Document:

exv10w28

 

Exhibit 10.28

SETTLEMENT AGREEMENT

     This Settlement Agreement (the “Agreement”) is entered into as of January 24, 2008, by and
among Tarragon Corporation, having an address of 423 West 55th St., 12th Floor, New York, NY 10019
(“Tarragon” or, the “Company”) and PNC Equity Securities, LLC having an address of One PNC Plaza,
249 Fifth Avenue, Pittsburgh, Pennsylvania 15222-2707 (“PNC”).

RECITALS

A. Tarragon and U.S. Bank National Association (the “Trustee”) are parties to that certain
Indenture dated as of September 16, 2004 (the “Indenture”)1 with respect to the 8.00%
Senior Convertible Notes due 2009 (the “Notes”) issued by the Company, in the original principal
amount of $62,000,000, of which $5,750,000 in principal amount is presently outstanding.

B. PNC is a Holder of $5,750,000 in principal amount of the Notes, which constitute all of the
outstanding notes under the Indenture (the “Outstanding Notes” and, collectively with the
Indenture, the “Loan Documents”).

C. Section 2 of the Outstanding Notes provides that Interest thereon shall be due and payable at
the rate of 8.00% per annum on March 15 and September 15 of each year until the earlier to occur of
payment in full of the outstanding principal amount thereof or upon the maturity of the Outstanding
Notes on September 16, 2009.

D. In its form 8-K dated August 17, 2007, Tarragon disclosed that National City Bank had notified
Tarragon that it had accelerated approximately $75.1 million of principal obligations, unrelated to
the Company’s obligations under the Indenture and the Notes, the payment of which is guaranteed by
Tarragon (the “National City Acceleration”).

E. By Notice of Default, dated August 27, 2007 (the “August 27 Default Notice”), PNC notified
Tarragon and the Trustee that the National City Acceleration constituted a Default under Section
4.1(f) of the Indenture (the “National City Default”) and that if the National City Default was not
cured, waived, rescinded or annulled within thirty (30) days of the August 27 Default Notice, then
an Event of Default would come into existence under Section 4.1(f) of the Indenture.

F. In a Notice of Event of Default, Acceleration and Demand for Payment dated September 28, 2007
(the “September 28 Acceleration Notice”), PNC notified Tarragon and the Trustee that an Event of
Default had occurred under the Indenture because the National City Acceleration was not cured,
waived, rescinded or annulled within thirty (30) days of the date of the August 27 Default Notice
(the “National City Event of Default”).

G. In a Notice of Default dated October 4, 2007 (the “October 4 Default Notice”), the

 

			
	1	 	Capitalized terms not otherwise defined herein shall
have the meaning ascribed to such terms by the Indenture.

 

 

Exhibit 10.28 (Continued)

Trustee notified Tarragon that Tarragon failed to make payment on September 15, 2007 of
interest due on the Outstanding Notes in the amount of $230,000 and that such failure to make
timely payment of Interest due constituted a default under Section 4.1 of the Indenture (the
“Interest Payment Default”).

H. The October 4 Default Notice further notified Tarragon that the continuance of the Interest
Payment Default through October 15, 2007 would result in the occurrence of an Event of Default
pursuant to Section 4.1(c) of the Indenture.

I. In a Notice of Acceleration dated November 14, 2007 (the “November 14 Acceleration Notice”), the
Trustee notified Tarragon that Tarragon failed to cure the Interest Payment Default within the time
allotted by Section 4.1(c) of the Indenture and declared the entire amount of the Outstanding Notes
to be due and payable, together with all accrued and unpaid Interest, Additional Interest and
Liquidated Damages payable under the Indenture through the date of payment.

J. In an Additional Notice of Event of Default, Acceleration and Demand for Payment dated October
18, 2007 (the “October 18 Acceleration Notice”), PNC notified Tarragon and the Trustee that, inter
alia, an Event of Default had occurred under the Indenture as a result of the continuance of the
Interest Payment Default for thirty (30) days.

K. By the October 18 Acceleration Notice, PNC further notified Tarragon that PNC declared the
Outstanding Notes to be due and payable in full and made demand for the immediate payment of all
amounts owing under the Outstanding Notes.

L. As of January 15, 2008, the total outstanding balance of Principal, Interest and Defaulted
Interest owed to PNC by Tarragon under the Loan Documents is $6,141,594 (the “P&I Balance Due”).
In addition to the P&I Balance Due, certain additional amounts are due to PNC by Tarragon under the
Loan Documents including, without limitation, PNC’s costs of collection and attorneys’ fees,
reimbursement of the Trustee’s fees and reimbursement of the Trustee’s attorneys’ fees (“PNC’s
Costs of Collection” and, together with the P&I Balance Due, the “Total Indebtedness”).

M. Tarragon and PNC have agreed to settle Tarragon’s liability under the Loan Documents in
accordance with and subject to the terms and conditions set forth herein.

     THEREFORE, the parties agree as follows:

     1. INCORPORATION OF RECITALS. The recitals set forth above are true and correct.

     2. AFFIRMATION OF P&I BALANCE DUE. Tarragon affirms and ratifies that the P&I Balance
Due as of January 15, 2008 is $6,141,594.

     3. SETTLEMENT PAYMENT. Within twenty-four (24) hours of the execution

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Exhibit 10.28 (Continued)

of this
Agreement by PNC and Tarragon (the “Settlement Date”), as a condition precedent to PNC’s
obligations under this Agreement, Tarragon shall pay to PNC the sum of Three Million Five Hundred
Ninety-Three Thousand Seven Hundred and Fifty Dollars ($3,593,750) (“Settlement Payment”) in
immediately available funds by wire transfer or certified check, made payable originally to PNC without intervening
endorsements. TIME IS OF THE ESSENCE FOR THIS OBLIGATION.

     4. CONDITIONAL RELEASE OF TARRAGON. Upon receipt of the Settlement Payment on or
before the Settlement Date, and subject to Section 9 of this Agreement, PNC, on behalf of itself
and each of PNC’s successors, assigns, parents, subsidiaries, affiliates, predecessors, officers,
directors, employees, agents, attorneys, heirs and executors, as applicable, both present and
former (collectively, “PNC Affiliates”), jointly and severally, releases, acquits and forever
discharges Tarragon and each of its successors, assigns, parents, subsidiaries, affiliates,
predecessors, officers, directors, employees, agents, attorneys, heirs and executors, as
applicable, both present and former (collectively, the “Tarragon Parties”) of and from any and all
manner of action and actions, cause and causes of action, suits, debts, controversies, damages,
judgments, executions, claims and demands whatsoever, asserted or unasserted, in contract, tort,
law or in equity which PNC has or ever had against Tarragon under the Loan Documents.

     5. [INTENTIONALLY OMITTED].

     6. RELEASE OF PNC. In consideration of PNC’s agreement to the provisions herein, to
the extent that Tarragon may have any offsets, defenses, claims or counterclaims against PNC or any
PNC Affiliate, Tarragon, on behalf of itself and each of the Tarragon Parties, jointly and
severally, releases, acquits and forever discharges PNC and all PNC Affiliates of and from any and
all manner of action and actions, cause and causes of action, suits, debts, controversies, damages,
judgments, executions, claims and demands whatsoever, asserted or unasserted, in contract, tort,
law or in equity against PNC or any PNC Affiliate which Tarragon or any Tarragon Party now has or
ever had upon or by reason of any matter, cause, causes or thing whatsoever, including, without
limitation, any presently existing claim or defense whether or not presently suspected,
contemplated or anticipated including, without limitation, (i) any claim arising under or related
to the Loan Documents, (ii) any actions or omissions of PNC or any PNC Affiliate in connection with
the initiation or continuing exercise of any right or remedy contained in the Loan Documents or at
law or in equity or (iii) any actions or omissions of PNC with respect to the August 27 Default
Notice, September 28 Acceleration Notice or the October 18 Acceleration Notice.

     7. CONFIDENTIALITY. Tarragon agrees that the terms of this Agreement and any terms
that may have been previously discussed among Tarragon and PNC are and shall remain confidential
and Tarragon agrees that such terms shall not be disclosed by Tarragon or any Tarragon Party to any
other person unless otherwise authorized by PNC in writing or required by law or regulation.

     8. COVENANT NOT TO SUE. Subject to the full and complete performance of

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Exhibit 10.28 (Continued)

Tarragon’s obligations under this Agreement, and subject to the terms and conditions of Section 9 below, PNC
covenants not to sue Tarragon with respect to Tarragon’s defaults under the Loan Documents during
the ninety-five (95) day period following the Settlement Date. Notwithstanding anything to the
contrary herein, Tarragon
acknowledges that it may have other obligations to PNC Affiliates incurred in connection with
transactions other than the Loan Documents and that such obligations are not released or impaired
by this Agreement.

     9. CONDITIONS SUBSEQUENT. Notwithstanding the foregoing, if any one or more of the
“Conditions Subsequent” as defined in subsections 9.1 — 9.5 of this Agreement (“Conditions
Subsequent”) occurs, the following provisions shall apply: (a) the provisions of Sections 4 and 8
of this Agreement shall be deemed void ab initio and shall be of no force or effect; (b) Tarragon’s
obligations under the Loan Documents shall continue to be effective, or be reinstated, as the case
may be; and (c) the full amount of the Total Indebtedness shall be due and payable immediately by
Tarragon, all as though PNC’s conditional agreement to accept the Settlement Payment in
satisfaction of Tarragon’s obligations under the Loan Documents had not been made and PNC may
immediately pursue all of its rights and remedies to collect such amounts, together with interest
thereon at the highest rate provided in the Notes and Indenture following a default accruing from
January 15, 2008, and all other amounts which PNC may lawfully recover in connection therewith,
including attorneys’ fees (including allocable costs of staff counsel) and expenses incurred to
date or which may be hereafter incurred, provided, however, that in any such event, the release of
PNC and the PNC Affiliates set forth in Section 6 of this Agreement and all other obligations and
agreements of Tarragon under this Agreement shall not be avoided, set aside or undone and shall
remain in full force and effect.

          The Conditions Subsequent are as follows:

          9.1. Litigation. Tarragon or any person claiming by or through Tarragon commences,
joins in, assists, cooperates in or participates as an adverse party or as an adverse witness
(subject to compulsory legal process which requires testimony) in any suit or other proceeding
against PNC or any PNC Affiliate relating to the Outstanding Notes, Indenture or this Agreement; or

          9.2. Avoidance. The Settlement Payment or any portion thereof, or any transfer of
property to PNC or any portion of such property, whether paid or transferred to PNC pursuant to
this Agreement or otherwise, is rescinded, avoided, set aside, rendered void or undone or otherwise
restored by PNC or any PNC Affiliate to Tarragon, or to any of the creditors of Tarragon, any
representative of Tarragon, any representative of any of Tarragon’s creditors, any trustee,
liquidating trust, liquidating committee or other representative of an estate created under title
11 of the United States Code, upon the insolvency, bankruptcy or reorganization of Tarragon, or
otherwise; or

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Exhibit 10.28 (Continued)

          9.3. Representations, Warranties, Covenants and Other Agreements. Any of the
representations, warranties, covenants or other agreements of Tarragon contained in this Agreement
shall have been false or incorrect in any material respect as of the Settlement Date; or

          9.4. Release of PNC Challenged. The release of PNC or any PNC Affiliate set forth in
Section 6 is alleged to be invalid or unenforceable by any claim or proceeding initiated or
commenced in favor of, through or by Tarragon or any Tarragon Party; or

          9.5. Unauthorized Disclosure. Any breach by Tarragon or any Tarragon Party to keep
the terms of this Agreement confidential pursuant to Section 7 of this Agreement.

     10. AGREEMENTS, ACKNOWLEDGMENTS, REPRESENTATIONS AND WARRANTIES. Tarragon
acknowledges, represents, warrants, affirms and confirms the following:

     A. Tarragon has read this Agreement, understands the effect and scope of this Agreement and
has had the assistance of separate legal counsel of its choice in carefully reviewing, discussing
and considering all terms of this Agreement or has elected to enter into this Agreement without
consulting legal counsel.

     B. Tarragon’s execution and delivery of this Agreement is not based upon reliance upon any
representation, understanding or agreement not expressly set forth in this Agreement. Neither PNC
nor any PNC Affiliate have made any representations to any other party (or such party’s agent) not
expressly set forth in this Agreement.

     C. Tarragon does execute and deliver this Agreement as its free and voluntary act, without any
duress, coercion or undue influence exerted by or on behalf of any other party.

     D. Tarragon has full and complete authorization and power to execute this Agreement in the
capacity herein stated. This Agreement is a valid, binding and enforceable obligation of Tarragon
and does not violate any law, rule or regulation, or any contract or agreement to which Tarragon is
a party.

     E. Tarragon has not conveyed, transferred, assigned, pledged or otherwise encumbered any claim
or causes of action covered by the release set forth in Section 6 of this Agreement.

     11. SEVERABILITY. If any term, provision, covenant or condition of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of
the provisions shall remain in full force and effect and shall in no way be affected, impaired or
invalidated. This Agreement is, and shall be deemed to be, the product

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Exhibit 10.28 (Continued)

of joint drafting by the
parties hereto and shall not be construed against any of them as the drafter hereof.

     12. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance
with the internal laws of the Commonwealth of Pennsylvania without regard to such jurisdiction’s
principles of conflicts of law. Tarragon agrees that all claims, disputes, and other matters
arising out of or relating to this Agreement, or the breach thereof, will be decided by proceedings
instituted and litigated in a court of competent jurisdiction sitting in the County of Allegheny or
the United States District Court for the Western District of Pennsylvania.

     13. COUNTERPARTS. This Agreement may be executed in multiple identical counterparts,
each of which when duly executed shall be deemed an original, and all of which shall be construed
together as one agreement.

     14. TIME IS OF THE ESSENCE. Time shall be of the essence with respect to each and
every of the various undertakings and obligations of Tarragon as set forth in the Agreement.

     15. NO MODIFICATION OR WAIVER. None of the terms or provisions of this Agreement may
be changed, waived, modified, discharged, or terminated except by an instrument in writing executed
by the party against which enforcement of the change, waiver, modification, discharge or
termination is asserted. None of the terms or provisions of this Agreement shall be deemed to have
been abrogated or waived by reason of any failure or failures to enforce the same.

     16. SUCCESSORS AND ASSIGNS. All rights and obligations of PNC under this Agreement
shall inure to the benefit of, and bind, PNC’s successors and assigns, and all rights and
obligations of Tarragon hereunder shall inure to the benefit of, and bind, the successors, assigns,
heirs, administrators, executors and legal representatives and estate of Tarragon.

     17. COOPERATION. Prior to and at all times following the date of this Agreement,
Tarragon agrees to execute and deliver, or to cause to be executed and delivered, such documents
and to do, or cause to be done, such other acts and things as might reasonably be requested by the
PNC to assure that the benefits of this Agreement are realized by the parties.

     18. WAIVER OF JURY TRIAL. TARRAGON KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHT IT MAY HAVE OR HEREAFTER HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE UNDERLYING TRANSACTIONS. TARRAGON
CERTIFIES THAT NEITHER PNC NOR ANY PNC AFFILIATE HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT PNC
WOULD NOT IN

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 Exhibit 10.28 (Continued)

THE EVENT OF ANY SUCH SUIT, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY JURY.

     IN WITNESS WHEREOF, the parties have executed this Agreement as an instrument under seal as of
the date first above written.

	 	 	 	 	 
	 	Tarragon Corporation

 	 
	 	By:  	/s/
Willian S. Friedman 	 
	 	 	 	 
	 	 	Title:  	CEO 	 
	 
	 	PNC Equity Securities, LLC

 	 
	 	By:  	/s/
James S. Bernier 	 
	 	 	 	 
	 	 	Title:  	President 	 
	 

7exv10w4w4

 

EXECUTION COPY

EXHIBIT 10.4.4

 

AMENDMENT NO. 3

to

CREDIT AGREEMENT

BY AND AMONG

CRICKET COMMUNICATIONS, INC

(AS LENDER)

AND

DENALI SPECTRUM LICENSE, LLC

(AS BORROWER)

AND

DENALI SPECTRUM, LLC

DENALI SPECTRUM OPERATIONS, LLC

DENALI SPECTRUM LICENSE SUB, LLC

(AS GUARANTORS)

Dated as of March 6, 2008

 

 

 

AMENDMENT NO. 3 TO CREDIT AGREEMENT

     AMENDMENT NO. 3 TO CREDIT AGREEMENT, dated as of March 6, 2008, among CRICKET COMMUNICATIONS,
INC., a Delaware corporation (“Cricket”) (as Lender), DENALI SPECTRUM LICENSE, LLC, a Delaware
limited liability company (the “License Company”) (as Borrower), DENALI SPECTRUM, LLC, a Delaware
limited liability company (“Denali Spectrum”), DENALI SPECTRUM OPERATIONS, LLC, a Delaware limited
liability company (“Operations Sub”) and DENALI SPECTRUM LICENSE SUB, LLC, a Delaware limited
liability company (“License Sub”) (each of Denali Spectrum, Operations Sub and License Sub, a
“Guarantor” and collectively, the “Guarantors”).

RECITALS

     WHEREAS, Cricket, the License Company and Denali Spectrum entered into that certain Credit
Agreement by and among Cricket Communications, Inc., Denali Spectrum License, LLC and Denali
Spectrum, LLC, dated as of July 13, 2006 and as amended by Amendment No. 1 to Credit Agreement,
dated as of September 28, 2006 and Amendment No. 2 to Credit Agreement dated as of April 16, 2007
(collectively, the “Credit Agreement”);

     WHEREAS, Operations Sub and License Sub each entered into a Borrower Subsidiary Guaranty with
Cricket, dated as of November 20, 2006, thereby becoming a guarantor of the License Company’s
obligations under the Credit Agreement;

     WHEREAS, Cricket, the License Company, Denali Spectrum, Operations Sub and License Sub desire
to further amend the Credit Agreement as set forth herein; and

     WHEREAS, the parties agree that no regulatory approval of this Amendment No. 3 to Credit
Agreement is required.

AGREEMENT

     NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto
agree as follows:

     Section 1. Paragraph (c) of the definition of “Permitted Lien” is hereby amended by
replacing the amount “$1,000,000” with the amount “$7,500,000”.

     Section 2. Section 6.9(b) of the Credit Agreement is hereby amended by replacing the
amount “$5.0 million” with the amount “$20.0 million”.

     Section 3. Section 6.9(h) of the Credit Agreement is hereby amended by replacing the
amount “$2.5 million” with the amount “$5.0 million”.

     Section 4. Except as expressly amended hereby, the Credit Agreement remains in full
force and effect in accordance with its terms.

[Signature Pages Follow]

1

 

     IN WITNESS WHEREOF, the parties hereto have signed this Amendment No. 3 to Credit Agreement,
or have caused it to be signed in their respective names by an officer, hereunto duly authorized,
on the date first written above.

	 	 	 	 	 
	CRICKET COMMUNICATIONS, INC.,	 	 
	as Lender	 	 
	 
	 	 	 	 
	By:

	 	/s/ S. DOUGLAS HUTCHESON	 	 
	 

	 	 	 	 
	Name:

	 	S. Douglas Hutcheson	 	 
	Title:

	 	CEO	 	 

	 	 	 
	DENALI SPECTRUM LICENSE, LLC, 

as Borrower
	 
	 	 
	By

	 	Denali Spectrum, LLC
	 

	 	Its sole member
	 
	 	 
	By

	 	Denali Spectrum Manager, LLC
	 

	 	Its Manager
	 
	 	 
	By

	 	Doyon, Limited,
	 

	 	Its Manager

	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ JAMES MERY
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:

Title:
	 	James Mery

Interim President/CEO	 	 

	 	 	 	 	 	 	 
	 	 	DENALI SPECTRUM, LLC,

as Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	Denali Spectrum Manager, LLC

Its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	Doyon, Limited,

Its Manager	 	 

	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ JAMES MERY
	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:

Title:
	 	James Mery

Interim President/CEO	 	 

2

 

     IN WITNESS WHEREOF, the parties hereto have signed this Amendment No. 3 to Credit Agreement,
or have caused it to be signed in their respective names by an officer, hereunto duly authorized,
on the date first written above.

	 	 	 	 	 	 	 	 	 	 	 
	DENALI SPECTRUM OPERATIONS, LLC, 

as Guarantor	 	 	 	 	 	DENALI SPECTRUM LICENSE SUB, LLC,

as Guarantor
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	Denali Spectrum License, LLC,
	 	 	 	 	 	By
	 	Denali Spectrum License, LLC,
	 

	 	Its sole member
	 	 	 	 	 	 	 	Its sole member
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	Denali Spectrum, LLC,
	 	 	 	 	 	By
	 	Denali Spectrum, LLC,
	 

	 	Its sole member
	 	 	 	 	 	 	 	Its sole member
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	Denali Spectrum Manager, LLC,
	 	 	,	 	 	By
	 	Denali Spectrum Manager, LLC,
	 

	 	Its Manager
	 	 	 	 	 	 	 	Its Manager
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	Doyon, Limited,
	 	 	 	 	 	By
	 	Doyon, Limited,
	 

	 	Its Manager
	 	 	 	 	 	 	 	Its Manager

	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ JAMES MERY
	 	 	 	By:
	 	/s/ JAMES MERY
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	James Mery
	 	 	 	Name:
	 	James Mery
	Title:

	 	 Interim President/CEO
	 	 	 	Title:
	 	Interim President/CEO

3

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