, 665 and 687, Florida Statutes (1996) and
applicable federal law.
70 Waivers/Miscellaneous Matters.
7.1 The Term Loan Notes are to be construed according to the appli-
cable laws of the State of Florida and the United States of America. Any
action brought upon the enforcement of this Note and the other Term Loan
Notes is hereby authorized to be instituted and prosecuted in Broward
County, Florida, or at the United States District Court for the Southern
District of Florida, at the election of the Agent, subject to and in
accordance with the terms of the Credit Agreement.
7.2 The Term Loan Notes may not be changed orally, but only by an
agreement in writing, signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
7.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note and the other Term Loan Note
hereby consents to any extension or renewal of this Note and the other Term
Loan Note or any part thereof, without notice, and agrees that it will
remain liable under this Note and the other Term Loan Note during any
extension or renewal thereof, until the indebtedness evidenced hereby and
thereby is paid in full.
7.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and neither the Agent, the Lender or the Other
Lender shall have any recourse against any property or assets of any such
constituent partner or other person or entity) under or in connection with
the Term Loan Notes, the Credit Agreement, the Security Documents, the
other Loan Documents, the Loans, or any instruments securing or otherwise
executed in connection therewith, or any certificate delivered in
connection therewith, or any amendments or modifications to any of the
foregoing made at any time or times, heretofore or hereafter (such persons
as described in this sentence being herein collectively referred to as
"Non-Recourse Persons"), provided, however, Non-Recourse Persons shall not
include any Maker or any Subsidiary of a Maker that would otherwise be
liable as a general partner in a Maker. The recourse of the Agent, the
Lender, the Other Lender and their successors and assignees under or in
connection with the Term Loan Notes, the Security Documents, the Credit
Agreement, the other Loan Documents, the Loans and such instruments and
certificates, and any such amendments or modifications, shall be limited to
the assets of the Makers, and the Agent, the Lender, the Other Lender and
each of their successors and assignees waive and do hereby waive any such
personal liability against any such Non-Recourse Persons. For the purposes
of the Term Loan Notes, the Security Documents, the Credit Agreement and
each other Loan Document and any such instruments and certificates and any
such amendments or modifications, neither the negative capital account of a
constituent partner in any Maker, nor any obligation of any constituent
partner in any Maker to restore a negative capital account or to advance or
contribute capital to any Maker or any other constituent partner in any
Maker shall be deemed to be the property or the asset of any Maker or any
such other constituent partner (and neither the Agent, the Lender or the
Other Lender nor any of their successors or assignees shall have any right
to collect, enforce or proceed against or with respect to any such negative
capital account or partner's obligation to restore, advance or contribute).
As used in this section, the term "constituent partner" means any direct
partner in any Maker, and any person or entity that is a partner in any
partnership that, directly or indirectly through one or more other
partnerships, is a partner in any Maker.
7.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
7.6 All sums received by the Agent for application to this Note and
the other Term Loan Note shall be applied by the Agent in the manner set
forth in Section 2.8 of the Credit Agreement.
7.7 The Makers are strictly liable for and hereby agree to pay or
reimburse the Agent (but not the Other Lender) for, and hold it harmless
from and against all of its reasonable third party costs and expenses
incurred in connection with the collection or enforcement of, or the
preservation of any rights under, this Note, the other Term Loan Note, the
Credit Agreement or other Loan Documents, including, without limitation,
the reasonable fees and disbursements of counsel for the Agent, including
attorneys' fees out of court, in trial, on appeal, in bankruptcy
proceedings or otherwise. The Makers shall pay all such amounts in
accordance with the terms of the Credit Agreement, and until repaid, such
sums shall bear interest at the Default Rate.
7.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note and the other Term Loan Note
shall be given in accordance with the notice provisions of Section 11.4 of
the Credit Agreement.
7.9 As used herein, the terms "Makers," "Agent," "Lender" and
"Other Lender" shall be deemed to include their respective successors and
assigns.
7.10 In the event any one or more of the provisions of this Note or
the other Term Loan Note shall for any reasons be held to be invalid,
illegal, or unenforceable, in whole or in part or in any respect, or in the
event one or more of the provisions of this Note or the other Term Loan
Note operates or would prospectively operate to invalidate this Note or the
other Term Loan Note, then in any of those events, only such provision or
provisions shall be deemed null and void and shall not effect any other
provision of this Note or the other Term Loan Note. The remaining
provisions of this Note and the other Term Loan Note shall remain operative
and in full force and effect and in shall no way be affected, prejudiced or
disturbed thereby. In the event any provisions of this Note or the other
Term Loan Notes are inconsistent with any provisions of the Credit
Agreement, the Security Documents or other Loan Documents, or any other
agreements or documents executed in connection with the Term Loan Notes,
the Term Loan Note shall control.
7.11 It is expressly understood and agreed that neither the Agent,
the Lender or any Other Lender shall ever be construed for any purposes, to
be the partner, joint venturer, principal or associate of the Makers or any
of them or any person or party claiming by, through or under the Makers or
any of them in the conduct of their respective businesses.
7.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof (a)
severally waive presentment for payment, demand, notice of demand, notice
of nonpayment or dishonor, protest and notice of protest of this Note and
the other Term Loan Note, and all other notices in connection with the
delivery, acceptance, performance or enforcement of the payment of this
Note and the other Term Loan Note, (b) expressly consent to all extensions
of time, renewals, postponements of time of payment of this Note and the
other Term Loan Note or other modifications from time to time prior to or
after the Maturity Date, without notice, consent or consideration to any of
the foregoing, (c) expressly agree to any substitution, exchange, addition
or release of any of the other Loan Documents or the addition or release of
any party or person primarily or secondarily liable hereon, (d) expressly
agree that the Agent and/or the Lender or Other Lender shall not be
required first to institute any suit, or to exhaust their remedies against
the Makers or any other person or party to become liable hereunder or
against the other Loan Documents in order to enforce the payment of this
Note and the other Term Loan Note, and (e) expressly agree that,
notwithstanding the occurrence of any of the foregoing, they shall be and
remain, jointly and severally, directly liable for all sums due under this
Note, the other Term Loan Note and the other Loan Documents subject to the
terms and conditions hereof and thereof.
7.13 Neither the Agent or the Lender or Other Lender shall be
deemed, by any act of omission or commission, to have waived any of their
rights or remedies hereunder unless such waiver is in writing given in
accordance with the terms of the Credit Agreement, and then only to the
extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy as to a subsequent event.
7.14 Neither this Note or the other Term Loan Note nor any provision
hereof or thereof may be changed or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change or termination is sought.
7.15 Failure to accelerate this Note or the other Term Loan Note
after an Event of Default, or the acceptance of a past due installment,
shall not be construed as a novation of the contract or a waiver of the
right of the Agent or the Lender or Other Lender to thereafter insist upon
strict compliance with the terms of this Note and the other Term Loan Note
without previous notice of such intention being given to the Makers.
7.16 Notwithstanding anything to the contrary in this Note, the
other Term Loan Notes, the Credit Agreement, the Security Documents or
other Loan Documents, the maximum liability of any Maker other than
Arvida/JMB Partners, L.P. (herein a "Maker Subsidiary" or "Maker
Affiliate") for the Obligations created, evidenced and secured thereby and
hereby shall not exceed the maximum amount, as such maximum amount shall be
determined by a court of competent jurisdiction of any such Maker
Subsidiary's or Maker Affiliate's liability therefor which may be incurred
without rendering the Obligations, as they relate to such Maker Subsidiary
or Maker Affiliate, voidable as a fraudulent conveyance or fraudulent
transfer under the Bankruptcy Code or under any other present or future
federal or state laws or statutes relating to bankruptcy, insolvency,
assignment for the benefit of creditors or other relief for debtors,
including, without limitation, the Uniform Fraudulent Transfer Act or the
Uniform Fraudulent Conveyance Act, as in effect in any jurisdiction wherein
any such Maker Subsidiary's or Maker Affiliate's Solvency (as defined in
the Credit Agreement) is subject to determination. For purposes of
determining such liability of any Maker Subsidiary or Maker Affiliate, due
consideration shall be given to the benefits received, directly or
indirectly, by such Maker Subsidiary or Maker Affiliate from the Loans (as
defined in the Credit Agreement) made pursuant to the Commitments (as
defined in the Credit Agreement).
7.17 The section headings of this Note and the other Term Loan Note
are for reference purposes only and are to be given no effect in the
construction or interpretation of this Note or the other Term Loan Note.
THE MAKERS AND THE LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER TERM LOAN NOTE OR THE
CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY MAKERS, THE AGENT,
THE LENDER OR ANY OTHER LENDER.
SIGNATURE PAGES FOLLOW
<PAGE>
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
SCHEDULE 1
<PAGE>
NOTE:DOCUMENTARY STAMPS AND INTANGIBLE TAXES WERE PAID IN CONNECTION
WITH THE VARIOUS NOTES PREVIOUSLY CONSOLIDATED AND EVIDENCE OF SAME APPEARS
ON THAT CERTAIN MORTGAGE AND SECURITY AGREEMENT DATED JULY 31, 1997, AND
RECORDED IN OFFICIAL RECORDS BOOK 26802, PAGE 888 OF THE PUBLIC RECORDS OF
BROWARD COUNTY, FLORIDA. THIS BIFURCATION OF NOTE AGREEMENT BIFURCATES
EXISTING INDEBTEDNESS AND/OR UNFUNDED AVAILABILITY WITHOUT ENLARGEMENT. NO
ADDITIONAL INDEBTEDNESS IS BEING INCURRED AND NO ADDITIONAL DOCUMENTARY
STAMPS OR INTANGIBLE TAXES ARE DUE.
BIFURCATION OF NOTE AGREEMENT
THIS BIFURCATION OF NOTE AGREEMENT ("Agreement) executed
effective as of September 1, 1998 by and between ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership, ARVIDA/JMB PARTNERS, a Florida general
partnership, ARVIDA GRAND BAY LIMITED PARTNERSHIP IV, a Delaware limited
partnership, THE AOK GROUP, a Florida general partnership, METRODRAMA JOINT
VENTURE, a Florida general partnership, SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation, GULF AND PACIFIC COMMUNICATIONS LIMITED
PARTNERSHIP, a Delaware limited partnership and WESTON HILLS COUNTRY CLUB
LIMITED PARTNERSHIP, a Delaware limited partnership (jointly and severally,
"Borrowers"), having an address of 900 North Michigan Avenue, Chicago,
Illinois 60611 and FIRST UNION NATIONAL BANK, as Agent, a national banking
association, having an address of 5581 West Oakland Park Boulevard, 2nd
Floor, Lauderhill, Florida 33313 ("Lender").
W I T N E S S E T H:
WHEREAS, Lender is owner and holder of a certain Consolidated and
Restated Line of Credit Promissory Note executed by Borrowers and dated of
even date herewith in the original principal amount of $20,000,000
("Consolidated Note"), subject to the terms of that certain Credit
Agreement dated July 31, 1997 ("Credit Agreement") and secured by the
"Security Documents" (as defined in the Credit Agreement); and
WHEREAS, Borrowers and Lender wish to bifurcate the Consolidated Note
into two notes to remain subject to the terms of the Credit Agreement, as
modified of even date, and to remain secured by the Security Documents, as
modified of even date.
NOW, THEREFORE, in consideration of the mutual benefit to be
obtained, the parties hereto, intending to be legally bound, do hereby
agree as follows:
1. The above recitals are true and correct and are incorporated
herein by this reference.
2. Borrowers acknowledge that the unpaid principal balance of the
Consolidated Note as of the date hereof is $ -0- and the unfunded
availability thereof is $20,000,000.
3. As of the date hereof, Borrowers have no defenses, rights of
set-off, claims or counterclaims against Lender under the Consolidated
Note, the Credit Agreement or the Security Documents and Borrowers hereby
reaffirm their obligations thereunder as modified hereby.
4. This Agreement is not intended by Borrowers to be a novation,
the existing indebtedness not being forgiven hereby, but merely bifurcated
into two notes.
5. The Consolidated Note is hereby bifurcated to evidence two
debts, represented by: (a) a $12,320,000 Line of Credit Restated Renewal
Promissory Note, attached hereto as Exhibit A, and (b) a $7,680,000 Line of
Credit Restated Renewal Promissory Note, a copy of which is attached hereto
as Exhibit B. Simultaneously herewith, the $7,680,000 Line of Credit
Restated Renewal Promissory Note, a copy of which is attached hereto as
Exhibit B shall be assigned by Lender to Bank United, a federal savings
bank, due to which intended assignment the bifurcated notes attached hereto
as Exhibit A and Exhibit B contain references to multiple lenders so as to
be consistent with the Credit Agreement, as modified of even date.
IN WITNESS WHEREOF, the parties have executed this Bifurcation of
Note Agreement the day and year first above written.
BORROWERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its sole
general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA /JMB PARTNERS, a Florida general
partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, a general
partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA GRAND BAY LIMITED PARTNERSHIP
IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation, its sole
general partner
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
THE AOK GROUP, a Florida general
partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership, a
general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS, a Florida
general partnership, a general partner
By: ARVIDA/JMB MANAGERS, INC.,
Delaware corporation, a
general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole
general partner
By:
Stephen A.
Lovelette, Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS, a Florida
general partnership, a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, a general partner
By:
Stephen A.
Lovelette, Vice President
[CORPORATE SEAL]
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC., an
Illinois corporation, its sole general partners
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP, a Delaware limited partnership
By: WHCC, INC., an Illinois
corporation,
its sole general partner
By: Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
LENDER:
FIRST UNION NATIONAL BANK,
a national banking association
By:
Print Name:
Title:
[CORPORATE SEAL]
<PAGE>
EXHIBIT "A" TO BIFURCATION OF NOTE AGREEMENT
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE. NON-
RECURRING INTANGIBLE TAXES SHALL BE PAID AT THE TIME OF EACH ADVANCE, ON
SUCH ADVANCE.
LINE OF CREDIT
PROMISSORY NOTE
$12,320,000 Effective Date: September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of First Union National Bank, a national banking
association, its successors or assigns (the "Lender"), the principal sum of
TWELVE MILLION THREE HUNDRED TWENTY THOUSAND DOLLARS ($12,320,000), or the
Lender's Actual Share of all sums as may be advanced under the Line of
Credit Commitment, pursuant to and in accordance with the Credit Agreement,
together with interest on the principal balance of this Note outstanding
from time to time, as same shall accrue thereon in accordance with the
terms hereof, but not to exceed the maximum non-usurious rate permitted by
law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 "Actual Share" means the percentage interest of the Lender in
the Advances made pursuant to the Line of Credit Commitment.
1.2 "Adjusted LIBO Rate" means, relative to any LIBO Rate Tranche
to be made, continued or maintained as, or converted into, a LIBO Rate
Tranche for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of one percent) equal to the quotient of
(i) the LIBO Rate applicable to the relevant Interest Period, divided by
(ii) the result of one minus the Reserve Percentage applicable to such
Interest Period.
1.3 "Agent" means First Union National Bank, a national banking
association.
1.4 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which the Agent is closed pursuant to authorization or
requirement of law.
1.5 "Committed Share" means the percentage interest of the Lender
in the Line of Credit Commitment.
1.6 "Credit Agreement" means the Credit Agreement dated July 31,
1997, between Lender and Borrower (among others), as amended, of even date
herewith, as the same may be amended, supplemented, restated, replaced or
otherwise modified from time to time.
1.7 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
1.8 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.9 "Interest Period" means, in the case of a LIBO Rate Tranche,
the period commencing on (and including) the Business Banking Day selected
by the Makers as the date on which such LIBO Rate Tranche is made or
continued as, or converted into a LIBO Rate Tranche pursuant to the terms
of this Note, and ending on (but excluding) the day which numerically
corresponds to such date one, two, three or six months thereafter (or if
such month has no numerically corresponding day, on the last Business
Banking Day of such month), in each case as the Makers may select, provided
that (a) if such Interest Period would otherwise end on a day which is not
a Business Banking Day, such Interest Period shall end on the next
following Business Banking Day (unless, in the case of a LIBO Rate Tranche,
such next following Business Banking Day is the first Business Banking Day
of the calendar month, in which case such Interest Period shall end on the
Business Banking Day next preceding such numerically corresponding day);
and (b) no Interest Period may end on a date later than the Maturity Date.
1.10 "LIBO Rate" means, relative to any Interest Period, a rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
one percent) equal to the rate for US dollar deposits with maturities
comparable to such Interest Period for delivery on the first day of such
Interest Period which appears on the Reuters Screen LIBO Page as of
11:00 a.m. (London time) on the day that is two (2) London Banking Days
preceding the commencement date of the Interest Period. If at least two
(2) such offered rates appear on the Reuters Screen LIBO Page, the rate
will be the arithmetic mean of such offered rates. The Agent may, in its
discretion, use any other publicly available index or reference rate
showing rates offered for United States dollar deposits in the London
Interbank market as of the applicable date. In addition, the Agent may, in
its discretion, use rate quotations for daily or annual periods in lieu of
quotations for substantially equivalent monthly periods, in the absence of
such quotations for substantially equivalent monthly periods. Each
determination of the LIBO Rate applicable to a particular Interest Period
shall be made by the Agent and shall be conclusive and binding upon the
Makers and Lenders absent manifest error.
1.11 "LIBO Rate Tranche" means a Tranche bearing interest at all
times during the Interest Period applicable to such Tranche, at a fixed
rate of interest equal to the Note LIBO Rate applicable to such Interest
Period.
1.12 "Line of Credit Commitment" has the meaning ascribed to such
term in the Credit Agreement.
1.13 "Line of Credit Notes" means this Note and the other Line of
Credit Note executed by the Makers in favor of the Other Lender, each dated
of even date herewith, in the aggregate amount of the Line of Credit
Commitment, as same may be amended, supplemented, renewed, restated,
replaced or otherwise modified from time to time.
1.14 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
1.15 "Loan Year" means each of the twelve (12) month periods
commencing on July 31, 1997 and on the first, second and third
anniversaries hereof.
1.16 "London Banking Day" means each day other than a Saturday, a
Sunday or any holiday on which commercial banks in London, England are
closed for business.
1.17 "Maturity Date" means the earlier of: (i) July 31, 2001 and
(ii) any earlier date upon which the principal balance outstanding
hereunder, together with all interest accrued thereon, shall become
immediately due and payable following an Event of Default, in accordance
with provisions of the Credit Agreement.
1.18 "Note" means this Line of Credit Promissory Note, in the amount
of the Lender's Committed Share of the Line of Credit Commitment, as same
maybe amended, supplemented, restated, replaced or otherwise modified from
time to time.
1.19 "Note LIBO Rate" means the Adjusted LIBO Rate applicable to a
specific LIBO Rate Tranche selected by the Makers for a relevant Interest
Period, plus 175 basis points.
1.20 "Note Prime Rate" means the Prime Rate applicable to the Prime
Rate Tranche. The Note Prime Rate shall be increased or decreased
effective on any date on which the Prime Rate shall be increased or
decreased.
1.21 "Other Lender" means, Bank United, a federal savings bank, also
being a "Lender".
1.22 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank, as its Prime Rate. The Prime
Rate is a reference rate for the information and use of the Agent in
establishing the actual rates to be charged to borrowers and is not
necessarily the lowest rate charged by the Agent. Should First Union
National Bank not publish a Prime Rate at any time during the term of this
Note, the Agent, in its reasonable discretion, may choose a substitute
Prime Rate. The rate of interest shall change automatically and
immediately as of the date of any change in the Prime Rate without notice
to Borrower or any endorser, surety or guarantor, if any.
1.23 "Prime Rate Tranche" means a Tranche bearing interest at the
Note Prime Rate.
1.24 "Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other rule, regulation or official interpretation of said Board
of Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
1.25 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.26 "Reserve Percentage" means the stated maximum rate (expressed
as a decimal) at which reserves are required to be maintained by the Agent
during an Interest Period, including, without limitation (i) any basis,
supplemental, marginal, or emergency reserve under any regulations of any
governmental authority to which the Agent is subject, (ii) any reserve
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), including, without limitation, Regulation D, for determining
the maximum reserve requirement in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits
by reference to which the LIBO Rate is determined). Without limiting the
effect of the foregoing, the Reserve Percentage shall reflect any other
reserves required to be maintained by the Agent under any regulation of any
governmental authority to which the Agent is subject against (a) any
category of liabilities that include deposits with reference to which the
LIBO Rate is to be determined or (b) any category of extension of credit or
other assets that includes loans bearing interest at a rate based on the
LIBO Rate. Each determination of the Reserve Percentage shall be made by
the Agent and shall be conclusive and binding upon the Makers and Lenders
absent manifest error.
1.27 "Security Documents" has the meaning ascribed to such terms in
the Credit Agreement.
1.28 "Tranche" means any portion of the outstanding principal
balance under the Line of Credit Notes bearing interest at the applicable
Note LIBO Rate for a specific Interest Period, as selected by the Makers in
accordance with Section 2.1, below, and any portion of the outstanding
principal balance under the Line of Credit Notes which may from time to
time bear interest at the Note Prime Rate.
20 Selection and Calculation of Interest Rate.
2.1 Provided that no Event of Default or circumstance which with
the passage of time or giving of notice would become an Event of Default
then exists under the Loan Documents, and provided there shall at no time
be permitted to exist more than four LIBO Rate Tranches with respect to the
total principal balance outstanding under the Line of Credit Notes, the
Makers shall have the right to elect to have the Note LIBO Rate then in
effect for an Interest Period apply to a LIBO Rate Tranche, in accordance
with, and subject to the provisions of this Section 2.1. To make an
election to have such Note LIBO Rate apply to any LIBO Rate Tranche, from
time to time, the Makers shall give to the Agent irrevocable notice (a
"Rate Election Notice") not later than 11:00 a.m. (Ft. Lauderdale, Florida
time) at least three (3) Business Banking Days prior to the commencement
date of each such Interest Period, which Rate Election Notice shall be
addressed as follows, and shall be given in writing (by telecopy, hand
delivery, or overnight delivery service), in accordance with the provisions
of Section 11.4 of the Credit Agreement:
Dana Hunter, Vice President
First Union National Bank
5581 West Oakland Park Blvd., 2nd Floor
Lauderhill, Florida 33313
(954) 467-5543
Fax: (954) 467-5557
Each such Rate Election Notice shall be in the form attached hereto as
Schedule 1 and shall specify: (i) the commencement day of the Interest
Period which shall be a Business Banking Day (and, with respect to any then
existing LIBO Rate Tranche, shall not be a date prior to the termination
date of such then existing LIBO Rate Tranche), (ii) the principal amount of
the LIBO Rate Tranche which shall be subject to the application of the Note
LIBO Rate, which shall be in a minimum amount of $2,000,000.00, and in
multiples of $100,000.00 and (iii) the applicable Interest Period which
shall apply to such LIBO Rate Tranche, provided, however, that no Interest
Period may extend beyond the Maturity Date.
2.2 If the Agent determines, absent manifest error, that the
maintenance of any Note LIBO Rate would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, of if the
Agent determines that the interest rate applicable to the Note LIBO Rate
does not accurately reflect the cost of maintaining any LIBO Rate Tranche
subject to such rate, then, at the election of the Agent, the Makers shall
not be entitled thereafter to select a Note LIBO Rate to be applicable to
any portions of the total outstanding principal balance under the Line of
Credit Notes, and the interest rate applicable to all of the outstanding
principal balance under the Line of Credit Notes then subject to the Note
LIBO Rate for any applicable Interest Period, shall, upon the expiration of
all such applicable Interest Periods, be converted to the Prime Rate.
2.3 In the event that the Makers shall fail to provide a timely
Rate Election Notice for the election of the Note LIBO Rate to apply to any
Advance or to any LIBO Rate Tranche, as of the termination date of the
applicable Interest Period for such Tranche, then as the date of such
Advance, or as of such termination date of such LIBO Rate Tranche, as the
case may be, the Prime Rate shall apply to such Advance or LIBO Rate
Tranche until the next eligible effective date for which the Maker shall
have provided a timely Rate Election Notice, and such Advance or such
principal amount previously comprising a LIBO Rate Tranche, shall
thereafter be deemed to be included in the Prime Rate Tranche.
2.4 Interest shall be calculated on the daily total outstanding
balance of all Advances of Loan Proceeds under the Line of Credit
Commitment, as such Advances are evidenced by the Line of Credit Notes, as
follows: (i) interest shall accrue on each LIBO Rate Tranche, commencing
with the effective date for each such LIBO Rate Tranche, at the applicable
Note LIBO Rate for the applicable Interest Period and (ii) interest shall
accrue on the Prime Rate Tranche, which shall comprise all of the
outstanding principal balance under the Line of Credit Notes not otherwise
subject to a LIBO Rate Tranche, at the Note Prime Rate, changing when and
as the Prime Rate changes. Interest shall be computed through and
including the date of any payment and shall be calculated for actual days
elapsed on the basis of a 360 day year (i.e. interest for each day on which
any principal is outstanding shall be calculated at the applicable interest
rate described above, divided by 360).
30 Payment of Interest and Principal.
3.1 Interest, calculated as above provided, shall be due and
payable by the Makers to the Agent, for the account of the Lender and Other
Lender, in accordance with their Actual Shares of the total outstanding
principal balance of the Line of Credit Notes, subject to the provisions of
Section 3.7 hereof, on the first Business Banking Day of the first calendar
month immediately following the Advance of Loan Proceeds under the Line of
Credit Commitment and continuing on the first day of each month thereafter
until the Maturity Date.
3.2 The total outstanding principal balance under the Line of
Credit Notes and all accrued but unpaid interest shall be fully due and
payable on the Maturity Date.
3.3 All payments of principal and interest under the Line of Credit
Notes shall be made in lawful money of the United States which shall be
legal tender in payment of all debts, public and private, at the time of
payment.
3.4 The Line of Credit Notes may be prepaid in whole or in part at
any time and from time to time, without penalty or premium, provided:
(i) any such prepayment shall be preceded by at least three (3) Business
Banking Days' prior written notice to the Agent and (ii) any such
prepayment shall be accompanied by accrued interest to the date of
prepayment and any other obligations and payments then due under the terms
of the Line of Credit Notes. If the Makers shall make a payment or
prepayment of all or any portion of the principal amount outstanding then
subject to a LIBO Rate Tranche, prior to the applicable termination date
thereof (including, without limitation, upon the acceleration of the
Maturity Date following an Event of Default), or the Makers shall attempt
to rescind a Rate Election Notice for a specified LIBO Rate Tranche, after
the Makers have submitted such Rate Election Notice to the Agent, then,
within three (3) Business Banking Days following written notice from the
Agent, the Makers shall pay to the Agent the amount of any loss or cost
incurred by the Agent, the Lender or the Other Lender resulting therefrom,
including, without limitation, any loss or cost resulting from the
liquidation or re-employment of deposits required to fund or maintain the
subject LIBO Rate Tranche, not to exceed the amount of interest which would
have been earned on the amount prepaid for the balance of the subject
Interest Period, at a rate equal to the difference, not less than zero, of
the LIBO Rate as of the first day of the Interest Period less the LIBO Rate
as of the date of such prepayment, for a corresponding Interest Period
commencing on the date of such prepayment. The obligations of the Makers
under this section shall survive payment of the Line of Credit Notes.
3.5 Prior to the Maturity Date, the Makers may borrow, repay and
reborrow hereunder, in accordance with the terms of the Credit Agreement.
The Makers shall repay the outstanding balances under the Line of Credit
Notes at least once each Loan Year, provided, however, that the Makers
shall, at no point, repay the outstanding balances under this Note or under
any of the other Line of Credit Notes to the extent that there shall be
less than One Thousand Dollars and no/100 ($1,000.00) outstanding
thereunder at any time, and shall not reborrow under the Line of Credit
Commitment for a period of at least thirty (30) days after such repayment
(a "Cleanup Repayment"). Notwithstanding the foregoing, however, the Maker
shall be entitled to forego such Cleanup Repayment for one Loan Year,
provided, however, that the Maker shall not be entitled to make any
Distributions (as defined in the Credit Agreement) during the Loan Year
following the Loan Year as to which the Makers shall have failed to make a
Cleanup Repayment, until the Makers shall make a Cleanup Repayment.
3.6 All payments of principal and interest under the Line of Credit
Notes shall be made in immediately available funds by 11:00 a.m. (Ft.
Lauderdale, Florida time) on a Business Banking Day, to the Agent for the
account of the Lenders, at the office of the Agent at 301 South College
Street, TW-6, Charlotte, North Carolina 28288-0166, Attention: Jane Hurley,
or by wire to ABA #053000219, Account No.465906 0010352, Reference
"Arvida," Attention: Jane Hurley, or at such other place as the Agent may
instruct. Any payments of principal or interest made after 11:00 a.m. (Ft.
Lauderdale, Florida time) shall be deemed to be payments made on the next
following Business Banking Day, for all purposes, hereof, including,
without limitation, the accrual of interest. Should any payment under the
Line of Credit Notes become due and payable on a day other than a Business
Banking Day, the maturity thereof shall be extended to the next succeeding
Business Banking Day, and, in the case of any payment of principal,
interest shall be payable thereon as calculated pursuant hereto, for each
Business Banking Day such principal is outstanding (provided, however, any
payment of principal received on any Business Banking Day by 11:00 a.m.
(Ft. Lauderdale, Florida time) shall not be deemed to be outstanding on
such Business Banking Day).
3.7 Notwithstanding anything to the contrary set forth herein, the
Agent shall provide the Makers with written notice prior to the first
Business Banking Day of each month of the interest installment with respect
to the Line of Credit Notes which is due and payable on such first Business
Banking Day of such month. With respect to each such monthly installment
of interest, the Agent and the Lenders hereby grant to the Makers a grace
period for the payment of same, which shall extend to the later of: (a) the
fifteenth (15th) day of the month or (b) if the Makers shall not have
received written notice of the monthly interest installment from the Agent,
prior to the first Business Banking Day of any month and the Makers shall
have provided written notice to the Agent, no later than such first
Business Banking Day of the month, of such Agent's failure to provide the
Makers with written notice of such interest installment, then, the date
fifteen (15) days from receipt by the Makers of such written notice of the
monthly interest installment. If the Agent shall not receive written
notice from the Makers on or before the first Business Banking Day of a
month, of the Agent's failure to provide written notice of an interest
installment, then, for all purposes of this Note, notwithstanding that the
Makers may later request such written notice of such interest installment,
such grace period shall extend to no later than the fifteenth (15th) day of
such month.
3.8 Any payment required to be paid by the Line of Credit Notes,
the Loan Documents or the Credit Agreement, with the exception of interest
and principal, shall be due and payable no later than fifteen (15) days
from receipt by the Makers from the Agent of written notice of the required
payment.
3.9 Provided the Agent has not exercised its right to accelerate
the Line of Credit Notes as provided in the Line of Credit Notes, the
Credit Agreement or the other Loan Documents: (a) in the event any payment
of principal required under the Line of Credit Notes, either pursuant to
the terms hereof or the terms of the Credit Agreement, is not received by
the Agent, for the account of the Lender and Other Lender, by the fifteenth
(15th) day following the day on which such payment is due, the Makers shall
pay to the Agent, for the account of the Lender and Other Lender, a late
charge of five percent (5%) of the payment not so received, the parties
agreeing that said charge is a fair and reasonable charge for the late
payment and shall not be deemed a penalty or as compounding interest, and
(b) in the event any scheduled payment of interest required under the Line
of Credit Notes is not received by the Agent, for the account of the Lender
and Other Lender, by the later of (i) fifteen (15) days from receipt by the
Makers of written notice of the monthly interest installment and (ii) the
fifteenth (15th) day of such month, the Makers shall pay to the Agent, for
the account of the Lender and Other Lender, a late charge of five percent
(5%) of the payment not so received, the parties agreeing that said charge
is a fair and reasonable charge for the late payment and shall not be
deemed a penalty or as compounding interest. Further, if any payment
required to be paid by the Line of Credit Notes, the Credit Agreement or
the other Loan Documents, with the exception of interest and principal, is
not paid within fifteen (15) days from receipt by the Makers from the Agent
of written notice of the required payment, the Makers shall pay to the
Agent, for the account of the Lender and Other Lender, a late charge of
five percent (5%) of the payment not so received, the parties agreeing that
said charge is a fair and reasonable charge for the late payment and shall
not be deemed a penalty or as compounding interest.
40 Collateral Security. This Note and the other Line of Credit Note are
issued pursuant to the Credit Agreement. This Note and the other Line of
Credit Note are secured by the Credit Agreement, the Security Documents and
the other Loan Documents. Reference is hereby made to the Credit
Agreement, the Security Documents and the other Loan Documents for a
description of Events of Default and rights of acceleration of the Maturity
Date upon the occurrence of an Event of Default. It is expressly agreed
that all of the covenants, conditions and agreements contained in the
Credit Agreement, the Security Documents and the other Loan Documents are
made a part of this Note and the other Line of Credit Note.
50 Events of Default.
5.1 Upon the occurrence of an Event of Default, the Agent may, and
upon the direction of the Required Lenders, shall declare the entire amount
of this Note and the other Line of Credit Note, including the principal
balance then outstanding thereunder, together with all interest accrued
thereon, to be immediately due and payable, without notice, (the Makers
hereby expressly waive notice of such Event of Default), time being of the
essence of this Line of Credit Note and the other Line of Credit Note. Any
Event of Default under this Note shall be an Event of Default under all
other Loan Documents and an Event of Default under any other Loan Document
shall be an Event of Default under this Note.
5.2 In the event the Agent accelerates the Line of Credit Notes as
herein provided or the full amount of outstanding principal and interest
under the Line of Credit Notes is not fully repaid to the Agent for the
account of the Lenders on or before the Maturity Date, then the entire
unpaid principal balance under the Line of Credit Notes, together with all
interest accrued thereon, shall bear interest from the date of an Event of
Default or from the Maturity Date, respectively, at the Default Rate. Any
late charge paid by the Makers shall be applied to the interest charged at
the Default Rate after acceleration of the Line of Credit Notes.
5.3 The remedies of the Agent, the Lender and Other Lender, as
provided herein, or in the Security Documents, the other Loan Documents or
Credit Agreement shall be cumulative and concurrent and may be pursued
singularly, successively or together, by the Agent in accordance with the
terms of the Credit Agreement, and may be exercised as often as the
occasion therefor shall arise. Notwithstanding anything herein seemingly
to the contrary, neither the Agent, the Lender or the Other Lender shall
take any action, including, without limitation, in connection with the
enforcement of any of their rights under the Line of Credit Notes, the
Credit Agreement or other Loan Documents, unless such action is consistent
with the action taken by the Agent, the Lender or the Other Lender, as the
case may be, with respect to all of the Line of Credit Notes and in
accordance with the provisions of the Credit Agreement.
60 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
the Line of Credit Notes, to pay interest in an amount or at a rate greater
than the highest non-usurious rate permissible under applicable law as
amended from time to time. Should any interest or other charges paid by
the Makers, or any party liable for the payment of the Loan evidenced by
the Line of Credit Notes, result in the computation or earning of interest
in excess of the highest non-usurious rate permissible under applicable
law, then any and all such excess shall be and the same is hereby waived by
the Agent, the Lender and the Other Lender, and all such excess shall be
paid by the Agent, the Lender or the Other Lender, as the case shall be, to
the Makers or to any party liable for the payment of the Loan evidenced by
the Line of Credit Notes, it being the intent of the parties hereto that
under no circumstances shall the Makers or any party liable for the payment
of the Loan hereunder, be required to pay interest in excess of the highest
non-usurious rate permissible under applicable law as amended from time to
time. By operation of Section 687.12, Florida Statutes (1996), the
interest rate charged under the Note and the other Line of Credit Notes is
authorized by Chapters 658, 665 and 687, Florida Statutes (1996) and
applicable federal law.
70 Waivers/Miscellaneous Matters.
7.1 The Line of Credit Notes are to be construed according to the
applicable laws of the State of Florida and the United States of America.
Any action brought upon the enforcement of this Note and the other Line of
Credit Note is hereby authorized to be instituted and prosecuted in Broward
County, Florida, or at the United States District Court for the Southern
District of Florida, at the election of the Agent, subject to and in
accordance with the terms of the Credit Agreement.
7.2 The Line of Credit Notes may not be changed orally, but only by
an agreement in writing, signed by the party against whom enforcement of
any waiver, change, modification or discharge is sought.
7.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note and the other Line of Credit
Note hereby consents to any extension or renewal of this Note and the other
Line of Credit Note or any part thereof, without notice, and agrees that it
will remain liable under this Note and the other Line of Credit Note during
any extension or renewal thereof, until the indebtedness evidenced hereby
and thereby is paid in full.
7.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and neither the Agent, the Lender or the Other
Lender shall have any recourse against any property or assets of any such
constituent partner or other person or entity) under or in connection with
the Line of Credit Notes, the Credit Agreement, the Security Documents, the
other Loan Documents, the Loans, or any instruments securing or otherwise
executed in connection therewith, or any certificate delivered in
connection therewith, or any amendments or modifications to any of the
foregoing made at any time or times, heretofore or hereafter (such persons
as described in this sentence being herein collectively referred to as
"Non-Recourse Persons"), provided, however, Non-Recourse Persons shall not
include any Maker or any Subsidiary of a Maker that would otherwise be
liable as a general partner in a Maker. The recourse of the Agent, the
Lender, the Other Lender and their successors and assignees under or in
connection with the Line of Credit Notes, the Security Documents, the
Credit Agreement, the other Loan Documents, the Loans and such instruments
and certificates, and any such amendments or modifications, shall be
limited to the assets of the Makers, and the Agent, the Lender, the Other
Lender and each of their successors and assignees waive and do hereby waive
any such personal liability against any such Non-Recourse Persons. For the
purposes of the Line of Credit Notes, the Security Documents, the Credit
Agreement and each other Loan Document and any such instruments and
certificates and any such amendments or modifications, neither the negative
capital account of a constituent partner in any Maker, nor any obligation
of any constituent partner in any Maker to restore a negative capital
account or to advance or contribute capital to any Maker or any other
constituent partner in any Maker shall be deemed to be the property or the
asset of any Maker or any such other constituent partner (and neither the
Agent, the Lender or the Other Lender nor any of their successors or
assignees shall have any right to collect, enforce or proceed against or
with respect to any such negative capital account or partner's obligation
to restore, advance or contribute). As used in this section, the term
"constituent partner" means any direct partner in any Maker, and any person
or entity that is a partner in any partnership that, directly or indirectly
through one or more other partnerships, is a partner in any Maker.
7.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
7.6 All sums received by the Agent for application to this Note and
the other Line of Credit Note shall be applied by the Agent in the manner
set forth in Section 2.8 of the Credit Agreement.
7.7 The Makers are strictly liable for and hereby agree to pay or
reimburse the Agent (but not the Other Lender) for, and hold it harmless
from and against all of its reasonable third party costs and expenses
incurred in connection with the collection or enforcement of, or the
preservation of any rights under, this Note, the other Line of Credit Note,
the Credit Agreement or other Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel for the Agent,
including attorneys' fees out of court, in trial, on appeal, in bankruptcy
proceedings or otherwise. The Makers shall pay all such amounts in
accordance with the terms of the Credit Agreement, and until repaid, such
sums shall bear interest at the Default Rate.
7.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note and the other Line of Credit
Note shall be given in accordance with the notice provisions of
Section 11.4 of the Credit Agreement.
7.9 As used herein, the terms "Makers," "Agent," "Lender" and
"Other Lender" shall be deemed to include their respective successors and
assigns.
7.10 In the event any one or more of the provisions of this Note or
the other Line of Credit Note shall for any reasons be held to be invalid,
illegal, or unenforceable, in whole or in part or in any respect, or in the
event one or more of the provisions of this Note or the other Line of
Credit Note operates or would prospectively operate to invalidate this Note
or the other Line of Credit Note, then in any of those events, only such
provision or provisions shall be deemed null and void and shall not effect
any other provision of this Note or the other Line of Credit Note. The
remaining provisions of this Note and the other Line of Credit Note shall
remain operative and in full force and effect and in shall no way be
affected, prejudiced or disturbed thereby. In the event any provisions of
this Note or the other Line of Credit Note are inconsistent with any
provisions of the Credit Agreement, the Security Documents or other Loan
Documents, or any other agreements or documents executed in connection with
the Line of Credit Note, the Line of Credit Note shall control.
7.11 It is expressly understood and agreed that neither the Agent,
the Lender or the Other Lender shall ever be construed for any purposes, to
be the partner, joint venturer, principal or associate of the Makers or any
of them or any person or party claiming by, through or under the Makers or
any of them in the conduct of their respective businesses.
7.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof (a)
severally waive presentment for payment, demand, notice of demand, notice
of nonpayment or dishonor, protest and notice of protest of this Note and
the other Line of Credit Note, and all other notices in connection with the
delivery, acceptance, performance or enforcement of the payment of this
Note and the other Line of Credit Note, (b) expressly consent to all
extensions of time, renewals, postponements of time of payment of this Note
and the other Line of Credit Note or other modifications from time to time
prior to or after the Maturity Date, without notice, consent or
consideration to any of the foregoing, (c) expressly agree to any
substitution, exchange, addition or release of any of the other Loan
Documents or the addition or release of any party or person primarily or
secondarily liable hereon, (d) expressly agree that the Agent and/or the
Lender or Other Lender shall not be required first to institute any suit,
or to exhaust their remedies against the Makers or any other person or
party to become liable hereunder or against the other Loan Documents in
order to enforce the payment of this Note and the other Line of Credit
Note, and (e) expressly agree that, notwithstanding the occurrence of any
of the foregoing, they shall be and remain, jointly and severally, directly
liable for all sums due under this Note, the other Line of Credit Note and
the other Loan Documents subject to the terms and conditions hereof and
thereof.
7.13 Neither the Agent or the Lender or Other Lender shall be
deemed, by any act of omission or commission, to have waived any of their
rights or remedies hereunder unless such waiver is in writing given in
accordance with the terms of the Credit Agreement, and then only to the
extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy as to a subsequent event.
7.14 Neither this Note or the other Line of Credit Note nor any
provision hereof or thereof may be changed or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change or termination is sought.
7.15 Failure to accelerate this Note or the other Line of Credit
Note after an Event of Default, or the acceptance of a past due
installment, shall not be construed as a novation of the contract or a
waiver of the right of the Agent or the Lender or Other Lender to
thereafter insist upon strict compliance with the terms of this Note and
the other Line of Credit Note without previous notice of such intention
being given to the Makers.
7.16 Notwithstanding anything to the contrary in this Note, the
other Line of Credit Notes, the Credit Agreement, the Security Documents or
other Loan Documents, the maximum liability of any Maker other than
Arvida/JMB Partners, L.P. (herein a "Maker Subsidiary" or "Maker
Affiliate") for the Obligations created, evidenced and secured thereby and
hereby shall not exceed the maximum amount, as such maximum amount shall be
determined by a court of competent jurisdiction of any such Maker
Subsidiary's or Maker Affiliate's liability therefor which may be incurred
without rendering the Obligations, as they relate to such Maker Subsidiary
or Maker Affiliate, voidable as a fraudulent conveyance or fraudulent
transfer under the Bankruptcy Code or under any other present or future
federal or state laws or statutes relating to bankruptcy, insolvency,
assignment for the benefit of creditors or other relief for debtors,
including, without limitation, the Uniform Fraudulent Transfer Act or the
Uniform Fraudulent Conveyance Act, as in effect in any jurisdiction wherein
any such Maker Subsidiary's or Maker Affiliate's Solvency (as defined in
the Credit Agreement) is subject to determination. For purposes of
determining such liability of any Maker Subsidiary or Maker Affiliate, due
consideration shall be given to the benefits received, directly or
indirectly, by such Maker Subsidiary or Maker Affiliate from the Loans (as
defined in the Credit Agreement) made pursuant to the Commitments (as
defined in the Credit Agreement).
7.17 The section headings of this Note and the other Line of Credit
Note are for reference purposes only and are to be given no effect in the
construction or interpretation of this Note or the other Line of Credit
Note.
<PAGE>
THE MAKERS AND THE LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LINE OF CREDIT NOTE OR
THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED
IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY MAKERS, THE AGENT,
THE LENDER OR ANY OTHER LENDER.
SIGNATURE PAGES FOLLOW
<PAGE>
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Mark D. Lassman,
Vice President
[CORPORATE SEAL]
<PAGE>
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Mark D. Lassman,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Mark D. Lassman,
Vice President
[CORPORATE SEAL]
<PAGE>
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Mark D. Lassman,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Mark D. Lassman,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Mark D. Lassman,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Mark D. Lassman,
Vice President
[CORPORATE SEAL]
<PAGE>
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Mark D. Lassman,
Vice President
[CORPORATE SEAL]
<PAGE>
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Mark D. Lassman,
Vice President
[CORPORATE SEAL]
<PAGE>
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Mark D. Lassman,
Vice President
[CORPORATE SEAL]
<PAGE>
EXHIBIT "B" TO BIFURCATION OF NOTE AGREEMENT
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE. NON-
RECURRING INTANGIBLE TAXES SHALL BE PAID AT THE TIME OF EACH ADVANCE, ON
SUCH ADVANCE.
LINE OF CREDIT
PROMISSORY NOTE
$7,680,000 Effective Date: September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of First Union National Bank, a national banking
association, its successors or assigns (the "Lender"), the principal sum of
SEVEN MILLION SIX HUNDRED EIGHTY THOUSAND DOLLARS ($7,680,000), or the
Lender's Actual Share of all sums as may be advanced under the Line of
Credit Commitment, pursuant to and in accordance with the Credit Agreement,
together with interest on the principal balance of this Note outstanding
from time to time, as same shall accrue thereon in accordance with the
terms hereof, but not to exceed the maximum non-usurious rate permitted by
law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 "Actual Share" means the percentage interest of the Lender in
the Advances made pursuant to the Line of Credit Commitment.
1.2 "Adjusted LIBO Rate" means, relative to any LIBO Rate Tranche
to be made, continued or maintained as, or converted into, a LIBO Rate
Tranche for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of one percent) equal to the quotient of
(i) the LIBO Rate applicable to the relevant Interest Period, divided by
(ii) the result of one minus the Reserve Percentage applicable to such
Interest Period.
1.3 "Agent" means First Union National Bank, a national banking
association.
1.4 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which the Agent is closed pursuant to authorization or
requirement of law.
1.5 "Committed Share" means the percentage interest of the Lender
in the Line of Credit Commitment.
1.6 "Credit Agreement" means the Credit Agreement dated July 31,
1997, between Lender and Borrower (among others), as amended, of even date
herewith, as the same may be amended, supplemented, restated, replaced or
otherwise modified from time to time.
1.7 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
1.8 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.9 "Interest Period" means, in the case of a LIBO Rate Tranche,
the period commencing on (and including) the Business Banking Day selected
by the Makers as the date on which such LIBO Rate Tranche is made or
continued as, or converted into a LIBO Rate Tranche pursuant to the terms
of this Note, and ending on (but excluding) the day which numerically
corresponds to such date one, two, three or six months thereafter (or if
such month has no numerically corresponding day, on the last Business
Banking Day of such month), in each case as the Makers may select, provided
that (a) if such Interest Period would otherwise end on a day which is not
a Business Banking Day, such Interest Period shall end on the next
following Business Banking Day (unless, in the case of a LIBO Rate Tranche,
such next following Business Banking Day is the first Business Banking Day
of the calendar month, in which case such Interest Period shall end on the
Business Banking Day next preceding such numerically corresponding day);
and (b) no Interest Period may end on a date later than the Maturity Date.
1.10 "LIBO Rate" means, relative to any Interest Period, a rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
one percent) equal to the rate for US dollar deposits with maturities
comparable to such Interest Period for delivery on the first day of such
Interest Period which appears on the Reuters Screen LIBO Page as of
11:00 a.m. (London time) on the day that is two (2) London Banking Days
preceding the commencement date of the Interest Period. If at least two
(2) such offered rates appear on the Reuters Screen LIBO Page, the rate
will be the arithmetic mean of such offered rates. The Agent may, in its
discretion, use any other publicly available index or reference rate
showing rates offered for United States dollar deposits in the London
Interbank market as of the applicable date. In addition, the Agent may, in
its discretion, use rate quotations for daily or annual periods in lieu of
quotations for substantially equivalent monthly periods, in the absence of
such quotations for substantially equivalent monthly periods. Each
determination of the LIBO Rate applicable to a particular Interest Period
shall be made by the Agent and shall be conclusive and binding upon the
Makers and Lenders absent manifest error.
1.11 "LIBO Rate Tranche" means a Tranche bearing interest at all
times during the Interest Period applicable to such Tranche, at a fixed
rate of interest equal to the Note LIBO Rate applicable to such Interest
Period.
1.12 "Line of Credit Commitment" has the meaning ascribed to such
term in the Credit Agreement.
1.13 "Line of Credit Notes" means this Note and the other Line of
Credit Note executed by the Makers in favor of the Other Lender, each dated
of even date herewith, in the aggregate amount of the Line of Credit
Commitment, as same may be amended, supplemented, renewed, restated,
replaced or otherwise modified from time to time.
1.14 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
1.15 "Loan Year" means each of the twelve (12) month periods
commencing on July 31, 1997 and on the first, second and third
anniversaries hereof.
1.16 "London Banking Day" means each day other than a Saturday, a
Sunday or any holiday on which commercial banks in London, England are
closed for business.
1.17 "Maturity Date" means the earlier of: (i) July 31, 2001 and
(ii) any earlier date upon which the principal balance outstanding
hereunder, together with all interest accrued thereon, shall become
immediately due and payable following an Event of Default, in accordance
with provisions of the Credit Agreement.
<PAGE>
1.18 "Note" means this Line of Credit Promissory Note, in the amount
of the Lender's Committed Share of the Line of Credit Commitment, as same
maybe amended, supplemented, restated, replaced or otherwise modified from
time to time.
1.19 "Note LIBO Rate" means the Adjusted LIBO Rate applicable to a
specific LIBO Rate Tranche selected by the Makers for a relevant Interest
Period, plus 175 basis points.
1.20 "Note Prime Rate" means the Prime Rate applicable to the Prime
Rate Tranche. The Note Prime Rate shall be increased or decreased
effective on any date on which the Prime Rate shall be increased or
decreased.
1.21 "Other Lender" means, Bank United, a federal savings bank, also
being a "Lender".
1.22 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank, as its Prime Rate. The Prime
Rate is a reference rate for the information and use of the Agent in
establishing the actual rates to be charged to borrowers and is not
necessarily the lowest rate charged by the Agent. Should First Union
National Bank not publish a Prime Rate at any time during the term of this
Note, the Agent, in its reasonable discretion, may choose a substitute
Prime Rate. The rate of interest shall change automatically and
immediately as of the date of any change in the Prime Rate without notice
to Borrower or any endorser, surety or guarantor, if any.
1.23 "Prime Rate Tranche" means a Tranche bearing interest at the
Note Prime Rate.
1.24 "Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other rule, regulation or official interpretation of said Board
of Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
1.25 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.26 "Reserve Percentage" means the stated maximum rate (expressed
as a decimal) at which reserves are required to be maintained by the Agent
during an Interest Period, including, without limitation (i) any basis,
supplemental, marginal, or emergency reserve under any regulations of any
governmental authority to which the Agent is subject, (ii) any reserve
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), including, without limitation, Regulation D, for determining
the maximum reserve requirement in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits
by reference to which the LIBO Rate is determined). Without limiting the
effect of the foregoing, the Reserve Percentage shall reflect any other
reserves required to be maintained by the Agent under any regulation of any
governmental authority to which the Agent is subject against (a) any
category of liabilities that include deposits with reference to which the
LIBO Rate is to be determined or (b) any category of extension of credit or
other assets that includes loans bearing interest at a rate based on the
LIBO Rate. Each determination of the Reserve Percentage shall be made by
the Agent and shall be conclusive and binding upon the Makers and Lenders
absent manifest error.
1.27 "Security Documents" has the meaning ascribed to such terms in
the Credit Agreement.
1.28 "Tranche" means any portion of the outstanding principal
balance under the Line of Credit Notes bearing interest at the applicable
Note LIBO Rate for a specific Interest Period, as selected by the Makers in
accordance with Section 2.1, below, and any portion of the outstanding
principal balance under the Line of Credit Notes which may from time to
time bear interest at the Note Prime Rate.
<PAGE>
20 Selection and Calculation of Interest Rate.
2.1 Provided that no Event of Default or circumstance which with
the passage of time or giving of notice would become an Event of Default
then exists under the Loan Documents, and provided there shall at no time
be permitted to exist more than four LIBO Rate Tranches with respect to the
total principal balance outstanding under the Line of Credit Notes, the
Makers shall have the right to elect to have the Note LIBO Rate then in
effect for an Interest Period apply to a LIBO Rate Tranche, in accordance
with, and subject to the provisions of this Section 2.1. To make an
election to have such Note LIBO Rate apply to any LIBO Rate Tranche, from
time to time, the Makers shall give to the Agent irrevocable notice (a
"Rate Election Notice") not later than 11:00 a.m. (Ft. Lauderdale, Florida
time) at least three (3) Business Banking Days prior to the commencement
date of each such Interest Period, which Rate Election Notice shall be
addressed as follows, and shall be given in writing (by telecopy, hand
delivery, or overnight delivery service), in accordance with the provisions
of Section 11.4 of the Credit Agreement:
Dana Hunter, Vice President
First Union National Bank
5581 West Oakland Park Blvd., 2nd Floor
Lauderhill, Florida 33313
(954) 467-5543
Fax: (954) 467-5557
Each such Rate Election Notice shall be in the form attached hereto as
Schedule 1 and shall specify: (i) the commencement day of the Interest
Period which shall be a Business Banking Day (and, with respect to any then
existing LIBO Rate Tranche, shall not be a date prior to the termination
date of such then existing LIBO Rate Tranche), (ii) the principal amount of
the LIBO Rate Tranche which shall be subject to the application of the Note
LIBO Rate, which shall be in a minimum amount of $2,000,000.00, and in
multiples of $100,000.00 and (iii) the applicable Interest Period which
shall apply to such LIBO Rate Tranche, provided, however, that no Interest
Period may extend beyond the Maturity Date.
2.2 If the Agent determines, absent manifest error, that the
maintenance of any Note LIBO Rate would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, of if the
Agent determines that the interest rate applicable to the Note LIBO Rate
does not accurately reflect the cost of maintaining any LIBO Rate Tranche
subject to such rate, then, at the election of the Agent, the Makers shall
not be entitled thereafter to select a Note LIBO Rate to be applicable to
any portions of the total outstanding principal balance under the Line of
Credit Notes, and the interest rate applicable to all of the outstanding
principal balance under the Line of Credit Notes then subject to the Note
LIBO Rate for any applicable Interest Period, shall, upon the expiration of
all such applicable Interest Periods, be converted to the Prime Rate.
2.3 In the event that the Makers shall fail to provide a timely
Rate Election Notice for the election of the Note LIBO Rate to apply to any
Advance or to any LIBO Rate Tranche, as of the termination date of the
applicable Interest Period for such Tranche, then as the date of such
Advance, or as of such termination date of such LIBO Rate Tranche, as the
case may be, the Prime Rate shall apply to such Advance or LIBO Rate
Tranche until the next eligible effective date for which the Maker shall
have provided a timely Rate Election Notice, and such Advance or such
principal amount previously comprising a LIBO Rate Tranche, shall
thereafter be deemed to be included in the Prime Rate Tranche.
<PAGE>
2.4 Interest shall be calculated on the daily total outstanding
balance of all Advances of Loan Proceeds under the Line of Credit
Commitment, as such Advances are evidenced by the Line of Credit Notes, as
follows: (i) interest shall accrue on each LIBO Rate Tranche, commencing
with the effective date for each such LIBO Rate Tranche, at the applicable
Note LIBO Rate for the applicable Interest Period and (ii) interest shall
accrue on the Prime Rate Tranche, which shall comprise all of the
outstanding principal balance under the Line of Credit Notes not otherwise
subject to a LIBO Rate Tranche, at the Note Prime Rate, changing when and
as the Prime Rate changes. Interest shall be computed through and
including the date of any payment and shall be calculated for actual days
elapsed on the basis of a 360 day year (i.e. interest for each day on which
any principal is outstanding shall be calculated at the applicable interest
rate described above, divided by 360).
30 Payment of Interest and Principal.
3.1 Interest, calculated as above provided, shall be due and
payable by the Makers to the Agent, for the account of the Lender and Other
Lender, in accordance with their Actual Shares of the total outstanding
principal balance of the Line of Credit Notes, subject to the provisions of
Section 3.7 hereof, on the first Business Banking Day of the first calendar
month immediately following the Advance of Loan Proceeds under the Line of
Credit Commitment and continuing on the first day of each month thereafter
until the Maturity Date.
3.2 The total outstanding principal balance under the Line of
Credit Notes and all accrued but unpaid interest shall be fully due and
payable on the Maturity Date.
3.3 All payments of principal and interest under the Line of Credit
Notes shall be made in lawful money of the United States which shall be
legal tender in payment of all debts, public and private, at the time of
payment.
3.4 The Line of Credit Notes may be prepaid in whole or in part at
any time and from time to time, without penalty or premium, provided:
(i) any such prepayment shall be preceded by at least three (3) Business
Banking Days' prior written notice to the Agent and (ii) any such
prepayment shall be accompanied by accrued interest to the date of
prepayment and any other obligations and payments then due under the terms
of the Line of Credit Notes. If the Makers shall make a payment or
prepayment of all or any portion of the principal amount outstanding then
subject to a LIBO Rate Tranche, prior to the applicable termination date
thereof (including, without limitation, upon the acceleration of the
Maturity Date following an Event of Default), or the Makers shall attempt
to rescind a Rate Election Notice for a specified LIBO Rate Tranche, after
the Makers have submitted such Rate Election Notice to the Agent, then,
within three (3) Business Banking Days following written notice from the
Agent, the Makers shall pay to the Agent the amount of any loss or cost
incurred by the Agent, the Lender or the Other Lender resulting therefrom,
including, without limitation, any loss or cost resulting from the
liquidation or re-employment of deposits required to fund or maintain the
subject LIBO Rate Tranche, not to exceed the amount of interest which would
have been earned on the amount prepaid for the balance of the subject
Interest Period, at a rate equal to the difference, not less than zero, of
the LIBO Rate as of the first day of the Interest Period less the LIBO Rate
as of the date of such prepayment, for a corresponding Interest Period
commencing on the date of such prepayment. The obligations of the Makers
under this section shall survive payment of the Line of Credit Notes.
<PAGE>
3.5 Prior to the Maturity Date, the Makers may borrow, repay and
reborrow hereunder, in accordance with the terms of the Credit Agreement.
The Makers shall repay the outstanding balances under the Line of Credit
Notes at least once each Loan Year, provided, however, that the Makers
shall, at no point, repay the outstanding balances under this Note or under
any of the other Line of Credit Notes to the extent that there shall be
less than One Thousand Dollars and no/100 ($1,000.00) outstanding
thereunder at any time, and shall not reborrow under the Line of Credit
Commitment for a period of at least thirty (30) days after such repayment
(a "Cleanup Repayment"). Notwithstanding the foregoing, however, the Maker
shall be entitled to forego such Cleanup Repayment for one Loan Year,
provided, however, that the Maker shall not be entitled to make any
Distributions (as defined in the Credit Agreement) during the Loan Year
following the Loan Year as to which the Makers shall have failed to make a
Cleanup Repayment, until the Makers shall make a Cleanup Repayment.
3.6 All payments of principal and interest under the Line of Credit
Notes shall be made in immediately available funds by 11:00 a.m. (Ft.
Lauderdale, Florida time) on a Business Banking Day, to the Agent for the
account of the Lenders, at the office of the Agent at 301 South College
Street, TW-6, Charlotte, North Carolina 28288-0166, Attention: Jane Hurley,
or by wire to ABA #053000219, Account No.465906 0010352, Reference
"Arvida," Attention: Jane Hurley, or at such other place as the Agent may
instruct. Any payments of principal or interest made after 11:00 a.m. (Ft.
Lauderdale, Florida time) shall be deemed to be payments made on the next
following Business Banking Day, for all purposes, hereof, including,
without limitation, the accrual of interest. Should any payment under the
Line of Credit Notes become due and payable on a day other than a Business
Banking Day, the maturity thereof shall be extended to the next succeeding
Business Banking Day, and, in the case of any payment of principal,
interest shall be payable thereon as calculated pursuant hereto, for each
Business Banking Day such principal is outstanding (provided, however, any
payment of principal received on any Business Banking Day by 11:00 a.m.
(Ft. Lauderdale, Florida time) shall not be deemed to be outstanding on
such Business Banking Day).
3.7 Notwithstanding anything to the contrary set forth herein, the
Agent shall provide the Makers with written notice prior to the first
Business Banking Day of each month of the interest installment with respect
to the Line of Credit Notes which is due and payable on such first Business
Banking Day of such month. With respect to each such monthly installment
of interest, the Agent and the Lenders hereby grant to the Makers a grace
period for the payment of same, which shall extend to the later of: (a) the
fifteenth (15th) day of the month or (b) if the Makers shall not have
received written notice of the monthly interest installment from the Agent,
prior to the first Business Banking Day of any month and the Makers shall
have provided written notice to the Agent, no later than such first
Business Banking Day of the month, of such Agent's failure to provide the
Makers with written notice of such interest installment, then, the date
fifteen (15) days from receipt by the Makers of such written notice of the
monthly interest installment. If the Agent shall not receive written
notice from the Makers on or before the first Business Banking Day of a
month, of the Agent's failure to provide written notice of an interest
installment, then, for all purposes of this Note, notwithstanding that the
Makers may later request such written notice of such interest installment,
such grace period shall extend to no later than the fifteenth (15th) day of
such month.
3.8 Any payment required to be paid by the Line of Credit Notes,
the Loan Documents or the Credit Agreement, with the exception of interest
and principal, shall be due and payable no later than fifteen (15) days
from receipt by the Makers from the Agent of written notice of the required
payment.
<PAGE>
3.9 Provided the Agent has not exercised its right to accelerate
the Line of Credit Notes as provided in the Line of Credit Notes, the
Credit Agreement or the other Loan Documents: (a) in the event any payment
of principal required under the Line of Credit Notes, either pursuant to
the terms hereof or the terms of the Credit Agreement, is not received by
the Agent, for the account of the Lender and Other Lender, by the fifteenth
(15th) day following the day on which such payment is due, the Makers shall
pay to the Agent, for the account of the Lender and Other Lender, a late
charge of five percent (5%) of the payment not so received, the parties
agreeing that said charge is a fair and reasonable charge for the late
payment and shall not be deemed a penalty or as compounding interest, and
(b) in the event any scheduled payment of interest required under the Line
of Credit Notes is not received by the Agent, for the account of the Lender
and Other Lender, by the later of (i) fifteen (15) days from receipt by the
Makers of written notice of the monthly interest installment and (ii) the
fifteenth (15th) day of such month, the Makers shall pay to the Agent, for
the account of the Lender and Other Lender, a late charge of five percent
(5%) of the payment not so received, the parties agreeing that said charge
is a fair and reasonable charge for the late payment and shall not be
deemed a penalty or as compounding interest. Further, if any payment
required to be paid by the Line of Credit Notes, the Credit Agreement or
the other Loan Documents, with the exception of interest and principal, is
not paid within fifteen (15) days from receipt by the Makers from the Agent
of written notice of the required payment, the Makers shall pay to the
Agent, for the account of the Lender and Other Lender, a late charge of
five percent (5%) of the payment not so received, the parties agreeing that
said charge is a fair and reasonable charge for the late payment and shall
not be deemed a penalty or as compounding interest.
40 Collateral Security. This Note and the other Line of Credit Note are
issued pursuant to the Credit Agreement. This Note and the other Line of
Credit Note are secured by the Credit Agreement, the Security Documents and
the other Loan Documents. Reference is hereby made to the Credit
Agreement, the Security Documents and the other Loan Documents for a
description of Events of Default and rights of acceleration of the Maturity
Date upon the occurrence of an Event of Default. It is expressly agreed
that all of the covenants, conditions and agreements contained in the
Credit Agreement, the Security Documents and the other Loan Documents are
made a part of this Note and the other Line of Credit Note.
50 Events of Default.
5.1 Upon the occurrence of an Event of Default, the Agent may, and
upon the direction of the Required Lenders, shall declare the entire amount
of this Note and the other Line of Credit Note, including the principal
balance then outstanding thereunder, together with all interest accrued
thereon, to be immediately due and payable, without notice, (the Makers
hereby expressly waive notice of such Event of Default), time being of the
essence of this Line of Credit Note and the other Line of Credit Note. Any
Event of Default under this Note shall be an Event of Default under all
other Loan Documents and an Event of Default under any other Loan Document
shall be an Event of Default under this Note.
5.2 In the event the Agent accelerates the Line of Credit Notes as
herein provided or the full amount of outstanding principal and interest
under the Line of Credit Notes is not fully repaid to the Agent for the
account of the Lenders on or before the Maturity Date, then the entire
unpaid principal balance under the Line of Credit Notes, together with all
interest accrued thereon, shall bear interest from the date of an Event of
Default or from the Maturity Date, respectively, at the Default Rate. Any
late charge paid by the Makers shall be applied to the interest charged at
the Default Rate after acceleration of the Line of Credit Notes.
<PAGE>
5.3 The remedies of the Agent, the Lender and Other Lender, as
provided herein, or in the Security Documents, the other Loan Documents or
Credit Agreement shall be cumulative and concurrent and may be pursued
singularly, successively or together, by the Agent in accordance with the
terms of the Credit Agreement, and may be exercised as often as the
occasion therefor shall arise. Notwithstanding anything herein seemingly
to the contrary, neither the Agent, the Lender or the Other Lender shall
take any action, including, without limitation, in connection with the
enforcement of any of their rights under the Line of Credit Notes, the
Credit Agreement or other Loan Documents, unless such action is consistent
with the action taken by the Agent, the Lender or the Other Lender, as the
case may be, with respect to all of the Line of Credit Notes and in
accordance with the provisions of the Credit Agreement.
60 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
the Line of Credit Notes, to pay interest in an amount or at a rate greater
than the highest non-usurious rate permissible under applicable law as
amended from time to time. Should any interest or other charges paid by
the Makers, or any party liable for the payment of the Loan evidenced by
the Line of Credit Notes, result in the computation or earning of interest
in excess of the highest non-usurious rate permissible under applicable
law, then any and all such excess shall be and the same is hereby waived by
the Agent, the Lender and the Other Lender, and all such excess shall be
paid by the Agent, the Lender or the Other Lender, as the case shall be, to
the Makers or to any party liable for the payment of the Loan evidenced by
the Line of Credit Notes, it being the intent of the parties hereto that
under no circumstances shall the Makers or any party liable for the payment
of the Loan hereunder, be required to pay interest in excess of the highest
non-usurious rate permissible under applicable law as amended from time to
time. By operation of Section 687.12, Florida Statutes (1996), the
interest rate charged under the Note and the other Line of Credit Notes is
authorized by Chapters 658, 665 and 687, Florida Statutes (1996) and
applicable federal law.
70 Waivers/Miscellaneous Matters.
7.1 The Line of Credit Notes are to be construed according to the
applicable laws of the State of Florida and the United States of America.
Any action brought upon the enforcement of this Note and the other Line of
Credit Note is hereby authorized to be instituted and prosecuted in Broward
County, Florida, or at the United States District Court for the Southern
District of Florida, at the election of the Agent, subject to and in
accordance with the terms of the Credit Agreement.
7.2 The Line of Credit Notes may not be changed orally, but only by
an agreement in writing, signed by the party against whom enforcement of
any waiver, change, modification or discharge is sought.
7.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note and the other Line of Credit
Note hereby consents to any extension or renewal of this Note and the other
Line of Credit Note or any part thereof, without notice, and agrees that it
will remain liable under this Note and the other Line of Credit Note during
any extension or renewal thereof, until the indebtedness evidenced hereby
and thereby is paid in full.
7.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
<PAGE>
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and neither the Agent, the Lender or the Other
Lender shall have any recourse against any property or assets of any such
constituent partner or other person or entity) under or in connection with
the Line of Credit Notes, the Credit Agreement, the Security Documents, the
other Loan Documents, the Loans, or any instruments securing or otherwise
executed in connection therewith, or any certificate delivered in
connection therewith, or any amendments or modifications to any of the
foregoing made at any time or times, heretofore or hereafter (such persons
as described in this sentence being herein collectively referred to as
"Non-Recourse Persons"), provided, however, Non-Recourse Persons shall not
include any Maker or any Subsidiary of a Maker that would otherwise be
liable as a general partner in a Maker. The recourse of the Agent, the
Lender, the Other Lender and their successors and assignees under or in
connection with the Line of Credit Notes, the Security Documents, the
Credit Agreement, the other Loan Documents, the Loans and such instruments
and certificates, and any such amendments or modifications, shall be
limited to the assets of the Makers, and the Agent, the Lender, the Other
Lender and each of their successors and assignees waive and do hereby waive
any such personal liability against any such Non-Recourse Persons. For the
purposes of the Line of Credit Notes, the Security Documents, the Credit
Agreement and each other Loan Document and any such instruments and
certificates and any such amendments or modifications, neither the negative
capital account of a constituent partner in any Maker, nor any obligation
of any constituent partner in any Maker to restore a negative capital
account or to advance or contribute capital to any Maker or any other
constituent partner in any Maker shall be deemed to be the property or the
asset of any Maker or any such other constituent partner (and neither the
Agent, the Lender or the Other Lender nor any of their successors or
assignees shall have any right to collect, enforce or proceed against or
with respect to any such negative capital account or partner's obligation
to restore, advance or contribute). As used in this section, the term
"constituent partner" means any direct partner in any Maker, and any person
or entity that is a partner in any partnership that, directly or indirectly
through one or more other partnerships, is a partner in any Maker.
7.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
7.6 All sums received by the Agent for application to this Note and
the other Line of Credit Note shall be applied by the Agent in the manner
set forth in Section 2.8 of the Credit Agreement.
7.7 The Makers are strictly liable for and hereby agree to pay or
reimburse the Agent (but not the Other Lender) for, and hold it harmless
from and against all of its reasonable third party costs and expenses
incurred in connection with the collection or enforcement of, or the
preservation of any rights under, this Note, the other Line of Credit Note,
the Credit Agreement or other Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel for the Agent,
including attorneys' fees out of court, in trial, on appeal, in bankruptcy
proceedings or otherwise. The Makers shall pay all such amounts in
accordance with the terms of the Credit Agreement, and until repaid, such
sums shall bear interest at the Default Rate.
7.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note and the other Line of Credit
Note shall be given in accordance with the notice provisions of
Section 11.4 of the Credit Agreement.
7.9 As used herein, the terms "Makers," "Agent," "Lender" and
"Other Lender" shall be deemed to include their respective successors and
assigns.
<PAGE>
7.10 In the event any one or more of the provisions of this Note or
the other Line of Credit Note shall for any reasons be held to be invalid,
illegal, or unenforceable, in whole or in part or in any respect, or in the
event one or more of the provisions of this Note or the other Line of
Credit Note operates or would prospectively operate to invalidate this Note
or the other Line of Credit Note, then in any of those events, only such
provision or provisions shall be deemed null and void and shall not effect
any other provision of this Note or the other Line of Credit Note. The
remaining provisions of this Note and the other Line of Credit Note shall
remain operative and in full force and effect and in shall no way be
affected, prejudiced or disturbed thereby. In the event any provisions of
this Note or the other Line of Credit Note are inconsistent with any
provisions of the Credit Agreement, the Security Documents or other Loan
Documents, or any other agreements or documents executed in connection with
the Line of Credit Note, the Line of Credit Note shall control.
7.11 It is expressly understood and agreed that neither the Agent,
the Lender or the Other Lender shall ever be construed for any purposes, to
be the partner, joint venturer, principal or associate of the Makers or any
of them or any person or party claiming by, through or under the Makers or
any of them in the conduct of their respective businesses.
7.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof (a)
severally waive presentment for payment, demand, notice of demand, notice
of nonpayment or dishonor, protest and notice of protest of this Note and
the other Line of Credit Note, and all other notices in connection with the
delivery, acceptance, performance or enforcement of the payment of this
Note and the other Line of Credit Note, (b) expressly consent to all
extensions of time, renewals, postponements of time of payment of this Note
and the other Line of Credit Note or other modifications from time to time
prior to or after the Maturity Date, without notice, consent or
consideration to any of the foregoing, (c) expressly agree to any
substitution, exchange, addition or release of any of the other Loan
Documents or the addition or release of any party or person primarily or
secondarily liable hereon, (d) expressly agree that the Agent and/or the
Lender or Other Lender shall not be required first to institute any suit,
or to exhaust their remedies against the Makers or any other person or
party to become liable hereunder or against the other Loan Documents in
order to enforce the payment of this Note and the other Line of Credit
Note, and (e) expressly agree that, notwithstanding the occurrence of any
of the foregoing, they shall be and remain, jointly and severally, directly
liable for all sums due under this Note, the other Line of Credit Note and
the other Loan Documents subject to the terms and conditions hereof and
thereof.
7.13 Neither the Agent or the Lender or Other Lender shall be
deemed, by any act of omission or commission, to have waived any of their
rights or remedies hereunder unless such waiver is in writing given in
accordance with the terms of the Credit Agreement, and then only to the
extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy as to a subsequent event.
7.14 Neither this Note or the other Line of Credit Note nor any
provision hereof or thereof may be changed or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change or termination is sought.
7.15 Failure to accelerate this Note or the other Line of Credit
Note after an Event of Default, or the acceptance of a past due
installment, shall not be construed as a novation of the contract or a
waiver of the right of the Agent or the Lender or Other Lender to
thereafter insist upon strict compliance with the terms of this Note and
the other Line of Credit Note without previous notice of such intention
being given to the Makers.
<PAGE>
7.16 Notwithstanding anything to the contrary in this Note, the
other Line of Credit Notes, the Credit Agreement, the Security Documents or
other Loan Documents, the maximum liability of any Maker other than
Arvida/JMB Partners, L.P. (herein a "Maker Subsidiary" or "Maker
Affiliate") for the Obligations created, evidenced and secured thereby and
hereby shall not exceed the maximum amount, as such maximum amount shall be
determined by a court of competent jurisdiction of any such Maker
Subsidiary's or Maker Affiliate's liability therefor which may be incurred
without rendering the Obligations, as they relate to such Maker Subsidiary
or Maker Affiliate, voidable as a fraudulent conveyance or fraudulent
transfer under the Bankruptcy Code or under any other present or future
federal or state laws or statutes relating to bankruptcy, insolvency,
assignment for the benefit of creditors or other relief for debtors,
including, without limitation, the Uniform Fraudulent Transfer Act or the
Uniform Fraudulent Conveyance Act, as in effect in any jurisdiction wherein
any such Maker Subsidiary's or Maker Affiliate's Solvency (as defined in
the Credit Agreement) is subject to determination. For purposes of
determining such liability of any Maker Subsidiary or Maker Affiliate, due
consideration shall be given to the benefits received, directly or
indirectly, by such Maker Subsidiary or Maker Affiliate from the Loans (as
defined in the Credit Agreement) made pursuant to the Commitments (as
defined in the Credit Agreement).
7.17 The section headings of this Note and the other Line of Credit
Note are for reference purposes only and are to be given no effect in the
construction or interpretation of this Note or the other Line of Credit
Note.
THE MAKERS AND THE LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LINE OF CREDIT NOTE OR
THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED
IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY MAKERS, THE AGENT,
THE LENDER OR ANY OTHER LENDER.
SIGNATURE PAGES FOLLOW
<PAGE>
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
NOTE:DOCUMENTARY STAMPS AND INTANGIBLE TAXES WERE PAID IN CONNECTION
WITH THE VARIOUS NOTES PREVIOUSLY CONSOLIDATED AND EVIDENCE OF SAME APPEARS
ON THAT CERTAIN MORTGAGE AND SECURITY AGREEMENT DATED JULY 31, 1997, AND
RECORDED IN OFFICIAL RECORDS BOOK 26802, PAGE 888 OF THE PUBLIC RECORDS OF
BROWARD COUNTY, FLORIDA. THIS BIFURCATION OF NOTE AGREEMENT BIFURCATES
EXISTING INDEBTEDNESS AND/OR UNFUNDED AVAILABILITY WITHOUT ENLARGEMENT. NO
ADDITIONAL INDEBTEDNESS IS BEING INCURRED AND NO ADDITIONAL DOCUMENTARY
STAMPS OR INTANGIBLE TAXES ARE DUE.
BIFURCATION OF NOTE AGREEMENT
THIS BIFURCATION OF NOTE AGREEMENT ("Agreement) executed
effective as of September 1, 1998 by and between ARVIDA/JMB PARTNERS,
L.P., a Delaware limited partnership, ARVIDA/JMB PARTNERS, a Florida
general partnership, ARVIDA GRAND BAY LIMITED PARTNERSHIP IV, a Delaware
limited partnership, THE AOK GROUP, a Florida general partnership,
METRODRAMA JOINT VENTURE, a Florida general partnership, SOUTHEAST FLORIDA
HOLDINGS, INC., an Illinois corporation, GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP, a Delaware limited partnership and WESTON HILLS
COUNTRY CLUB LIMITED PARTNERSHIP, a Delaware limited partnership (jointly
and severally, "Borrowers"), having an address of 900 North Michigan
Avenue, Chicago, Illinois 60611 and FIRST UNION NATIONAL BANK, as Agent, a
national banking association, having an address of 5581 West Oakland Park
Boulevard, 2nd Floor, Lauderhill, Florida 33313 ("Lender").
W I T N E S S E T H:
WHEREAS, Lender is owner and holder of a certain Consolidated and
Restated Demand Note Letter of Credit Line Promissory Note executed by
Borrowers and dated of even date herewith in the original principal amount
of $5,000,000 ("Consolidated Note"), subject to the terms of that certain
Credit Agreement dated July 31, 1997 ("Credit Agreement") and secured by
the "Security Documents" (as defined in the Credit Agreement); and
WHEREAS, Borrowers and Lender wish to bifurcate the Consolidated Note
into two notes to remain subject to the terms of the Credit Agreement, as
modified of even date, and to remain secured by the Security Documents, as
modified of even date.
NOW, THEREFORE, in consideration of the mutual benefit to be
obtained, the parties hereto, intending to be legally bound, do hereby
agree as follows:
1. The above recitals are true and correct and are incorporated
herein by this reference.
2. Borrowers acknowledge that the unpaid principal balance of the
Consolidated Note as of the date hereof is $ -0- and the unfunded
availability thereof is $5,000,000.
3. As of the date hereof, Borrowers have no defenses, rights of
set-off, claims or counterclaims against Lender under the Consolidated
Note, the Credit Agreement or the Security Documents and Borrowers hereby
reaffirm their obligations thereunder as modified hereby.
4. This Agreement is not intended by Borrowers to be a novation,
the existing indebtedness not being forgiven hereby, but merely bifurcated
into two notes.
<PAGE>
5. The Consolidated Note is hereby bifurcated to evidence two
debts, represented by: (a) a $3,080,000 Demand Note Letter of Credit Line
Restated Renewal Promissory Note, attached hereto as Exhibit A, and (b) a
$1,920,000 Demand Note Letter of Credit Line Restated Renewal Promissory
Note, a copy of which is attached hereto as Exhibit B. Simultaneously
herewith, the $1,920,000 Demand Note Letter of Credit Line Restated Renewal
Promissory Note, a copy of which is attached hereto as Exhibit B shall be
assigned by Lender to Bank United, a federal savings bank, due to which
intended assignment the bifurcated notes attached hereto as Exhibit A and
Exhibit B contain references to multiple lenders so as to be consistent
with the Credit Agreement, as modified of even date.
IN WITNESS WHEREOF, the parties have executed this Bifurcation of
Note Agreement the day and year first above written.
BORROWERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA /JMB PARTNERS, a Florida general
partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, a general
partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA GRAND BAY LIMITED PARTNERSHIP
IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation, its sole
general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
THE AOK GROUP, a Florida general
partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership, a
general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
<PAGE>
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS, a Florida
general partnership, a general partner
By: ARVIDA/JMB MANAGERS, INC.,
Delaware corporation, a
general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole
general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS, a Florida
general partnership, a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC., an
Illinois corporation, its sole general partners
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP, a Delaware limited partnership
By: WHCC, INC., an Illinois
corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
LENDER:
FIRST UNION NATIONAL BANK,
a national banking association
By:
Print Name:
Title:
[CORPORATE SEAL]
<PAGE>
EXHIBIT "A" TO BIFURCATION OF NOTE AGREEMENT
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE. NON-
RECURRING INTANGIBLE TAXES SHALL BE PAID AT THE TIME OF EACH ADVANCE, ON
SUCH ADVANCE.
DEMAND NOTE
LETTER OF CREDIT LINE
$3,080,000 Effective Date: September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of First Union National Bank, a national banking
association, its successors or assigns (the "Lender"), the principal sum of
THREE MILLION EIGHTY THOUSAND DOLLARS ($3,080,000), or the Lender's Actual
Share of all sums as may be advanced under the Letter of Credit Commitment,
pursuant to and in accordance with the Credit Agreement, together with
interest on the principal balance of this Note outstanding from time to
time, as same shall accrue thereon in accordance with the terms hereof, but
not to exceed the maximum non-usurious rate permitted by law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 "Actual Share" means the percentage interest of the Lender in
the Advance made pursuant to the Letter of Credit Commitment.
1.2 "Agent" means First Union National Bank, a national banking
association.
1.3 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which the Agent is closed pursuant to authorization or
requirement of law.
1.4 "Committed Share" means the percentage interest of the Lender
in the Letter of Credit Commitment.
1.5 "Credit Agreement" means the Credit Agreement dated July 31,
1997, between Lender and the Borrower (among others), as amended, of even
date herewith, as the same may be amended, supplemented, restated, replaced
or otherwise modified from time to time.
1.6 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
1.7 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.8 "Letter of Credit Commitment" has the meaning ascribed to such
term in the Credit Agreement.
<PAGE>
1.9 "Letter of Credit Notes" means this Note and the other Letter
of Credit Note executed by the Makers in favor of the Other Lender, each
dated of even date herewith, in the aggregate amount of the Letter of
Credit Commitment, as same may be amended, supplemented, renewed, restated,
replaced or otherwise modified from time to time.
1.10 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
1.11 "Note" means this Note, in the amount of the Lender's Committed
Share of the Letter of Credit Commitment, as same maybe amended,
supplemented, restated, replaced or otherwise modified from time to time.
1.12 "Other Lender" means Bank United, a federal savings bank, also
being a "Lender".
1.13 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank, as its Prime Rate. The Prime
Rate is a reference rate for the information and use of the Agent in
establishing the actual rates to be charged to borrowers and is not
necessarily the lowest rate charged by the Agent or the Lender. Should
First Union National Bank not publish a Prime Rate at any time during the
term of this Note, the Agent, in its reasonable discretion, may choose a
substitute Prime Rate. The rate of interest shall change automatically and
immediately as of the date of any change in the Prime Rate without notice
to Borrower or any endorser, surety or guarantor, if any.
1.14 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.15 "Security Documents" has the meaning ascribed to such terms in
the Credit Agreement.
20 Payment of Interest and Principal.
2.1 The Maker shall pay to the Agent for the account of the Lender
and the Other Lender, the entire principal balance of all Advances
outstanding under the Letter of Credit Notes, together with all interest
accrued thereon, at the Prime Rate, not later than three (3) Business
Banking Days following receipt of demand therefor, from the Agent. The
failure of the Makers to make such payment at such time shall constitute an
Event of Default hereunder, under the other Letter of Credit Note, and
under the Credit Agreement, and thereafter interest shall accrue on the
entire principal balance outstanding under the Letter of Credit Notes, at
the Default Rate.
2.2 All payments of principal and interest under the Letter of
Credit Notes shall be made in lawful money of the United States which shall
be legal tender in payment of all debts, public and private, at the time of
payment.
2.3 All payments of principal and interest under the Letter of
Credit Notes shall be made in immediately available funds by 11:00 a.m.
(Ft. Lauderdale, Florida time) on a Business Banking Day, to the Agent for
the account of the Lenders, at the office of the Agent at 301 South College
Street, TW-6, Charlotte, North Carolina 28288-0166, Attention: Jane Hurley,
or by wire to ABA #053000219, Account No.465906 0010352, Reference
"Arvida," Attention: Jane Hurley, or at such other place as the Agent may
instruct. Any payments of principal or interest made after 11:00 a.m. (Ft.
Lauderdale, Florida time) shall be deemed to be payments made on the next
following Business Banking Day, for all purposes, hereof, including,
without limitation, the accrual of interest. Should any payment under the
Letter of Credit Notes become due and payable on a day other than a
Business Banking Day, the maturity thereof shall be extended to the next
succeeding Business Banking Day, and, in the case of any payment of
principal, interest shall be payable thereon as calculated pursuant hereto,
for each Business Banking Day such principal is outstanding (provided,
however, any payment of principal received on any Business Banking Day by
11:00 a.m. (Ft. Lauderdale, Florida time) shall not be deemed to be
outstanding on such Business Banking Day).
<PAGE>
30 Collateral Security. This Note and the other Letter of Credit Note
are issued pursuant to the Credit Agreement. This Note and the other
Letter of Credit Note are secured by the Credit Agreement, the Security
Documents and the other Loan Documents. Reference is hereby made to the
Credit Agreement, the Security Documents and the other Loan Documents for a
description of Events of Default and rights of acceleration of the Maturity
Date upon the occurrence of an Event of Default. It is expressly agreed
that all of the covenants, conditions and agreements contained in the
Credit Agreement, the Security Documents and the other Loan Documents are
made a part of this Note and the other Letter of Credit Note. The Letter
of Credit Commitment expires July 31, 2001, at which time, the Makers shall
either (i) cause all underlying Letters of Credit to be returned and
cancelled or (ii) if not previously paid to the Agent, pay to the Agent
Cash Collateral (as defined in the Credit Agreement) in an amount equal to
the maximum amount of all outstanding Letters of Credit.
40 Events of Default. The remedies of the Agent, the Lender and Other
Lender, as provided herein, or in the Security Documents, the other Loan
Documents or Credit Agreement shall be cumulative and concurrent and may be
pursued singularly, successively or together, by the Agent in accordance
with the terms of the Credit Agreement, and may be exercised as often as
the occasion therefor shall arise. Notwithstanding anything herein
seemingly to the contrary, neither the Agent, the Lender or the Other
Lender shall take any action, including, without limitation, in connection
with the enforcement of any of their rights under the Letter of Credit
Notes, the Credit Agreement or other Loan Documents, unless such action is
consistent with the action taken by the Agent, the Lender or the Other
Lender, as the case may be, with respect to all of the Letter of Credit
Notes and in accordance with the provisions of the Credit Agreement.
50 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
the Letter of Credit Notes, to pay interest in an amount or at a rate
greater than the highest non-usurious rate permissible under applicable law
as amended from time to time. Should any interest or other charges paid by
the Makers, or any party liable for the payment of the Loan evidenced by
the Letter of Credit Notes, result in the computation or earning of
interest in excess of the highest non-usurious rate permissible under
applicable law, then any and all such excess shall be and the same is
hereby waived by the Agent, the Lender and the Other Lender, and all such
excess shall be paid by the Agent, the Lender or the Other Lender, as the
case shall be, to the Makers or to any party liable for the payment of the
Loan evidenced by the Letter of Credit Notes, it being the intent of the
parties hereto that under no circumstances shall the Makers or any party
liable for the payment of the Loan hereunder, be required to pay interest
in excess of the highest non-usurious rate permissible under applicable law
as amended from time to time. By operation of Section 687.12, Florida
Statutes (1996), the interest rate charged under the Note and the other
Letter of Credit Notes is authorized by Chapters 658, 665 and 687, Florida
Statutes (1996) and applicable federal law.
60 Waivers/Miscellaneous Matters.
6.1 The Letter of Credit Notes are to be construed according to the
applicable laws of the State of Florida and the United States of America.
Any action brought upon the enforcement of this Note and the other Letter
of Credit Note is hereby authorized to be instituted and prosecuted in
Broward County, Florida, or at the United States District Court for the
Southern District of Florida, at the election of the Agent, subject to and
in accordance with the terms of the Credit Agreement.
6.2 The Letter of Credit Notes may not be changed orally, but only
by an agreement in writing, signed by the party against whom enforcement of
any waiver, change, modification or discharge is sought.
<PAGE>
6.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note and the other Letter of Credit
Note hereby consents to any extension or renewal of this Note and the other
Letter of Credit Note or any part thereof, without notice, and agrees that
it will remain liable under this Note and the other Letter of Credit Note
during any extension or renewal thereof, until the indebtedness evidenced
hereby and thereby is paid in full.
6.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and neither the Agent, the Lender or the Other
Lender shall have any recourse against any property or assets of any such
constituent partner or other person or entity) under or in connection with
the Letter of Credit Notes, the Credit Agreement, the Security Documents,
the other Loan Documents, the Loans, or any instruments securing or
otherwise executed in connection therewith, or any certificate delivered in
connection therewith, or any amendments or modifications to any of the
foregoing made at any time or times, heretofore or hereafter (such persons
as described in this sentence being herein collectively referred to as
"Non-Recourse Persons"), provided, however, Non-Recourse Persons shall not
include any Maker or any Subsidiary of a Maker that would otherwise be
liable as a general partner in a Maker. The recourse of the Agent, the
Lender, the Other Lender and their successors and assignees under or in
connection with the Letter of Credit Notes, the Security Documents, the
Credit Agreement, the other Loan Documents, the Loans and such instruments
and certificates, and any such amendments or modifications, shall be
limited to the assets of the Makers, and the Agent, the Lender, the Other
Lender and each of their successors and assignees waive and do hereby waive
any such personal liability against any such Non-Recourse Persons. For the
purposes of the Letter of Credit Notes, the Security Documents, the Credit
Agreement and each other Loan Document and any such instruments and
certificates and any such amendments or modifications, neither the negative
capital account of a constituent partner in any Maker, nor any obligation
of any constituent partner in any Maker to restore a negative capital
account or to advance or contribute capital to any Maker or any other
constituent partner in any Maker shall be deemed to be the property or the
asset of any Maker or any such other constituent partner (and neither the
Agent, the Lender or the Other Lender nor any of their successors or
assignees shall have any right to collect, enforce or proceed against or
with respect to any such negative capital account or partner's obligation
to restore, advance or contribute). As used in this section, the term
"constituent partner" means any direct partner in any Maker, and any person
or entity that is a partner in any partnership that, directly or indirectly
through one or more other partnerships, is a partner in any Maker.
6.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
6.6 All sums received by the Agent for application to this Note and
the other Letter of Credit Note shall be applied by the Agent in the manner
set forth in Section 2.8 of the Credit Agreement.
<PAGE>
6.7 The Makers are strictly liable for and hereby agree to pay or
reimburse the Agent (but not the Other Lender) for, and hold it harmless
from and against all of its reasonable third party costs and expenses
incurred in connection with the collection or enforcement of, or the
preservation of any rights under, this Note, the other Letter of Credit
Note, the Credit Agreement or other Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel for the Agent,
including attorneys' fees out of court, in trial, on appeal, in bankruptcy
proceedings or otherwise. The Makers shall pay all such amounts in
accordance with the terms of the Credit Agreement, and until repaid, such
sums shall bear interest at the Default Rate.
6.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note and the other Letter of
Credit Note shall be given in accordance with the notice provisions of
Section 11.4 of the Credit Agreement.
6.9 As used herein, the terms "Makers," "Agent," "Lender" and
"Other Lender" shall be deemed to include their respective successors and
assigns.
6.10 In the event any one or more of the provisions of this Note or
the other Letter of Credit Note shall for any reasons be held to be
invalid, illegal, or unenforceable, in whole or in part or in any respect,
or in the event one or more of the provisions of this Note or the other
Letter of Credit Note operates or would prospectively operate to invalidate
this Note or the other Letter of Credit Note, then in any of those events,
only such provision or provisions shall be deemed null and void and shall
not effect any other provision of this Note or the other Letter of Credit
Note. The remaining provisions of this Note and the other Letter of Credit
Note shall remain operative and in full force and effect and in shall no
way be affected, prejudiced or disturbed thereby. In the event any
provisions of this Note or the other Letter of Credit Note are inconsistent
with any provisions of the Credit Agreement, the Security Documents or
other Loan Documents, or any other agreements or documents executed in
connection with the Letter of Credit Notes, the Letter of Credit Notes
shall control.
6.11 It is expressly understood and agreed that neither the Agent,
the Lender or the Other Lender shall ever be construed for any purposes, to
be the partner, joint venturer, principal or associate of the Makers or any
of them or any person or party claiming by, through or under the Makers or
any of them in the conduct of their respective businesses.
6.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof
(a) severally waive presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this
Note and the other Letter of Credit Note, and all other notices in
connection with the delivery, acceptance, performance or enforcement of the
payment of this Note and the other Letter of Credit Note, (b) expressly
consent to all extensions of time, renewals, postponements of time of
payment of this Note and the other Letter of Credit Note or other
modifications from time to time, without notice, consent or consideration
to any of the foregoing, (c) expressly agree to any substitution, exchange,
addition or release of any of the other Loan Documents or the addition or
release of any party or person primarily or secondarily liable hereon,
(d) expressly agree that the Agent and/or the Lender or Other Lender shall
not be required first to institute any suit, or to exhaust their remedies
against the Makers or any other person or party to become liable hereunder
or against the other Loan Documents in order to enforce the payment of this
Note and the other Letter of Credit Note, and (e) expressly agree that,
notwithstanding the occurrence of any of the foregoing, they shall be and
remain, jointly and severally, directly and primarily liable for all sums
due under this Note, the other Letter of Credit Note and the other Loan
Documents subject to the terms and conditions hereof and thereof.
<PAGE>
6.13 Neither the Agent or the Lender or Other Lender shall be
deemed, by any act of omission or commission, to have waived any of their
rights or remedies hereunder unless such waiver is in writing given in
accordance with the terms of the Credit Agreement, and then only to the
extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy as to a subsequent event.
6.14 Neither this Note or the other Letter of Credit Note nor any
provision hereof or thereof may be changed or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change or termination is sought.
6.15 Failure to accelerate this Note or the other Letter of Credit
Note after an Event of Default, or the acceptance of a past due
installment, shall not be construed as a novation of the contract or a
waiver of the right of the Agent or the Lender or Other Lender to
thereafter insist upon strict compliance with the terms of this Note and
the other Letter of Credit Note without previous notice of such intention
being given to the Makers.
6.16 Notwithstanding anything to the contrary in this Note, the
other Letter of Credit Note, the Credit Agreement, the Security Documents
or other Loan Documents, the maximum liability of any Maker other than
Arvida/JMB Partners, L.P. (herein a "Maker Subsidiary" or "Maker
Affiliate") for the Obligations created, evidenced and secured thereby and
hereby shall not exceed the maximum amount, as such maximum amount shall be
determined by a court of competent jurisdiction of any such Maker
Subsidiary's or Maker Affiliate's liability therefor which may be incurred
without rendering the Obligations, as they relate to such Maker Subsidiary
or Maker Affiliate, voidable as a fraudulent conveyance or fraudulent
transfer under the Bankruptcy Code or under any other present or future
federal or state laws or statutes relating to bankruptcy, insolvency,
assignment for the benefit of creditors or other relief for debtors,
including, without limitation, the Uniform Fraudulent Transfer Act or the
Uniform Fraudulent Conveyance Act, as in effect in any jurisdiction wherein
any such Maker Subsidiary's or Maker Affiliate's Solvency (as defined in
the Credit Agreement) is subject to determination. For purposes of
determining such liability of any Maker Subsidiary or Maker Affiliate, due
consideration shall be given to the benefits received, directly or
indirectly, by such Maker Subsidiary or Maker Affiliate from the Loans (as
defined in the Credit Agreement) made pursuant to the Commitments (as
defined in the Credit Agreement).
6.17 The section headings of this Note and the other Letter of
Credit Note are for reference purposes only and are to be given no effect
in the construction or interpretation of this Note or the other Letter of
Credit Note.
THE MAKERS AND THE LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LETTER OF CREDIT NOTE OR
THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED
IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY MAKERS, THE AGENT,
THE LENDER OR ANY OTHER LENDER.
SIGNATURE PAGES FOLLOW
<PAGE>
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
EXHIBIT "B" TO BIFURCATION OF NOTE AGREEMENT
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE. NON-
RECURRING INTANGIBLE TAXES SHALL BE PAID AT THE TIME OF EACH ADVANCE, ON
SUCH ADVANCE.
DEMAND NOTE
LETTER OF CREDIT LINE
$1,920,000 Effective Date: September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of First Union National Bank, a national banking
association, its successors or assigns (the "Lender"), the principal sum of
ONE MILLION NINE HUNDRED TWENTY THOUSAND DOLLARS ($1,920,000), or the
Lender's Actual Share of all sums as may be advanced under the Letter of
Credit Commitment, pursuant to and in accordance with the Credit Agreement,
together with interest on the principal balance of this Note outstanding
from time to time, as same shall accrue thereon in accordance with the
terms hereof, but not to exceed the maximum non-usurious rate permitted by
law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 "Actual Share" means the percentage interest of the Lender in
the Advance made pursuant to the Letter of Credit Commitment.
1.2 "Agent" means First Union National Bank, a national banking
association.
1.3 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which the Agent is closed pursuant to authorization or
requirement of law.
1.4 "Committed Share" means the percentage interest of the Lender
in the Letter of Credit Commitment.
1.5 "Credit Agreement" means the Credit Agreement dated July 31,
1997, between Lender and the Borrower (among others), as amended, of even
date herewith, as the same may be amended, supplemented, restated, replaced
or otherwise modified from time to time.
1.6 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
1.7 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.8 "Letter of Credit Commitment" has the meaning ascribed to such
term in the Credit Agreement.
<PAGE>
1.9 "Letter of Credit Notes" means this Note and the other Letter
of Credit Note executed by the Makers in favor of the Other Lender, each
dated of even date herewith, in the aggregate amount of the Letter of
Credit Commitment, as same may be amended, supplemented, renewed, restated,
replaced or otherwise modified from time to time.
1.10 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
1.11 "Note" means this Note, in the amount of the Lender's Committed
Share of the Letter of Credit Commitment, as same maybe amended,
supplemented, restated, replaced or otherwise modified from time to time.
1.12 "Other Lender" means Bank United, a federal savings bank, also
being a "Lender".
1.13 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank, as its Prime Rate. The Prime
Rate is a reference rate for the information and use of the Agent in
establishing the actual rates to be charged to borrowers and is not
necessarily t he lowest rate charged by the Agent or the Lender. Should
First Union National Bank not publish a Prime Rate at any time during the
term of this Note, the Agent, in its reasonable discretion, may choose a
substitute Prime Rate. The rate of interest shall change automatically and
immediately as of the date of any change in the Prime Rate without notice
to Borrower or any endorser, surety or guarantor, if any.
1.14 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.15 "Security Documents" has the meaning ascribed to such terms in
the Credit Agreement.
20 Payment of Interest and Principal.
2.1 The Maker shall pay to the Agent for the account of the Lender
and the Other Lender, the entire principal balance of all Advances
outstanding under the Letter of Credit Notes, together with all interest
accrued thereon, at the Prime Rate, not later than three (3) Business
Banking Days following receipt of demand therefor, from the Agent. The
failure of the Makers to make such payment at such time shall constitute an
Event of Default hereunder, under the other Letter of Credit Note, and
under the Credit Agreement, and thereafter interest shall accrue on the
entire principal balance outstanding under the Letter of Credit Notes, at
the Default Rate.
2.2 All payments of principal and interest under the Letter of
Credit Notes shall be made in lawful money of the United States which shall
be legal tender in payment of all debts, public and private, at the time of
payment.
2.3 All payments of principal and interest under the Letter of
Credit Notes shall be made in immediately available funds by 11:00 a.m.
(Ft. Lauderdale, Florida time) on a Business Banking Day, to the Agent for
the account of the Lenders, at the office of the Agent at 301 South College
Street, TW-6, Charlotte, North Carolina 28288-0166, Attention: Jane Hurley,
or by wire to ABA #053000219, Account No.465906 0010352, Reference
"Arvida," Attention: Jane Hurley, or at such other place as the Agent may
instruct. Any payments of principal or interest made after 11:00 a.m. (Ft.
Lauderdale, Florida time) shall be deemed to be payments made on the next
following Business Banking Day, for all purposes, hereof, including,
without limitation, the accrual of interest. Should any payment under the
Letter of Credit Notes become due and payable on a day other than a
Business Banking Day, the maturity thereof shall be extended to the next
succeeding Business Banking Day, and, in the case of any payment of
principal, interest shall be payable thereon as calculated pursuant hereto,
for each Business Banking Day such principal is outstanding (provided,
however, any payment of principal received on any Business Banking Day by
11:00 a.m. (Ft. Lauderdale, Florida time) shall not be deemed to be
outstanding on such Business Banking Day).
<PAGE>
30 Collateral Security. This Note and the other Letter of Credit Note
are issued pursuant to the Credit Agreement. This Note and the other
Letter of Credit Note are secured by the Credit Agreement, the Security
Documents and the other Loan Documents. Reference is hereby made to the
Credit Agreement, the Security Documents and the other Loan Documents for a
description of Events of Default and rights of acceleration of the Maturity
Date upon the occurrence of an Event of Default. It is expressly agreed
that all of the covenants, conditions and agreements contained in the
Credit Agreement, the Security Documents and the other Loan Documents are
made a part of this Note and the other Letter of Credit Note. The Letter
of Credit Commitment expires July 31, 2001, at which time, the Makers shall
either (i) cause all underlying Letters of Credit to be returned and
cancelled or (ii) if not previously paid to the Agent, pay to the Agent
Cash Collateral (as defined in the Credit Agreement) in an amount equal to
the maximum amount of all outstanding Letters of Credit.
40 Events of Default. The remedies of the Agent, the Lender and Other
Lender, as provided herein, or in the Security Documents, the other Loan
Documents or Credit Agreement shall be cumulative and concurrent and may be
pursued singularly, successively or together, by the Agent in accordance
with the terms of the Credit Agreement, and may be exercised as often as
the occasion therefor shall arise. Notwithstanding anything herein
seemingly to the contrary, neither the Agent, the Lender or the Other
Lender shall take any action, including, without limitation, in connection
with the enforcement of any of their rights under the Letter of Credit
Notes, the Credit Agreement or other Loan Documents, unless such action is
consistent with the action taken by the Agent, the Lender or the Other
Lender, as the case may be, with respect to all of the Letter of Credit
Notes and in accordance with the provisions of the Credit Agreement.
50 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
the Letter of Credit Notes, to pay interest in an amount or at a rate
greater than the highest non-usurious rate permissible under applicable law
as amended from time to time. Should any interest or other charges paid by
the Makers, or any party liable for the payment of the Loan evidenced by
the Letter of Credit Notes, result in the computation or earning of
interest in excess of the highest non-usurious rate permissible under
applicable law, then any and all such excess shall be and the same is
hereby waived by the Agent, the Lender and the Other Lender, and all such
excess shall be paid by the Agent, the Lender or the Other Lender, as the
case shall be, to the Makers or to any party liable for the payment of the
Loan evidenced by the Letter of Credit Notes, it being the intent of the
parties hereto that under no circumstances shall the Makers or any party
liable for the payment of the Loan hereunder, be required to pay interest
in excess of the highest non-usurious rate permissible under applicable law
as amended from time to time. By operation of Section 687.12, Florida
Statutes (1996), the interest rate charged under the Note and the other
Letter of Credit Notes is authorized by Chapters 658, 665 and 687, Florida
Statutes (1996) and applicable federal law.
60 Waivers/Miscellaneous Matters.
6.1 The Letter of Credit Notes are to be construed according to the
applicable laws of the State of Florida and the United States of America.
Any action brought upon the enforcement of this Note and the other Letter
of Credit Note is hereby authorized to be instituted and prosecuted in
Broward County, Florida, or at the United States District Court for the
Southern District of Florida, at the election of the Agent, subject to and
in accordance with the terms of the Credit Agreement.
6.2 The Letter of Credit Notes may not be changed orally, but only
by an agreement in writing, signed by the party against whom enforcement of
any waiver, change, modification or discharge is sought.
<PAGE>
6.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note and the other Letter of Credit
Note hereby consents to any extension or renewal of this Note and the other
Letter of Credit Note or any part thereof, without notice, and agrees that
it will remain liable under this Note and the other Letter of Credit Note
during any extension or renewal thereof, until the indebtedness evidenced
hereby and thereby is paid in full.
6.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and neither the Agent, the Lender or the Other
Lender shall have any recourse against any property or assets of any such
constituent partner or other person or entity) under or in connection with
the Letter of Credit Notes, the Credit Agreement, the Security Documents,
the other Loan Documents, the Loans, or any instruments securing or
otherwise executed in connection therewith, or any certificate delivered in
connection therewith, or any amendments or modifications to any of the
foregoing made at any time or times, heretofore or hereafter (such persons
as described in this sentence being herein collectively referred to as
"Non-Recourse Persons"), provided, however, Non-Recourse Persons shall not
include any Maker or any Subsidiary of a Maker that would otherwise be
liable as a general partner in a Maker. The recourse of the Agent, the
Lender, the Other Lender and their successors and assignees under or in
connection with the Letter of Credit Notes, the Security Documents, the
Credit Agreement, the other Loan Documents, the Loans and such instruments
and certificates, and any such amendments or modifications, shall be
limited to the assets of the Makers, and the Agent, the Lender, the Other
Lender and each of their successors and assignees waive and do hereby waive
any such personal liability against any such Non-Recourse Persons. For the
purposes of the Letter of Credit Notes, the Security Documents, the Credit
Agreement and each other Loan Document and any such instruments and
certificates and any such amendments or modifications, neither the negative
capital account of a constituent partner in any Maker, nor any obligation
of any constituent partner in any Maker to restore a negative capital
account or to advance or contribute capital to any Maker or any other
constituent partner in any Maker shall be deemed to be the property or the
asset of any Maker or any such other constituent partner (and neither the
Agent, the Lender or the Other Lender nor any of their successors or
assignees shall have any right to collect, enforce or proceed against or
with respect to any such negative capital account or partner's obligation
to restore, advance or contribute). As used in this section, the term
"constituent partner" means any direct partner in any Maker, and any person
or entity that is a partner in any partnership that, directly or indirectly
through one or more other partnerships, is a partner in any Maker.
6.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
6.6 All sums received by the Agent for application to this Note and
the other Letter of Credit Note shall be applied by the Agent in the manner
set forth in Section 2.8 of the Credit Agreement.
<PAGE>
6.7 The Makers are strictly liable for and hereby agree to pay or
reimburse the Agent (but not the Other Lender) for, and hold it harmless
from and against all of its reasonable third party costs and expenses
incurred in connection with the collection or enforcement of, or the
preservation of any rights under, this Note, the other Letter of Credit
Note, the Credit Agreement or other Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel for the Agent,
including attorneys' fees out of court, in trial, on appeal, in bankruptcy
proceedings or otherwise. The Makers shall pay all such amounts in
accordance with the terms of the Credit Agreement, and until repaid, such
sums shall bear interest at the Default Rate.
6.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note and the other Letter of
Credit Note shall be given in accordance with the notice provisions of
Section 11.4 of the Credit Agreement.
6.9 As used herein, the terms "Makers," "Agent," "Lender" and
"Other Lender" shall be deemed to include their respective successors and
assigns.
6.10 In the event any one or more of the provisions of this Note or
the other Letter of Credit Note shall for any reasons be held to be
invalid, illegal, or unenforceable, in whole or in part or in any respect,
or in the event one or more of the provisions of this Note or the other
Letter of Credit Note operates or would prospectively operate to invalidate
this Note or the other Letter of Credit Note, then in any of those events,
only such provision or provisions shall be deemed null and void and shall
not effect any other provision of this Note or the other Letter of Credit
Note. The remaining provisions of this Note and the other Letter of Credit
Note shall remain operative and in full force and effect and in shall no
way be affected, prejudiced or disturbed thereby. In the event any
provisions of this Note or the other Letter of Credit Note are inconsistent
with any provisions of the Credit Agreement, the Security Documents or
other Loan Documents, or any other agreements or documents executed in
connection with the Letter of Credit Notes, the Letter of Credit Notes
shall control.
6.11 It is expressly understood and agreed that neither the Agent,
the Lender or the Other Lender shall ever be construed for any purposes, to
be the partner, joint venturer, principal or associate of the Makers or any
of them or any person or party claiming by, through or under the Makers or
any of them in the conduct of their respective businesses.
6.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof
(a) severally waive presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this
Note and the other Letter of Credit Note, and all other notices in
connection with the delivery, acceptance, performance or enforcement of the
payment of this Note and the other Letter of Credit Note, (b) expressly
consent to all extensions of time, renewals, postponements of time of
payment of this Note and the other Letter of Credit Note or other
modifications from time to time, without notice, consent or consideration
to any of the foregoing, (c) expressly agree to any substitution, exchange,
addition or release of any of the other Loan Documents or the addition or
release of any party or person primarily or secondarily liable hereon,
(d) expressly agree that the Agent and/or the Lender or Other Lender shall
not be required first to institute any suit, or to exhaust their remedies
against the Makers or any other person or party to become liable hereunder
or against the other Loan Documents in order to enforce the payment of this
Note and the other Letter of Credit Note, and (e) expressly agree that,
notwithstanding the occurrence of any of the foregoing, they shall be and
remain, jointly and severally, directly and primarily liable for all sums
due under this Note, the other Letter of Credit Note and the other Loan
Documents subject to the terms and conditions hereof and thereof.
<PAGE>
6.13 Neither the Agent or the Lender or Other Lender shall be
deemed, by any act of omission or commission, to have waived any of their
rights or remedies hereunder unless such waiver is in writing given in
accordance with the terms of the Credit Agreement, and then only to the
extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy as to a subsequent event.
6.14 Neither this Note or the other Letter of Credit Note nor any
provision hereof or thereof may be changed or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change or termination is sought.
6.15 Failure to accelerate this Note or the other Letter of Credit
Note after an Event of Default, or the acceptance of a past due
installment, shall not be construed as a novation of the contract or a
waiver of the right of the Agent or the Lender or Other Lender to
thereafter insist upon strict compliance with the terms of this Note and
the other Letter of Credit Note without previous notice of such intention
being given to the Makers.
6.16 Notwithstanding anything to the contrary in this Note, the
other Letter of Credit Note, the Credit Agreement, the Security Documents
or other Loan Documents, the maximum liability of any Maker other than
Arvida/JMB Partners, L.P. (herein a "Maker Subsidiary" or "Maker
Affiliate") for the Obligations created, evidenced and secured thereby and
hereby shall not exceed the maximum amount, as such maximum amount shall be
determined by a court of competent jurisdiction of any such Maker
Subsidiary's or Maker Affiliate's liability therefor which may be incurred
without rendering the Obligations, as they relate to such Maker Subsidiary
or Maker Affiliate, voidable as a fraudulent conveyance or fraudulent
transfer under the Bankruptcy Code or under any other present or future
federal or state laws or statutes relating to bankruptcy, insolvency,
assignment for the benefit of creditors or other relief for debtors,
including, without limitation, the Uniform Fraudulent Transfer Act or the
Uniform Fraudulent Conveyance Act, as in effect in any jurisdiction wherein
any such Maker Subsidiary's or Maker Affiliate's Solvency (as defined in
the Credit Agreement) is subject to determination. For purposes of
determining such liability of any Maker Subsidiary or Maker Affiliate, due
consideration shall be given to the benefits received, directly or
indirectly, by such Maker Subsidiary or Maker Affiliate from the Loans (as
defined in the Credit Agreement) made pursuant to the Commitments (as
defined in the Credit Agreement).
6.17 The section headings of this Note and the other Letter of
Credit Note are for reference purposes only and are to be given no effect
in the construction or interpretation of this Note or the other Letter of
Credit Note.
THE MAKERS AND THE LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LETTER OF CREDIT NOTE OR
THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED
IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY MAKERS, THE AGENT,
THE LENDER OR ANY OTHER LENDER.
SIGNATURE PAGES FOLLOW
<PAGE>
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
EXHIBIT 4.4
- - -----------
(Arvida)
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE
RECORDED IN OFFICIAL RECORDS BOOK 26802, PAGE 888, OF THE PUBLIC RECORDS OF
BROWARD COUNTY, FLORIDA.
THIS NOTE RENEWS WITHOUT ENLARGEMENT THE CURRENT PRINCIPAL BALANCE OF THAT
CERTAIN PROMISSORY NOTE OF EVEN DATE HEREWITH AND ASSIGNED TO LENDER ON
EVEN DATE HEREOF IN THE ORIGINAL PRINCIPAL BALANCE OF $18,800,000, CREATED
BY THE BIFURCATION OF THAT CERTAIN CONSOLIDATED AND RESTATED TERM LOAN
PROMISSORY NOTE IN THE ORIGINAL PRINCIPAL BALANCE OF $49,000,000 OF EVEN
DATE HEREWITH, COPIES OF WHICH ARE ATTACHED HERETO AND MADE A PART HEREOF.
RENEWAL TERM LOAN
PROMISSORY NOTE
$18,800,000 Effective Date: September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of Bank United, a federal savings bank, its successors or
assigns (the "Lender"), the principal sum of EIGHTEEN MILLION EIGHT HUNDRED
THOUSAND DOLLARS ($18,800,000), or the Lender's Actual Share of all sums as
may be advanced under the Term Loan Commitment, pursuant to and in
accordance with the Credit Agreement, together with interest on the
principal balance of this Note outstanding from time to time, as same shall
accrue thereon in accordance with the terms hereof, but not to exceed the
maximum non-usurious rate permitted by law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 "Actual Share" means the percentage interest of the Lender in
the Advance made pursuant to the Term Loan Commitment.
1.2 "Adjusted LIBO Rate" means, relative to any LIBO Rate Tranche
to be made, continued or maintained as, or converted into, a LIBO Rate
Tranche for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of one percent) equal to the quotient of
(i) the LIBO Rate applicable to the relevant Interest Period, divided by
(ii) the result of one minus the Reserve Percentage applicable to such
Interest Period.
1.3 "Agent" means First Union National Bank, a national banking
association.
1.4 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which the Agent or the Lender or any Other Lender is
closed pursuant to authorization or requirement of law.
1.5 "Committed Share" means the percentage interest of the Lender
in the Term Loan Commitment.
1.6 "Credit Agreement" means the Credit Agreement dated July 31,
1997 between Lender and the Borrower (among others), as amended, of even
date herewith, as the same may be amended, supplemented, restated, replaced
or otherwise modified from time to time.
1.7 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
1.8 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.9 "Interest Period" means, in the case of a LIBO Rate Tranche,
the period commencing on (and including) the Business Banking Day selected
by the Makers as the date on which such LIBO Rate Tranche is made or
continued as, or converted into a LIBO Rate Tranche pursuant to the terms
of this Note, and ending on (but excluding) the day which numerically
corresponds to such date one, two, three or six months thereafter (or if
such month has no numerically corresponding day, on the last Business
Banking Day of such month), in each case as the Makers may select, provided
that (a) if such Interest Period would otherwise end on a day which is not
a Business Banking Day, such Interest Period shall end on the next
following Business Banking Day (unless, in the case of a LIBO Rate Tranche,
such next following Business Banking Day is the first Business Banking Day
of the calendar month, in which case such Interest Period shall end on the
Business Banking Day next preceding such numerically corresponding day);
and (b) no Interest Period may end on a date later than the Maturity Date.
1.10 "LIBO Rate" means, relative to any Interest Period, a rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
one percent) equal to the rate for US dollar deposits with maturities
comparable to such Interest Period for delivery on the first day of such
Interest Period which appears on the Reuters Screen LIBO Page, as of
11:00 a.m. (London time) on the day that is two (2) London Banking Days
preceding the commencement date of the Interest Period. If at least two
(2) such offered rates appear on the Reuters Screen LIBO Page, the rate
will be the arithmetic mean of such offered rates. The Agent may, in its
discretion, use any other publicly available index or reference rate
showing rates offered for United States dollar deposits in the London
Interbank market as of the applicable date. In addition, the Agent may, in
its discretion, use rate quotations for daily or annual periods in lieu of
quotations for substantially equivalent monthly periods, in the absence of
such quotations for substantially equivalent monthly periods. Each
determination of the LIBO Rate applicable to a particular Interest Period
shall be made by the Agent and shall be conclusive and binding upon the
Makers and Lender absent manifest error.
1.11 "LIBO Rate Tranche" means a Tranche bearing interest at all
times during the Interest Period applicable to such Tranche, at a fixed
rate of interest equal to the Note LIBO Rate applicable to such Interest
Period.
1.12 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
1.13 "Loan Year" means each of the twelve (12) month periods
commencing on July 31, 1997 and on the first, second and third
anniversaries hereof.
1.14 "London Banking Day" means each day other than a Saturday, a
Sunday or any holiday on which commercial banks in London, England are
closed for business.
1.15 "Maturity Date" means the earlier of: (i) July 31, 2001 and
(ii) any earlier date upon which the principal balance outstanding
hereunder, together with all interest accrued thereon, shall become
immediately due and payable following an Event of Default, in accordance
with provisions of the Credit Agreement.
1.16 "Note" means this Term Loan Promissory Note, in the amount of
the Lender's Committed Share of the Term Loan Commitment, as same maybe
amended, supplemented, restated, replaced or otherwise modified from time
to time.
1.17 "Note LIBO Rate" means the Adjusted LIBO Rate applicable to a
specific LIBO Rate Tranche selected by the Makers for a relevant Interest
Period, plus 175 basis points.
1.18 "Note Prime Rate" means the Prime Rate applicable to the Prime
Rate Tranche. The Note Prime Rate shall be increased or decreased
effective on any date on which the Prime Rate shall be increased or
decreased.
1.19 "Other Lender" means, First Union National Bank, a national
banking association, also being a "Lender".
1.20 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank, as its Prime Rate. The Prime
Rate is a reference rate for the information and use of the Agent in
establishing the actual rates to be charged to borrowers and is not
necessarily the lowest rate charged by the Agent. Should First Union
National Bank not publish a Prime Rate at any time during the term of this
Note, the Agent, in its reasonable discretion, may choose a substitute
Prime Rate. The rate of interest shall change automatically and immediately
as of the date of any change in the Prime Rate without notice to Borrower
or any endorser, surety or guarantor, if any.
1.21 "Prime Rate Tranche" means a Tranche bearing interest at the
Note Prime Rate.
1.22 "Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other rule, regulation or official interpretation of said Board
of Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
1.23 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.24 "Reserve Percentage" means the stated maximum rate (expressed
as a decimal) at which reserves are required to be maintained by the Agent
during an Interest Period, including, without limitation (i) any basis,
supplemental, marginal, or emergency reserve under any regulations of any
governmental authority to which the Agent is subject, (ii) any reserve
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), including, without limitation, Regulation D, for determining
the maximum reserve requirement in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits
by reference to which the LIBO Rate is determined). Without limiting the
effect of the foregoing, the Reserve Percentage shall reflect any other
reserves required to be maintained by the Agent under any regulation of any
governmental authority to which the Agent is subject against (a) any
category of liabilities that include deposits with reference to which the
LIBO Rate is to be determined or (b) any category of extension of credit or
other assets that includes loans bearing interest at a rate based on the
LIBO Rate. Each determination of the Reserve Percentage shall be made by
the Agent and shall be conclusive and binding upon the Makers and Lenders
absent manifest error.
1.25 "Security Documents" has the meaning ascribed to such term in
the Credit Agreement.
1.26 "Term Loan Commitment" has the meaning ascribed to such term in
the Credit Agreement.
<PAGE>
1.27 "Term Loan Notes" means this Note and the other Term Loan Note
executed by the Makers in favor of the Other Lender, each dated of even
date herewith, in the aggregate amount of the Term Loan Commitment, as same
may be amended, supplemented, renewed, restated, replaced or otherwise
modified from time to time.
1.28 "Tranche" means any portion of the outstanding principal
balance under the Term Loan Notes bearing interest at the applicable Note
LIBO Rate for a specific Interest Period, as selected by the Makers in
accordance with Section 2.1, below, and any portion of the outstanding
principal balance under the Term Loan Notes which may from time to time
bear interest at the Note Prime Rate.
20 Selection and Calculation of Interest Rate.
2.1 Provided that no Event of Default or circumstance which with
the passage of time or giving of notice would become an Event of Default
then exists under the Loan Documents, and provided there shall at no time
be permitted to exist more than four LIBO Rate Tranches with respect to the
total principal balance outstanding under the Term Loan Notes, the Makers
shall have the right to elect to have the Note LIBO Rate then in effect for
an Interest Period apply to a LIBO Rate Tranche, in accordance with, and
subject to the provisions of this Section 2.1. To make an election to have
such Note LIBO Rate apply to any LIBO Rate Tranche, from time to time, the
Makers shall give to the Agent irrevocable notice (a "Rate Election
Notice") not later than 11:00 a.m. (Ft. Lauderdale, Florida time) at least
three (3) Business Banking Days prior to the commencement date of each such
Interest Period, which Rate Election Notice shall be addressed as follows,
and shall be given in writing (by telecopy, hand delivery, or overnight
delivery service), in accordance with the provisions of Section 11.4 of the
Credit Agreement:
Dana Hunter, Vice President
First Union National Bank
5581 West Oakland Park Blvd., 2nd Floor
Lauderhill, Florida 33313
(954) 467-5543
Fax: (954) 467-5557
Each such Rate Election Notice shall be in the form attached hereto as
Schedule 1 and shall specify: (i) the commencement day of the Interest
Period which shall be a Business Banking Day (and, with respect to any then
existing LIBO Rate Tranche, shall not be a date prior to the termination
date of such then existing LIBO Rate Tranche), (ii) the principal amount of
the LIBO Rate Tranche which shall be subject to the application of the Note
LIBO Rate, which shall be in a minimum amount of $2,000,000.00, and in
multiples of $100,000.00 and (iii) the applicable Interest Period which
shall apply to such LIBO Rate Tranche, provided, however, that no Interest
Period may extend beyond the Maturity Date.
2.2 If the Agent determines, absent manifest error, that the
maintenance of any Note LIBO Rate would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, of if the
Agent determines that the interest rate applicable to the Note LIBO Rate
does not accurately reflect the cost of maintaining any LIBO Rate Tranche
subject to such rate, then, at the election of the Agent, the Makers shall
not be entitled thereafter to select a Note LIBO Rate to be applicable to
any portions of the total outstanding principal balance under the Term Loan
Notes, and the interest rate applicable to all of the outstanding principal
balance under the Term Loan Notes then subject to the Note LIBO Rate for
any applicable Interest Period, shall, upon the expiration of all such
applicable Interest Periods, be converted to the Prime Rate.
<PAGE>
2.3 In the event that the Makers shall fail to provide a timely
Rate Election Notice for the election of the Note LIBO Rate to apply to any
Advance or to any LIBO Rate Tranche, as of the termination date of the
applicable Interest Period for such Tranche, then as the date of such
Advance, or as of such termination date of such LIBO Rate Tranche, as the
case may be, the Prime Rate shall apply to such Advance or LIBO Rate
Tranche until the next eligible effective date for which the Makers shall
have provided a timely Rate Election Notice, and such Advance or such
principal amount previously comprising a LIBO Rate Tranche, shall
thereafter be deemed to be included in the Prime Rate Tranche.
2.4 Interest shall be calculated on the daily total outstanding
balance of all Advances of Loan Proceeds under the Term Loan Commitment, as
such Advances are evidenced by the Term Loan Notes, as follows:
(i) interest shall accrue on each LIBO Rate Tranche, commencing with the
effective date for each such LIBO Rate Tranche, at the applicable Note LIBO
Rate for the applicable Interest Period and (ii) interest shall accrue on
the Prime Rate Tranche, which shall comprise all of the outstanding
principal balance under the Term Loan Notes not otherwise subject to a LIBO
Rate Tranche, at the Note Prime Rate, changing when and as the Prime Rate
changes. Interest shall be computed through and including the date of any
payment and shall be calculated for actual days elapsed on the basis of a
360 day year (i.e. interest for each day on which any principal is
outstanding shall be calculated at the applicable interest rate described
above, divided by 360).
30 Payment of Interest and Principal.
3.1 Interest, calculated as above provided, shall be due and
payable by the Makers to the Agent, for the account of the Lender and Other
Lender, in accordance with their Actual Shares of the total outstanding
principal balance of the Term Loan Notes, subject to the provisions of
Section 3.7 hereof, on the first Business Banking Day of the first calendar
month immediately following the Advance of Loan Proceeds under the Term
Loan Commitment and continuing on the first day of each month thereafter
until the Maturity Date.
3.2 The Makers shall make payments in reduction of the total
principal balance outstanding under the Term Loan Notes, as follows:
(a) The Makers shall pay to the Agent, for the account of the
Lender and the Other Lender, on or before the last Business Banking Day of
each Loan Year, the sum of $12,500,000.00 (the "Minimum Required
Curtailment").
(b) The Makers shall pay to the Agent, for the account of the
Lender and the Other Lender, on each ARC Payment Date, an amount (the
"Additional Required Curtailment") calculated as follows:
(A) On the 1999 February ARC Payment Date and each
subsequent February ARC Payment Date, an amount equal to the sum of:
(x) the ARC Deficit, if any, to the extent the ARC Deficit does not exceed
the Adjusted CFAPF for the fiscal year ended on the immediately preceding
December 31, plus (y) twenty-five percent (25%) of the remainder of the
Adjusted CFAPF for the fiscal year ended on the immediately preceding
December 31, after any payment of the ARC Deficit pursuant to subparagraph
(x) hereinabove.
(B) On each August ARC Payment Date, an amount equal to
the sum of: (x) the ARC Deficit, if any, plus (y) twenty-five percent (25%)
of the remainder of any Distribution then made, after any payment of the
ARC Deficit pursuant to subparagraph (x) hereinabove.
<PAGE>
(C) Notwithstanding anything herein to the contrary,
those portions of the Additional Required Curtailment calculated pursuant
to subpart (y) of subsection (A); and subpart (y) of subsection (B) shall
in the aggregate, in any one (1) Loan Year, not exceed $6,250,000.00.
The term "Adjusted CFAPF" means Cash Flow After Project
Financing less all Term Loan Principal Payments and all interest paid on
the Term Loan during the preceding fiscal year.
The term "Cash Flow After Project Financing" has the meaning
ascribed to such term in the Credit Agreement.
The term "Distribution" has the meaning ascribed to such term
in the Credit Agreement.
The term "ARC Deficit" means: (i) as of any ARC Payment Date in
the second Loan Year, the difference of $18,750,000.00 less the sum of all
Term Loan Payments theretofore paid, (ii) as of any ARC Payment Date in the
third Loan Year, the difference of $37,500,000.00 less the sum of all Term
Loan Payments theretofore paid and (iii) as of any ARC Payment Date in the
fourth Loan Year, the difference of $56,250,000.00 less the sum of all Term
Loan Payments theretofore paid (for the purpose of this Note, the first
"Loan Year" shall be deemed to have commenced July 31, 1997).
The term "ARC Payment Date" means: (i) any Business Banking Day
in any August of any Loan Year, on which a Distribution is made, if any (an
"August ARC Payment Date"), and (ii) the first Business Day of each
February of each Loan Year, or such later date in February on which the
Makers intend to make a Distribution, provided the Makers shall have
notified the Lender and the Other Lenders of such later date, in writing,
not later than January 15 of such year (a "February ARC Payment Date").
The term "Term Loan Principal Payments" means, as of any ARC
Payment Date, all payments which have theretofore been made toward the
reduction of the outstanding principal balance under the Term Loan,
including, without limitation, all payments of Minimum Required
Curtailments made in the same Loan Year and all prior Loan Years, all
payments of Additional Required Curtailments made in the same Loan Year and
all prior Loan Years and all prior voluntary prepayments made in the same
Loan Year and all prior Loan Years.
(c) The total outstanding principal under the Term Loan Notes
and all accrued but unpaid interest shall be fully due and payable on the
Maturity Date.
3.3 All payments of principal and interest under the Term Loan
Notes shall be made in lawful money of the United States which shall be
legal tender in payment of all debts, public and private, at the time of
payment.
3.4 The Term Loan Notes may be prepaid in whole or in part at any
time and from time to time, without penalty or premium, provided: (i) any
such prepayment shall be preceded by at least three (3) Business Banking
Days' prior written notice to the Agent and (ii) any such prepayment shall
be accompanied by accrued interest to the date of prepayment and any other
obligations and payments then due under the terms of the Term Loan Notes.
If the Makers shall make a payment or prepayment of all or any portion of
the principal amount outstanding then subject to a LIBO Rate Tranche, prior
to the applicable termination date thereof (including, without limitation,
upon the acceleration of the Maturity Date following an Event of Default),
or the Makers shall attempt to rescind a Rate Election Notice for a
specified LIBO Rate Tranche, after the Makers have submitted such Rate
Election Notice to the Agent, then, within three (3) Business Banking Days
following written notice from the Agent, the Makers shall pay to the Agent
<PAGE>
the amount of any loss or cost incurred by the Agent, the Lender or the
Other Lender resulting therefrom, including, without limitation, any loss
or cost resulting from the liquidation or re-employment of deposits
required to fund or maintain the subject LIBO Rate Tranche, not to exceed
the amount of interest which would have been earned on the amount prepaid
for the balance of the subject Interest Period, at a rate equal to the
difference, not less than zero, of the LIBO Rate as of the first day of the
Interest Period less the LIBO Rate as of the date of such prepayment, for a
corresponding Interest Period commencing on the date of such prepayment.
The obligations of the Makers under this section shall survive payment of
the Term Loan Notes.
3.5 The Term Loan is a non-revolving loan, so that the Makers shall
not have the right to request re-advances of prepaid monies.
3.6 All payments of principal and interest under the Term Loan
Notes shall be made in immediately available funds by 11:00 a.m.
(Ft. Lauderdale, Florida time) on a Business Banking Day, to the Agent for
the account of the Lenders, at the office of the Agent at First Union
National Bank, 301 South College Street, TW-6, Charlotte, North Carolina
28288-0166, Attention: Jane Hurley, or by wire to ABA #053000219, Account
No.465906 0010352, Reference "Arvida," Attention: Jane Hurley, or at such
other place as the Agent may instruct. Any payments of principal or
interest made after 11:00 a.m. (Ft. Lauderdale, Florida time) shall be
deemed to be payments made on the next following Business Banking Day, for
all purposes, hereof, including, without limitation, the accrual of
interest. Should any payment under the Term Loan Notes become due and
payable on a day other than a Business Banking Day, the maturity thereof
shall be extended to the next succeeding Business Banking Day, and, in the
case of any payment of principal, interest shall be payable thereon as
calculated pursuant hereto, for each Business Banking Day such principal is
outstanding (provided, however, any payment of principal received on any
Business Banking Day by 11:00 a.m. (Ft. Lauderdale, Florida time) shall not
be deemed to be outstanding on such Business Banking Day).
3.7 Notwithstanding anything to the contrary set forth herein, the
Agent shall provide the Makers with written notice prior to the first
Business Banking Day of each month of the interest installment with respect
to the Term Loan Notes which is payable on such first Business Banking Day
of such month. With respect to each such monthly installment of interest,
the Agent and the Lenders hereby grant to the Makers a grace period for the
payment of same, which shall extend to the later of: (a) the fifteenth
(15th) day of the month or (b) if the Makers shall not have received
written notice of the monthly interest installment from the Agent, prior to
the first Business Banking Day of any month and the Makers shall have
provided written notice to the Agent, no later than such first Business
Banking Day of the month, of such Agent's failure to provide the Makers
with written notice of such interest installment, then, the date fifteen
(15) days from receipt by the Makers of such written notice of the monthly
interest installment. If the Agent shall not receive written notice from
the Makers on or before the first Business Banking Day of a month, of the
Agent's failure to provide written notice of an interest installment, then,
for all purposes of this Note, notwithstanding that the Makers may later
request such written notice of such interest installment, such grace period
shall extend to no later than the fifteenth (15th) day of such month.
3.8 Any payment required to be paid by the Term Loan Notes, the
Loan Documents or the Credit Agreement, with the exception of interest and
principal, shall be due and payable no later than fifteen (15) days from
receipt by the Makers from the Agent of written notice of the required
payment.
<PAGE>
3.9 Provided the Agent has not exercised its right to accelerate
the Term Loan Notes as provided in the Term Loan Notes, the Credit
Agreement or the other Loan Documents: (a) in the event any payment of
principal required under the Term Loan Notes, either pursuant to the terms
hereof or the terms of the Credit Agreement, is not received by the Agent,
for the account of the Lender and Other Lender, by the fifteenth (15th) day
following the day on which such payment is due, the Makers shall pay to the
Agent, for the account of the Lender and Other Lender, a late charge of
five percent (5%) of the payment not so received, the parties agreeing that
said charge is a fair and reasonable charge for the late payment and shall
not be deemed a penalty or as compounding interest, and (b) in the event
any scheduled payment of interest required under the Term Loan Notes is not
received by the Agent, for the account of the Lender and Other Lender, by
the later of (i) fifteen (15) days from receipt by the Makers of written
notice of the monthly interest installment and (ii) the fifteenth (15th)
day of such month, the Makers shall pay to the Agent, for the account of
the Lender and Other Lender, a late charge of five percent (5%) of the
payment not so received, the parties agreeing that said charge is a fair
and reasonable charge for the late payment and shall not be deemed a
penalty or as compounding interest. Further, if any payment required to be
paid by the Term Loan Notes, the Credit Agreement or the other Loan
Documents, with the exception of interest and principal, is not paid within
fifteen (15) days from receipt by the Makers from the Agent of written
notice of the required payment, the Makers shall pay to the Agent, for the
account of the Lender and Other Lender, a late charge of five percent (5%)
of the payment not so received, the parties agreeing that said charge is a
fair and reasonable charge for the late payment and shall not be deemed a
penalty or as compounding interest.
40 Collateral Security. This Note and the other Term Loan Note are
issued pursuant to the Credit Agreement. This Note and the other Term Loan
Note are secured by the Credit Agreement, the Security Documents and the
other Loan Documents. Reference is hereby made to the Credit Agreement,
the Security Documents and the other Loan Documents for a description of
Events of Default and rights of acceleration of the Maturity Date upon the
occurrence of an Event of Default. It is expressly agreed that all of the
covenants, conditions and agreements contained in the Credit Agreement, the
Security Documents and the other Loan Documents are made a part of this
Note and the other Term Loan Note.
50 Events of Default.
5.1 Upon the occurrence of an Event of Default, the Agent may, and
upon the direction of the Required Lenders, shall declare the entire amount
of this Note and the other Term Loan Note, including the principal balance
then outstanding thereunder, together with all interest accrued thereon, to
be immediately due and payable, without notice, (the Makers hereby
expressly waive notice of such Event of Default), time being of the essence
of this Term Loan Note and the other Term Loan Note. Any Event of Default
under this Note shall be an Event of Default under all other Loan Documents
and any Event of Default under any other Loan Document shall be an Event of
Default hereunder.
5.2 In the event the Agent accelerates the Term Loan Notes as
herein provided or the full amount of outstanding principal and interest
under the Term Loan Notes is not fully repaid to the Agent, for the account
of the Lenders on or before the Maturity Date, then the entire unpaid
principal balance under the Term Loan Notes, together with all interest
accrued thereon, shall bear interest from the date of an Event of Default
or from the Maturity Date, respectively, at the Default Rate. Any late
charge paid by the Makers shall be applied to the interest charged at the
Default Rate after acceleration of the Term Loan Notes.
<PAGE>
5.3 The remedies of the Agent, the Lender and Other Lender, as
provided herein, or in the Security Documents, the other Loan Documents or
Credit Agreement shall be cumulative and concurrent and may be pursued
singularly, successively or together, by the Agent in accordance with the
terms of the Credit Agreement, and may be exercised as often as the
occasion therefor shall arise. Notwithstanding anything herein seemingly
to the contrary, neither the Agent, the Lender or the Other Lender shall
take any action, including, without limitation, in connection with the
enforcement of any of their rights under the Term Loan Notes, the Credit
Agreement or other Loan Documents, unless such action is consistent with
the action taken by the Agent, the Lender or the Other Lender, as the case
may be, with respect to all of the Term Loan Notes and in accordance with
the provisions of the Credit Agreement.
60 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
the Term Loan Notes, to pay interest in an amount or at a rate greater than
the highest non-usurious rate permissible under applicable law as amended
from time to time. Should any interest or other charges paid by the
Makers, or any party liable for the payment of the Loan evidenced by the
Term Loan Notes, result in the computation or earning of interest in excess
of the highest non-usurious rate permissible under applicable law, then any
and all such excess shall be and the same is hereby waived by the Agent,
the Lender and the Other Lender, and all such excess shall be paid by the
Agent, the Lender or the Other Lender, as the case shall be, to the Makers
or to any party liable for the payment of the Loan evidenced by the Term
Loan Notes, it being the intent of the parties hereto that under no
circumstances shall the Makers or any party liable for the payment of the
Loan hereunder, be required to pay interest in excess of the highest non-
usurious rate permissible under applicable law as amended from time to
time. By operation of Section 687.12, Florida Statutes (1996), the
interest rate charged under the Note and the other Term Loan Notes is
authorized by Chapters 658, 665 and 687, Florida Statutes (1996) and
applicable federal law.
70 Waivers/Miscellaneous Matters.
7.1 The Term Loan Notes are to be construed according to the appli-
cable laws of the State of Florida and the United States of America. Any
action brought upon the enforcement of this Note and the other Term Loan
Notes is hereby authorized to be instituted and prosecuted in Broward
County, Florida, or at the United States District Court for the Southern
District of Florida, at the election of the Agent, subject to and in
accordance with the terms of the Credit Agreement.
7.2 The Term Loan Notes may not be changed orally, but only by an
agreement in writing, signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
7.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note and the other Term Loan Note
hereby consents to any extension or renewal of this Note and the other Term
Loan Note or any part thereof, without notice, and agrees that it will
remain liable under this Note and the other Term Loan Note during any
extension or renewal thereof, until the indebtedness evidenced hereby and
thereby is paid in full.
<PAGE>
7.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and neither the Agent, the Lender or the Other
Lender shall have any recourse against any property or assets of any such
constituent partner or other person or entity) under or in connection with
the Term Loan Notes, the Credit Agreement, the Security Documents, the
other Loan Documents, the Loans, or any instruments securing or otherwise
executed in connection therewith, or any certificate delivered in
connection therewith, or any amendments or modifications to any of the
foregoing made at any time or times, heretofore or hereafter (such persons
as described in this sentence being herein collectively referred to as
"Non-Recourse Persons"), provided, however, Non-Recourse Persons shall not
include any Maker or any Subsidiary of a Maker that would otherwise be
liable as a general partner in a Maker. The recourse of the Agent, the
Lender, the Other Lender and their successors and assignees under or in
connection with the Term Loan Notes, the Security Documents, the Credit
Agreement, the other Loan Documents, the Loans and such instruments and
certificates, and any such amendments or modifications, shall be limited to
the assets of the Makers, and the Agent, the Lender, the Other Lender and
each of their successors and assignees waive and do hereby waive any such
personal liability against any such Non-Recourse Persons. For the purposes
of the Term Loan Notes, the Security Documents, the Credit Agreement and
each other Loan Document and any such instruments and certificates and any
such amendments or modifications, neither the negative capital account of a
constituent partner in any Maker, nor any obligation of any constituent
partner in any Maker to restore a negative capital account or to advance or
contribute capital to any Maker or any other constituent partner in any
Maker shall be deemed to be the property or the asset of any Maker or any
such other constituent partner (and neither the Agent, the Lender or the
Other Lender nor any of their successors or assignees shall have any right
to collect, enforce or proceed against or with respect to any such negative
capital account or partner's obligation to restore, advance or contribute).
As used in this section, the term "constituent partner" means any direct
partner in any Maker, and any person or entity that is a partner in any
partnership that, directly or indirectly through one or more other
partnerships, is a partner in any Maker.
7.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
7.6 All sums received by the Agent for application to this Note and
the other Term Loan Note shall be applied by the Agent in the manner set
forth in Section 2.8 of the Credit Agreement.
7.7 The Makers are strictly liable for and hereby agree to pay or
reimburse the Agent (but not the Lender) for, and hold it harmless from and
against all of its reasonable third party costs and expenses incurred in
connection with the collection or enforcement of, or the preservation of
any rights under, this Note, the other Term Loan Note, the Credit Agreement
or other Loan Documents, including, without limitation, the reasonable fees
and disbursements of counsel for the Agent, including attorneys' fees out
of court, in trial, on appeal, in bankruptcy proceedings or otherwise. The
Makers shall pay all such amounts in accordance with the terms of the
Credit Agreement, and until repaid, such sums shall bear interest at the
Default Rate.
7.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note and the other Term Loan Note
shall be given in accordance with the notice provisions of Section 11.4 of
the Credit Agreement.
<PAGE>
7.9 As used herein, the terms "Makers," "Agent," "Lender" and
"Other Lender" shall be deemed to include their respective successors and
assigns.
7.10 In the event any one or more of the provisions of this Note or
the other Term Loan Note shall for any reasons be held to be invalid,
illegal, or unenforceable, in whole or in part or in any respect, or in the
event one or more of the provisions of this Note or the other Term Loan
Note operates or would prospectively operate to invalidate this Note or the
other Term Loan Note, then in any of those events, only such provision or
provisions shall be deemed null and void and shall not effect any other
provision of this Note or the other Term Loan Note. The remaining
provisions of this Note and the other Term Loan Note shall remain operative
and in full force and effect and in shall no way be affected, prejudiced or
disturbed thereby. In the event any provisions of this Note or the other
Term Loan Notes are inconsistent with any provisions of the Credit
Agreement, the Security Documents or other Loan Documents, or any other
agreements or documents executed in connection with the Term Loan Notes,
the Term Loan Note shall control.
7.11 It is expressly understood and agreed that neither the Agent,
the Lender or any Other Lender shall ever be construed for any purposes, to
be the partner, joint venturer, principal or associate of the Makers or any
of them or any person or party claiming by, through or under the Makers or
any of them in the conduct of their respective businesses.
7.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof (a)
severally waive presentment for payment, demand, notice of demand, notice
of nonpayment or dishonor, protest and notice of protest of this Note and
the other Term Loan Note, and all other notices in connection with the
delivery, acceptance, performance or enforcement of the payment of this
Note and the other Term Loan Note, (b) expressly consent to all extensions
of time, renewals, postponements of time of payment of this Note and the
other Term Loan Note or other modifications from time to time prior to or
after the Maturity Date, without notice, consent or consideration to any of
the foregoing, (c) expressly agree to any substitution, exchange, addition
or release of any of the other Loan Documents or the addition or release of
any party or person primarily or secondarily liable hereon, (d) expressly
agree that the Agent and/or the Lender or Other Lender shall not be
required first to institute any suit, or to exhaust their remedies against
the Makers or any other person or party to become liable hereunder or
against the other Loan Documents in order to enforce the payment of this
Note and the other Term Loan Note, and (e) expressly agree that,
notwithstanding the occurrence of any of the foregoing, they shall be and
remain, jointly and severally, directly liable for all sums due under this
Note, the other Term Loan Note and the other Loan Documents subject to the
terms and conditions hereof and thereof.
7.13 Neither the Agent or the Lender or Other Lender shall be
deemed, by any act of omission or commission, to have waived any of their
rights or remedies hereunder unless such waiver is in writing given in
accordance with the terms of the Credit Agreement, and then only to the
extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy as to a subsequent event.
7.14 Neither this Note or the other Term Loan Note nor any provision
hereof or thereof may be changed or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change or termination is sought.
7.15 Failure to accelerate this Note or the other Term Loan Note
after an Event of Default, or the acceptance of a past due installment,
shall not be construed as a novation of the contract or a waiver of the
right of the Agent or the Lender or Other Lender to thereafter insist upon
strict compliance with the terms of this Note and the other Term Loan Note
without previous notice of such intention being given to the Makers.
<PAGE>
7.16 Notwithstanding anything to the contrary in this Note, the
other Term Loan Notes, the Credit Agreement, the Security Documents or
other Loan Documents, the maximum liability of any Maker other than
Arvida/JMB Partners, L.P. (herein a "Maker Subsidiary" or "Maker
Affiliate") for the Obligations created, evidenced and secured thereby and
hereby shall not exceed the maximum amount, as such maximum amount shall be
determined by a court of competent jurisdiction of any such Maker
Subsidiary's or Maker Affiliate's liability therefor which may be incurred
without rendering the Obligations, as they relate to such Maker Subsidiary
or Maker Affiliate, voidable as a fraudulent conveyance or fraudulent
transfer under the Bankruptcy Code or under any other present or future
federal or state laws or statutes relating to bankruptcy, insolvency,
assignment for the benefit of creditors or other relief for debtors,
including, without limitation, the Uniform Fraudulent Transfer Act or the
Uniform Fraudulent Conveyance Act, as in effect in any jurisdiction wherein
any such Maker Subsidiary's or Maker Affiliate's Solvency (as defined in
the Credit Agreement) is subject to determination. For purposes of
determining such liability of any Maker Subsidiary or Maker Affiliate, due
consideration shall be given to the benefits received, directly or
indirectly, by such Maker Subsidiary or Maker Affiliate from the Loans (as
defined in the Credit Agreement) made pursuant to the Commitments (as
defined in the Credit Agreement).
7.17 The section headings of this Note and the other Term Loan Note
are for reference purposes only and are to be given no effect in the
construction or interpretation of this Note or the other Term Loan Note.
THE MAKERS AND THE LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER TERM LOAN NOTE OR THE
CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY MAKERS, THE AGENT,
THE LENDER OR ANY OTHER LENDER.
<PAGE>
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE
RECORDED IN OFFICIAL RECORDS BOOK 26802, PAGE 888, OF THE PUBLIC RECORDS OF
BROWARD COUNTY, FLORIDA. NON-RECURRING INTANGIBLE TAXES SHALL BE PAID AT
THE TIME OF EACH ADVANCE, ON SUCH ADVANCE.
THIS NOTE RENEWS WITHOUT ENLARGEMENT THE CURRENT UNFUNDED AVAILABILITY
UNDER THAT CERTAIN PROMISSORY NOTE OF EVEN DATE HEREWITH AND ASSIGNED TO
LENDER ON EVEN DATE HEREOF IN THE ORIGINAL PRINCIPAL BALANCE OF $7,680,000,
CREATED BY THE BIFURCATION OF THAT CERTAIN CONSOLIDATED AND RESTATED LINE
OF CREDIT PROMISSORY NOTE IN THE ORIGINAL PRINCIPAL AMOUNT OF $20,000,000
OF EVEN DATE HEREWITH, COPIES OF WHICH ARE ATTACHED HERETO AND MADE A PART
HEREOF.
RENEWAL LINE OF CREDIT
PROMISSORY NOTE
$7,680,000 Effective Date: September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of Bank United, a federal savings bank, its successors or
assigns (the "Lender"), the principal sum of SEVEN MILLION SIX HUNDRED
EIGHTY THOUSAND DOLLARS ($7,680,000), or the Lender's Actual Share of all
sums as may be advanced under the Line of Credit Commitment, pursuant to
and in accordance with the Credit Agreement, together with interest on the
principal balance of this Note outstanding from time to time, as same shall
accrue thereon in accordance with the terms hereof, but not to exceed the
maximum non-usurious rate permitted by law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 "Actual Share" means the percentage interest of the Lender in
the Advances made pursuant to the Line of Credit Commitment.
1.2 "Adjusted LIBO Rate" means, relative to any LIBO Rate Tranche
to be made, continued or maintained as, or converted into, a LIBO Rate
Tranche for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of one percent) equal to the quotient of
(i) the LIBO Rate applicable to the relevant Interest Period, divided by
(ii) the result of one minus the Reserve Percentage applicable to such
Interest Period.
1.3 "Agent" means First Union National Bank, a national banking
association.
1.4 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which the Agent or the Lender or any Other Lender is
closed pursuant to authorization or requirement of law.
1.5 "Committed Share" means the percentage interest of the Lender
in the Line of Credit Commitment.
<PAGE>
1.6 "Credit Agreement" means the Credit Agreement dated July 31,
1997, between Lender and Borrower (among others), as amended, of even date
herewith, as the same may be amended, supplemented, restated, replaced or
otherwise modified from time to time.
1.7 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
1.8 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.9 "Interest Period" means, in the case of a LIBO Rate Tranche,
the period commencing on (and including) the Business Banking Day selected
by the Makers as the date on which such LIBO Rate Tranche is made or
continued as, or converted into a LIBO Rate Tranche pursuant to the terms
of this Note, and ending on (but excluding) the day which numerically
corresponds to such date one, two, three or six months thereafter (or if
such month has no numerically corresponding day, on the last Business
Banking Day of such month), in each case as the Makers may select, provided
that (a) if such Interest Period would otherwise end on a day which is not
a Business Banking Day, such Interest Period shall end on the next
following Business Banking Day (unless, in the case of a LIBO Rate Tranche,
such next following Business Banking Day is the first Business Banking Day
of the calendar month, in which case such Interest Period shall end on the
Business Banking Day next preceding such numerically corresponding day);
and (b) no Interest Period may end on a date later than the Maturity Date.
1.10 "LIBO Rate" means, relative to any Interest Period, a rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of
one percent) equal to the rate for US dollar deposits with maturities
comparable to such Interest Period for delivery on the first day of such
Interest Period which appears on the Reuters Screen LIBO Page as of
11:00 a.m. (London time) on the day that is two (2) London Banking Days
preceding the commencement date of the Interest Period. If at least two
(2) such offered rates appear on the Reuters Screen LIBO Page, the rate
will be the arithmetic mean of such offered rates. The Agent may, in its
discretion, use any other publicly available index or reference rate
showing rates offered for United States dollar deposits in the London
Interbank market as of the applicable date. In addition, the Agent may, in
its discretion, use rate quotations for daily or annual periods in lieu of
quotations for substantially equivalent monthly periods, in the absence of
such quotations for substantially equivalent monthly periods. Each
determination of the LIBO Rate applicable to a particular Interest Period
shall be made by the Agent and shall be conclusive and binding upon the
Makers and Lender absent manifest error.
1.11 "LIBO Rate Tranche" means a Tranche bearing interest at all
times during the Interest Period applicable to such Tranche, at a fixed
rate of interest equal to the Note LIBO Rate applicable to such Interest
Period.
1.12 "Line of Credit Commitment" has the meaning ascribed to such
term in the Credit Agreement.
1.13 "Line of Credit Notes" means this Note and the other Line of
Credit Note executed by the Makers in favor of the Other Lender, each dated
of even date herewith, in the aggregate amount of the Line of Credit
Commitment, as same may be amended, supplemented, renewed, restated,
replaced or otherwise modified from time to time.
1.14 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
<PAGE>
1.15 "Loan Year" means each of the twelve (12) month periods
commencing on July 31, 1997 and on the first, second and third
anniversaries hereof.
1.16 "London Banking Day" means each day other than a Saturday, a
Sunday or any holiday on which commercial banks in London, England are
closed for business.
1.17 "Maturity Date" means the earlier of: (i) July 31, 2001 and
(ii) any earlier date upon which the principal balance outstanding
hereunder, together with all interest accrued thereon, shall become
immediately due and payable following an Event of Default, in accordance
with provisions of the Credit Agreement.
1.18 "Note" means this Line of Credit Promissory Note, in the amount
of the Lender's Committed Share of the Line of Credit Commitment, as same
maybe amended, supplemented, restated, replaced or otherwise modified from
time to time.
1.19 "Note LIBO Rate" means the Adjusted LIBO Rate applicable to a
specific LIBO Rate Tranche selected by the Makers for a relevant Interest
Period, plus 175 basis points.
1.20 "Note Prime Rate" means the Prime Rate applicable to the Prime
Rate Tranche. The Note Prime Rate shall be increased or decreased
effective on any date on which the Prime Rate shall be increased or
decreased.
1.21 "Other Lender" means, First Union National Bank, a national
banking association, also being a "Lender".
1.22 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank, as its Prime Rate. The Prime
Rate is a reference rate for the information and use of the Agent in
establishing the actual rates to be charged to borrowers and is not
necessarily the lowest rate charged by the Agent. Should First Union
National Bank not publish a Prime Rate at any time during the term of this
Note, the Agent, in its reasonable discretion, may choose a substitute
Prime Rate. The rate of interest shall change automatically and
immediately as of the date of any change in the Prime Rate without notice
to Borrower or any endorser, surety or guarantor, if any.
1.23 "Prime Rate Tranche" means a Tranche bearing interest at the
Note Prime Rate.
1.24 "Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor
thereto or other rule, regulation or official interpretation of said Board
of Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
1.25 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.26 "Reserve Percentage" means the stated maximum rate (expressed
as a decimal) at which reserves are required to be maintained by the Agent
during an Interest Period, including, without limitation (i) any basis,
supplemental, marginal, or emergency reserve under any regulations of any
governmental authority to which the Agent is subject, (ii) any reserve
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), including, without limitation, Regulation D, for determining
the maximum reserve requirement in respect of "Eurocurrency liabilities"
(or in respect of any other category of liabilities which includes deposits
<PAGE>
by reference to which the LIBO Rate is determined). Without limiting the
effect of the foregoing, the Reserve Percentage shall reflect any other
reserves required to be maintained by the Agent under any regulation of any
governmental authority to which the Agent is subject against (a) any
category of liabilities that include deposits with reference to which the
LIBO Rate is to be determined or (b) any category of extension of credit or
other assets that includes loans bearing interest at a rate based on the
LIBO Rate. Each determination of the Reserve Percentage shall be made by
the Agent and shall be conclusive and binding upon the Makers and Lenders
absent manifest error.
1.27 "Security Documents" has the meaning ascribed to such terms in
the Credit Agreement.
1.28 "Tranche" means any portion of the outstanding principal
balance under the Line of Credit Notes bearing interest at the applicable
Note LIBO Rate for a specific Interest Period, as selected by the Makers in
accordance with Section 2.1, below, and any portion of the outstanding
principal balance under the Line of Credit Notes which may from time to
time bear interest at the Note Prime Rate.
20 Selection and Calculation of Interest Rate.
2.1 Provided that no Event of Default or circumstance which with
the passage of time or giving of notice would become an Event of Default
then exists under the Loan Documents, and provided there shall at no time
be permitted to exist more than four LIBO Rate Tranches with respect to the
total principal balance outstanding under the Line of Credit Notes, the
Makers shall have the right to elect to have the Note LIBO Rate then in
effect for an Interest Period apply to a LIBO Rate Tranche, in accordance
with, and subject to the provisions of this Section 2.1. To make an
election to have such Note LIBO Rate apply to any LIBO Rate Tranche, from
time to time, the Makers shall give to the Agent irrevocable notice (a
"Rate Election Notice") not later than 11:00 a.m. (Ft. Lauderdale, Florida
time) at least three (3) Business Banking Days prior to the commencement
date of each such Interest Period, which Rate Election Notice shall be
addressed as follows, and shall be given in writing (by telecopy, hand
delivery, or overnight delivery service), in accordance with the provisions
of Section 11.4 of the Credit Agreement:
Dana Hunter, Vice President
First Union National Bank
5581 West Oakland Park Blvd., 2nd Floor
Lauderhill, Florida 33313
(954) 467-5543
Fax: (954) 467-5557
Each such Rate Election Notice shall be in the form attached hereto as
Schedule 1 and shall specify: (i) the commencement day of the Interest
Period which shall be a Business Banking Day (and, with respect to any then
existing LIBO Rate Tranche, shall not be a date prior to the termination
date of such then existing LIBO Rate Tranche), (ii) the principal amount of
the LIBO Rate Tranche which shall be subject to the application of the Note
LIBO Rate, which shall be in a minimum amount of $2,000,000.00, and in
multiples of $100,000.00 and (iii) the applicable Interest Period which
shall apply to such LIBO Rate Tranche, provided, however, that no Interest
Period may extend beyond the Maturity Date.
<PAGE>
2.2 If the Agent determines, absent manifest error, that the
maintenance of any Note LIBO Rate would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, of if the
Agent determines that the interest rate applicable to the Note LIBO Rate
does not accurately reflect the cost of maintaining any LIBO Rate Tranche
subject to such rate, then, at the election of the Agent, the Makers shall
not be entitled thereafter to select a Note LIBO Rate to be applicable to
any portions of the total outstanding principal balance under the Line of
Credit Notes, and the interest rate applicable to all of the outstanding
principal balance under the Line of Credit Notes then subject to the Note
LIBO Rate for any applicable Interest Period, shall, upon the expiration of
all such applicable Interest Periods, be converted to the Prime Rate.
2.3 In the event that the Makers shall fail to provide a timely
Rate Election Notice for the election of the Note LIBO Rate to apply to any
Advance or to any LIBO Rate Tranche, as of the termination date of the
applicable Interest Period for such Tranche, then as the date of such
Advance, or as of such termination date of such LIBO Rate Tranche, as the
case may be, the Prime Rate shall apply to such Advance or LIBO Rate
Tranche until the next eligible effective date for which the Maker shall
have provided a timely Rate Election Notice, and such Advance or such
principal amount previously comprising a LIBO Rate Tranche, shall
thereafter be deemed to be included in the Prime Rate Tranche.
2.4 Interest shall be calculated on the daily total outstanding
balance of all Advances of Loan Proceeds under the Line of Credit
Commitment, as such Advances are evidenced by the Line of Credit Notes, as
follows: (i) interest shall accrue on each LIBO Rate Tranche, commencing
with the effective date for each such LIBO Rate Tranche, at the applicable
Note LIBO Rate for the applicable Interest Period and (ii) interest shall
accrue on the Prime Rate Tranche, which shall comprise all of the
outstanding principal balance under the Line of Credit Notes not otherwise
subject to a LIBO Rate Tranche, at the Note Prime Rate, changing when and
as the Prime Rate changes. Interest shall be computed through and
including the date of any payment and shall be calculated for actual days
elapsed on the basis of a 360 day year (i.e. interest for each day on which
any principal is outstanding shall be calculated at the applicable interest
rate described above, divided by 360).
30 Payment of Interest and Principal.
3.1 Interest, calculated as above provided, shall be due and
payable by the Makers to the Agent, for the account of the Lender and Other
Lender, in accordance with their Actual Shares of the total outstanding
principal balance of the Line of Credit Notes, subject to the provisions of
Section 3.7 hereof, on the first Business Banking Day of the first calendar
month immediately following the Advance of Loan Proceeds under the Line of
Credit Commitment and continuing on the first day of each month thereafter
until the Maturity Date.
3.2 The total outstanding principal balance under the Line of
Credit Notes and all accrued but unpaid interest shall be fully due and
payable on the Maturity Date.
3.3 All payments of principal and interest under the Line of Credit
Notes shall be made in lawful money of the United States which shall be
legal tender in payment of all debts, public and private, at the time of
payment.
<PAGE>
3.4 The Line of Credit Notes may be prepaid in whole or in part at
any time and from time to time, without penalty or premium, provided:
(i) any such prepayment shall be preceded by at least three (3) Business
Banking Days' prior written notice to the Agent and (ii) any such
prepayment shall be accompanied by accrued interest to the date of
prepayment and any other obligations and payments then due under the terms
of the Line of Credit Notes. If the Makers shall make a payment or
prepayment of all or any portion of the principal amount outstanding then
subject to a LIBO Rate Tranche, prior to the applicable termination date
thereof (including, without limitation, upon the acceleration of the
Maturity Date following an Event of Default), or the Makers shall attempt
to rescind a Rate Election Notice for a specified LIBO Rate Tranche, after
the Makers have submitted such Rate Election Notice to the Agent, then,
within three (3) Business Banking Days following written notice from the
Agent, the Makers shall pay to the Agent the amount of any loss or cost
incurred by the Agent, the Lender or the Other Lender resulting therefrom,
including, without limitation, any loss or cost resulting from the
liquidation or re-employment of deposits required to fund or maintain the
subject LIBO Rate Tranche, not to exceed the amount of interest which would
have been earned on the amount prepaid for the balance of the subject
Interest Period, at a rate equal to the difference, not less than zero, of
the LIBO Rate as of the first day of the Interest Period less the LIBO Rate
as of the date of such prepayment, for a corresponding Interest Period
commencing on the date of such prepayment. The obligations of the Makers
under this section shall survive payment of the Line of Credit Notes.
3.5 Prior to the Maturity Date, the Makers may borrow, repay and
reborrow hereunder, in accordance with the terms of the Credit Agreement.
The Makers shall repay the outstanding balances under the Line of Credit
Notes at least once each Loan Year, provided, however, that the Makers
shall, at no point, repay the outstanding balances under this Note or under
any of the other Line of Credit Notes to the extent that there shall be
less than One Thousand Dollars and no/100 ($1,000.00) outstanding
thereunder at any time, and shall not reborrow under the Line of Credit
Commitment for a period of at least thirty (30) days after such repayment
(a "Cleanup Repayment"). Notwithstanding the foregoing, however, the Maker
shall be entitled to forego such Cleanup Repayment for one Loan Year,
provided, however, that the Maker shall not be entitled to make any
Distributions (as defined in the Credit Agreement) during the Loan Year
following the Loan Year as to which the Makers shall have failed to make a
Cleanup Repayment, until the Makers shall make a Cleanup Repayment.
3.6 All payments of principal and interest under the Line of Credit
Notes shall be made in immediately available funds by 11:00 a.m. (Ft.
Lauderdale, Florida time) on a Business Banking Day, to the Agent for the
account of the Lenders, at the office of the Agent at First Union National
Bank, 301 South College Street, TW-6, Charlotte, North Carolina 28288-0166,
Attention: Jane Hurley, or by wire to ABA #053000219, Account No.465906
0010352, Reference "Arvida," Attention: Jane Hurley, or at such other place
as the Agent may instruct. Any payments of principal or interest made
after 11:00 a.m. (Ft. Lauderdale, Florida time) shall be deemed to be
payments made on the next following Business Banking Day, for all purposes,
hereof, including, without limitation, the accrual of interest. Should any
payment under the Line of Credit Notes become due and payable on a day
other than a Business Banking Day, the maturity thereof shall be extended
to the next succeeding Business Banking Day, and, in the case of any
payment of principal, interest shall be payable thereon as calculated
pursuant hereto, for each Business Banking Day such principal is
outstanding (provided, however, any payment of principal received on any
Business Banking Day by 11:00 a.m. (Ft. Lauderdale, Florida time) shall not
be deemed to be outstanding on such Business Banking Day).
<PAGE>
3.7 Notwithstanding anything to the contrary set forth herein, the
Agent shall provide the Makers with written notice prior to the first
Business Banking Day of each month of the interest installment with respect
to the Line of Credit Notes which is due and payable on such first Business
Banking Day of such month. With respect to each such monthly installment
of interest, the Agent and the Lenders hereby grant to the Makers a grace
period for the payment of same, which shall extend to the later of: (a) the
fifteenth (15th) day of the month or (b) if the Makers shall not have
received written notice of the monthly interest installment from the Agent,
prior to the first Business Banking Day of any month and the Makers shall
have provided written notice to the Agent, no later than such first
Business Banking Day of the month, of such Agent's failure to provide the
Makers with written notice of such interest installment, then, the date
fifteen (15) days from receipt by the Makers of such written notice of the
monthly interest installment. If the Agent shall not receive written
notice from the Makers on or before the first Business Banking Day of a
month, of the Agent's failure to provide written notice of an interest
installment, then, for all purposes of this Note, notwithstanding that the
Makers may later request such written notice of such interest installment,
such grace period shall extend to no later than the fifteenth (15th) day of
such month.
3.8 Any payment required to be paid by the Line of Credit Notes,
the Loan Documents or the Credit Agreement, with the exception of interest
and principal, shall be due and payable no later than fifteen (15) days
from receipt by the Makers from the Agent of written notice of the required
payment.
3.9 Provided the Agent has not exercised its right to accelerate
the Line of Credit Notes as provided in the Line of Credit Notes, the
Credit Agreement or the other Loan Documents: (a) in the event any payment
of principal required under the Line of Credit Notes, either pursuant to
the terms hereof or the terms of the Credit Agreement, is not received by
the Agent, for the account of the Lender and Other Lender, by the fifteenth
(15th) day following the day on which such payment is due, the Makers shall
pay to the Agent, for the account of the Lender and Other Lender, a late
charge of five percent (5%) of the payment not so received, the parties
agreeing that said charge is a fair and reasonable charge for the late
payment and shall not be deemed a penalty or as compounding interest, and
(b) in the event any scheduled payment of interest required under the Line
of Credit Notes is not received by the Agent, for the account of the Lender
and Other Lender, by the later of (i) fifteen (15) days from receipt by the
Makers of written notice of the monthly interest installment and (ii) the
fifteenth (15th) day of such month, the Makers shall pay to the Agent, for
the account of the Lender and Other Lender, a late charge of five percent
(5%) of the payment not so received, the parties agreeing that said charge
is a fair and reasonable charge for the late payment and shall not be
deemed a penalty or as compounding interest. Further, if any payment
required to be paid by the Line of Credit Notes, the Credit Agreement or
the other Loan Documents, with the exception of interest and principal, is
not paid within fifteen (15) days from receipt by the Makers from the Agent
of written notice of the required payment, the Makers shall pay to the
Agent, for the account of the Lender and Other Lender, a late charge of
five percent (5%) of the payment not so received, the parties agreeing that
said charge is a fair and reasonable charge for the late payment and shall
not be deemed a penalty or as compounding interest.
40 Collateral Security. This Note and the other Line of Credit Note are
issued pursuant to the Credit Agreement. This Note and the other Line of
Credit Note are secured by the Credit Agreement, the Security Documents and
the other Loan Documents. Reference is hereby made to the Credit
Agreement, the Security Documents and the other Loan Documents for a
description of Events of Default and rights of acceleration of the Maturity
Date upon the occurrence of an Event of Default. It is expressly agreed
that all of the covenants, conditions and agreements contained in the
Credit Agreement, the Security Documents and the other Loan Documents are
made a part of this Note and the other Line of Credit Note.
<PAGE>
50 Events of Default.
5.1 Upon the occurrence of an Event of Default, the Agent may, and
upon the direction of the Required Lenders, shall declare the entire amount
of this Note and the other Line of Credit Note, including the principal
balance then outstanding thereunder, together with all interest accrued
thereon, to be immediately due and payable, without notice, (the Makers
hereby expressly waive notice of such Event of Default), time being of the
essence of this Line of Credit Note and the other Line of Credit Note. Any
Event of Default under this Note shall be an Event of Default under all
other Loan Documents and an Event of Default under any other Loan Document
shall be an Event of Default under this Note.
5.2 In the event the Agent accelerates the Line of Credit Notes as
herein provided or the full amount of outstanding principal and interest
under the Line of Credit Notes is not fully repaid to the Agent for the
account of the Lenders on or before the Maturity Date, then the entire
unpaid principal balance under the Line of Credit Notes, together with all
interest accrued thereon, shall bear interest from the date of an Event of
Default or from the Maturity Date, respectively, at the Default Rate. Any
late charge paid by the Makers shall be applied to the interest charged at
the Default Rate after acceleration of the Line of Credit Notes.
5.3 The remedies of the Agent, the Lender and Other Lender, as
provided herein, or in the Security Documents, the other Loan Documents or
Credit Agreement shall be cumulative and concurrent and may be pursued
singularly, successively or together, by the Agent in accordance with the
terms of the Credit Agreement, and may be exercised as often as the
occasion therefor shall arise. Notwithstanding anything herein seemingly
to the contrary, neither the Agent, the Lender or the Other Lender shall
take any action, including, without limitation, in connection with the
enforcement of any of their rights under the Line of Credit Notes, the
Credit Agreement or other Loan Documents, unless such action is consistent
with the action taken by the Agent, the Lender or the Other Lender, as the
case may be, with respect to all of the Line of Credit Notes and in
accordance with the provisions of the Credit Agreement.
60 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
the Line of Credit Notes, to pay interest in an amount or at a rate greater
than the highest non-usurious rate permissible under applicable law as
amended from time to time. Should any interest or other charges paid by
the Makers, or any party liable for the payment of the Loan evidenced by
the Line of Credit Notes, result in the computation or earning of interest
in excess of the highest non-usurious rate permissible under applicable
law, then any and all such excess shall be and the same is hereby waived by
the Agent, the Lender and the Other Lender, and all such excess shall be
paid by the Agent, the Lender or the Other Lender, as the case shall be, to
the Makers or to any party liable for the payment of the Loan evidenced by
the Line of Credit Notes, it being the intent of the parties hereto that
under no circumstances shall the Makers or any party liable for the payment
of the Loan hereunder, be required to pay interest in excess of the highest
non-usurious rate permissible under applicable law as amended from time to
time. By operation of Section 687.12, Florida Statutes (1996), the
interest rate charged under the Note and the other Line of Credit Notes is
authorized by Chapters 658, 665 and 687, Florida Statutes (1996) and
applicable federal law.
70 Waivers/Miscellaneous Matters.
<PAGE>
7.1 The Line of Credit Notes are to be construed according to the
applicable laws of the State of Florida and the United States of America.
Any action brought upon the enforcement of this Note and the other Line of
Credit Note is hereby authorized to be instituted and prosecuted in Broward
County, Florida, or at the United States District Court for the Southern
District of Florida, at the election of the Agent, subject to and in
accordance with the terms of the Credit Agreement.
7.2 The Line of Credit Notes may not be changed orally, but only by
an agreement in writing, signed by the party against whom enforcement of
any waiver, change, modification or discharge is sought.
7.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note and the other Line of Credit
Note hereby consents to any extension or renewal of this Note and the other
Line of Credit Note or any part thereof, without notice, and agrees that it
will remain liable under this Note and the other Line of Credit Note during
any extension or renewal thereof, until the indebtedness evidenced hereby
and thereby is paid in full.
7.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and neither the Agent, the Lender or the Other
Lender shall have any recourse against any property or assets of any such
constituent partner or other person or entity) under or in connection with
the Line of Credit Notes, the Credit Agreement, the Security Documents, the
other Loan Documents, the Loans, or any instruments securing or otherwise
executed in connection therewith, or any certificate delivered in
connection therewith, or any amendments or modifications to any of the
foregoing made at any time or times, heretofore or hereafter (such persons
as described in this sentence being herein collectively referred to as
"Non-Recourse Persons"), provided, however, Non-Recourse Persons shall not
include any Maker or any Subsidiary of a Maker that would otherwise be
liable as a general partner in a Maker. The recourse of the Agent, the
Lender, the Other Lender and their successors and assignees under or in
connection with the Line of Credit Notes, the Security Documents, the
Credit Agreement, the other Loan Documents, the Loans and such instruments
and certificates, and any such amendments or modifications, shall be
limited to the assets of the Makers, and the Agent, the Lender, the Other
Lender and each of their successors and assignees waive and do hereby waive
any such personal liability against any such Non-Recourse Persons. For the
purposes of the Line of Credit Notes, the Security Documents, the Credit
Agreement and each other Loan Document and any such instruments and
certificates and any such amendments or modifications, neither the negative
capital account of a constituent partner in any Maker, nor any obligation
of any constituent partner in any Maker to restore a negative capital
account or to advance or contribute capital to any Maker or any other
constituent partner in any Maker shall be deemed to be the property or the
asset of any Maker or any such other constituent partner (and neither the
Agent, the Lender or the Other Lender nor any of their successors or
assignees shall have any right to collect, enforce or proceed against or
with respect to any such negative capital account or partner's obligation
to restore, advance or contribute). As used in this section, the term
"constituent partner" means any direct partner in any Maker, and any person
or entity that is a partner in any partnership that, directly or indirectly
through one or more other partnerships, is a partner in any Maker.
<PAGE>
7.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
7.6 All sums received by the Agent for application to this Note and
the other Line of Credit Note shall be applied by the Agent in the manner
set forth in Section 2.8 of the Credit Agreement.
7.7 The Makers are strictly liable for and hereby agree to pay or
reimburse the Agent (but not the Other Lender) for, and hold it harmless
from and against all of its reasonable third party costs and expenses
incurred in connection with the collection or enforcement of, or the
preservation of any rights under, this Note, the other Line of Credit Note,
the Credit Agreement or other Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel for the Agent,
including attorneys' fees out of court, in trial, on appeal, in bankruptcy
proceedings or otherwise. The Makers shall pay all such amounts in
accordance with the terms of the Credit Agreement, and until repaid, such
sums shall bear interest at the Default Rate.
7.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note and the other Line of Credit
Note shall be given in accordance with the notice provisions of
Section 11.4 of the Credit Agreement.
7.9 As used herein, the terms "Makers," "Agent," "Lender" and
"Other Lender" shall be deemed to include their respective successors and
assigns.
7.10 In the event any one or more of the provisions of this Note or
the other Line of Credit Note shall for any reasons be held to be invalid,
illegal, or unenforceable, in whole or in part or in any respect, or in the
event one or more of the provisions of this Note or the other Line of
Credit Note operates or would prospectively operate to invalidate this Note
or the other Line of Credit Note, then in any of those events, only such
provision or provisions shall be deemed null and void and shall not effect
any other provision of this Note or the other Line of Credit Note. The
remaining provisions of this Note and the other Line of Credit Note shall
remain operative and in full force and effect and in shall no way be
affected, prejudiced or disturbed thereby. In the event any provisions of
this Note or the other Line of Credit Note are inconsistent with any
provisions of the Credit Agreement, the Security Documents or other Loan
Documents, or any other agreements or documents executed in connection with
the Line of Credit Note, the Line of Credit Note shall control.
7.11 It is expressly understood and agreed that neither the Agent,
the Lender or the Other Lender shall ever be construed for any purposes, to
be the partner, joint venturer, principal or associate of the Makers or any
of them or any person or party claiming by, through or under the Makers or
any of them in the conduct of their respective businesses.
7.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof (a)
severally waive presentment for payment, demand, notice of demand, notice
of nonpayment or dishonor, protest and notice of protest of this Note and
the other Line of Credit Note, and all other notices in connection with the
delivery, acceptance, performance or enforcement of the payment of this
Note and the other Line of Credit Note, (b) expressly consent to all
extensions of time, renewals, postponements of time of payment of this Note
and the other Line of Credit Note or other modifications from time to time
prior to or after the Maturity Date, without notice, consent or
consideration to any of the foregoing, (c) expressly agree to any
substitution, exchange, addition or release of any of the other Loan
Documents or the addition or release of any party or person primarily or
secondarily liable hereon, (d) expressly agree that the Agent and/or the
Lender or Other Lender shall not be required first to institute any suit,
<PAGE>
or to exhaust their remedies against the Makers or any other person or
party to become liable hereunder or against the other Loan Documents in
order to enforce the payment of this Note and the other Line of Credit
Note, and (e) expressly agree that, notwithstanding the occurrence of any
of the foregoing, they shall be and remain, jointly and severally, directly
liable for all sums due under this Note, the other Line of Credit Note and
the other Loan Documents subject to the terms and conditions hereof and
thereof.
7.13 Neither the Agent or the Lender or Other Lender shall be
deemed, by any act of omission or commission, to have waived any of their
rights or remedies hereunder unless such waiver is in writing given in
accordance with the terms of the Credit Agreement, and then only to the
extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy as to a subsequent event.
7.14 Neither this Note or the other Line of Credit Note nor any
provision hereof or thereof may be changed or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change or termination is sought.
7.15 Failure to accelerate this Note or the other Line of Credit
Note after an Event of Default, or the acceptance of a past due
installment, shall not be construed as a novation of the contract or a
waiver of the right of the Agent or the Lender or Other Lender to
thereafter insist upon strict compliance with the terms of this Note and
the other Line of Credit Note without previous notice of such intention
being given to the Makers.
7.16 Notwithstanding anything to the contrary in this Note, the
other Line of Credit Notes, the Credit Agreement, the Security Documents or
other Loan Documents, the maximum liability of any Maker other than
Arvida/JMB Partners, L.P. (herein a "Maker Subsidiary" or "Maker
Affiliate") for the Obligations created, evidenced and secured thereby and
hereby shall not exceed the maximum amount, as such maximum amount shall be
determined by a court of competent jurisdiction of any such Maker
Subsidiary's or Maker Affiliate's liability therefor which may be incurred
without rendering the Obligations, as they relate to such Maker Subsidiary
or Maker Affiliate, voidable as a fraudulent conveyance or fraudulent
transfer under the Bankruptcy Code or under any other present or future
federal or state laws or statutes relating to bankruptcy, insolvency,
assignment for the benefit of creditors or other relief for debtors,
including, without limitation, the Uniform Fraudulent Transfer Act or the
Uniform Fraudulent Conveyance Act, as in effect in any jurisdiction wherein
any such Maker Subsidiary's or Maker Affiliate's Solvency (as defined in
the Credit Agreement) is subject to determination. For purposes of
determining such liability of any Maker Subsidiary or Maker Affiliate, due
consideration shall be given to the benefits received, directly or
indirectly, by such Maker Subsidiary or Maker Affiliate from the Loans (as
defined in the Credit Agreement) made pursuant to the Commitments (as
defined in the Credit Agreement).
7.17 The section headings of this Note and the other Line of Credit
Note are for reference purposes only and are to be given no effect in the
construction or interpretation of this Note or the other Line of Credit
Note.
THE MAKERS AND THE LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LINE OF CREDIT NOTE OR
THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED
IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY MAKERS, THE AGENT,
THE LENDER OR ANY OTHER LENDER.
SIGNATURE PAGES FOLLOW
<PAGE>
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
THE TAX HAS BEEN PAID AND THE PROPER DOCUMENTARY STAMPS HAVE BEEN AFFIXED
TO THE MORTGAGE AND SECURITY AGREEMENT SECURING THIS PROMISSORY NOTE
RECORDED IN OFFICIAL RECORDS BOOK 26802, PAGE 888, OF THE PUBLIC RECORDS OF
BROWARD COUNTY, FLORIDA. NON-RECURRING INTANGIBLE TAXES SHALL BE PAID AT
THE TIME OF EACH ADVANCE, ON SUCH ADVANCE.
THIS NOTE RENEWS WITHOUT ENLARGEMENT THE CURRENT UNFUNDED AVAILABILITY
UNDER THAT CERTAIN PROMISSORY NOTE OF EVEN DATE HEREWITH AND ASSIGNED TO
LENDER ON EVEN DATE HEREOF IN THE ORIGINAL PRINCIPAL BALANCE OF $1,920,000,
CREATED BY THE BIFURCATION OF THAT CERTAIN CONSOLIDATED AND RESTATED DEMAND
NOTE LETTER OF CREDIT LINE PROMISSORY NOTE IN THE ORIGINAL PRINCIPAL AMOUNT
OF $5,000,000 OF EVEN DATE HEREWITH, COPIES OF WHICH ARE ATTACHED HERETO
AND MADE A PART HEREOF.
RENEWAL DEMAND NOTE
LETTER OF CREDIT LINE
$1,920,000 Effective Date: September 1, 1998
FOR VALUE RECEIVED, the undersigned, Arvida/JMB Partners, L.P., a
Delaware limited partnership, Arvida/JMB Partners, a Florida general
partnership, Arvida Grand Bay Limited Partnership IV, a Delaware limited
partnership, The AOK Group, a Florida general partnership, Metrodrama Joint
Venture, a Florida general partnership, Southeast Florida Holdings, Inc.,
an Illinois corporation, Gulf and Pacific Communications Limited
Partnership, a Delaware limited partnership, and Weston Hills Country Club
Limited Partnership, a Delaware limited partnership, all having an office
at 900 N. Michigan Avenue, Chicago, Illinois 60611 (hereinafter
collectively referred to as the "Makers"), jointly and severally promise to
pay to the order of Bank United, a federal savings bank, its successors or
assigns (the "Lender"), the principal sum of ONE MILLION NINE HUNDRED
TWENTY THOUSAND DOLLARS ($1,920,000), or the Lender's Actual Share of all
sums as may be advanced under the Letter of Credit Commitment, pursuant to
and in accordance with the Credit Agreement, together with interest on the
principal balance of this Note outstanding from time to time, as same shall
accrue thereon in accordance with the terms hereof, but not to exceed the
maximum non-usurious rate permitted by law.
10 Definitions. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement. In
addition to capitalized terms defined elsewhere herein, the following
capitalized terms shall have the meanings ascribed to them as follows:
1.1 "Actual Share" means the percentage interest of the Lender in
the Advance made pursuant to the Letter of Credit Commitment.
1.2 "Agent" means First Union National Bank, a national banking
association.
1.3 "Business Banking Day" means a day that is not a Saturday, a
Sunday, or a day on which the Agent or the Lender or any Other Lender is
closed pursuant to authorization or requirement of law.
1.4 "Committed Share" means the percentage interest of the Lender
in the Letter of Credit Commitment.
1.5 "Credit Agreement" means the Credit Agreement dated July 31,
1997, between Lender and the Borrower (among others), as amended, of even
date herewith, as the same may be amended, supplemented, restated, replaced
or otherwise modified from time to time.
1.6 "Default Rate" means the lesser of: (i) five percent (5%) above
the Note Prime Rate and (ii) the maximum non-usurious rate permitted under
applicable law, provided the maximum interest rate shall never be more then
twenty-four and 99/100 percent (24.99%).
<PAGE>
1.7 "Event of Default" has the meaning ascribed to such term in the
Credit Agreement.
1.8 "Letter of Credit Commitment" has the meaning ascribed to such
term in the Credit Agreement.
1.9 "Letter of Credit Notes" means this Note and the other Letter
of Credit Note executed by the Makers in favor of the Other Lender, each
dated of even date herewith, in the aggregate amount of the Letter of
Credit Commitment, as same may be amended, supplemented, renewed, restated,
replaced or otherwise modified from time to time.
1.10 "Loan Documents" has the meaning described to such term in the
Credit Agreement.
1.11 "Note" means this Note, in the amount of the Lender's Committed
Share of the Letter of Credit Commitment, as same maybe amended,
supplemented, restated, replaced or otherwise modified from time to time.
1.12 "Other Lender" means First Union National Bank, a national
banking association, also being a "Lender".
1.13 "Prime Rate" means the annual rate of interest announced from
time to time by First Union National Bank, as its Prime Rate. The Prime
Rate is a reference rate for the information and use of the Agent in
establishing the actual rates to be charged to borrowers and is not
necessarily the lowest rate charged by the Agent or the Lender. Should
First Union National Bank not publish a Prime Rate at any time during the
term of this Note, the Agent, in its reasonable discretion, may choose a
substitute Prime Rate. The rate of interest shall change automatically and
immediately as of the date of any change in the Prime Rate without notice
to Borrower or any endorser, surety or guarantor, if any.
1.14 "Required Lenders" has the meaning ascribed to such term in the
Credit Agreement.
1.15 "Security Documents" has the meaning ascribed to such terms in
the Credit Agreement.
20 Payment of Interest and Principal.
2.1 The Maker shall pay to the Agent for the account of the Lender
and the Other Lender, the entire principal balance of all Advances
outstanding under the Letter of Credit Notes, together with all interest
accrued thereon, at the Prime Rate, not later than three (3) Business
Banking Days following receipt of demand therefor, from the Agent. The
failure of the Makers to make such payment at such time shall constitute an
Event of Default hereunder, under the other Letter of Credit Note, and
under the Credit Agreement, and thereafter interest shall accrue on the
entire principal balance outstanding under the Letter of Credit Notes, at
the Default Rate.
2.2 All payments of principal and interest under the Letter of
Credit Notes shall be made in lawful money of the United States which shall
be legal tender in payment of all debts, public and private, at the time of
payment.
<PAGE>
2.3 All payments of principal and interest under the Letter of
Credit Notes shall be made in immediately available funds by 11:00 a.m.
(Ft. Lauderdale, Florida time) on a Business Banking Day, to the Agent for
the account of the Lenders, at the office of the Agent at First Union
National Bank, 301 South College Street, TW-6, Charlotte, North Carolina
28288-0166, Attention: Jane Hurley, or by wire to ABA #053000219, Account
No.465906 0010352, Reference "Arvida," Attention: Jane Hurley, or at such
other place as the Agent may instruct. Any payments of principal or
interest made after 11:00 a.m. (Ft. Lauderdale, Florida time) shall be
deemed to be payments made on the next following Business Banking Day, for
all purposes, hereof, including, without limitation, the accrual of
interest. Should any payment under the Letter of Credit Notes become due
and payable on a day other than a Business Banking Day, the maturity
thereof shall be extended to the next succeeding Business Banking Day, and,
in the case of any payment of principal, interest shall be payable thereon
as calculated pursuant hereto, for each Business Banking Day such principal
is outstanding (provided, however, any payment of principal received on any
Business Banking Day by 11:00 a.m. (Ft. Lauderdale, Florida time) shall not
be deemed to be outstanding on such Business Banking Day).
30 Collateral Security. This Note and the other Letter of Credit Note
are issued pursuant to the Credit Agreement. This Note and the other
Letter of Credit Note are secured by the Credit Agreement, the Security
Documents and the other Loan Documents. Reference is hereby made to the
Credit Agreement, the Security Documents and the other Loan Documents for a
description of Events of Default and rights of acceleration of the Maturity
Date upon the occurrence of an Event of Default. It is expressly agreed
that all of the covenants, conditions and agreements contained in the
Credit Agreement, the Security Documents and the other Loan Documents are
made a part of this Note and the other Letter of Credit Note. The Letter
of Credit Commitment expires July 31, 2001, at which time, the Makers shall
either (i) cause all underlying Letters of Credit to be returned and
cancelled or (ii) if not previously paid to the Agent, pay to the Agent
Cash Collateral (as defined in the Credit Agreement) in an amount equal to
the maximum amount of all outstanding Letters of Credit.
40 Events of Default. The remedies of the Agent, the Lender and Other
Lender, as provided herein, or in the Security Documents, the other Loan
Documents or Credit Agreement shall be cumulative and concurrent and may be
pursued singularly, successively or together, by the Agent in accordance
with the terms of the Credit Agreement, and may be exercised as often as
the occasion therefor shall arise. Notwithstanding anything herein
seemingly to the contrary, neither the Agent, the Lender or the Other
Lender shall take any action, including, without limitation, in connection
with the enforcement of any of their rights under the Letter of Credit
Notes, the Credit Agreement or other Loan Documents, unless such action is
consistent with the action taken by the Agent, the Lender or the Other
Lender, as the case may be, with respect to all of the Letter of Credit
Notes and in accordance with the provisions of the Credit Agreement.
50 Usury. Nothing herein contained, nor in any instrument or
transaction related hereto, shall be construed or so operate as to require
the Makers, or any person liable for the payment of the Loan evidenced by
the Letter of Credit Notes, to pay interest in an amount or at a rate
greater than the highest non-usurious rate permissible under applicable law
as amended from time to time. Should any interest or other charges paid by
the Makers, or any party liable for the payment of the Loan evidenced by
the Letter of Credit Notes, result in the computation or earning of
interest in excess of the highest non-usurious rate permissible under
applicable law, then any and all such excess shall be and the same is
hereby waived by the Agent, the Lender and the Other Lender, and all such
excess shall be paid by the Agent, the Lender or the Other Lender, as the
case shall be, to the Makers or to any party liable for the payment of the
<PAGE>
Loan evidenced by the Letter of Credit Notes, it being the intent of the
parties hereto that under no circumstances shall the Makers or any party
liable for the payment of the Loan hereunder, be required to pay interest
in excess of the highest non-usurious rate permissible under applicable law
as amended from time to time. By operation of Section 687.12, Florida
Statutes (1996), the interest rate charged under the Note and the other
Letter of Credit Notes is authorized by Chapters 658, 665 and 687, Florida
Statutes (1996) and applicable federal law.
60 Waivers/Miscellaneous Matters.
6.1 The Letter of Credit Notes are to be construed according to the
applicable laws of the State of Florida and the United States of America.
Any action brought upon the enforcement of this Note and the other Letter
of Credit Note is hereby authorized to be instituted and prosecuted in
Broward County, Florida, or at the United States District Court for the
Southern District of Florida, at the election of the Agent, subject to and
in accordance with the terms of the Credit Agreement.
6.2 The Letter of Credit Notes may not be changed orally, but only
by an agreement in writing, signed by the party against whom enforcement of
any waiver, change, modification or discharge is sought.
6.3 Each maker, endorser and guarantor or any person, firm or
corporation becoming liable under this Note and the other Letter of Credit
Note hereby consents to any extension or renewal of this Note and the other
Letter of Credit Note or any part thereof, without notice, and agrees that
it will remain liable under this Note and the other Letter of Credit Note
during any extension or renewal thereof, until the indebtedness evidenced
hereby and thereby is paid in full.
6.4 Notwithstanding anything to the contrary herein or in the
Credit Agreement, the Security Documents or other Loan Documents (or any
instruments or certificates executed or delivered in connection therewith
at any time or times), neither any present or future constituent partner
(as hereinafter defined) in, or agent of, any of the Makers, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes
a constituent partner in any of the Makers shall be personally liable,
directly or indirectly (and neither the Agent, the Lender or the Other
Lender shall have any recourse against any property or assets of any such
constituent partner or other person or entity) under or in connection with
the Letter of Credit Notes, the Credit Agreement, the Security Documents,
the other Loan Documents, the Loans, or any instruments securing or
otherwise executed in connection therewith, or any certificate delivered in
connection therewith, or any amendments or modifications to any of the
foregoing made at any time or times, heretofore or hereafter (such persons
as described in this sentence being herein collectively referred to as
"Non-Recourse Persons"), provided, however, Non-Recourse Persons shall not
include any Maker or any Subsidiary of a Maker that would otherwise be
liable as a general partner in a Maker. The recourse of the Agent, the
Lender, the Other Lender and their successors and assignees under or in
connection with the Letter of Credit Notes, the Security Documents, the
Credit Agreement, the other Loan Documents, the Loans and such instruments
and certificates, and any such amendments or modifications, shall be
limited to the assets of the Makers, and the Agent, the Lender, the Other
Lender and each of their successors and assignees waive and do hereby waive
any such personal liability against any such Non-Recourse Persons. For the
purposes of the Letter of Credit Notes, the Security Documents, the Credit
Agreement and each other Loan Document and any such instruments and
certificates and any such amendments or modifications, neither the negative
capital account of a constituent partner in any Maker, nor any obligation
of any constituent partner in any Maker to restore a negative capital
account or to advance or contribute capital to any Maker or any other
constituent partner in any Maker shall be deemed to be the property or the
<PAGE>
asset of any Maker or any such other constituent partner (and neither the
Agent, the Lender or the Other Lender nor any of their successors or
assignees shall have any right to collect, enforce or proceed against or
with respect to any such negative capital account or partner's obligation
to restore, advance or contribute). As used in this section, the term
"constituent partner" means any direct partner in any Maker, and any person
or entity that is a partner in any partnership that, directly or indirectly
through one or more other partnerships, is a partner in any Maker.
6.5 Time is of the essence hereof with regard to the performance
and observance of all of the terms, provisions and conditions hereof on the
part of the Makers to be observed and/or performed.
6.6 All sums received by the Agent for application to this Note and
the other Letter of Credit Note shall be applied by the Agent in the manner
set forth in Section 2.8 of the Credit Agreement.
6.7 The Makers are strictly liable for and hereby agree to pay or
reimburse the Agent (but not the Other Lender) for, and hold it harmless
from and against all of its reasonable third party costs and expenses
incurred in connection with the collection or enforcement of, or the
preservation of any rights under, this Note, the other Letter of Credit
Note, the Credit Agreement or other Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel for the Agent,
including attorneys' fees out of court, in trial, on appeal, in bankruptcy
proceedings or otherwise. The Makers shall pay all such amounts in
accordance with the terms of the Credit Agreement, and until repaid, such
sums shall bear interest at the Default Rate.
6.8 All notices and like communications required or permitted to be
given pursuant to the provisions of this Note and the other Letter of
Credit Note shall be given in accordance with the notice provisions of
Section 11.4 of the Credit Agreement.
6.9 As used herein, the terms "Makers," "Agent," "Lender" and
"Other Lender" shall be deemed to include their respective successors and
assigns.
6.10 In the event any one or more of the provisions of this Note or
the other Letter of Credit Note shall for any reasons be held to be
invalid, illegal, or unenforceable, in whole or in part or in any respect,
or in the event one or more of the provisions of this Note or the other
Letter of Credit Note operates or would prospectively operate to invalidate
this Note or the other Letter of Credit Note, then in any of those events,
only such provision or provisions shall be deemed null and void and shall
not effect any other provision of this Note or the other Letter of Credit
Note. The remaining provisions of this Note and the other Letter of Credit
Note shall remain operative and in full force and effect and in shall no
way be affected, prejudiced or disturbed thereby. In the event any
provisions of this Note or the other Letter of Credit Note are inconsistent
with any provisions of the Credit Agreement, the Security Documents or
other Loan Documents, or any other agreements or documents executed in
connection with the Letter of Credit Notes, the Letter of Credit Notes
shall control.
6.11 It is expressly understood and agreed that neither the Agent,
the Lender or the Other Lender shall ever be construed for any purposes, to
be the partner, joint venturer, principal or associate of the Makers or any
of them or any person or party claiming by, through or under the Makers or
any of them in the conduct of their respective businesses.
<PAGE>
6.12 The undersigned Makers and any endorsers, sureties, guarantors
and all others who are or may become liable for the payment hereof
(a) severally waive presentment for payment, demand, notice of demand,
notice of nonpayment or dishonor, protest and notice of protest of this
Note and the other Letter of Credit Note, and all other notices in
connection with the delivery, acceptance, performance or enforcement of the
payment of this Note and the other Letter of Credit Note, (b) expressly
consent to all extensions of time, renewals, postponements of time of
payment of this Note and the other Letter of Credit Note or other
modifications from time to time, without notice, consent or consideration
to any of the foregoing, (c) expressly agree to any substitution, exchange,
addition or release of any of the other Loan Documents or the addition or
release of any party or person primarily or secondarily liable hereon,
(d) expressly agree that the Agent and/or the Lender or Other Lender shall
not be required first to institute any suit, or to exhaust their remedies
against the Makers or any other person or party to become liable hereunder
or against the other Loan Documents in order to enforce the payment of this
Note and the other Letter of Credit Note, and (e) expressly agree that,
notwithstanding the occurrence of any of the foregoing, they shall be and
remain, jointly and severally, directly and primarily liable for all sums
due under this Note, the other Letter of Credit Note and the other Loan
Documents subject to the terms and conditions hereof and thereof.
6.13 Neither the Agent or the Lender or Other Lender shall be
deemed, by any act of omission or commission, to have waived any of their
rights or remedies hereunder unless such waiver is in writing given in
accordance with the terms of the Credit Agreement, and then only to the
extent specifically set forth in the writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of
any right or remedy as to a subsequent event.
6.14 Neither this Note or the other Letter of Credit Note nor any
provision hereof or thereof may be changed or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change or termination is sought.
6.15 Failure to accelerate this Note or the other Letter of Credit
Note after an Event of Default, or the acceptance of a past due
installment, shall not be construed as a novation of the contract or a
waiver of the right of the Agent or the Lender or Other Lender to
thereafter insist upon strict compliance with the terms of this Note and
the other Letter of Credit Note without previous notice of such intention
being given to the Makers.
6.16 Notwithstanding anything to the contrary in this Note, the
other Letter of Credit Note, the Credit Agreement, the Security Documents
or other Loan Documents, the maximum liability of any Maker other than
Arvida/JMB Partners, L.P. (herein a "Maker Subsidiary" or "Maker
Affiliate") for the Obligations created, evidenced and secured thereby and
hereby shall not exceed the maximum amount, as such maximum amount shall be
determined by a court of competent jurisdiction of any such Maker
Subsidiary's or Maker Affiliate's liability therefor which may be incurred
without rendering the Obligations, as they relate to such Maker Subsidiary
or Maker Affiliate, voidable as a fraudulent conveyance or fraudulent
transfer under the Bankruptcy Code or under any other present or future
federal or state laws or statutes relating to bankruptcy, insolvency,
assignment for the benefit of creditors or other relief for debtors,
including, without limitation, the Uniform Fraudulent Transfer Act or the
Uniform Fraudulent Conveyance Act, as in effect in any jurisdiction wherein
any such Maker Subsidiary's or Maker Affiliate's Solvency (as defined in
the Credit Agreement) is subject to determination. For purposes of
determining such liability of any Maker Subsidiary or Maker Affiliate, due
consideration shall be given to the benefits received, directly or
indirectly, by such Maker Subsidiary or Maker Affiliate from the Loans (as
defined in the Credit Agreement) made pursuant to the Commitments (as
defined in the Credit Agreement).
<PAGE>
6.17 The section headings of this Note and the other Letter of
Credit Note are for reference purposes only and are to be given no effect
in the construction or interpretation of this Note or the other Letter of
Credit Note.
THE MAKERS AND THE LENDER BY ITS ACCEPTANCE HEREOF HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LETTER OF CREDIT NOTE OR
THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED TO BE EXECUTED
IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY MAKERS, THE AGENT,
THE LENDER OR ANY OTHER LENDER.
IN WITNESS WHEREOF, the undersigned Makers have executed this Note on
the date set forth above.
MAKERS:
ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
THE AOK GROUP,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
By: ARVIDA/JMB PARTNERS,
a Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
METRODRAMA JOINT VENTURE,
a Florida general partnership
By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
By: ARVIDA/JMB PARTNERS, a
Florida general partnership,
a general partner
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA/JMB PARTNERS,
a Florida general partnership
By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
a general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV,
a Delaware limited partnership
By: ARVIDA GRAND BAY MANAGERS, INC.,
a Delaware corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PACIFIC PROPERTIES, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
WESTON HILLS COUNTRY CLUB LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: WHCC, INC.,
an Illinois corporation,
its sole general partner
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
<PAGE>
SOUTHEAST FLORIDA HOLDINGS, INC.,
an Illinois corporation
By:
Stephen A. Lovelette,
Vice President
[CORPORATE SEAL]
EXHIBIT 10.1
- - ------------
(Arvida)
ASSET PURCHASE AGREEMENT
by and between
GULF AND PACIFIC COMMUNICATIONS LIMITED PARTNERSHIP
and
SCHURZ COMMUNICATIONS, INC.
Dated as of July 15, 1998
<PAGE>
TABLE OF CONTENTS
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1. DEFINITIONS AND REFERENCES. . . . . . . . . . . . . . . 1
Schedule 2.1 (e) . . . . . . . . . . . . . . . . 4
ARTICLE 2. SALE AND PURCHASE OF ASSETS; PURCHASE PRICE;
ADJUSTMENTS; ASSUMPTION OF LIABILITIES . . . . . . . . . . . . 5
2.1 Asset Sale and Purchase of Assets. . . . . . . . . . . . 5
2.1(a) Franchise. . . . . . . . . . . . . . . . . . . . 5
Schedule 2.1 (a) . . . . . . . . . . . . . . . . 5
2.1(b) FCC Licenses . . . . . . . . . . . . . . . . . . 5
Schedule 2.1 (b) . . . . . . . . . . . . . . . . 5
2.1(c) Real Property. . . . . . . . . . . . . . . . . . 5
Schedule 2.1 (c) . . . . . . . . . . . . . . . . 5
2.1(d) Owned Personal Property. . . . . . . . . . . . . 5
Schedule 2.1 (d) . . . . . . . . . . . . . . . . 5
2.1(e) Material Contracts . . . . . . . . . . . . . . . 5
Schedule 2.1 (e) . . . . . . . . . . . . . . . . 5
2.1(f) Additional Agreements. . . . . . . . . . . . . . 5
Schedule 2.1 (f) . . . . . . . . . . . . . . . . 5
2.1(g) Files and Records. . . . . . . . . . . . . . . . 6
2.1(h) Third-Party Claims . . . . . . . . . . . . . . . 6
2.1(i) Permits and Licenses . . . . . . . . . . . . . . 6
2.1(j) Accounts Receivable. . . . . . . . . . . . . . . 6
2.2 Excluded Assets. . . . . . . . . . . . . . . . . 6
2.2(a) Third Party Claims . . . . . . . . . . . . . . . 6
2.2(b) Personal Property Disposed Of. . . . . . . . . . 7
2.2(c) Insurance. . . . . . . . . . . . . . . . . . . . 7
2.2(d) Certain Books and Records. . . . . . . . . . . . 7
2.2(e) Rights under this Agreement. . . . . . . . . . . 7
2.2(f) Excluded Contracts . . . . . . . . . . . . . . . 7
Schedules 2.1 (e) and 2.1 (f) . . . . . . . . . 7
2.2(g) Cash, Receivables and Cash Equivalents.. . . . . 7
2.3 Consideration . . . . . . . . . . . . . . . . 7
2.4 Payment of Purchase Price. . . . . . . . . . . . 7
2.5 Adjustments. . . . . . . . . . . . . . . . . . . 7
2.6 Assumption of Liabilities. . . . . . . . . . . . 9
ARTICLE 3. REPRESENTATIONS AND WARRANTIES BY SELLER. . . . . . . . 10
3.1 Organization and Standing. . . . . . . . . . . . 10
3.2 Authorization. . . . . . . . . . . . . . . . . . 10
3.3 Compliance with Laws . . . . . . . . . . . . . . 10
Schedule 3.3 . . . . . . . . . . . . . . . . . . 10
3.4 Required Consents; No Conflicts. . . . . . . . . 10
Schedule 2.1(e). . . . . . . . . . . . . . . . . 10
3.5 Absence of Litigation. . . . . . . . . . . . . . 11
Schedule 3.5 . . . . . . . . . . . . . . . . . . 11
3.6 Ownership and Condition of Assets. . . . . . . . 11
3.6(a) Owned Real Property . . . . . . . . . . . . . . 11
Schedule 3.6 (a) . . . . . . . . . . . . . . . . 11
3.6(b) Leased Real Property . . . . . . . . . . . . . 11
Schedule 3.6 (b) . . . . . . . . . . . . . . . . 11
Schedule 3.6 (b) . . . . . . . . . . . . . . . . 11
3.6(c) Owned Personal Property. . . . . . . . . . . . 12
Schedule 2.1(d . . . . . . . . . . . . . . . . . 12
Schedule 2.1(d). . . . . . . . . . . . . . . . . 12
3.6(d) Leased Personal Property. . . . . . . . . . . . 12
Schedule 3.6 (d) . . . . . . . . . . . . . . . . 12
3.7 Material Contracts.. . . . . . . . . . . . . . . 12
Schedule 2.1 (e) . . . . . . . . . . . . . . . . 12
Schedule 2.1 (e)). . . . . . . . . . . . . . . . 12
3.8 Environmental Matters. . . . . . . . . . . . . . 13
3.8(a) Environmental Compliance . . . . . . . . . . . . 13
3.8(b) Environmental Law. . . . . . . . . . . . . . . . 13
3.9 Insurance. . . . . . . . . . . . . . . . . . . . 13
Schedule 3.9 . . . . . . . . . . . . . . . . . . 13
3.10 Cable System . . . . . . . . . . . . . . . . . . 13
Schedule 3.10. . . . . . . . . . . . . . . . . . 13
3.11 No other Representations. . . . . . . . . . . 13
ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY PURCHASER . . . . . . 14
4.1 Organization and Standing. . . . . . . . . . . . 14
4.2 Authorization. . . . . . . . . . . . . . . . . . 14
4.3 Required Consents; No Conflicts. . . . . . . . . 14
4.4 Absence of Litigation. . . . . . . . . . . . . . 14
4.5 Qualification of Purchaser . . . . . . . . . . . 14
4.6 HSR Filings. . . . . . . . . . . . . . . . . . . 15
ARTICLE 5. PRE-CLOSING FILINGS AND UNDERTAKINGS . . . . . . . . . . 16
5.1 Franchise Transfer Application; FCC
Assignment Applications.. . . . . . . . . . . . . . . . . . . . . . 16
5.2 Sharing Information. . . . . . . . . . . . . . . 16
5.3 Environmental Reports. . . . . . . . . . . . . . 16
ARTICLE 6. COVENANTS AND AGREEMENTS OF SELLER. . . . . . . . . . . 17
6.1 Negative Covenants . . . . . . . . . . . . . . . 17
6.1(a) Dispositions; Mergers. . . . . . . . . . . . . . 17
6.1(b) Additional Agreements/Material Contracts. . . . 17
6.1(c) Contract Breaches. . . . . . . . . . . . . . . . 17
6.2 Affirmative Covenants. . . . . . . . . . . . . . 17
6.2(a) Normal Operations. . . . . . . . . . . . . . . . 17
6.2(b) Actions. . . . . . . . . . . . . . . . . . . . . 17
6.2(c) Access . . . . . . . . . . . . . . . . . . . . . 18
6.2(d) Encumbrances . . . . . . . . . . . . . . . . . . 18
6.2(e) Insurance. . . . . . . . . . . . . . . . . . . . 18
6.2(f) Violations . . . . . . . . . . . . . . . . . . . 18
6.2(g) Interruption in Cable System Operation . . . . . 18
6.2(h) Environmental Matters. . . . . . . . . . . . . . 18
6.2(i) Consents . . . . . . . . . . . . . . . . . . . . 19
6.2(j) Updating . . . . . . . . . . . . . . . . . . . . 19
6.2(k) Consent of Lenders . . . . . . . . . . . . . . . 19
6.3 Confidentiality. . . . . . . . . . . . . . . . . 20
ARTICLE 7. COVENANTS AND AGREEMENTS OF PURCHASER . . . . . . . . . 21
7.1 Confidentiality. . . . . . . . . . . . . . . . . 21
7.2 Actions. . . . . . . . . . . . . . . . . . . . . 21
7.3 Access . . . . . . . . . . . . . . . . . . . . . 21
7.4 Notice of Certain Events . . . . . . . . . . . . 21
ARTICLE 8. MUTUAL COVENANTS AND UNDERSTANDINGS
OF SELLER AND PURCHASER. . . . . . . . . . . . . . . . . . . . 22
8.1 Possession and Control.. . . . . . . . . . . . . 22
8.2 Risk of Loss . . . . . . . . . . . . . . . . . . 22
8.3 Cable System Employees . . . . . . . . . . . . . 22
ARTICLE 9. CONDITIONS PRECEDENT TO
PURCHASER'S OBLIGATION TO CLOSE. . . . . . . . . . . . . . . . 23
9.1 Representations and Covenants. . . . . . . . . . 23
9.2 Consents . . . . . . . . . . . . . . . . . . . . 23
9.3 Delivery of Documents. . . . . . . . . . . . . . 23
9.4 Franchise Renewal. . . . . . . . . . . . . . . . 23
9.5 Franchise Transfer . . . . . . . . . . . . . . . 23
9.6 Legal Proceedings. . . . . . . . . . . . . . . . 23
ARTICLE 10. CONDITIONS PRECEDENT TO
SELLER'S OBLIGATION TO CLOSE . . . . . . . . . . . . . . . . . 24
10.1 Representations and Covenants. . . . . . . . . . 24
10.2 Delivery by Purchaser. . . . . . . . . . . . . . 24
10.3 Franchise Transfer . . . . . . . . . . . . . . . 24
10.4 Franchise Renewal. . . . . . . . . . . . . . . . 24
10.5 Legal Proceedings. . . . . . . . . . . . . . . . 24
11.1 Closing. . . . . . . . . . . . . . . . . . . . . 25
11.1(a) Closing Date . . . . . . . . . . . . . . . . . . 25
11.1(b) Closing Venue. . . . . . . . . . . . . . . . . . 25
11.2 Delivery by Seller . . . . . . . . . . . . . . . 25
11.2(a) Contracts; Agreements and Instruments. . . . . . 25
11.2(b) Consents . . . . . . . . . . . . . . . . . . . . 25
11.2(c) UCC Report . . . . . . . . . . . . . . . . . . . 26
11.2(d) Certified Consents; Certificates.. . . . . . . . 26
11.2(e) Certified Resolutions and Corporate Documents. . 26
11.2(f) Other Documents. . . . . . . . . . . . . . . . . 26
11.3 Delivery by Purchaser. . . . . . . . . . . . . . 26
11.3(a) Purchase Price Payment . . . . . . . . . . . . . 26
11.3(b) Purchaser Documents. . . . . . . . . . . . . . . 26
11.3(c) Certified Resolutions and Corporate Documents. . 27
11.3(d) Officer's Certificate. . . . . . . . . . . . . . 27
11.3(e) Allocation . . . . . . . . . . . . . . . . . . . 27
11.3(f) Other Documents. . . . . . . . . . . . . . . . . 27
ARTICLE 12. NO SURVIVAL; INDEMNIFICATION . . . . . . . . . . . . . 28
12.1 No Survival of Representations . . . . . . . . . 28
12.2 Indemnification by Seller. . . . . . . . . . . . 28
12.3 Indemnification by Purchaser . . . . . . . . . . 28
12.4 Conditions of Indemnification. . . . . . . . . . 29
12.4(a) Losses.. . . . . . . . . . . . . . . . . . . . . 29
12.4(b) Defense. . . . . . . . . . . . . . . . . . . . . 29
12.4(c) Costs and Expenses . . . . . . . . . . . . . . . 29
12.4(d) Compromise or Settlement of Losses . . . . . . . 30
12.4(e) Claim for Indemnification. . . . . . . . . . . . 30
12.4(f) Expiration of Indemnification Obligations. . . . 30
12.4(g) Hazardous Material Clean-Up. . . . . . . . . . . 30
ARTICLE 13. TERMINATION. . . . . . . . . . . . . . . . . . . . . . 31
13.1 Termination. . . . . . . . . . . . . . . . . . . 31
13.2 Effect of Termination. . . . . . . . . . . . . . 31
ARTICLE 14. REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 32
14.1 Default by Purchaser . . . . . . . . . . . . . . 32
14.2 Default by Seller. . . . . . . . . . . . . . . . 32
ARTICLE 15. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . 32
15.1 Further Assurances . . . . . . . . . . . . . . . 32
15.2 Mail . . . . . . . . . . . . . . . . . . . . . . 33
15.3 Brokers. . . . . . . . . . . . . . . . . . . . . 33
15.4 Expenses . . . . . . . . . . . . . . . . . . . . 33
15.5 Notices. . . . . . . . . . . . . . . . . . . . . 33
15.6 Waiver . . . . . . . . . . . . . . . . . . . . . 35
15.7 Purchaser's Assignment . . . . . . . . . . . . . 35
15.8 Successors and Assigns . . . . . . . . . . . . . 35
15.9 Entire Agreement; Amendment. . . . . . . . . . . 35
15.10 Severability . . . . . . . . . . . . . . . . . . 36
15.11 Headings . . . . . . . . . . . . . . . . . . . . 36
15.12 Governing Law. . . . . . . . . . . . . . . . . . 36
15.13 Signature in Counterparts. . . . . . . . . . . . 36
15.14 Assignment . . . . . . . . . . . . . . . . . . . 36
15.15 Seller's Liability . . . . . . . . . . . . . . . 37
ARTICLE 16. ALLOCATION OF PURCHASE PRICE AND ASSUMED LIABILITIES . 38
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into as of the
_________ day of July, 1998 by and between GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP, a Delaware limited partnership ("Seller") and SCHURZ
COMMUNICATIONS, INC., an Indiana corporation ("Purchaser").
RECITALS
- - --------
WHEREAS, Seller is the owner of a cable company in Weston, Florida, which
is operating at 550 MHz ("Cable Company"); and
WHEREAS, Seller wishes to sell, and Purchaser wishes to buy, all of the
assets used or useful in connection with the ownership and operation of the
Cable Company, other than the Excluded Assets (as defined below), all in
accordance with and subject to the terms and conditions set forth below;
and
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:
ARTICLE 1.
DEFINITIONS AND REFERENCES
- - --------------------------
Unless the context otherwise specifies or requires, terms used herein shall
have the respective meanings assigned thereto as follows (such definitions
to be equally applicable to both the singular and plural forms of the terms
defined). Unless otherwise specified, references herein to "Articles" or
"Sections" are to Articles or Sections of this Agreement.
ADDITIONAL AGREEMENTS means any and all contracts, agreements and leases
executed and delivered by Seller between the date hereof and the Closing
Date, excluding Material Contracts.
ADJUSTMENT DATE shall have the meaning specified in Section 2.5.
AFFILIATE shall have the meaning specified in Section 15.14.
ASSETS shall have the meaning specified in Section 2.1.
ASSIGNMENT OF CONTRACTS means an Assignment of Contracts, dated as of the
Closing Date and executed by Seller, in form and substance reasonably
satisfactory to Purchaser and Seller with respect to agreements as to which
consents have been obtained pursuant to Section 6.2(k).
ASSIGNMENT OF LEASES means an Assignment of Leases, dated as of the Closing
Date and executed by Seller, in form and substance reasonably satisfactory
to Purchaser and Seller, pursuant to Sections 3.6 (b) and 3.6 (d).
ASSUMED LIABILITIES means the Material Contracts and the Additional
Agreements, and any liabilities and agreements assumed by Purchaser
hereunder.
BILL OF SALE means a Bill of Sale dated as of the Closing Date and executed
by Seller, in form and substance reasonably satisfactory to Purchaser and
Seller.
<PAGE>
CABLE ORDINANCE means the City of Weston Cable Television Ordinance No. 98-
10 dated March 2, 1998.
CABLE SYSTEM means Seller's cable system operated in the City of Weston
pursuant to the Cable Ordinance and the Franchise.
CABLE SYSTEM SITE shall mean that building site located at 1274 Weston
Road, Weston 33326-1916.
CLOSING means the closing of the purchase and sale of the Assets (other
than the Excluded Assets) and the assumption of the Assumed Liabilities.
CLOSING DATE means the time and date on which the Closing takes place, as
established by Section 11.1
CODE means the Internal Revenue Code of 1986, as amended.
COMMUNICATIONS ACT means the Communications Act of 1934, as amended, and
the rules and regulations of the FCC promulgated pursuant thereto.
ENCUMBRANCES means any mortgages, pledges, liens, claims, security
interests, agreements, restrictions, defects in title, easements or
encumbrances.
ENVIRONMENTAL LAWS means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), as amended by the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C.
Section 9601 et seq.; the Toxic Substances Control Act ("TSCA"), 15 U.S.C.
Section 2601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1802 et seq.; the Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. Section 9601 et seq.; the Clean Water Act ("CWA"), 33 U.S.C.
Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f
et seq; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq.; or any
other applicable federal, state, or local laws, regulations, ordinances,
decrees, rules, judgments,
orders or directives now or hereinafter in effect relating to the
protection of human health, safety or the environment, or otherwise
relating to Hazardous Materials generation, production, use, storage,
treatment, transportation or disposal.
EQUIVALENT BASIC SUBSCRIBER means a subscriber on the Adjustment Date that:
(i) is receiving cable television service provided by the Cable System;
(ii) is not more than sixty (60) days delinquent in payment for such
service, excluding balances of $5.00 or less; and (iii) pays Seller's
standard rate for cable television service. In addition, Equivalent Basic
Subscribers shall include the quotient resulting from dividing the standard
basic rate for the Cable System into the total amount billed for any bulk
accounts billed for the last full month preceding the Adjustment Date. In
addition, Equivalent Basic Subscribers shall include the sum, calculated
from the date of this Agreement to the Adjustment Date, of the following:
(i) additional homes closed in Weston, (ii) additional apartments or rental
units rented in Weston; and (iii) commercial accounts.
ESCROW AGENT shall have the meaning specified in Section 2.4(a).
ESCROW AGREEMENT shall have the meaning specified in Section 2.4(a).
ESCROW DEPOSIT shall have the meaning specified in Section 2.4(a).
<PAGE>
EXCLUDED ASSETS shall have the meaning specified in Section 2.2.
FCC means the Federal Communications Commission.
FCC ASSIGNMENT APPLICATIONS shall have the meaning specified in Section 5.1
(b).
FCC LICENSES means any license granted to the Seller by the FCC that
authorizes the use of any communications system, microwave system or other
telecommunications system used in the operation of the Cable System.
FRANCHISE/FRANCHISE RENEWAL means a cable television franchise ordinance
(Ordinance No. 98-29 dated June 15, 1998) to operate the Cable System in
the City of Weston pursuant to the Cable Ordinance.
FRANCHISE TRANSFER APPLICATION means the application for the transfer of
the Franchise with the City of Weston in accordance with all of the
requirements of the Cable Ordinance and the Communications Act.
GAAP means generally accepted accounting principles.
GOVERNMENTAL APPROVALS shall have the meaning specified in Section 3.3.
GOVERNMENTAL AUTHORITY means any agency, board, bureau, court, commission,
department, instrumentality or administration of the United States
government, any state government or any local or other governmental body in
a state of the United States or the District of Columbia.
HAZARDOUS MATERIALS means any wastes, substances, or materials (whether
solids, liquids or gases) that are defined or regulated as hazardous or
toxic under any Environmental Law, including without limitation, substances
defined as "hazardous wastes," "hazardous substances," "toxic substances,"
"radioactive materials," or other similar designations in any Environmental
Laws. "Hazardous Materials" includes, without limitation, polychlorinated
biphenyls (PCBs), asbestos, lead-based paints and petroleum and petroleum
products.
HSR ACT means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder.
INDEMNIFIED PARTY and INDEMNIFYING PARTY shall have the respective meanings
specified in Section 12.4(a).
INCLUDING means "including without limitation".
IRS means the Internal Revenue Service.
IMPROVEMENTS shall have the meaning specified in Section 3.6(a).
LEASED REAL PROPERTY shall have the meaning specified in Section 3.6(b).
LEASES shall have the meaning specified in Section 3.6(b).
LOSSES means any and all demands, claims, complaints, actions or causes of
action, suits, proceedings, investigations, arbitrations, assessments,
losses, damages (including diminution in value), liabilities, obligations
(including those arising out of any action, such as any settlement or
compromise thereof or judgment or award therein) and any costs and
expenses, including, without limitation to, interest, penalties and
reasonable attorneys' fees and disbursements.
<PAGE>
MATERIAL ADVERSE EFFECT means, except as otherwise specifically provided
herein, any event or condition which has a material adverse effect
(financial or otherwise) on the Assets, other than the Excluded Assets, to
be acquired hereunder, taken as a whole.
MATERIAL CONTRACTS means those contracts that are designated as Material
Contracts in Schedule 2.1 (e), excluding Additional Agreements.
ORDINARY COURSE OF BUSINESS means, with respect to Seller, the ordinary
course of business consistent with past practices of Seller.
PERMITTED ENCUMBRANCES means (a) easements that do not materially adversely
affect the full use and enjoyment of the Real Property for the purposes for
which it is currently used or detract from the value of the Real Property
in any material respect; (b) imperfections of title and consensual
encumbrances , if any, which, in the aggregate, do not detract from the
marketability or value of the properties subject thereto in any material
respect and do not impair the operations of the Cable System thereof; and
(c) liens for taxes not yet due and payable.
PURCHASER DOCUMENTS means, collectively, this Agreement and any other
agreement to be executed and delivered by Purchaser hereunder or as
otherwise contemplated herein.
PURCHASER INDEMNIFIED PARTIES shall have the meaning specified in Section
12.2.
PURCHASE PRICE shall have the meaning specified in Section 2.3.
REAL PROPERTY shall have the meaning specified in Section 2.1(c).
SELLER INDEMNIFIED PARTIES shall have the meaning specified in Section
12.3.
SELLER'S OFFICE means a nineteen hundred twenty five (1,925) square foot
business office and operating complex located at: 1274 Weston Road, Weston,
FL 33326-1916.
TAX/TAXES means all federal, state and local taxes (including, without
limitation, income, profit, franchise, sales, use, real property, personal
property, ad valorem, excise, employment, social security and wage
withholding taxes) and installments of estimated taxes, assessments,
deficiencies, levies, imports, duties, license fees, registration fees,
withholdings, or other similar charges of every kind, character or
description imposed by any Governmental Authorities, and any interest,
penalties or additions to tax imposed thereon or in connection therewith.
TRANSACTION DOCUMENTS means, collectively, this Agreement, the Assignment
of Leases, the Bill of Sale, the FCC Assignment Applications, the
Assignment of Contracts and any other agreements to be executed and
delivered by Seller hereunder or as otherwise contemplated herein.
<PAGE>
ARTICLE 2.
SALE AND PURCHASE OF ASSETS; PURCHASE PRICE;
ADJUSTMENTS; ASSUMPTION OF LIABILITIES
- - --------------------------------------------
2.1 Asset Sale and Purchase of Assets.
Subject to the terms and conditions hereof and in reliance upon the
representations, warranties, covenants and agreements contained herein, at
the Closing, Seller shall sell, assign, transfer, convey and deliver to
Purchaser, and Purchaser agrees to purchase from Seller, all of Seller's
right, title and interest in the following property, free and clear of all
mortgages, security interests, liens or similar claims by third parties
(other than Permitted Encumbrances), but excluding the Excluded Assets
described in Section 2.2 (collectively, the "Assets"). Subject to the
provisions of Sections 2.2 and 6.1 (a), Assets shall include all such
assets (excluding the Excluded Assets) owned by Seller on the date hereof
and all such assets acquired between the date hereof and midnight (Eastern
Time) on the date immediately preceding the Closing Date.
The Assets shall consist of all of Seller's right, title and interest
in, to and under the following:
2.1(a) Franchise. The Franchise described in Schedule 2.1 (a);
2.1(b) FCC Licenses. The FCC Licenses described in Schedule 2.1 (b),
subject to the FCC Assignment Applications;
2.1(c) Real Property. All realty, fixtures, easements, rights of way,
buildings and improvements owned by Seller, including any undivided
interest in any of the foregoing, located at or pertaining to the Cable
System Site ("Real Property"), including but not limited to those listed or
described in Schedule 2.1 (c) ;
2.1(d) Owned Personal Property. All of the furniture, fixtures,
furnishings, machinery, computers, equipment (mobile or otherwise) and
computer software applications (including, but not limited to the Great
Lakes billing system and WordPerfect 5.1), inventory, supplies, cable
plant, antenna installations, tower, satellite dishes, office materials and
other tangible property owned by Seller, used or useful in the operation of
the Cable System, including but not limited to the property listed or
described in Schedule 2.1 (d);
2.1(e) Material Contracts. The contracts, commitments, plans,
agreements, leases, arrangements, and licenses, that relate to the
ownership, operation, business or use of the Cable System or any of the
Assets, and that are listed or described in Schedule 2.1 (e);
2.1(f) Additional Agreements. The contracts, commitments, plans,
agreements, leases, arrangements, and licenses, that relate to the
ownership, operation, business or use of the Cable System or any of the
Assets, and that are listed or described in Schedule 2.1 (f);
<PAGE>
2.1(g) Files and Records. All engineering plans or reports, customer
lists, logs, files and records pertaining to the Assets; originals of all:
(i) books, records, accounts, checks, payment records, Tax records
(including payroll, unemployment, real estate and other Tax records) and
other similar books, records and information of the Seller relating to the
Assets, (ii) all records prepared by or on behalf of Seller in connection
with the sale of the Cable System, (iii) all records and documents located
at Seller's affiliate company corporate offices including, but not limited
to Seller's accounts payable, general ledger and payroll systems (original
and supporting documentation);
2.1(h) Third-Party Claims. All rights and claims of Seller which
accrue or arise after the Closing, against third parties relating to the
Assets (other than the Excluded Assets), whether in tort, contract, or
otherwise, under or pursuant to all warranties, representations and
guarantees made by manufacturers, suppliers or vendors;
2.1(i) Permits and Licenses. All other permits, approvals, orders,
authorizations, consents, licenses, certificates, exemptions of, or filings
or registrations with, any Governmental Authority in any jurisdiction,
which have been issued or granted to or are owned or used by Seller in
connection with the business and operation of the Cable System and
ownership of the Assets and all pending applications therefor;
2.1(j) Accounts Receivable. The amount of accounts receivable for
cable services which are less than 60 days old on the Adjustment Date; and
2.1 (k) Miscellaneous. Any other Assets of the Cable System which
Purchaser determines in its reasonable discretion are required in order to
provide continual ongoing cable television service.
2.2 Excluded Assets.
Notwithstanding anything to the contrary in this Agreement, there shall be
excluded from the Assets and retained by Seller, to the extent in existence
at midnight (Eastern Time) on the date immediately preceding the Closing
Date, all assets not specified in Section 2.1, including the following
assets (collectively, the "Excluded Assets"):
2.2(a) Third Party Claims. All rights and claims of Seller, including
any Affiliate thereof, which accrue or arise prior to the Closing, whether
mature, contingent or otherwise, against third parties relating to the
Assets, operation of the business or employees of the Cable System, whether
in tort, contract, or otherwise, under or pursuant to all warranties,
representations and guarantees made by manufacturers, suppliers or vendors;
and those obligations in connection with such litigation (as referenced on
Schedule 3.5) by Pacific Properties, Inc. v. Louis Brugman;
<PAGE>
2.2(b) Personal Property Disposed Of. All tangible personal property
disposed of in the Ordinary Course of Business as permitted by this
Agreement;
2.2(c) Insurance. All contracts of insurance and any insurance plans
and the assets thereof, including, without limitation, prepaid insurance
expenses; and all insurance proceeds or claims of Seller relating to
property or equipment repaired, replaced or restored by Seller, or any
claims in connection with the Assets, the business operations, or the
employees of the Cable System prior to the Closing;
2.2(d) Certain Books and Records. Originals of all records and
documents relating to any Excluded Assets;
2.2(e) Rights under this Agreement. All of Seller's rights under or
pursuant to this Agreement or any other rights in favor of Seller pursuant
to the other agreements contemplated hereby;
2.2(f) Excluded Contracts. All Additional Agreements that have
terminated or expired prior to the Closing in the Ordinary Course of
Business or as otherwise permitted by this Agreement and all contracts,
commitments, plans, agreements, leases, arrangements, undertakings and
licenses not identified in Schedules 2.1 (e) and 2.1 (f), including,
without limitation, all employment agreements; and
2.2(g) Cash, Receivables and Cash Equivalents. All cash,
inter-company receivables, note receivables, bank deposits, overpayments,
other cash equivalents and investment securities.
2.3 Consideration.
The consideration for the conveyance and assignment of the Assets described
herein, in addition to the assumption of Assumed Liabilities by Purchaser
as set forth in Section 2.6 (the "Purchase Price"), shall be Thirty One
Million Six Hundred Eighty Seven Thousand Five Hundred and 00/100 Dollars
($31,687,500). At Closing, the Purchase Price shall be adjusted pursuant
to Section 2.5.
2.4 Payment of Purchase Price.
(a) Upon the execution of this Agreement, Purchaser shall deposit the
amount of One Million and 00/100 Dollars ($1,000,000) into escrow ("Escrow
Deposit"). The total Escrow Deposit shall be held by the law firm of
Gunster, Yoakley Valdes - Fauli & Stewart, P.A. (together with any
successor thereto, "Escrow Agent") pursuant to the terms and conditions of
the escrow agreement executed on the date hereof ("Escrow Agreement") in
the form of Exhibit A hereto. At the Closing, the Escrow Deposit, together
with any interest earned thereon, shall be paid by Escrow Agent to Seller
and credited to the Purchase Price at Closing. If the Closing does not
occur due to the reason specified in Section 14.1 hereof, the total Escrow
Deposit, together with any interest earned thereon, shall be paid to Seller
as liquidated damages as specified in Section 14.1. If the Closing does not
occur for any other reason, the total Escrow Deposit, together with any
interest earned thereon, shall be returned to Purchaser.
(b) Thirty Million Six Hundred Eighty Seven Thousand Five Hundred and
00/100 Dollars ($30,687,500), plus or minus any adjustments or increases
made pursuant to Section 2.5, shall be paid by the Purchaser on the Closing
Date by wire transfer of immediately available funds to such bank or other
financial institution as shall be designated by Seller.
2.5 Adjustments.
Operation of the Cable System through 11:59 p.m. on the Adjustment Date
shall be for the account of Seller. Operation of the Cable System after
11:59 p.m. on the Adjustment Date shall be for the account of Purchaser.
The revenue and expenses associated with the operation of the Cable System
and the ownership of the Assets shall be prorated between Seller and
Purchaser as of the Adjustment Date in accordance with GAAP. The Purchase
Price shall be paid on the Closing Date and possession and operation of the
Cable System by Purchaser shall be effectuated as of the Closing Date.
However, revenues and expenses shall be prorated as of the Adjustment Date.
In addition, the Purchase Price shall be adjusted on the Closing Date with
the following adjustments as of the Adjustment Date:
(a) The Purchase Price shall be reduced by the sum of the following
amounts:
1. The amount of Seller's liabilities with respect to any
converter deposits;
2. The amount of prepayments related to services which
Purchaser shall be obligated to provide after the Adjustment Date; and
3. In the event that there are fewer than 9,750
Equivalent Basic Subscribers on the Adjustment Date, the amount calculated
by subtracting the number of Equivalent Basic Subscribers on the Adjustment
Date from 9,750 and multiplying the resulting difference by $3,250.
(b) The Purchase Price shall be increased by the sum of the
following:
1. The amount of accounts receivable for cable services
which are less than 60 days old on the Adjustment Date; and
2. In the event that there are more than 9,750 Equivalent
Basic Subscribers on the Adjustment Date, the amount calculated by
subtracting 9,750 from the number of Equivalent Basic Subscribers on the
Adjustment Date and multiplying the resulting difference by $3,250.
(c) All other revenue, prepaid expenses and direct expenses
relating to the Cable System and the Assets shall be prorated, with Seller
being entitled to all revenues and liable for such expenses relating to the
period prior to the Adjustment Date and Purchaser being entitled to all
revenues and liable for all such expenses relating to the period after the
Adjustment Date.
<PAGE>
(d) At Closing, there will be a settlement between Seller and
Purchaser with respect to the above adjustments and prorations ( such
adjustments and prorations shall be made as if the effective date of
Closing was October 31, 1998) based on estimates by Seller and Purchaser,
with a final settlement to occur within sixty (60) days after the
Adjustment Date and the net amount, if any, due to or due from Purchaser
as the result of such prorations and adjustments shall be paid to or by
Purchaser, as the case may be, within fifteen (15) business days following
such final accounting. To the extent that the dollar amount of the items of
revenue and expense used as the basis for the adjustments and prorations
prove to be incorrect, each party shall have a continuing duty to make
appropriate credits and payments to the other party. Such adjustments and
prorations shall include any accounts receivable for cable services which
are determined by Purchaser to be uncollectible between the Adjustment Date
and the final settlement. Each party shall be permitted access to all
books, records, billing service reports and other documents necessary for
the determination of such adjustments and prorations.
2.6 Assumption of Liabilities.
At the Closing, Purchaser shall assume and become liable for the following:
(i) the liabilities and obligations of Seller arising after the Closing
Date under the Material Contracts and Additional Agreements, and (ii) the
liabilities and obligations of Seller arising after the Closing Date under
any Additional Agreements entered into after the date hereof in compliance
with Section 6.1(b) ("Assumed Liabilities").
Except for: (i) those liabilities and obligations expressly assumed by
Purchaser pursuant to this Section 2.6 hereof, (ii) those liabilities for
which Purchaser has received a credit under Section 2.5, (iii) liabilities
and obligations of Seller arising under contracts (exclusive of Additional
Agreements) which are not Material Contracts but which Purchaser, in its
sole discretion, elects to assume on or after the Closing Date, and (iv)
those obligations arising after the Closing Date in connection with such
litigation (as referenced on Schedule 3.5) before the Federal
Communications Commission for Request for Carriage Complaint of Hispanic
Keys Broadcasting, Corp. ("Carriage Litigation"), Purchaser shall have no
responsibility for any liabilities or obligations of any kind or
description whether connected with the business and operations of the Cable
System or the Seller, including any employee of Seller, or otherwise
arising from the ownership or operation of any of the Assets or the
business and operations of the Cable System or the Seller prior to the
Closing Date (collectively, "Seller's Retained Liabilities").
After the Closing Date, Seller shall have no responsibility: (i) for any
Assumed Liabilities, (ii) in connection with any Permitted Encumbrances,
(iii) for any costs that Purchaser agrees to assume pursuant to Section 5.3
hereof, or (iv) those obligations arising after the Closing Date in
connection with the Carriage Litigation.
<PAGE>
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES BY SELLER
- - ----------------------------------------
Seller represents and warrants to Purchaser as follows:
3.1 Organization and Standing.
Seller is a Limited Partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
power and authority to own and lease its assets and to conduct its business
as presently conducted. Seller has all requisite power and authority to
execute and deliver this Agreement and the other Transaction Documents and
to consummate the transactions contemplated hereby and thereby. Neither the
nature of the business of the Cable System, nor the character of the
properties owned, leased or otherwise held by Seller for use in the Cable
System's business makes any qualification necessary in any state other than
Florida.
3.2 Authorization.
The execution, delivery and performance of this Agreement and the other
Transaction Documents to be executed and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary partnership or other proceedings on the part of
Seller and no other partnership or other proceedings or actions on the part
of Seller is necessary therefor. This Agreement constitutes, and upon
execution and delivery each Transaction Document will constitute, a valid
and binding agreement and obligation of Seller, enforceable in accordance
with their respective terms.
3.3 Compliance with Laws.
Except as disclosed in Schedule 3.3, Seller is in material compliance with
all applicable laws, ordinances, regulations, including payment of all
taxes due, and the terms, conditions, rules and regulations of the Cable
Ordinance, the Franchise and with all rules and regulations of the FCC
("Governmental Approvals") except where the failure to be in compliance is
of such a minor nature as to not materially affect the ability of Seller to
conduct its business in a manner consistent with its current operations.
3.4 Required Consents; No Conflicts.
Except as set forth in Schedule 3.4 or in connection with the filings
referred to in Section 5.1, the execution, delivery and performance by
Seller of the Transaction Documents will not require the consent, approval,
authorization or permit of, or filing with, or notification to any person,
entity or Governmental Authority, except the consents of third parties to
the assignment of the Material Contracts as indicated on Schedule 2.1(e)
and those for which the failure to obtain would not materially affect the
ability of Seller to conduct its business in a manner consistent with its
current operations or which would not materially affect Seller's ability to
consummate the transactions contemplated by this Agreement.
<PAGE>
3.5 Absence of Litigation.
Except as set forth and described in Schedule 3.5, there is no action,
suit, investigation, claim, arbitration or litigation pending or, to the
actual knowledge of Seller (which shall be deemed to mean the actual
knowledge of Tom Siegel and Don Mears), threatened against, affecting or
involving the Assets, the Cable System or the business and operations of
the Cable System, or the transactions contemplated by this Agreement or any
other Transaction Document, at law or in equity, or before or by any
court, arbitrator or other Governmental Authority, that would, individually
or in the aggregate, if resolved adversely to Seller: (i) materially impair
the ability of Seller to perform its obligations under this Agreement, or
(ii) prevent the timely consummation of any of the transactions
contemplated by this Agreement.
3.6 Ownership and Condition of Assets.
3.6(a) Owned Real Property. Seller currently owns and operates Seller's
Office. Schedule 3.6 (a) contains a description of all Owned Real
Property. Copies of: (i) all deeds, title insurance commitment and surveys
of the Owned Real Property, and (ii) all documents evidencing any
Encumbrances upon the Owned Real Property have been delivered to Purchaser.
Purchaser shall be able to obtain from A&D Title, an owner's policy in the
form of an ALTA Form B Owners Policy of Title Insurance in the amount of
the purchase price allocated for the Owned Real Property, subject only to
matters which do not adversely affect marketability (as determined by the
standards adopted by the Florida Bar) of title to the Owned Real Property
or affect the ability of Purchaser to utilize the Owned Real Property in
the same manner that Seller has utilized the Owned Real Property.
The uses for which the buildings, facilities, and other improvements
located on the Owned Real Property ("Improvements") are zoned do not
materially restrict, or in any material manner impair, the use of the
Improvements for purposes of the business of Seller and the construction of
the Improvements complies in all material respects with all applicable
building and zoning codes, deed restrictions, ordinances and rules.
3.6(b) Leased Real Property. All of the real property leased by Seller
as tenant or lessee is identified on Schedule 3.6 (b) (collectively
referred to herein as "Leased Real Property").
Copies of the leases of any of the Leased Real Property (collectively,
"Leases" ) as set forth on Schedule 3.6 (b) have been delivered to
Purchaser. There are no material defaults, and no events or circumstances
have occurred that, with or without notice or lapse of time or both, would
constitute material defaults by Seller (nor, to Seller's knowledge [which
shall be deemed to mean the actual knowledge of Tom Siegel and Don Mears],
any other party) under any of the Leases.
<PAGE>
3.6(c) Owned Personal Property. The Cable System's channel capacity
is seventy-seven (77) channels across a five hundred fifty (550) MHz
bandwidth. The Cable System's Headend utilizes Scientific Atlanta
processing equipment, and addressable scrambling encryption in conjunction
with an eighty (80) foot off air reception tower and four (4) TVRO
satellite dishes. Schedule 2.1(d) contains a complete description of all
of Seller's machinery, equipment and other tangible personal property that
is located at the Cable System Site and is material to the operation of the
Cable System (other than Excluded Assets) (collectively, the "Equipment").
Seller has good and marketable title to all of the Equipment. None of such
Equipment is subject to any mortgage, pledge, lien, conditional sale
agreement, security agreement, encumbrance or other charge, except for
Permitted Encumbrances. The Equipment is sufficient for Purchaser to
continue the operations of the Cable System in accordance with applicable
law as conducted by Seller. Except as otherwise specified in Schedule
2.1(d), all Equipment of Seller is in good repair and working order,
ordinary wear and tear excepted, and Seller has maintained all Equipment in
compliance with good engineering and customary business practice.
3.6(d) Leased Personal Property. All personal property leased by Seller
as tenant or lessee as identified on Schedule 3.6 (d). Purchaser shall have
no obligation to accept assignment of the Leased Personal Property.
However, if Purchaser desires to have the Leased Personal Property assigned
to Purchaser, and if such leases are not assignable, then (i) Seller shall
not be required by Purchaser to incur any additional costs in order to
transfer said Leased Personal Property to Purchaser or in the termination
of such leases, and (ii) Purchaser shall not be required by Seller to
incur any additional costs in the termination or transfer of such leases.
3.7 Material Contracts.
Schedule 2.1 (e) contains a listing of all Material Contracts as of the
date hereof. Seller has delivered to Purchaser true and complete copies of
all Material Contracts, including any and all amendments and other
modifications thereto. There are no material defaults by Seller (nor, to
Seller's knowledge [which shall be deemed to mean the actual knowledge of
Tom Siegel and Don Mears], any other party) under any of the Material
Contracts and there are no events or circumstances that, with the giving of
notice or lapse of time or both, would constitute material defaults by
Seller under any of the Material Contracts. The execution of this
Agreement and the consummation of the transactions contemplated hereby will
not, with respect to any Material Contract: (i) constitute a default
thereunder, (ii) require the consent of any person or party (excluding the
Programming/Licensing Agreements as referenced on Schedule 2.1 (e)), or
(iii) affect the continuation, or the terms thereof. With respect to the
Programming/Licensing Agreements, if Purchaser determines not to assume
such Programming/Licensing Agreements, then Seller shall be required to
terminate the same. With respect to the Service Agreement as referenced on
Schedule 2.1 (e), Arvida/JMB Partners ("Developer"), as successor to Arvida
Corporation shall provide Purchaser with an agreement ("Arvida Agreement"),
prior to Closing, wherein Developer (and its successors and assigns)
agrees: (i) not to consent to the termination of the Service Agreement by
The Town Foundation, Inc., (ii) not to grant a third party the right to
provide Service (as defined in the Service Agreement) to the Community (as
defined in the Service Agreement); and (iii) not to engage in providing
Service to the Community itself or through an Affiliate (as defined in
Section 15.14 herein); all of the above for the fifteen (15) year term of
the Franchise.
<PAGE>
3.8 Environmental Matters.
3.8(a) Environmental Compliance. To the actual knowledge of Seller
(which shall be deemed to mean the actual knowledge of Tom Siegel and Don
Mears), there are no pending or threatened actions, suits, claims, legal
proceedings or other proceedings based on, and Seller has not received any
written notice of, any complaint, order, directive, citation, notice of
responsibility, notice of potential responsibility, or information request
from any Governmental Authority, with respect to any Environmental Laws.
3.8(b) Environmental Law. To the best of Seller's actual knowledge
(which shall be deemed to mean the actual knowledge of Tom Siegel and Don
Mears), Seller is in compliance, in all material respects, with all
applicable Environmental Laws, including having obtained and maintained all
permits, licenses, certificates, and approvals required under any
Environmental Law.
3.9 Insurance.
Schedule 3.9 contains a list of all policies of property, fire, casualty,
liability, workmen's compensation, relating to the Assets (other than the
Excluded Assets) of the business and operations of the Cable System and
owned or held by Seller as of the date hereof. All such policies are in
full force and effect.
3.10 Cable System.
Schedule 3.10 contains lists with respect to the Cable System of the
approximate number of: (a) Homes Passed as reported in the Cable System's
records; (b) miles of installed plant; (c) Basic Equivalent Subscribers;
(d) the minimum channels and MHz capacity of the Cable System; (e) a
description of basic and optional services available from the Cable System,
the rates charged for each, and the number of Basic Equivalent Subscribers
receiving each optional service; and (f) a current channel line-up for the
Cable System. Seller shall update Schedule 3.10 as of the Closing Date.
3.11 No other Representations. Seller shall not be deemed to have
made any representation or warranty other than as set forth in this
Agreement. THE ASSETS ARE BEING TRANSFERRED "AS IS" AND NO OTHER
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, ARE GIVEN OTHER THAN AS
EXPRESSLY CONTAINED HEREIN, INCLUDING, WITHOUT LIMITATION, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
<PAGE>
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES BY PURCHASER
- - -------------------------------------------
Purchaser represents and warrants to Seller as follows:
4.1 Organization and Standing.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Indiana and has all requisite power
and authority to carry on its business as now being conducted. Purchaser
has all requisite power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby.
4.2 Authorization.
The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate proceedings on the part of
Purchaser and no other corporate proceedings or actions on the part of
Purchaser, its board of directors or its shareholders is necessary
therefor. This Agreement constitutes a valid and binding agreement and
obligation of Purchaser, enforceable in accordance with its terms.
4.3 Required Consents; No Conflicts.
Except in connection with the filings referred to in Section 4.6 and
Section 5.1, the execution, delivery and performance by Purchaser of this
Agreement will not require the consent, approval, authorization or permit
of, or filing with, or notification to any person, entity or Governmental
Authority, except which would not materially affect Purchaser's ability to
consummate the transactions contemplated by this Agreement.
4.4 Absence of Litigation.
There is no action, suit, investigation, claim, arbitration or litigation
pending or, to the best of Purchaser's knowledge, threatened against,
affecting or involving the transactions contemplated by this Agreement or
that would affect Purchaser's ability to perform its obligations under this
Agreement, at law or in equity, or before or by any court, arbitrator or
Governmental Authority, and Purchaser is not operating under or subject to
an order, award, judgment, writ, decree, determination or injunction of any
court, arbitrator or Governmental Authority that would affect the
transactions contemplated by this Agreement or its ability to perform its
obligations under this Agreement.
4.5 Qualification of Purchaser.
Purchaser knows of no facts or circumstances that would cause Purchaser not
to meet any qualification to be the transferee of the Franchise or that
Purchaser believes will delay a routine grant of the FCC Assignment
Applications (as defined in Article 5.1).
<PAGE>
4.6 HSR Filings.
Purchaser shall, as promptly as practicable following the execution of this
Agreement, and Seller shall cooperate with Purchaser in connection
therewith, file with the Department of Justice and the Federal Trade
Commission any documents required under the HSR Act, and Purchaser shall
use its best efforts to obtain early termination of all waiting periods
under the HSR Act. All fees assessed in connection with the filing of such
forms and documents shall be borne by the Purchaser.
<PAGE>
ARTICLE 5.
PRE-CLOSING FILINGS AND UNDERTAKINGS
- - ------------------------------------
5.1 Franchise Transfer Application; FCC Assignment Applications.
5.1(a) Franchise Transfer Application. By August 15, 1998, Seller and
Purchaser shall have a completed transfer application submitted to the City
of Weston in full compliance with the Cable Ordinance and the Franchise
("Franchise Transfer Application"). Seller and Purchaser will diligently
take, or fully cooperate in the taking of, all necessary and proper steps,
and provide any additional information reasonably requested, and use their
respective best efforts to resolve objections that may be asserted by the
City of Weston or any third party, in order to obtain promptly the
requested consent and approval of the transfer of the Franchise. Purchaser
shall pay for all of the costs and fees associated with the Franchise
Transfer Application.
5.1(b) FCC Assignment Applications. As promptly as practicable
following the execution of this Agreement, Seller and Purchaser shall
jointly file one or more applications with the FCC requesting its consent
to the assignment of any FCC Licenses to be assigned to Purchaser ("FCC
Assignment Applications"). Seller and Purchaser will diligently take, or
fully cooperate in the taking of, all necessary and proper steps, and
provide any additional information reasonably requested, and use their
respective reasonable commercial efforts to resolve objections that may be
asserted by the FCC or any third party, in order to obtain promptly the
requested consent and approval of the FCC Assignment Applications.
Purchaser shall pay for all of the costs and fees associated with the FCC
Assignment Applications.
5.2 Sharing Information.
Each party hereto shall as promptly as possible, and in any event within
two (2) business days, inform the other of any material communications
between such party and the FCC or any other Governmental Authority
regarding this Agreement or the transactions contemplated hereby. If any
party receives a request for additional information or documentary material
from any such Governmental Authority, then such party shall endeavor in
good faith to make, or cause to be made, as promptly as practicable and
after consultation with the other party, an appropriate response to such
request.
5.3 Environmental Reports.
By July 13, 1998, Seller shall cause to be delivered to Purchaser, at
Seller's sole cost and expense, a Phase I environmental site assessment of
the Real Property, prepared by: Dames & Moore with offices at 6400 Congress
Avenue, Suite 2500, Boca Raton, FL 33487 ("Phase I Report"). Upon Seller's
receipt of the Phase I Report (which has been certified to Purchaser),
Seller shall send a copy of such report to Purchaser. If, upon receipt of
the Phase I Report, the Purchaser has reasonable grounds to believe that
there is contamination of the Cable System Site with Hazardous Materials,
Purchaser shall contact Seller and be required to obtain Seller's written
consent prior to conducting a Phase II environmental site assessment, or
any invasive testing or laboratory analyses ("Phase II Report").
<PAGE>
ARTICLE 6.
COVENANTS AND AGREEMENTS OF SELLER
- - ----------------------------------
Subject to Section 8. 1 below, Seller covenants and agrees with Purchaser
as follows:
6.1 Negative Covenants.
Pending and prior to the Closing, Seller will not, without the prior
written consent or approval of Purchaser, which shall not be unreasonably
withheld or delayed, do or agree to do any of the following, as such
actions relate to the Cable System or the Assets:
6.1(a) Dispositions; Mergers. Sell, assign, lease or otherwise
transfer or dispose of any of the Assets; or merge or consolidate with or
into any other entity or enter into any contracts relating thereto;
provided, however, that Seller may sell, assign, lease or otherwise
transfer or dispose of any Asset in the Ordinary Course of Business
provided that either: (i) it is replaced, or (ii) the sale proceeds with
respect to such Asset are held for the benefit of the Purchaser.
6.1(b) Additional Agreements/Material Contracts. Acquire or enter
into any Additional Agreements except in the Ordinary Course of Business,
or renew, extend, amend, alter, modify, replace or otherwise change any
Material Contract, except in the Ordinary Course of Business.
6.1(c) Contract Breaches. Do or omit to do any act (or permit such
action or omission) which will cause a material breach of any Material
Contract to which Seller is a party or by which Seller is bound.
6.2 Affirmative Covenants.
Prior to the Closing Date, Seller will, as such actions relate to the Cable
System or the Assets:
6.2(a) Normal Operations. Subject to the terms and conditions of this
Agreement (including, without limitation, Section 6.1) (i) carry on the
business and activities of the Cable System in the Ordinary Course of
Business; (ii) pay or otherwise satisfy all obligations of the Cable System
in the Ordinary Course of Business; (iii) maintain all Assets in customary
repair, order and condition; and (iv) maintain its books of account,
records, and files in substantially the same manner as heretofore
maintained.
6.2(b) Actions. Take all actions under the applicable laws and
regulations of the State of Florida that in Seller's opinion are
reasonably necessary to effectuate the transactions contemplated by this
Agreement and by the other Transaction Documents.
<PAGE>
6.2(c) Access. Seller shall: (i) give to Purchaser and Purchaser's
authorized representatives access during normal business hours to Seller's
properties, books, records, contracts, commitments, Cable System
facilities, premises, and equipment and to Seller's officers and employees,
agents and representatives (including, without limitation, the independent
accountants of Seller) relating to the Assets, and (ii) permit Purchaser
and Purchaser's consulting engineers and independent contractors, at
Purchaser's expense, to conduct engineering and other inspections of the
Cable System and the Assets, provide that all access under subparagraphs
(i) and (ii) shall be upon reasonable prior notice and in a manner that
will not interfere with the Cable System's operations and all such
information obtained by Purchaser shall be kept confidential and used only
in connection with its purchase of the Assets (other than the Excluded
Assets).
6.2(d) Encumbrances. Pay in full all liabilities associated with and
use its reasonable commercial efforts to obtain discharges of all
mortgages, security interests, liens and similar claims by third parties
encumbering the Assets (other than Permitted Encumbrances) at or prior to
the Closing Date.
6.2(e) Insurance. Maintain in full force and effect all of their
existing casualty, liability, and other insurance through the Closing Date
in amounts not less than those in effect on the date hereof.
6.2(f) Violations. Upon receiving notice or otherwise becoming aware
of any material violations under any applicable laws and regulations,
promptly notify Purchaser and, at Seller's expense, use reasonable
commercial efforts to cure all such violations prior to the Closing Date.
6.2(g) Interruption in Cable System Operation . Promptly notify
Purchaser in writing if the Cable System ceases to operate at its activated
bandwidth for more than 48 consecutive hours. Such notice shall specify the
reason or reasons for such cessation and the corrective measures taken or
to be taken by Seller.
6.2(h) Environmental Matters. (i) Promptly furnish to Purchaser
written notice of any material discharge of any Hazardous Materials or of
any actions or notices described in Section 3.8, and (ii) any material
change in the information set forth in Section 3.8.
<PAGE>
6.2(i) Consents. Use commercially reasonable efforts to obtain any
third party consents required to assign to Purchaser all Material Contracts
and to obtain third party consents to all other Additional Agreements. If,
on the Closing Date, Seller has not obtained any required consent for the
assignment of any Material Contract to Purchaser and the Closing occurs,
then after the Closing Date, Seller will continue to use commercially
reasonable efforts, and the Purchaser will cooperate with Seller, to obtain
any such consent and/or to remove any other impediments to the assignment
of any such Material Contract. From and after the Closing, until the valid
assignment of all such Material Contracts, Seller will take such lawful
actions as are reasonably necessary to assure that Purchaser shall receive
the benefits of, and Purchaser shall be obligated to perform the
obligations of Seller under, all such Material Contracts after the Closing
Date to the same extent as if Purchaser were a party thereunder (and
Purchaser agrees to cooperate with Seller in connection with any such
actions and to enter into, at the time of the Closing, any lawful
arrangements in furtherance thereof, but at no additional cost to Purchaser
other than such costs as Purchaser would incur as a party to such Material
Contracts). This provision shall survive the Closing.
6.2(j) Updating . Five (5) days prior to the Closing Date, provide
Purchaser with documentation regarding any material changes to the
Schedules hereto including, without limitation, copies of Additional
Agreements.
6.2(k) Consent of Lenders. Use commercially reasonable efforts to
obtain the consents of its lenders under any and all existing credit
facilities which are required to consummate the transactions contemplated
by this Agreement. If such consents are not obtained by the Closing, Seller
shall have the right to terminate this Agreement pursuant to the terms of
Section 13 hereof. If such consents are not obtained by the Closing, and
if it results in Seller's inability to assign the Assets or Material
Contracts to Purchaser, or if in connection therewith, Purchaser will be
assuming a debt, liability, third party claim or obligation under any such
credit facilities, then Purchaser shall have the right to terminate this
Agreement pursuant to the terms of Section 13 hereof. This provision
shall survive the Closing.
<PAGE>
6.3 Confidentiality.
Seller shall maintain strict confidentiality with respect to all documents
and information furnished to Seller by or on behalf of Purchaser or
retained by Seller pursuant to this Agreement. Nothing shall be deemed to
be confidential information that: (a) is known to Seller at the time of its
disclosure to Seller; (b) becomes publicly known or available other than
through disclosure by Seller; (c) is received by Seller from a third party
not actually known by Seller to be bound by a confidentiality agreement
with or obligation to Purchaser; or (d) is independently developed by
Seller as clearly evidenced by its records. Notwithstanding the foregoing
provisions of this Section 6.3, Seller may disclose such confidential
information: (i) to the extent required or deemed advisable to comply with
applicable laws and regulations, (ii) to its officers, managers, members,
employees, representatives, financial advisors, attorneys, accountants,
lenders and agents and to its members, officers and directors as necessary
with respect to the transactions contemplated hereby (so long as such
parties are informed of the confidentiality of such information), and (iii)
as necessary, to any Governmental Authority in connection with the
transactions contemplated hereby. If this Agreement is terminated, Seller
will return to Purchaser all confidential information prepared or furnished
by Purchaser relating to the transactions contemplated hereunder, whether
obtained before or after the execution of this Agreement. This provision
shall survive the Closing.
<PAGE>
ARTICLE 7.
COVENANTS AND AGREEMENTS OF PURCHASER
- - -------------------------------------
Purchaser covenants and agrees with Seller as follows:
7.1 Confidentiality.
Purchaser shall maintain strict confidentiality with respect to all
documents and information furnished to Purchaser by or on behalf of Seller.
Nothing shall be deemed to be confidential information that: (a) is known
to Purchaser at the time of its disclosure to Purchaser; (b) becomes
publicly known or available other than through disclosure by Purchaser; (c)
is received by Purchaser from a third party not actually known by Purchaser
to be bound by a confidentiality agreement with or obligation to Seller; or
(d) is independently developed by Purchaser as clearly evidenced by its
records. Notwithstanding the foregoing provisions of this Section 7.1,
Purchaser may disclose such confidential information: (i) to the extent
required or deemed advisable to comply with applicable laws and
regulations, (ii) to its officers, directors, employees, representatives,
financial advisors, attorneys, accountants, and agents as necessary with
respect to the transactions contemplated hereby (so long as such parties
are informed of the confidentiality of such information), and (iii) as
necessary, to any Governmental Authority in connection with the
transactions contemplated hereby. If this Agreement is terminated,
Purchaser will return to Seller all confidential information prepared or
furnished by Seller relating to the transactions contemplated hereunder,
whether obtained before or after the execution of this Agreement. This
provision shall survive the Closing.
7.2 Actions.
Prior to the Closing, Purchaser shall take all action under the applicable
laws and regulations of any state having jurisdiction over Purchaser
necessary to effectuate the transactions contemplated by this Agreement.
7.3 Access.
Purchaser agrees to: (i) maintain all of the books and records of the Cable
System existing on the Closing Date for a period of ten (10) years from the
Closing Date, unless earlier released by Seller, and (ii) give Seller and
Seller's authorized representatives full and complete access upon
reasonable notice during normal business hours to such books and records of
the Cable System existing on the Closing Date.
7.4 Notice of Certain Events.
Purchaser agrees to promptly notify Seller of any fact or circumstance of
which Purchaser becomes aware after the date of this Agreement that would
reasonably be expected to cause it not to meet any qualification of the:
(i) Cable Ordinance, (ii) the Franchise, or (iii) to be the assignee of any
FCC License. Purchaser will use its best efforts to remedy such fact or
circumstance. Purchaser will not take any action that Purchaser knows, or
has reason to believe, would result in the occurrence of any such fact or
circumstance.
<PAGE>
ARTICLE 8.
MUTUAL COVENANTS AND UNDERSTANDINGS
OF SELLER AND PURCHASER
- - -----------------------------------
8.1 Possession and Control.
Notwithstanding any other provision of this Agreement or any Transaction
Document, between the date hereof and the Closing Date, Purchaser shall not
directly or indirectly control, supervise or direct, or attempt to control,
supervise or direct, the business and operations of the Cable System, and
such operation, including complete control and supervision of all
programming, finances and employment shall be the sole responsibility of
Seller until the Closing Date; provided, however, that Purchaser shall be
entitled to inspect the Assets as provided in Section 6.2 (c). On and after
the Closing Date, Seller shall have no control over, or right to intervene,
supervise, direct or participate in, the business and operations of the
Cable System.
8.2 Risk of Loss.
The risk of loss or damage by fire or other casualty or cause (including,
but not limited to eminent domain) to the Assets until the Closing Date
shall be upon Seller. In the event of such loss or damage prior to the
Closing Date, Seller shall use commercially reasonable efforts to restore,
replace or repair the damaged Assets in accordance with Seller's past
practices at Seller's sole cost and expense. Notwithstanding anything to
the contrary contained herein, if Seller's uninsured costs in connection
with restoring, replacing, or repairing the damaged Assets exceeds One
Million and 00/100 Dollars ($1,000,000), Seller or Purchaser shall have the
right to terminate this Agreement.
8.3 Cable System Employees.
All employees of the Cable System shall be and remain Seller's employees as
of the Closing Date, with Seller having full authority and control over
their actions, and Purchaser shall not assume the status of an employer or
incur or be subject to any liability or obligation of an employer with
respect to, any such employees unless and until actually hired by
Purchaser. Seller shall be solely responsible for any and all liabilities
and obligations Seller may have to the employees of the Cable System which
have accrued on or prior to the Closing Date, or as a result of or arising
from the termination of any employee on or prior to the Closing Date,
including, without limitation, compensation, severance pay, incentive
bonuses, health expenses, and accrued vacation time, sick leave and
obligations under any of Seller's employee benefit plans.
Notwithstanding anything to the contrary contained herein, if Purchaser
hires any employee of the Cable System, Purchaser shall be solely
responsible for any and all liabilities and obligations in connection with
such employee which have accrued after the Closing Date, or as a result of
or arising from the termination of any employee after the Closing Date
(which shall be an Assumed Liability), including, without limitation,
compensation, severance pay, incentive bonuses, health expenses, and
accrued vacation time and sick leave.
<PAGE>
ARTICLE 9.
CONDITIONS PRECEDENT TO
PURCHASER'S OBLIGATION TO CLOSE
- - -------------------------------
The obligations of Purchaser to purchase the Assets and to proceed with the
Closing are subject to the satisfaction (or waiver in writing by Purchaser)
at or prior to the Closing of each of the following conditions:
9.1 Representations and Covenants.
Each of the representations and warranties (other than those
representations and warranties which by their terms are as of a specific
date) of Seller made in this Agreement or in any other Transaction Document
shall be true and correct in all material respects, as though made on or as
of the Closing Date, and Seller shall have performed and complied in all
material respects with all covenants and agreements required by this
Agreement or any other Transaction Document to be performed or complied
with by Seller prior to the Closing.
9.2 Consents.
Seller shall have either: (a) obtained prior to the Closing Date all
consents, authorizations or approvals necessary to effect valid assignments
to Purchaser of the Material Contracts (including any Additional Agreements
that either: (i) replace any Material Contract, or (ii) the subject matter
and value of which is substantially similar to any Material Contract, but
excluding those Material Contracts that have expired in the Ordinary Course
of Business prior to the Closing Date), or (b) entered into an arrangement
pursuant to Section 6.2(i) hereof with respect to such Material Contracts.
9.3 Delivery of Documents.
Seller shall have delivered to Purchaser the Transaction Documents required
to be delivered by Seller to Purchaser pursuant to Section 11.2.
9.4 Franchise Renewal.
The Franchise Renewal shall have been obtained by Seller.
9.5 Franchise Transfer.
The Franchise Transfer Application to Purchaser shall have been granted.
9.6 Legal Proceedings.
No Governmental Authority shall have enacted, enforced, issued or entered
any law, rule, regulation or order, including in connection with any action
or proceeding brought by a third party (not subsequently dismissed, settled
or otherwise terminated), which prohibits or invalidates the transactions
contemplated by this Agreement or any other Transaction Document or
materially and adversely prevents, limits, restricts or impairs the
ownership, use or operation of the Assets or the Cable System by Purchaser,
other than an action or proceeding instituted by Purchaser.
<PAGE>
ARTICLE 10.
CONDITIONS PRECEDENT TO
SELLER'S OBLIGATION TO CLOSE
- - ----------------------------
The obligations of Seller to sell, transfer, convey and deliver the Assets
(other than the Excluded Assets) and to proceed with the Closing are
subject to the satisfaction (or waiver in writing by Seller) at or prior to
the Closing of each of the following conditions:
10.1 Representations and Covenants.
Each of the representations and warranties of Purchaser made in this
Agreement shall be true and correct, in all material respects, as though
made on or as of the Closing Date, and Purchaser shall have performed and
complied in all material respects with all covenants and agreements
required by this Agreement or any other Transaction Document to be
performed or complied with by Purchaser prior to the Closing.
10.2 Delivery by Purchaser.
Purchaser shall have delivered to Seller: (i) the Purchase Price and (ii)
any other monies or document required to be delivered by Purchaser to
Seller pursuant to Section 11.3.
10.3 Franchise Transfer.
The Franchise Transfer Application to Purchaser shall have been granted.
10.4 Franchise Renewal.
The Franchise Renewal shall have been obtained by Seller.
10.5 Legal Proceedings.
No Governmental Authority shall have enacted, enforced, issued or entered
any law, rule, regulation or order, including in connection with any action
or proceeding brought by a third party, (not subsequently dismissed,
settled, or otherwise terminated) which prohibits or invalidates the
transactions contemplated by this Agreement, any other Purchaser Document
or any Transaction Document, other than an action or proceeding instituted
by Seller.
<PAGE>
ARTICLE 11.
THE CLOSING
- - -----------
11.1 Closing.
11.1(a) Closing Date. Unless otherwise agreed upon in writing by
Purchaser and Seller, the Closing Date shall be October 30, 1998, but the
Adjustment Date shall be October 31, 1998. Time is of the essence with
respect to the Closing Date.
11.1(b) Closing Venue. The Closing shall be held at Seller's affiliate
company's corporate offices located at 7900 Glades Road, Boca Raton,
Florida.
11.2 Delivery by Seller.
At or before the Closing, Seller shall deliver to Purchaser the following
Transaction Documents:
11.2(a) Contracts; Agreements and Instruments. The following
Transaction Documents dated as of the Closing Date and duly executed by
Seller, in form and substance reasonably satisfactory to counsel to
Purchaser and sufficient to transfer and convey to Purchaser all of
Seller's right, title and interest in and to the Assets:
(i) the Assignment of Leases;
(ii) the Bill of Sale;
(iii) an Allocation of Purchase Price and Assumed Liabilities pursuant to
Article 16;
(iv) the Assignment of Contracts;
(v) a Schedule of Purchase Price adjustments pursuant to Section 2.5;
(vi) the Arvida Agreement; and
(vii) all such other general instruments of transfer, assignment
and conveyance, deeds, certificates of title, assignments, evidences of
consent or waiver, and other instruments or documents in form and substance
satisfactory to Purchaser, as shall be necessary to evidence the sale,
assignment, transfer and conveyance of the Assets to Purchaser in
accordance with this Agreement.
11.2(b) Consents. Originals of all consents obtained pursuant to
Sections 6.2 (i) and 6.2(k).
<PAGE>
11.2(c) UCC Report. A report dated not more than thirty (30) days prior
to the Closing Date evidencing no judgments, financing statements, tax
liens, mechanics's, materialmen's or other statutory liens on file with
respect to the Assets, and, if such report evidences that judgments,
financing statements, tax liens, mechanics's, materialmen's or other
statutory liens are on file with respect to any of the Assets, a
termination statement or other appropriate document signed by the secured
party or lienholder evidencing the release or termination of such financing
statement or such lien or a pay-off letter from such secured party or
lienholder indicating that such party or lienholder will provide such
release or termination statement upon receipt of payment from the proceeds
of the sale contemplated herein.
11.2(d) Certified Consents; Certificates. A copy of: (i) a written
consent signed by an officer of the general partner of Seller and certified
as being correct and complete and then in full force and effect,
authorizing the execution, delivery and performance of the Transaction
Documents, and the consummation of the transactions contemplated thereby,
as of the Closing Date. Certificates from Seller signed on behalf of Seller
by an officer of the general partner of Seller certifying that all
conditions set forth in Section 9.1 (giving effect to any updated Schedules
pursuant to Section 6.2(j)) have been satisfied; and (ii) Certificates
signed by the officers of Seller as to the authorization of the officers
executing any Transaction Document on behalf of such Seller.
11.2(e) Certified Resolutions and Corporate Documents. A copy of: (i)
the resolutions of the board of directors of the general partner of Seller,
certified as being correct and complete and then in full force and effect,
authorizing the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, and (ii) a copy
of the limited partnership agreement of Seller, certified by the corporate
secretary of the general partner of Seller as being true, correct and
complete as of the Closing Date. A copy from the general partner of
Arvida/JMB Partners of a resolution of its board of directors, certified as
being correct and complete and then in full force and effect, authorizing
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.
11.2(f) Other Documents. Such other documents to be delivered by Seller
hereunder as are reasonably necessary for Purchaser to effectuate and
document the transactions contemplated hereby.
11.3 Delivery by Purchaser.
At or before the Closing, Purchaser shall deliver to Seller the following:
11.3(a) Purchase Price Payment. The Purchase Price.
11.3(b) Purchaser Documents. Such certificates, instruments or
documents as Seller may reasonably request in order to effect and document
the transactions contemplated hereby.
<PAGE>
11.3(c) Certified Resolutions and Corporate Documents. A copy of: (i)
the resolutions of the board of directors of Purchaser, certified as being
correct and complete and then in full force and effect, authorizing the
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby, and (ii) a copy of the certificate
of incorporation and by-laws of Purchaser, certified by the corporate
secretary of Purchaser as being true, correct and complete as of the
Closing Date.
11.3(d) Officer's Certificate. (i) A certificate of Purchaser signed by
its president and corporate secretary certifying that all conditions set
forth in Section 10.1 and Section 10.5 have been satisfied; and (ii) a
certificate signed by the corporate secretary of Purchaser as to the
incumbency of the officer of Purchaser executing this Agreement on behalf
of the Purchaser.
11.3(e) Allocation. The allocation of Purchase Price and Assumed
Liabilities made pursuant to Article 16.
11.3(f) Other Documents. Such other documents to be delivered by
Purchaser hereunder as are reasonably necessary for Seller to effectuate
and document the transactions contemplated hereby.
<PAGE>
ARTICLE 12.
NO SURVIVAL; INDEMNIFICATION
----------------------------
12.1 No Survival of Representations.
Except as otherwise provided in this Article 12, or elsewhere specifically
provided in this Agreement, the representations and warranties of Seller
and Purchaser in this Agreement shall not survive after the Closing Date.
12.2 Indemnification by Seller.
Excluding Section 5.3 and subject to the conditions and provisions of
Section 12.4, Seller hereby agrees to indemnify, defend and hold harmless
Purchaser and Purchaser's respective directors, officers, partners,
shareholders, managers and employees ("Purchaser Indemnified Parties") from
and against and with respect to any and all Losses, asserted against,
resulting to, imposed upon or incurred by Purchaser Indemnified Parties,
directly or indirectly, by reason of or resulting from: (a) any of Seller's
Retained Liabilities; (b) any misrepresentation or breach of the
warranties of Seller contained in or made pursuant to any Transaction
Documents; (c) any noncompliance by Seller with any covenants, agreements
or undertakings of Seller contained in or made pursuant to any Transaction
Document; (d) any liability or obligation of or claims against Purchaser
Indemnified Parties (whether absolute, accrued, contingent or otherwise and
whether contractual, Tax or any other type of liability or obligation or
claim) arising out of, relating to or resulting from the business of
Seller, or relating to or resulting from the Excluded Assets or the
Excluded Liabilities, or the business and operations of the Cable System
prior to the Closing Date; and (e) any failure by Seller prior to the
Closing Date to obtain and hold any permit, license or approval from any
Governmental Authority necessary in order to conduct the operations of the
Cable System prior to the Closing Date in accordance with applicable law
and to own, use and maintain the Assets prior to the Closing Date.
12.3 Indemnification by Purchaser.
Subject to the conditions and provisions of Section 12.4, Purchaser hereby
agrees to indemnify, defend and hold harmless Seller, Seller's partners and
their respective directors, officers, partners, shareholders, managers and
employees ("Seller Indemnified Parties") from, against and with respect to
any and all Losses, asserted against, resulting to, imposed upon or
incurred by Seller Indemnified Parties, directly or indirectly, by reason
of or resulting from: (a) any liability or obligation of or claims against
Seller Indemnified Parties (whether absolute, accrued, contingent or
otherwise and whether contractual, Tax or any other type of liability or
obligation or claim) assumed by Purchaser pursuant to Section 2.6; (b) any
misrepresentation or breach of the warranties of Purchaser contained in or
made pursuant to any Purchaser Document; (c) any noncompliance by Purchaser
with any covenants, agreements or undertakings of Purchaser contained in or
made pursuant to any Purchaser Document; (d) any liability or obligation of
or claims against Seller Indemnified Parties (whether absolute, accrued,
contingent or otherwise and whether contractual, Tax or any other type of
liability or obligation or claim) arising out of, relating to or resulting
from the business of Purchaser, or relating to or resulting from the Assets
(other than the Excluded Assets) or the Assumed Liabilities, or the
business and operations of the Cable System after the Closing Date; (e) any
<PAGE>
failure by Purchaser to obtain and hold any permit, license or approval
from any Governmental Authority necessary in order to conduct the
operations of the Cable System in accordance with applicable law and to
own, use and maintain the Assets; and (f) any decision by Purchaser to
close the transactions contemplated by this Agreement notwithstanding a
failure by Seller to obtain any consent, authorization or approval,
including Governmental Approvals relating to the assignment of governmental
permits, orders or authorizations, and consents, authorizations and
approvals of non-governmental third parties necessary to effect valid
assignments or transfers to Purchaser of any Asset, including any Material
Contract set forth on Schedule 2.1(e), or any Additional Agreements.
12.4 Conditions of Indemnification.
The obligations and liabilities of Seller and of Purchaser hereunder with
respect to their respective indemnities pursuant to this Article 12, shall
be subject to the following terms and conditions:
12.4(a) Losses. The party seeking indemnification (the "Indemnified
Party") must give the other party or parties, as the case may be (the
"Indemnifying Party"), notice specifying in reasonable detail the nature of
any such Losses promptly after the Indemnified Party receives notice
thereof; provided that the failure to give such notice shall not affect the
rights of the Indemnified Party hereunder except to the extent that the
Indemnifying Party's defense shall have been materially impaired.
12.4(b) Defense. The Indemnifying Party shall have the right, absent a
conflict of interest, to undertake, by counsel or other representatives of
its own choosing, the defense of such Losses at the Indemnifying Party's
risk and expense.
12.4(c) Costs and Expenses. In the event that the Indemnifying Party
shall elect not to undertake such defense, or, within a reasonable time
after notice from the Indemnified Party of any such Losses, shall fail to
defend, the Indemnified Party (upon further written notice to the
Indemnifying Party) shall have the right to undertake the defense,
compromise or settlement of such Losses, by counsel or other
representatives of its own choosing, on behalf of and for the account and
risk of the Indemnifying Party (subject to the right of the Indemnifying
Party to assume defense under Section 12.4(b) hereof at any time prior to
settlement, compromise or final determination thereof). In such event, the
Indemnifying Party shall pay to the Indemnified Party, in addition to the
other sums required to be paid hereunder, the reasonable costs and expenses
incurred by the Indemnified Party in connection with such defense,
compromise or settlement as and when such costs and expenses are so
incurred.
<PAGE>
12.4(d) Compromise or Settlement of Losses. Anything in this Section
12.4 to the contrary notwithstanding, (i) if there is a reasonable
probability that Losses may materially and adversely affect the Indemnified
Party other than as a result of money damages or other money payments, the
Indemnified Party shall have the right, at its own cost and expense, to
participate in the defense, compromise or settlement of the Losses, (ii)
the Indemnifying Party shall not, without the Indemnified Party's written
consent, which shall not be unreasonably withheld, settle or compromise any
Losses or consent to entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to
the Indemnified Party of a release from all liability in respect of such
Losses in form and substance satisfactory to the Indemnified Party, and
(iii) in the event that the Indemnifying Party undertakes defense of any
Losses, the Indemnified Party, by counsel or other representative of its
own choosing and at its sole cost and expense, shall have the right to
consult with the Indemnifying Party and its counsel or other
representatives concerning such Losses and the Indemnifying Party and the
Indemnified Party and their respective counsel or other representatives
shall cooperate with respect to such Losses and (iv) in the event that the
Indemnifying Party undertakes defense of any Losses, the Indemnifying Party
shall have an obligation to keep the Indemnified Party informed of the
status of the defense of such Losses and furnish the Indemnified Party with
all documents, instruments and information that the Indemnified Party shall
reasonably request in connection therewith.
12.4(e) Claim for Indemnification. No claim for indemnification shall
be made by Purchaser against Seller unless the aggregate losses of
Purchaser exceed One Hundred Thousand and 00/100 Dollars ($100,000)
("Threshold Amount"), whereupon, Purchaser shall be entitled to
indemnification hereunder by the Seller for any such aggregate losses in
excess of the Threshold Amount. Notwithstanding any other provision of this
Agreement, the maximum liability that Seller shall have for indemnification
claims hereunder shall not exceed One Million Two Hundred Fifty Thousand
and 00/100 Dollars ($ 1,250,000) in the aggregate.
12.4(f) Expiration of Indemnification Obligations. The indemnification
obligations under this Article 12 with respect to Sections 12.2 and 12.3
shall expire two (2) years following the Closing Date; provided, that, if
any such indemnification claim under such Sections has been asserted in
writing prior to the stated expiration of the applicable period set forth
above, then any indemnification obligation with respect thereto shall
survive until final resolution thereof.
12.4(g) Hazardous Material Clean-Up. If any indemnity claim relates to
the cleanup of Hazardous Materials, such cleanup shall be required only to
the extent that it is required by a Governmental Authority pursuant to an
Environmental Law, regulation or ordinance.
<PAGE>
ARTICLE 13.
TERMINATION
- - -----------
13.1 Termination.
This Agreement may be terminated at any time prior to the Closing by: (i)
the mutual consent, in writing, of Seller and Purchaser; (ii) Purchaser, by
written notice of termination delivered to Seller, if Seller is in material
default of its obligations hereunder and has failed to cure such default
within fifteen (15) days following written notice of such default sent by
Purchaser to Seller; (iii) Seller and Purchaser, pursuant to, and in
accordance with Section 6.2(k); (iv) Seller, by written notice of
termination delivered to Purchaser, if Purchaser is in material default of
its obligations hereunder and has failed to cure such default within
fifteen (15) days following written notice of such default sent by Seller
to Purchaser; (v) Purchaser if the Phase I Report indicates that there is
contamination of the Cable System Site from Hazardous Materials (Purchaser
shall then not be obligated to perform a Phase II Report), or if the Phase
I Report referenced in Section 5.3 recommends a Phase II Report and Seller
refuses to consent to such Phase II Report or if a Phase II Report confirms
that there is contamination from Hazardous Materials; (vi) Seller or
Purchaser pursuant to, and in accordance with Section 8.2, or (vii) by any
party not then in default hereunder if for any reason the Closing has not
occurred by November 30, 1998 (as such date may be extended by mutual
agreement of the parties).
13.2 Effect of Termination.
Subject to Article 14, in the event this Agreement is terminated as
provided in Sections 13.1(i), (iii), (v), (vi) or (vii), this Agreement
shall be deemed null, void and of no further force or effect, and the
parties hereto shall be released from all future obligations hereunder with
respect to the Cable System; provided, however, that the obligations of
Purchaser and Seller in Sections 6.3, 7.1, 13.2, 15.3 and 15.4, shall
survive such termination. In the event this Agreement is terminated as
provided in Sections 13.1(i), (iii), (v), (vi) or (vii), Purchaser shall
be paid the Escrow Deposit, together with any interest earned thereon. If
this Agreement is terminated as provided in Sections 13.1(ii) or (iv) the
rights of the parties shall be governed by Article 14.
<PAGE>
ARTICLE 14.
REMEDIES
- - -----------
14.1 Default by Purchaser.
If this Agreement is terminated pursuant to Section 13.1(iv) and Seller is
not in material default or material breach of this Agreement, Seller shall
be paid the Escrow Deposit, together with any interest earned thereon, as
liquidated damages, and it being agreed that such payment shall constitute
full payment for any and all damages suffered by Seller by reason thereof
and that Seller shall have no rights to indirect, consequential or
punitive damages nor rights to claims for specific performance from
Purchaser or its Affiliates.
14.2 Default by Seller.
If this Agreement is terminated pursuant to Section 13.1(ii) and Purchaser
is not in material default or material breach of this Agreement, Purchaser
shall be reimbursed the Escrow Deposit, together with any interest earned
thereon, and Purchaser shall have the right to actual out-of-pocket damages
("Out-of-Pocket Damages"), and it being agreed that such payment of the
Escrow Deposit and Out-of-Pocket Damages shall constitute full payment for
any and all damages suffered by Purchaser by reason thereof and that
Purchaser shall have no rights to indirect, consequential or punitive
damages nor rights to claims for specific performance from Seller or its
Affiliates.
ARTICLE 15.
GENERAL PROVISIONS
- - -------------------
15.1 Further Assurances.
Subject to the terms and conditions herein provided, each of the parties
hereto agrees to use its commercially reasonable efforts to take or cause
to be taken all such further actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement or in order to fully effectuate the purposes, terms and
conditions of this Agreement (including, without limitation, executing,
delivering and filing or causing to be executed, delivered and filed such
further documents and instruments and obtaining such consents (including
Governmental Approvals), as may be necessary or reasonably requested in
connection with the consummation of the transactions contemplated hereby).
In case at any time after the Closing Date any further action is necessary
to carry out the purposes of this Agreement, including, without limitation,
the securing of consents of third parties, each party hereto shall use its
commercially reasonable efforts to take all such necessary action. This
provision shall survive the Closing.
<PAGE>
15.2 Mail.
Seller hereby authorizes and empowers Purchaser from and after the Closing
Date: (a) to receive and open mail addressed to the Cable System, and (b)
to deal with the contents thereof in any manner Purchaser sees fit,
provided such mail and the contents thereof relate to the Cable System or
the Assets (other than the Excluded Assets) or to any of the Assumed
Liabilities for any period from and after the Closing Date. Seller agrees
to deliver to Purchaser any mail, checks or other documents received by it
pertaining to the Cable System or the Assets (other than the Excluded
Assets) or any of the Assumed Liabilities for any period from and after the
Closing Date. Purchaser agrees to deliver to Seller any mail which it
receives to which it is not entitled by reason of the Agreement or
otherwise and to which Seller is entitled. This provision shall survive the
Closing.
15.3 Brokers.
Seller represents to Purchaser that Seller has not engaged, or incurred any
liability (for any brokerage fees, finders' fees, commissions or otherwise)
to, any broker, finder or agent in connection with the transactions
contemplated by this Agreement, except Edward H. Frazier, Senior Vice
President of Communications Equity Associates, Inc. 101 East Kennedy
Boulevard, Suite 3300, Tampa, Florida 33602 phone number: (813) 226-8844,
fax number: (813) 225-1513. Seller shall be responsible to pay for
Communications Equity Associates, Inc.'s brokerage fee in connection
herewith pursuant to a separate agreement. Purchaser represents to Seller
that Purchaser has not engaged, or incurred any unpaid liability (for any
brokerage fees, finders' fees, commissions or otherwise) to, any broker,
finder or agent in connection with the transactions contemplated by this
Agreement; and Seller agrees to indemnify Purchaser, and Purchaser agrees
to indemnify Seller, against any claims asserted against the other parties
for any such fees or commissions by any person purporting to act or to have
acted for or on behalf of the indemnifying party. Notwithstanding any other
provision of this Agreement, this Section 15.3 shall survive the Closing
without limitation.
15.4 Expenses.
Each party hereto shall pay its own expenses incurred in connection with
this Agreement and in the preparation for and consummation of the
transactions provided for herein. Notwithstanding the foregoing, Purchaser
shall pay for any expenses in connection with any transfer, sales, filing
or use Taxes or fees applicable to, imposed upon or arising out of the
transactions contemplated hereby including, without limitation, any
transfer taxes, documentary stamp taxes, title insurance premiums and
filing or recording fees relating to the transfer of Real Property or
personal property, or filing or transfer fees and costs relating to the
Franchise Transfer Application, FCC Assignment Applications, or any fee for
a filing under, or relating to the HSR Act.
15.5 Notices.
All notices, demands, requests, or other communications which may be or are
required to be given or made by any party to any other party pursuant to
this Agreement shall be in writing and shall be hand delivered, mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, delivered by overnight air courier addressed as follows. Either
party may transmit by facsimile transmission in addition to any other form
of transmission as referenced herein. Facsimile transmission alone shall
not be deemed sufficient notice.
<PAGE>
(i) If to Purchaser:
Advanced Cable Communications
12409 N.W. 35th Street
Coral Springs, Florida 33065
Attention: Wally Snedeker, Vice President
Phone: (954) 752-7244 Ext. 251
Facsimile: (954) 345-8164
with a copy to:
Susan P. Motley, Esq.
Ruden, McClosky, Smith, Schuster & Russell, P.A.
200 East Broward Boulevard
Ft. Lauderdale, Florida 33302
Phone: (954) 527-2412
Facsimile: (954) 764-4996
with a copy (which shall not constitute notice) to:
Schurz Communications, Inc.
225 West Colfax Avenue
South Bend, IN 46626
Attention: E. Berry Smith
Phone: (219) 287-1001
Facsimile: (219) 287-2257
(ii) If to Seller:
James D. Motta
President
Arvida
7900 Glades Road,
Boca Raton, Florida 33434
Phone: (561) 479-1213
Facsimile: (561) 479-1227
with a copy to:
John Baric
General Counsel
Arvida
7900 Glades Road,
Boca Raton, Florida 33434
Phone: (561) 479-1160
Facsimile: (561) 479-1227
and with a copy (which shall not constitute notice) to:
Gary Nickele
General Counsel
JMB Realty Corporation
900 North Michigan Avenue
Suite 1900
Chicago, IL 60611-1575
Phone: (312) 915-1977
Facsimile: (312) 915-1023
<PAGE>
or such other address as the addressee may indicate by written notice to
the other parties. Each notice, demand, request, or communication which
shall be given or made in the manner described above shall be deemed
sufficiently given or made for all purposes at such time as it is delivered
to the addressee (with the return receipt, the delivery receipt, or the
affidavit of messenger being deemed conclusive but not exclusive evidence
of such delivery) or at such time as delivery is refused by the addressee
upon presentation.
15.6 Waiver.
No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Agreement or under any other
instrument or document given in connection with this Agreement shall impair
any such right, power or privilege or be construed as a waiver of any
default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power or
privilege. No waiver shall be valid against any party hereto unless made in
writing and signed by the party against whom enforcement of such waiver is
sought and then only to the extent expressly specified therein.
15.7 Purchaser's Assignment.
Purchaser shall not assign this Agreement (except as provided in Section
15.14 (b)), in whole or in part, whether by operation of law or otherwise,
without the prior written consent of Seller which such consent may be
unreasonably withheld in Seller's sole and absolute discretion. Any
purported assignment contrary to the terms hereof shall be null, void and
of no force and effect.
15.8 Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns as permitted
hereunder. No person or entity other than the parties hereto and their
respective successors and assigns is or shall be entitled to bring any
action to enforce any provision of this Agreement against any of the
parties hereto, and the covenants and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only
by the parties hereto or their respective successors and assigns as
permitted hereunder.
15.9 Entire Agreement; Amendment.
This Agreement, including the Schedules hereto and the other instruments
and documents referred to herein or delivered pursuant hereto contain the
entire agreement among the parties with respect to the subject matter
hereof and supersede all prior oral or written agreements, commitments or
understandings with respect to such matters. No amendment, modification or
discharge of this Agreement shall be valid or binding unless set forth in
writing and duly executed by the parties hereto.
<PAGE>
15.10Severability.
If any part of any provision of this Agreement or any other contract,
agreement, document or writing given pursuant to or in connection with this
Agreement shall be invalid or unenforceable under applicable law, such part
shall be ineffective to the extent of such invalidity or unenforceability
only, without in any way affecting the remaining parts of such provisions
or the remaining provisions of said contract, agreement, document or
writing.
15.11Headings.
The headings of the sections and subsections contained in this Agreement
are inserted for convenience only and do not form a part or affect the
meaning, construction or scope thereof.
15.12Governing Law.
This Agreement, the rights and obligations of the parties hereto, and any
claims or disputes relating thereto, shall be governed by and construed
under and in accordance with the laws of the State of Florida.
15.13Signature in Counterparts.
This Agreement may be executed in separate counterparts, none of which need
contain the signatures of all parties, each of which shall be deemed to be
an original, and all of which taken together constitute one and the same
instrument.
15.14Assignment.
15.14 (a) Seller's Assignment.
Notwithstanding anything to the contrary contained herein, Seller may
assign and transfer its rights and obligations related to or arising out of
this Agreement to any corporation, partnership or other entity owned or
controlled by, or under common control with, Arvida/JMB Partners L.P.
("JMB"), a Delaware limited partnership, Pacific Properties Inc.,
("Properties") or any of their respective Affiliates. Notwithstanding the
foregoing, no assignment by Seller hereunder and no transfer by Seller of
its rights and obligations related to or arising out of this Agreement
shall relieve Seller of its responsibilities and liabilities hereunder.
This Agreement, including the rights and obligations related to or arising
out of it, shall be assignable by Seller to any Affiliate of Seller or to a
publicly owned entity in which at least Twenty Percent (20%) of the
ownership thereof is owned or controlled directly or indirectly by one (1)
or more Affiliates of Seller, JMB or Properties, without the prior consent
of the Purchaser. Any other assignment or transfer shall be governed by the
provisions of the Cable Ordinance and the Franchise.
15.14 (b) Purchaser's Assignment.
Notwithstanding anything to the contrary contained herein, Purchaser may
assign and transfer its rights and obligations related to or arising out of
this Agreement to any corporation, partnership or other entity owned or
controlled by, or under common control with Purchaser or any of its
respective Affiliates. Notwithstanding the foregoing, no assignment by
Purchaser hereunder and no transfer by Purchaser of its rights and
obligations related to or arising out of this Agreement shall relieve
Purchaser of its responsibilities and liabilities hereunder. Any other
assignment or transfer shall be governed by the provisions of this
Agreement, the Cable Ordinance and the Franchise.
<PAGE>
AFFILIATE DEFINITION: "Affiliate" of a specified person or entity for the
purposes of this Agreement, means a person or entity which (either directly
or indirectly, through one or more intermediaries) controls, is under
common control with or is controlled by, the specified person or entity.
For purposes of this definition control of a specified person or entity
(including the correlative terms "controlled by" and "under common control
with") means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of the specified
person or entity, whether through ownership of voting securities, the
ability to appoint one or more of an entity's trustees, directors or
persons in a similar capacity, or otherwise.
15.15Seller's Liability.
Notwithstanding anything to the contrary in this Agreement, no present or
future constituent partner in or agent of Seller, nor any shareholder,
officer, director, employee, trustee, beneficiary or agent of any
corporation or trust that is or becomes a constituent partner in Seller,
shall be personally liable, directly or indirectly, under or in connection
with this Agreement, or any agreement, instrument or certificate executed
in connection with this Agreement, or any amendments or modifications to
any of the foregoing made at any time or times, heretofore or hereafter;
and the Purchaser and each of its successors and assignees waives and does
hereby waive any such personal liability. For purposes of this Agreement,
and any such agreements, instruments and certificates, and any such
amendments or modifications, neither the negative capital account of any
constituent partner in Seller, nor any obligation of any constituent
partner in Seller to restore a negative capital account or to contribute
capital to Seller or to any other constituent partner in Seller, shall at
any time be deemed to be the property or an asset of Seller or any such
other constituent partner (and neither the Purchaser nor any of its
successors or assignees shall have any right to collect, enforce or proceed
against or with respect to any such negative capital account or partner's
obligation to restore or contribute). As used in this paragraph, a
"constituent partner" in Seller shall mean any direct partner in Seller and
any person or entity that is a partner in any partnership that, directly or
indirectly through one or more other partnerships, is a partner in Seller.
<PAGE>
ARTICLE 16.
ALLOCATION OF PURCHASE PRICE AND ASSUMED LIABILITIES
- - ----------------------------------------------------
The Purchase Price shall be allocated for tax reporting purposes as agreed
to by Purchaser and Seller in a manner as set forth in an Allocation of
Purchase Price and Assumed Liabilities Schedule to be delivered by Seller
to Purchaser and shall be agreed upon by mutual consent of the parties
hereto, on or before September 15, 1998, in order to be finalized as a
Transaction Document pursuant to Section 11.2 (a) iii of this Agreement.
Purchaser and Seller declare that the valuation of the Assets and the
Assumed Liabilities has been determined in good faith and as the result of
arms' length bargaining and both parties agree to reasonably cooperate
with each other in such determination. Purchaser and Seller agree that no
position inconsistent with the allocation agreed to by Purchaser and Seller
shall be taken by either party before any governmental or judicial
authority. If Purchaser and Seller are unable to reach an agreement on the
allocation prior to the Closing, the dispute shall, within ten (10) days
thereafter, be submitted by either party to a mutually agreed upon
nationally recognized "Big 6" firm of independent certified public
accountants that shall make its determination of the allocation within
thirty (30) days of such submission. The determination of the allocation
by such accounting firm shall be final and binding upon Purchaser and
Seller. Purchaser and Seller agree to file Internal Revenue Service Form
8594 in accordance with the agreed upon allocation referenced in the
Allocation of Purchase Price and Assumed Liabilities Schedule.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement,
or has caused this Agreement to be duly executed and delivered in its name
on its behalf, all as of the day and year first above written.
SELLER:
GULF AND PACIFIC COMMUNICATIONS LIMITED PARTNERSHIP
By: Pacific Properties, Inc., its general partner
By: ___________________________
Name: James D. Mott
Title: President
Sworn to and subscribed before me this ______day of July, 1998.
______________________________
Notary Public
My Commission Expires:
PURCHASER:
SCHURZ COMMUNICATIONS, INC.
By: ____________________________
Name: E. Berry Smith
Title: Senior Vice President
Sworn to and subscribed before me this ______day of July, 1998.
_______________________________
Notary Public
My Commission Expires:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 49,102,729
<SECURITIES> 0
<RECEIVABLES> 53,123,144
<ALLOWANCES> 1,210,935
<INVENTORY> 166,087,554
<CURRENT-ASSETS> 0
<PP&E> 71,666,615
<DEPRECIATION> 29,930,097
<TOTAL-ASSETS> 320,781,473
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 178,653,092
<TOTAL-LIABILITY-AND-EQUITY>320,781,473
<SALES> 224,840,149
<TOTAL-REVENUES> 224,840,149
<CGS> 177,285,068
<TOTAL-COSTS> 177,285,068
<OTHER-EXPENSES> 12,810,270
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 34,744,811
<INCOME-TAX> 0
<INCOME-CONTINUING> 34,744,811
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,744,811
<EPS-PRIMARY> 79.05
<EPS-DILUTED> 79.05
</TABLE>
