LOAN AND SECURITY AGREEMENT
$500,000.00 Fort Lauderdale, Florida
Date: August 1, 2001
FOR VALUE RECEIVED, the undersigned HOLIDAY RV SUPERSTORES, INC. d/b/a
RECREATION USA, a Delaware corporation ("Company"), hereby promises to pay to
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R.B.F. INTERNATIONAL, INC., a New Jersey corporation ("Holder"), at such place
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as Holder may reasonably specify, in lawful money of the United States of
America, the principal amount of $500,000.00 on October 31, 2001 (the "Maturity
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Date"), plus interest on the principal amount outstanding from time to time
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hereunder at a rate equal to the lesser of (i) the maximum lawful rate or (ii)
10% per annum. Interest shall be calculated in arrears through the last day of
each month and shall be due and payable in arrears in monthly installments on
the last business day of each month commencing with August 31, 2001 and ending
on the Maturity Date. Interest shall be computed on the basis of a 365 or 366-
day year, as applicable.
1. Advances; Payments. On or before August 2, 2001, pursuant to the terms
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of this Loan and Security Agreement (the "Agreement") and subject to the
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accuracy of Company's representations, Holder will deliver to Company in
immediately available funds the principal amount set forth above.
All payments under this Agreement shall be applied first to fees and
expenses, then to interest and then to principal. Any principal or interest
payments on this Agreement outstanding after the occurrence and during the
continuance of a default under this Agreement shall bear interest at a rate
equal to the lesser of (i) the lawful legal rate or (ii) five percent (5%) above
the interest rate otherwise applicable under this Agreement.
2. Secured Agreement. To secure repayment of all obligations evidenced by
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this Agreement and performance of all of Company's obligations hereunder,
Company grants Holder a second mortgage on real estate property located in
Tampa, Florida and Las Cruces, New Mexico (subject to the first mortgage
provided as additional security collateral for the Bank of America Floor Plan
Facility) (collectively, the "Collateral") as more fully described in Exhibit A.
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Company shall take such actions as Holder reasonably requests from time to time
to perfect or continue the second priority security interest granted hereunder
including, without limitation, the recording of deeds of trust in connection
therewith. Company, except in the ordinary course of business, shall not dispose
of or encumber all or any substantial part of the Collateral without prior
written consent of Holder.
3. Representations, Warranties and Covenants of Company.
(a) Corporate Existence and Authority. Company is and will continue
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to be duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization. Company is and will
continue to be qualified and licensed to do business in all jurisdictions in
which any failure to do so would have a material adverse effect on Company.
Company has all requisite power to transact the business it transacts and
proposes to transact, to execute and deliver this Agreement, and all other
documents and agreements contemplated by this Agreement, and to perform the
provisions of this Agreement and to consummate the transactions contemplated by
this Agreement. The execution, delivery and performance of this Agreement, and
all other documents and agreements contemplated by this Agreement, and the
consummation of the transactions contemplated by this Agreement, have been duly
authorized and approved by Company. This Agreement, and all other documents and
agreements contemplated by this Agreement have each been duly authorized,
executed and delivered by, and each is the valid and binding obligation of,
Company enforceable against Company in accordance with its terms, except as may
be limited by applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws or by legal or equitable principles relating to or limiting
creditors' rights generally.
(b) No Conflicts. The consummation of the transactions contemplated
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by this Agreement and the performance of the terms and provisions of this
Agreement, and any other documents or agreements contemplated by this Agreement
will not (i) contravene, result in any breach of, or constitute a default under
any indenture, mortgage, deed of trust, bank loan or credit agreement, corporate
charter, by-laws or other material agreement or instrument to which Company is a
party or by which Company or any of its properties or the Collateral is bound,
(ii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order of any court, arbitrator or Federal, State, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (collectively, "Governmental Person")
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applicable to Company or (iii) violate any material provision of any statute or
other rule or regulation of any Governmental Person applicable to Company, which
could have a material adverse effect on Company.
(c) Place of Business; Location of Collateral. The address set forth
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in Section 7(c) of this Agreement is Company's chief executive office. See
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Exhibit A for the location of the Tampa, Florida and Las Cruces, New Mexico
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properties
(d) Title to Collateral; Permitted Liens. Company is now, directly or
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indirectly through one of its subsidiaries or affiliates, and will at all times
in the future be, the sole owner of all the Collateral. The Collateral now is
and will remain free and clear of any and all liens, charges, security
interests, encumbrances and adverse claims, except for purchase money or lessor
security interests in certain equipment and the first mortgage in favor of Bank
of America, N.A. for the Bank of America Floor Plan Facility. Holder now has an
enforceable security interest in all of the Collateral, subject only to the
purchase money or lessor security interests and the Bank of America, N.A. first
mortgage, and Company will at all times defend Holder and the Collateral against
all claims of others (subject to the rights of holders of purchase money or
lessor security interests in certain equipment and the interests of Bank of
America, N.A.).
(e) Maintenance of Collateral. Company will maintain the Collateral
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in good working condition, ordinary wear and tear excepted, and Company will not
use the Collateral for any unlawful purposes. Company will immediately advise
Holder in writing of any material loss or damage to the Collateral.
(f) Books and Records. Company has maintained and will maintain at
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Company's chief executive office complete and accurate books and records,
comprising an accounting system in accordance with generally accepted accounting
principles.
(g) Financial Condition, Statements and Reports. All financial
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statements now or in the future delivered to Holder have been, and will be,
prepared in conformity with generally accepted accounting principles and now and
in the future will completely and fairly reflect the financial condition of
Company, at the times and for the periods therein stated. Between the last date
covered by any such statement provided to Holder and the date hereof, there has
been no material adverse change in the financial condition or business of
Company.
(h) Compliance with Law. Company has complied, and will comply, in
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all material respects, with all provisions of all applicable laws and
regulations, including, but not limited to, those relating to Company's
ownership of real or personal property, the conduct and licensing of Company's
business, and all environmental matters.
(i) Litigation. There is no claim, suit, litigation, proceeding or
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investigation pending or (to the best of Company's knowledge) threatened by or
against or affecting Company in any court or before any governmental agency (or
any basis therefor known to Company) which could normally or reasonably be
expected to result, either separately or in the aggregate, in any material
adverse change in the financial condition or business of Company, or in any
material impairment in the ability of Company to carry on its business in
substantially the same manner as it is now being conducted. Company will
promptly inform Holder in writing of any claim, proceeding, litigation or
investigation in the future threatened or instituted by or against Company.
(j) Use of Proceeds. General working capital at the sole discretion
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of the Company's management. All proceeds of the loan shall be used solely for
lawful business purposes.
(k) Intellectual Property. Company possesses all material licenses,
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permits, franchises, authorizations, patents, copyrights, trademarks and trade
names and any other tangible or intangible or intellectual property rights, or
rights thereto, required to conduct its business substantially as now conducted,
without actual knowledge of conflict with the rights of others.
(l) Disclosure. No representation or other statement made by Company
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to Holder contains any untrue statement of a material fact or omits to state a
material fact necessary to make any statements made to Holder not misleading.
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(m) Performance. Company shall pay the principal of and interest on
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the loan evidenced by this Agreement in the manner provided in this Agreement.
The obligation of Company described in the preceding sentence is absolute and
unconditional, irrespective of any tax or accounting treatment of such
obligation including without limitation any documentary stamp, transfer, ad
valorem or other taxes assessed by any jurisdiction in connection with this
transaction.
(n) Stay, Extension and Usury Laws. Company agrees (to the extent it
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may lawfully do so) that it will not at any time insist upon, plead or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive
Company from paying all or a portion of the principal of, finance fee, or
interest on the loan contemplated by this Agreement, wherever enacted, now or at
any time hereinafter in force, or that may materially affect the covenants or
the performance of this Agreement in any manner inconsistent with the provisions
of this Agreement. Company expressly waives all benefit or advantage of any such
law. If a court of competent jurisdiction prescribes that Company may not waive
its rights to take the benefit or advantage of any stay or extension law or any
usury law or other law in accordance with the prior sentence, then the
obligation to pay interest on the principal shall be reduced to the maximum
legal limit under applicable law governing the interest payable in connection
with this Agreement, and any amount of interest paid by Company that is deemed
illegal shall be deemed to have been a prepayment of principal on the loan.
(o) Taxes. Company shall make all necessary tax filings and reports
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and pay prior to delinquency all taxes, assessments and governmental levies that
may be imposed upon Company, except as contested in good faith and by
appropriate proceedings.
(p) Limitations on Indebtedness. Without Holder's prior written
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consent, Company shall not, directly or indirectly, create, incur, assume,
suffer to exist or otherwise in any manner become liable or commit to become
liable for any indebtedness other than Company's obligations to Holder under
this Agreement and indebtedness incurred in the ordinary course of business not
in excess of US$100,000 in the aggregate.
(q) Insurance. Company shall maintain insurance with responsible and
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reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which Company operates.
(r) Reports. Company will provide Holder with monthly company-
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prepared financial statements within 15 days after the end of each month and
such additional financial and other information as Holder may reasonably request
from time to time.
(s) Insurance. Company will maintain insurance on the Collateral that
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includes a lender's loss payable endorsement in favor of Holder as an additional
loss payee. Company will maintain insurance in a form acceptable to Holder
relating to the Collateral and Company's business in amounts and of a type that
are customary to businesses similar to Company's.
(t) Consolidation. Company will not merge or consolidate with any
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person or entity, or make any investments, or dispose of any substantial portion
of its assets without Holder's prior written consent, unless such merger,
consolidation, or disposal shall result in the payment in full of all debt,
including without limitation any principal and interest outstanding pursuant to
this Agreement, owed by Company to Holder.
4. Optional Prepayments. Company may, from time to time, prepay the loan
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evidenced hereby, in whole or in part, so long as each partial prepayment of
principal is equal to or greater than $50,000 and Company has given Holder two
(2) or more business days' written notice of such optional prepayment. Any such
optional prepayment of principal shall be without premium or penalty. Each
prepayment of principal under this Section shall be accompanied by all interest
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then accrued and unpaid on the principal so prepaid. Any principal prepaid
pursuant to this Section shall be in addition to, and not in lieu of, all
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payments otherwise required to be paid under this Agreement at the time of such
prepayment.
5. Warrant. Company shall have delivered to Holder a warrant to purchase
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common stock, in form reasonably acceptable to Holder ("Warrant", together with
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the Agreement and any other documents delivered in
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connection with this Agreement, the "Loan Documents"). Company shall pay all
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reasonable and actual costs that Holder incurs in enforcing this Agreement or
exercising any rights with respect to the Collateral, including without
limitation reasonable attorneys' fees and expenses.
6. Events of Default; Remedies.
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(a) Events of Default Defined; Acceleration of Maturity. If any of
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the following events ("Events of Default") shall occur and be continuing (for
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any reason whatsoever and whether it shall be voluntary or involuntary or by
operation of law or otherwise):
(i) default shall be made in the payment of the
principal of, or interest on, the loan when and as the same shall become due and
payable, whether at stated maturity, by acceleration, upon a mandatory
prepayment due date or otherwise; or
(ii) default shall be made in the performance or
observance of any covenant, agreement or condition contained in this Agreement
or in any of the other Loan Documents, and such default shall have continued for
a period of five (5) business days following receipt of written notice of such
default, provided however, that failure by any party to give notice of such
default shall not relieve Company from any liability under this Section; or
(iii) Company shall (1) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property and
assets, (2) be generally unable to pay its debts as such debts become due, (3)
make a general assignment for the benefit of its creditors, (4) commence a
voluntary case under the United States Bankruptcy Code or similar law or
regulation (as now or hereafter in effect), (5) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (6) fail to
controvert in a timely or appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under the United States
Bankruptcy Code or other law or regulation, (7) dissolve, (8) take any corporate
action under any applicable law analogous to any of the foregoing, or (9) take
any corporate action for the purpose of effecting any of the foregoing; or
(iv) a proceeding or case shall be commenced, without the
application or consent of Company in any court of competent jurisdiction,
seeking (1) the liquidation, reorganization, dissolution, winding up or
composition or readjustment of its debts, (2) the appointment of a trustee,
receiver, custodian, liquidator or the like of it or for all or any substantial
part of its assets, or (3) similar relief in respect of Company, under any law
providing for the relief of debtors, and such proceeding or case shall continue
undismissed, or unstayed and in effect, for a period of sixty (60) days; or an
order for relief shall be entered in an involuntary case under the United States
Bankruptcy Code or other similar law or regulation, against Company; or action
under the laws of any jurisdiction affecting Company analogous to any of the
foregoing shall be taken with respect to Company and shall continue unstayed and
in effect for any period of sixty (60) days; or
(v) final judgment for the payment of money shall be
rendered by a court of competent jurisdiction against Company and Company shall
not discharge the same or provide for its discharge in accordance with its
terms, or procure a stay of execution thereof within sixty (60) days from the
date of entry thereof and within said period of sixty (60) days, or such longer
period during which execution of such judgment shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal, and
such judgment together with all other such judgments shall exceed in the
aggregate US$50,000; or
(vi) any representation or warranty made by Company in
this Agreement, or any other documents or agreements contemplated hereby and
thereby or in any certificate or other instrument delivered hereunder or
pursuant hereto or in connection with any provision hereof shall be false or
incorrect in any material respect on the date as of which made;
then (x) upon the occurrence of any Event of Default described in Section
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6(a)(iii) or (iv), the unpaid principal amount of the loan, together with the
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interest accrued thereon and all other amounts payable by Company under this
Agreement, shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by Company or (y) upon the occurrence of
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any other Event of Default, Holder may, by notice to Company indicating the
Event or Events of Default, declare the unpaid principal amount of the loan to
be, and the same shall forthwith become, due and payable, together with the
interest accrued thereon and all other amounts payable by Company hereunder.
Failure by the Holder to indicate any Event of Default in any one notice shall
not preclude the Holder from indicating such omitted Event or Events of Default
in future notices and shall not relieve Company of any liability under this
Agreement, nor constitute a waiver of Holder's rights under this Agreement.
(b) Suits for Enforcement. If any Event of Default shall have
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occurred and be continuing, Holder may proceed to protect and enforce its rights
against Company, either by suit in equity or by action at law, or both, whether
for the specific performance of any covenant or agreement contained in this
Agreement or in aid of the exercise of any power granted in this Agreement, or
Holder may proceed to enforce the payment by Company of all sums due under this
Agreement or to enforce any other legal or equitable right of Holder including
without limitation all rights of a secured party under the UCC.
Company covenants that, if it shall default in the making of any
payment due hereunder or in the performance or observance of any agreement
contained in this Agreement, it will pay to Holder such further amounts, to the
extent lawful, to cover any reasonable costs and expenses of collection or of
otherwise enforcing Holder's rights, including without limitation the reasonable
counsel fees and costs and expenses incurred in connection with any
restructuring, negotiation, refinancing, workout, bankruptcy or other similar
transaction or proceeding. The obligations set forth in this paragraph shall
survive the payment in full of the loan.
(c) Remedies Cumulative. No remedy herein conferred upon Holder is
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intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
(d) Remedies Not Waived. No course of dealing between Company and any
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other person and no delay or failure in exercising any rights hereunder or under
the loan in respect thereof shall operate as a waiver of Holder's rights.
7. Miscellaneous.
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(a) Reliance on and Survival of Representations. All representations,
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warranties, covenants and agreements of Company herein shall be deemed to be
material and to have been relied upon by Holder and shall survive the execution
and delivery of this Agreement and of the Securities, for so long as the loan
remains outstanding.
(b) Successors and Assigns. This Agreement shall bind and inure to
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the benefit of and be enforceable by Company, Holder and each of their
respective successors and assigns, and, in addition, shall inure to the benefit
of and be enforceable by each person who shall from time to time be a holder of
the loan. Holder shall be permitted to transfer the Securities in accordance
with their terms and in accordance with applicable restrictions under applicable
federal and state securities laws.
(c) Notices. All notices and other communications provided for in
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this Agreement shall be in writing and delivered by registered or certified
mail, postage prepaid, or delivered by overnight courier (for next business day
delivery) or telecopied, addressed as follows, or at such other address as any
of the parties hereto may hereafter designate by notice to the other parties
given in accordance with this Section:
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1) if to Company:
Holiday RV Superstores, Inc.
d/b/a Recreation USA
000 X. Xxxxxxx Xxxx., Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
5
Telecopy: (000) 000-0000
With a copy of any notice to:
Nida & Xxxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx
Telephone:(000) 000-0000
Telecopy: (000) 000-0000
2) if to Holder:
R.B.F. International, Inc.
Stock and Bond Loans
0 Xxxxx Xxxx
Xxxxx 000 X
Xxxxxx, XX 00000
Attn: Xxxxxxx X'Xxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
Any such notice or communication shall be deemed to have been duly
given on the fifth day after being so mailed, the next business day after
delivery by overnight courier, when received when sent by telecopy or upon
receipt when delivered personally.
(d) Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Signatures may be
exchanged by telecopy, with original signatures to follow. Each of the parties
hereto agrees that it will be bound by its own telecopied signature and that it
accepts the telecopied signatures of the other parties to this Agreement. The
original signature pages shall be forwarded to Holder or its counsel and Holder
or its counsel will provide all of the parties hereto with a copy of the entire
Agreement.
(e) Amendments. This Agreement may only be amended by a writing duly
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executed by the parties hereto.
(f) Severability. If any term or provision of this Agreement or any
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other document executed in connection herewith shall be determined to be illegal
or unenforceable, all other terms and provisions hereof and thereof shall
nevertheless remain effective and shall be enforced to the fullest extent
permitted by applicable law.
(g) Governing Law; Submission to Process. THIS AGREEMENT AND ALL
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AMENDMENTS, SUPPLEMENTS, WAIVERS AND CONSENTS RELATING HERETO OR THERETO SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY HEREBY
IRREVOCABLY SUBMITS ITSELF TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITTING IN THE STATE OF CALIFORNIA AND AGREES AND CONSENTS THAT
SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDINGS RELATING HERETO
BY ANY MEANS ALLOWED UNDER CALIFORNIA OR FEDERAL LAW. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING BROUGHT
IN SUCH COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. THE COMPANY SHALL APPOINT AN AGENT FOR
SERVICE OF PROCESS IN CALIFORNIA AND SHALL NOTIFY HOLDER OF ANY FUTURE CHANGE
THEREIN.
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(h) Entire Agreement. This Agreement contains the entire Agreement of
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the parties hereto with respect to the transactions contemplated hereby and
supersedes all previous oral and written, and all previous contemporaneous oral
negotiations, commitments and understandings.
(i) Further Assurances. Company agrees promptly to execute and
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deliver such documents and to take such other acts as are reasonably necessary
to effectuate the purposes of this Agreement.
(j) Headings. The headings contained herein are for reference
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purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(k) Assignments and Participations. Company may not assign its rights
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or obligations hereunder or under the loan without the prior written consent of
Holder. Holder may assign all or any portion of the loan or Warrant with the
prior consent of Company. Holder may sell or agree to sell to one or more other
persons a participation in all or any part of any of the loan or Warrant with
the prior consent of Company. Upon surrender of the loan or Warrant, Company
shall execute and deliver one or more substitute notes, warrants or other
securities in such denominations and of a like aggregate unpaid principal amount
or other amount issued to Holder and/or to Holder's designated transferee or
transferees. Holder may furnish any information in the possession of Holder
concerning Company, or any of its respective subsidiaries, from time to time to
assignees and participants (including prospective assignees and participants).
(l) Waivers; Indemnity. Company waives presentment and demand for
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payment, notice of dishonor, protest of this Agreement, and shall pay all costs
of collection when incurred, including reasonable attorneys' fees, costs and
expenses. Company shall indemnify and hold harmless from any claim, obligation
or liability (including without limitation reasonable attorneys fees and
expenses) arising out of this Agreement or the transactions contemplated under
the Loan Documents.
(m) JURY WAIVER. HOLDER AND COMPANY EACH WAIVES ANY RIGHT TO A JURY
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TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF THE LOAN DOCUMENTS OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREIN.
[signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year set forth above.
COMPANY:
HOLIDAY RV SUPERSTORES, INC. d/b/a
RECREATION USA, a Delaware corporation
By: ____________________________________
Xxxxx Xxxxxxx
CFO
HOLDER:
R.B.F. INTERNATIONAL, INC., a New Jersey
corporation
By: ____________________________________
Xxxxxxx X'Xxxxxx
Title: President
EXHIBIT A
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Real Property Description
Address and legal description of the Las Cruces, New Mexico property:
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0000 Xxxxxxx Xx Xxxxxxx, Xxx Xxxxxx, Xxx Xxxxxx 00000-0000
Xxx 0, X.X.X.X. XXXXX 0X-00X, XXXX NO. 1, in the City of Las Cruces, Xxxx Xxx
County, New Mexico, as the same is shown and designated on Plat No. 2486,
thereof filed for record in the office of the County Clerk of said county on
February 1, 1994, and recorded in Book 18, Pages 0-0, Xxxx Xxxxxxx, Xxxx Xxx
Xxxxxx, Xxx Xxxxxx.
Address of the Tampa, Florida property:
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0000 Xxxxxxxx Xxxx, Xxxxx, Xxxxxxx 00000-0000
