SECOND AMENDMENT TO LOAN AGREEMENT
AND NOTE
THIS SECOND AMENDMENT TO LOAN AGREEMENT AND NOTE ("Amendment") is entered
into as of September 30, 2002 (the "Amendment Date"), by and between IMAGINE
INVESTMENTS, INC., a Delaware corporation ("Lender"), whose address is 0000
Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000 and RIVERSIDE GROUP,
INC., a Florida corporation ("Borrower"), whose address is 0000 Xxxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000. WHEREAS, On August 31, 1999, Borrower
and Lender entered into that certain Loan Agreement (as the same may have been
amended, modified, renewed, extended or restated from time to time, the "Loan
Agreement");
WHEREAS, pursuant to that certain First Amendment to Loan Agreement and
Stock Pledge Agreements (the "First Amendment") dated August 31, 2000 between
Borrower and Lender, Borrower executed and delivered to Lender that certain
First Amended and Restated Promissory Note in the principal amount of Two
Million Twenty-One Thousand Six Hundred Twenty-Eight and .01/100 Dollars
($2,021,628.01) (the "Note")
WHEREAS, Borrower has requested and, subject to the terms and conditions of
this Amendment, Lender has agreed, to extend the maturity of the Indebtedness
(as defined in the Loan Agreement) as further evidenced by the Note and the
other Loan Documents to November 30, 2002.
NOW, THEREFORE, notwithstanding anything to the contrary contained in the
Note or any of the other Loan Documents, Borrower and Lender agree as follows:
1. Defined Terms. All terms used herein and not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
2. Reaffirmation of Indebtedness. Borrower and Lender hereby acknowledge
and confirm that: (a) the outstanding principal balance and accrued interest of
the Note as of the Amendment Date is equal to $2,565,716.12, (b) Borrower's
obligation to repay the outstanding principal balance and accrued interest of
the Note and all other Indebtedness is unconditional and not subject to any
offsets, defenses or counterclaims, and (c) by entering into this Amendment,
Lender does not waive or release any term or condition of the Note or the other
Loan Documents or any of its rights or remedies under such Loan Documents, or
applicable law, except as set forth herein.
3. Interest. Interest on the unpaid principal of the Indebtedness continues
to accrue at the rate of twelve and three fourths of one percent (12.75%) per
annum, effective as of December 15, 2000, until all of the Indebtedness
(including, without limitation, principal and interest) is indefeasibly paid in
full.
4. Payment of Principal and Interest on the Indebtedness. The Note and each
of the other Loan Documents are hereby amended to extend the maturity date of
the Indebtedness (regardless of the stated date of the maturity of the
Indebtedness for the Note or the other Loan Documents) to November 30, 2002, at
which time all Indebtedness (including, without limitation, principal and
interest) shall be due and payable in full.
5. Reinstatement of Note and Loan Documents. Lender, without prejudice to
or waiver of any right or remedy available to it by reason of the occurrence
subsequent to the date hereof of any event or condition constituting a Possible
Default or Event of Default or any other default or event of default that has
occurred and is continuing under the Note or the other Loan Documents hereby
agrees to take no action with respect to any such Possible Default or Event of
Default or any other default or event of default that has occurred and is
continuing under the Note or the other Loan Documents which heretofore has
occurred, until no earlier than November 30, 2002. Borrower and Lender hereby
agree that the Note and the Loan Documents are fully reinstated in accordance
with their terms and conditions, as amended, by this Amendment, as if no
Possible Default or Event of Default or any other default or event of default
that has occurred and is continuing under the Note or the other Loan Documents
had occurred in the payment of the Indebtedness prior to the date of this
Agreement, but only until November 30, 2002. It is expressly understood that
Lender will and does hereafter require full performance of any and all terms,
conditions and requirements of all Loan Documents, as amended by this Amendment.
It is further understood and agreed that the validity and perfection of the
liens and security interests granted under the Loan Documents are not diminished
or impaired in any way by this Amendment. Borrower agrees to perform and/or
observe the terms and provisions of the Loan Documents to which it is a party,
as amended by this Amendment.
6. No Commitment to Make Further Advances. Notwithstanding anything to the
contrary contained herein or in any other Loan Document (including, without
limitation, the Loan Agreement) any and all commitments of Lender to advance
funds or issue letters of credit to, or on behalf of, Borrower are terminated
and Lender shall have no further obligation to advance funds or issue letters of
credit to, or on behalf of, Borrower.
7. Expenses. All expenses incurred by Borrower or Lender in connection with
this transaction, including, but not limited to, attorneys' fees, shall be borne
by Borrower and to the extent Lender's expenses are not paid by Borrower within
10 days of Lender submitting an invoice therefor to Borrower, the amount of such
expenses shall be added to the outstanding principal amount of the Indebtedness
and shall accrue interest in accordance with Paragraph 3 hereof.
8. Ratification of Prior Instruments and Priorities. Except as herein
expressly amended, each and every term, condition, warranty and provision of the
Note and the other Loan Documents shall remain in full force and effect and the
Note and other Loan Documents as amended through even date herewith are hereby
ratified, confirmed and approved by the parties hereto. Nothing herein shall be
construed to alter or affect the priority of the liens, security interests or
title created by the Loan Documents. Any provision herein that might otherwise
be construed to conflict with the desire of Lender that the liens, security
interests and title of the Loan Documents be maintained and preserved prior to
any and all encumbrances affecting the Collateral arising subsequent to the
execution of the Loan Documents shall, at Lender's option, be void and of no
force and effect; it being the expressly declared intention of the parties
hereto that no novation of the Loan Documents be created hereby. Any promissory
note or other indebtedness described in the Loan Documents as the obligation
secured thereby shall hereafter mean the Note as modified by this Agreement and
the Indebtedness. The Loan Documents as modified and amended hereby are hereby
ratified and confirmed in all respects.
9. Representations and Warranties. Borrower hereby represents and warrants
that: (a) Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida; (b) Borrower has all requisite
power and authority and all necessary consents, approvals, licenses, permits and
other authorizations (i) to own and operate the Collateral, (ii) to execute and
deliver this Amendment and all other documents and agreements to be executed by
Borrower in connection herewith, and (iii) to carry out and comply with the
terms of the Note and the other Loan Documents, as amended by this Amendment;
(c) the Note and the other Loan Documents remain in full force and effect and
constitute, and upon the execution and delivery of this Amendment will continue
to constitute, the legal, valid and binding obligations of Borrower enforceable
in accordance with their terms; (f) Borrower is the sole legal and beneficial
owner of the Collateral; and (g) neither the execution and delivery of this
Amendment nor the consummation of the transactions contemplated herein nor
compliance by Borrower with the provisions of the Loan Documents, as amended by
this Amendment, will conflict with or result in a breach of, or constitute a
default under, any of the terms, conditions or provisions of any law, rule,
regulation, order, writ, injunction or decree of any court or governmental
authority to which Borrower is subject, or of the articles of incorporation,
bylaws or any other organizational document of Borrower, or of any indenture,
mortgage, deed of trust, promissory note, loan agreement or any other agreement
or undertaking to which Borrower is a party or by which Borrower or its
properties may be bound or subject.
10. Conditions to Effectiveness of this Amendment. This Amendment shall not
become effective until, and shall become effective when, each and every one of
the following conditions shall have been satisfied:
a. executed counterparts of this Amendment, duly executed by Borrower and
Lender, shall have been delivered
to Lender;
b. Lender shall have received a copy of the resolutions of the Board of
Directors of Borrower authorizing the execution, delivery and
performance by Borrower of this Amendment and any and all documents
relating thereto, certified by Borrowers' Secretary or an Assistant
Secretary; and
c. the representations and warranties of Borrower set forth herein are
true and correct on and with respect to the date hereof.
11. Defenses. Borrower covenants and warrants that there are no defenses,
counterclaims or offsets to the Note, the other Loan Documents or the
Indebtedness, and Borrower hereby waives any defense, claim or counterclaim
against Lender.
12. Further Assurances. Borrower, upon request from Lender, agrees to
execute such other and further documents as may be reasonably necessary or
appropriate to consummate the transactions contemplated herein or to perfect the
liens and security interests intended to secure the payment of the Indebtedness.
13. Business and Financial Information. Borrower will promptly furnish to
Lender from time to time such information regarding the Collateral and/or the
business and affairs and financial condition of Borrower as Lender may
reasonably request, and will furnish such items Lender.
14. Descriptive Headings. Descriptive headings are inserted for convenience
and reference only and do not in any way limit or amplify the terms and
provisions hereof.
15. Default. If Borrower shall fail to perform or observe any of the
covenants or agreements contained herein or if any statement, representation or
warranty contained herein is false, misleading or erroneous in any material
respect, an Event of Default shall be deemed to have occurred and Lender shall
be entitled at its option to exercise any and all of the rights and remedies
granted pursuant to any of the Loan Document or which Lender may otherwise be
entitled, whether at law or in equity.
16. FINAL AGREEMENT. THE NOTE AND THE OTHER LOAN DOCUMENTS, AS AMENDED
HEREBY, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO RELATED TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.
IN WITNESS WHEREOF, the parties hereto have each executed this Amendment as
of September 30, 2002.
LENDER:
IMAGINE INVESTMENTS, INC.
By:_______________________________________
Name:_____________________________________
Title:____________________________________
BORROWER:
RIVERSIDE GROUP, INC.,
a Florida corporation
By:_______________________________________
Name: Xxxxxxxxx X. Xxxx
Title: Senior Vice President and CFO
