Consolidated, Amended And Restated Revolving Credit Construction Loan Agreement

EXHIBIT 10.22


SECOND CONSOLIDATED, AMENDED AND RESTATED
REVOLVING CREDIT CONSTRUCTION LOAN AGREEMENT


among


WCI COMMUNITIES, INC.
and BAY COLONY-GATEWAY, INC.
AS BORROWER,


and
WACHOVIA BANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT AND A LENDER,


and


BANK OF AMERICA, N.A., AMSOUTH BANK, SUNTRUST BANK,
BANK UNITED, F.S.B., GUARANTY BANK, NATIONAL CITY BANK
AND KEYBANK, NATIONAL ASSOCIATION,
AS LENDERS


and
WACHOVIA CAPITAL MARKETS, LLC, AS CO-LEAD ARRANGER


and
BANK OF AMERICA, N.A., AS SYNDICATION AGENT


and
BANC OF AMERICA SECURITIES LLC, AS CO-LEAD ARRANGER


Dated as of December 31, 2004


SECOND CONSOLIDATED, AMENDED AND RESTATED


REVOLVING CREDIT CONSTRUCTION LOAN AGREEMENT


THIS SECOND CONSOLIDATED, AMENDED AND RESTATED REVOLVING CREDIT CONSTRUCTION LOAN AGREEMENT (this "Agreement") is made as of the 31st day of December, 2004, by and among WCI COMMUNITIES, INC., a Delaware corporation ("WCI"), and BAY COLONY-GATEWAY, INC., a Delaware corporation ("BCG"), each having its principal place of business at 24301 Walden Center Drive, Bonita Springs, Florida 34134, Attention: Legal Department (WCI and BCG being hereinafter jointly and severally, collectively and singularly referred to as "Borrower"); WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association ("Wachovia"), having an address of 5801 Pelican Bay Boulevard, Naples, Florida 34108, Attention: James Howard, BANK OF AMERICA, N.A., a national banking association ("BOA"), AMSOUTH BANK, an Alabama state chartered bank, SUNTRUST BANK, a Georgia corporation, BANK UNITED, F.S.B., a federal savings bank, GUARANTY BANK, a federal savings bank, NATIONAL CITY BANK, and KEYBANK NATIONAL ASSOCIATION, a national banking association, together with certain other lending institutions which may become parties hereto pursuant to Section 20.13 (Wachovia and the foregoing lending institutions are collectively referred to herein as the "Lenders" and individually as "Lender"); WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent ("Agent") for itself and the other Lenders; WACHOVIA CAPITAL MARKETS, LLC, as Co-Lead Arranger; BANK OF AMERICA, N.A., as Syndication Agent; and BANC OF AMERICA SECURITIES LLC, as Co-Lead Arranger.


R E C I T A L S:


WHEREAS, Fleet National Bank ("Fleet"), individually and as Agent, Borrower and the Lenders (excluding BOA) entered into that certain Consolidated, Amended and Restated Revolving Credit Construction Loan Agreement dated as of March 30, 2004 (the "First Loan Agreement"), pursuant to which the Lenders agreed to make available construction loans to the Borrower in an amount up to $290,000,000.00; and


WHEREAS, Fleet assigned the agency under the First Loan Agreement to Wachovia pursuant to that certain Assignment and Assumption of Agency with respect to Consolidated, Amended and Restated Revolving Credit Construction Loan Agreement and Other Loan Documents dated as of October 1, 2004; and


WHEREAS, Fleet assigned its Commitment under the First Loan Agreement to BOA pursuant to that certain Assignment and Acceptance Agreement dated as of October 1, 2004; and


WHEREAS, the First Loan Agreement makes reference in certain provisions to the defined term "Senior Unsecured Revolving Credit Agreement" which is defined as that certain Senior Unsecured Revolving Credit Agreement dated as of June 28, 2002, among WCI as "Borrower", Fleet National Bank and certain other lending institutions as "Lenders", Fleet National Bank, as "Lead Agent", Wachovia Bank, N.A., as "Syndication Agent", and Fleet


Securities, Inc., and Wachovia Bank, N.A., as "Co-Lead Arrangers", as amended, modified, renewed or consolidated from time to time; and


WHEREAS, the Senior Unsecured Revolving Credit Agreement was replaced by that certain Senior Unsecured Revolving Credit Agreement dated as of August 13, 2004, among WCI as "Borrower", BOA as "Administrative Agent", "Swing Line Lender" and an "L/C Issuer", the other "Lenders" party thereto, Wachovia as "Syndication Agent", KeyBank National Association and Bank One, NA, as "Co-Documentation Agents" and Banc of America Securities LLC and Wachovia Capital Markets, LLC as "Joint Lead Arrangers" and "Joint Book Managers" (the "BOA Senior Credit Agreement"); and


WHEREAS, Agent, the Lenders and the Borrower desire to amend the First Loan Agreement so that all references to the Senior Unsecured Revolving Credit Agreement shall now refer to the BOA Senior Credit Agreement, and to amend certain other provisions of the First Loan Agreement;


NOW, THEREFORE, for and in consideration of the mutual benefits to be received by the parties hereto and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby expressly acknowledged by the parties hereto, the parties do hereby amend and restate the First Loan Agreement in its entirety and covenant and agree as follows:


ARTICLE 1
DEFINITIONS AND RULES OF INTERPRETATION.


1.1 DEFINITIONS. The following terms shall have the meanings set forth in this Section 1.1 or elsewhere in the provisions of this Agreement or other Loan Documents referred to below:


ACCORDION NOTE. That certain Renewal Replacement Revolving Line of Credit Note (Accordion) dated as of March 30, 2004, made by Borrower payable to the order of Fleet National Bank, in the face principal amount of $50,000,000.00, transferred by Allonge to Wachovia Bank, National Association, as of October 1, 2004, and any replacement notes therefor, to be held in accordance with the provisions of Section 2.4 of this Agreement.


ADDITIONAL COMMITMENT LENDER. See Section 4.6.4 of this Agreement.


ACT. See Article 35 of this Agreement.


ACTUAL KNOWLEDGE. See Section 20.10.1 of this Agreement.


ADA. See Section 11.10 of this Agreement.


ADJUSTED PROJECT COSTS. Project Costs less Required Equity Funds and Escrow Deposits used in construction.


ADJUSTED TANGIBLE NET WORTH. As defined in the Senior Unsecured Revolving Credit Agreement.


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


AFFILIATE. As applied to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with the Person specified.


AGENT. See preamble.


AGENT'S OFFICE. Agent's address as set forth in Article 23, or such other address as Agent may from time to time notify Borrower and the Lenders of.


AGREEMENT. This Second Consolidated, Amended and Restated Revolving Credit Construction Loan Agreement, including the Exhibits and Schedules attached hereto, as amended, modified consolidated, supplemented or restated from time to time.


APPLICABLE RATE. At the time of determination thereof, a percentage per annum determined by the Pricing Level in effect on such date as shown below:


Senior Pricing Leverage Unsecured Eurodollar Level Ratio Debt Rating Rate Base Rate Unused Fee - ------- ---------- ----------- ---------- --------- ----------
1 N/A BBB-/Baa3 1.00% 0.00% 0.20%
or better
2 Less than N/A 1.05% 0.00% 0.25%
or equal
to 1.0:1
3 Greater N/A 1.25% 0.00% 0.275%
than
1.0:1 but
less than
or equal
to 1.25:1
4 Greater N/A 1.50% 0.00% 0.275%
than
1.25:1
but less
than or
equal to
1.75:1
5 Greater N/A 1.75% 0.00% 0.30%
than
1.75:1
but less
than or
equal to
2.0:1
6 Greater N/A 2.00% 0.00% 0.35%
than 2.0:1


Initially, the Applicable Rate shall be set at Level 4. Upon delivery of the Compliance Certificate pursuant to Section 9.6.3, after the end of each Fiscal Quarter (commencing with the Compliance Certificate delivered for the Fiscal Quarter ending December 31, 2004), the Applicable Rate shall automatically be adjusted to the rate corresponding to the Leverage Ratio set forth in the table above, such automatic adjustment to take effect on the last day that the


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Compliance Certificate was required to be delivered, and shall remain in effect until subsequently adjusted in accordance herewith upon the delivery of each such subsequent Compliance Certificate. If Borrower fails to deliver such Compliance Certificate with respect to any Fiscal Quarter within the period of time required by Section 9.6.3, then the Applicable Rate shall automatically be adjusted to that set forth in Level 6 as of the first (1st) Business Day after the date on which such Compliance Certificate was required to be delivered until Borrower delivers such Compliance Certificate with respect to such Fiscal Quarter. Notwithstanding the foregoing, (a) for so long as WCI maintains an Investment Grade Rating, the Applicable Rate as of any date of determination thereof shall be set at Level 1, and (b) at all times while an Event of Default exists, the Applicable Rate shall be set at Level 6. In the event that the Debt Ratings are not equivalent, the Applicable Rate shall be based on the two (2) highest Debt Ratings. Each change in the Applicable Rate resulting from a publicly announced change in the Debt Rating shall be effective, in the case of an upgrade, during the period commencing on the date of delivery by Borrower to Agent of notice thereof pursuant to Section 9.7.6(c) and ending on the date immediately preceding the effective date of the next such change and, in the case of a downgrade, during the period commencing on the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change.


APPRAISALS. Collectively, those certain MAI appraisals of the Projects, determined on a fair market value basis, prepared in accordance with all applicable Federal banking regulations by a qualified independent appraiser approved by Agent.


APPRAISED VALUE. The "Discounted Bulk Sales Value" of a Project or Proposed Project determined by the most recent Appraisal of such parcel or update, subject, however, to such changes or adjustments to the value determined thereby as may be required by the appraisal department of the Agent in its good faith business judgment.


ARCHITECTS. Collectively, the architects selected by Borrower with respect to the design of the Projects and described on Part III of the Project Schedules attached hereto as Exhibit A.


ARCHITECTS' CONTRACTS. Collectively, the contracts between Borrower and the Architects.


ARRANGERS. Each of BAS and WCM in its capacity as Co-Lead Arranger.


ASSIGNMENT AND ACCEPTANCE. See Section 20.13.1(e) of this Agreement.


ASSIGNMENTS OF PROJECT DOCUMENTS. Collectively, the Collateral Assignments of Project Documents made by Borrower in favor of Agent, including, without limitation, the Consolidated, Amended and Restated Collateral Assignment of Project Documents, dated as of March 30, 2004, pursuant to which Borrower assigns and grants a security interest in Borrower's right, title and interest in and to the Architects' Contracts, the Construction Contracts, the Plans and Specifications and the Project Approvals, as the same may be modified or amended.


ASSIGNMENTS OF SALES CONTRACTS. Collectively, the Collateral Assignments of Residence Purchase Agreements made by Borrower in favor of Agent, including, without limitation, the Consolidated, Amended and Restated Collateral Assignments of Residence Purchase Agreements, dated as of March 30, 2004, pursuant to which Borrower assigns all of the sellers'


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rights, title and interest in and to the Sales Contracts, the Escrow Deposits and all proceeds, issues and profits therefrom, as the same may be modified or amended.


AUDITED FINANCIAL STATEMENTS. The audited consolidated balance sheet of WCI and its Subsidiaries for the fiscal year ended December 31, 2003, and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal year of WCI and its Subsidiaries, including the notes thereto.


BAS. Banc of America Securities LLC and its successors.


BASE RATE. For any day, a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Agent as its "prime rate." The "prime rate" is a rate set by Agent based upon various factors including Agent's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Agent shall take effect at the opening of business on the day specified in the public announcement of such change.


BASE RATE ADVANCE. Any Advance or portion of an Advance that bears interest based at the Base Rate.


BCG. See preamble.


BOA. See preamble.


BORROWER. See preamble.


BORROWER MATERIALS. See Section 9.6 of this Agreement.


BORROWER'S REQUEST TO ADD PROPOSED PROJECT. See Section 2.5.2(a) of this Agreement.


BORROWER'S REQUISITION FOR ADVANCE. See Section 3.1 of this Agreement.


BORROWING BASE. At any time of determination, the sum of the following:


(a) Project Costs. One hundred percent (100%) of the aggregate Adjusted Project Costs; provided, that on and after the date that is ninety (90) days after the Completion Date for Improvements at a Project, the Adjusted Project Costs for such Project shall be excluded from computation in the Borrowing Base under this subparagraph (a) and shall thereafter be included under subparagraph (b) or (c) below; plus


(b) Sold Units. With respect to Units subject to Sales Contracts (but not yet closed) and as to which ninety (90) days have elapsed from the Completion Date for the Improvements in which such Units are located, seventy-five percent (75%) of the Adjusted Project Costs incurred by Borrower with respect thereto; provided, that such Adjusted Project Costs shall be excluded from computation in the Borrowing Base under this subparagraph (b) on


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and after the date that is one hundred eighty (180) days from the Completion Date and shall thereafter be included in subparagraph (c) below; plus


(c) Unsold Units. With respect to Unsold Units as to which (90) days have elapsed from the Completion Date for the Improvements in which such Units are located, fifty percent (50%) of the Adjusted Project Costs incurred by Borrower with respect thereto; provided, that such Adjusted Project Costs shall be excluded from computation in the Borrowing Base under this subparagraph (c) on and after the date that is one (1) year from the Completion Date;


provided, however, that:


(i) the cost basis for any Borrowing Base asset described in subparagraphs (b) and (c) above shall not exceed its net realizable value determined in accordance with GAAP;


(ii) for purposes of the cost calculations in the Borrowing Base, capitalized costs such as corporate general and administrative costs and marketing costs shall be excluded; and


(iii) the portion of the Borrowing Base attributable to subparagraph (c) above shall not at any time exceed fifteen percent (15%) of the total amount of the Borrowing Base.


BORROWING BASE REPORT. A report with respect to the Borrowing Base in the form attached hereto as Exhibit G and by this reference incorporated herein, or in such other form and substance as may be reasonably requested by Agent, including a certificate signed by an authorized officer of Borrower showing a calculation of the Borrowing Base and attaching all documentation used in such calculation.


BUSINESS DAY. Any day other than a Saturday, Sunday, or other day on which commercial banks are authorized or required to close under the Laws of the state where the Agent's Office is located and the Laws of the United States of America, and if the applicable day relates to a Eurodollar Rate Advance or an Interest Period for a Eurodollar Rate Advance, the day on which dealings in Dollar deposits are also carried on in the London interbank eurodollar market and banks are open for business in London.


CERCLA. See Section 8.15.1 of this Agreement.


CHANGE OF CONTROL. An event or series of events by which:


(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than a Principal becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have "beneficial ownership" of all securities that such


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person or group has the right to acquire (such right, an "option right"), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of fifty percent (50%) or more of the equity securities of Borrower entitled to vote for members of the board of directors or equivalent governing body of Borrower on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or


(b) during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors); or


(c) any Person other than a Principal or two (2) or more Persons other than Principals acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of Borrower, or control over the equity securities of Borrower entitled to vote for members of the board of directors or equivalent governing body of Borrower on a fully-diluted basis (and taking into account all such securities that such Person or group has the right to acquire pursuant to any option right) representing fifty percent (50%) or more of the combined voting power of such securities; or


(d) for any reason a "change in control" or similar event shall occur as provided in any agreement governing any "Senior Notes", any "Senior Subordinated Notes", or any "Subordinated Debt", as such terms are defined in the Senior Unsecured Revolving Credit Agreement.


CLOSING DATE. December 31, 2004.


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


COLLATERAL. All of the property, rights and interests of Borrower that are subject to the security interests, assignments, and Liens created by the Security Documents, including, without limitation, the Projects and Sales Contracts.


COMMITMENT. With respect to each Lender, the obligation to make loans to Borrower under this Agreement up to the amount set forth on Schedule 1.1 as the amount of such Lender's


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commitment to make loans to Borrower, as the same may be reduced from time to time or increased from time to time in accordance with Section 2.4 hereof.


COMPLETION DATE. With respect to each Project, the date the Certificate of the applicable surveyor that the Improvements have been completed is recorded in the official records of the county in which the Project is located in accordance with Fla. Stat. Sections 718.104(4)(e) (or the substantial equivalent to such certificate in any other applicable state is filed or recorded in accordance with such state's Requirements).


COMPLIANCE CERTIFICATE. A certificate substantially in the form of Exhibit I.


CONDOMINIUM ACT. As to Projects located in the State of Florida, the Florida Condominium Act, Fla. Stat. Ch. 718 (2003), as amended from time to time, and as to Projects located outside the State of Florida, the condominium act of such state applicable to such Project, as each such act is amended from time to time.


CONFIDENTIAL INFORMATION. See Section 20.26 of this Agreement.


CONSOLIDATED GROUP. Collectively, Borrower and its Subsidiaries.


CONSTRUCTION CONTRACTS. Collectively, the contracts between Borrower and each of the Contractors, providing for the construction of each of the Improvements on their respective Land.


CONSTRUCTION INSPECTOR. At Agent's option, either a qualified officer or employee of Agent or consulting architects, engineers or inspectors appointed by Agent from time to time.


CONSTRUCTION SCHEDULES. Collectively, the schedules of the estimated dates of commencement and completion of construction of each of the respective Improvements, prepared by each of the respective Contractors, approved by Agent and contained in Part VI of the Project Schedules attached hereto as Exhibit A.


CONTINGENCY RESERVES. Collectively, the amounts allocated as contingency reserves in each of the Project Budgets, to be advanced only in accordance with the provisions of Section 2.11 hereof.


CONTRACTORS. Collectively, the general contractors selected by Borrower with respect to the construction of the Projects and described in Part II of the Project Schedules attached hereto as Exhibit A.


CONTROL. The possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. CONTROLLING and CONTROLLED have meanings correlative thereto.


CONVERT, CONVERSION and CONVERTED. The conversion of Base Rate Advances or Eurodollar Rate Advances to another Type of Advance.


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CORE BUSINESSES. The business of planning, designing, engineering, developing, constructing, marketing, selling, financing, managing and operating real estate including business and commercial projects, office buildings, residential subdivisions, condominiums (including low-, mid- and high-rise condominiums), villa developments, single family residences, timeshares, hotels, and related amenity improvements, which include golf clubs, marinas, tennis facilities, and restaurants. In connection with the activities described above, the Consolidated Group engages in planning, designing and engineering, land development, construction/home building, marketing, real estate sales and brokerage, mortgage brokerage and finance, title insurance, property management, management of homeowner/condominium associations, fee based property development and construction management services, real estate franchise brokerage business and the operation of golf clubs, restaurants, marinas, conservation areas, rest areas, hotels and health care facilities. The Consolidated Group may also engage in various service business activities ancillary to and consistent with its ownership and operation of real estate, such as pest control and security services.


CUSTOMARY CLOSING COSTS. Reasonable and customary closing costs and commissions paid for at the time of the closing of the sale of Units, not to exceed in the aggregate six percent (6%) of the Total Price of each such Unit.


DEBTOR RELIEF LAWS. The Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.


DEBT RATING. As of any date of determination by a Rating Agency, (a) the rating of the Obligations under this Agreement, or (b) if such Rating Agency does not publicly announce the rating described in clause (a) above, the rating of the obligations under the Senior Unsecured Revolving Credit Agreement, or (c) if such Rating Agency does not publicly announce the rating described in clauses (a) or (b) above, such Rating Agency's rating of Borrower's non-credit-enhanced senior unsecured long term debt, or (d) if such Rating Agency does not publicly announce the rating described in clauses (a), (b) or (c) above, such Rating Agency's publicly announced corporate rating of WCI.


DEFAULT. A condition or event which, with either notice or passage of time or both, would constitute an Event of Default.


DEFAULT RATE. When used with respect to Obligations other than Eurodollar Rate Advances, an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Advances plus (c) four percent (4%) per annum; provided, however, that with respect to a Eurodollar Rate Advance, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Advance plus four percent (4%) per annum.


DEFAULTED ADVANCE. See Section 20.14.1 of this Agreement.


DEFAULTING LENDER. See Section 20.14.1 of this Agreement.


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DIRECT COSTS. With respect to each Project, the costs of t ...