Exhibit 10.3
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SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
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AGREEMENT AND FORBEARANCE AGREEMENT
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This is a Second Amendment to Amended and Restated Loan and Security
Agreement and Forbearance Agreement (this "Agreement") made this 9th day of
January 2002, effective November 30, 2001, among HOLIDAY RV SUPERSTORES, INC.,
("Holiday RV") a Delaware corporation, HOLIDAY RV SUPERSTORES OF SOUTH CAROLINA,
INC., a South Carolina corporation, HOLIDAY RV SUPERSTORES WEST, INC., a
California corporation, COUNTY LINE SELECT CARS, INC., a Florida corporation,
("County Line"), HALL ENTERPRISES, INC., a Kentucky corporation, and HOLIDAY RV
SUPERSTORES OF NEW MEXICO, INC., a New Mexico corporation (singularly, a
"Borrower" and collectively, "Borrowers"); HOLIDAY RV RENTAL/LEASING, INC., a
Florida corporation, LITTLE VALLEY AUTO & RV SALES, INC., a West Virginia
corporation, HOLIDAY RV ASSURANCE SERVICE, INC., F/K/A HOLIDAY RV ASSURANCE
CORPORATION, a Florida corporation, and RECREATION USA INSURANCE CORPORATION, a
Florida corporation (singularly, a "Guarantor and collectively "Guarantors");
and BANC OF AMERICA SPECIALTY FINANCE, INC., a North Carolina corporation
("Specialty") and BANK OF AMERICA, N.A., a national banking association (the
"Bank") (together, "Lender").
RECITALS
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WHEREAS, prior to March 8, 2001, Borrowers and Guarantors and Lender
and/or its predecessors were parties to certain credit facilities.
WHEREAS, Borrowers requested an amended and restated credit facility from
Lender, and on about March 8, 2001, Borrowers and Guarantors entered into that
certain Amended and Restated Loan and Security Agreement.
WHEREAS, all capitalized terms used herein and not otherwise defined shall
have the meanings given in the Amended and Restated Loan and Security Agreement.
WHEREAS, the Amended and Restated Loan and Security Agreement set forth
the modified terms and conditions of the loans from Lender under the Existing
Holiday RV Documents and Existing County Line Documents, and reaffirmed the
grant of a security interest and lien in certain personal property, including
new and used inventory and parts, and also granted a security interest and lien
in additional property as described in Exhibit 1 attached thereto (the
"Collateral").
WHEREAS, pursuant to the Amended and Restated Loan and Security Agreement,
certain of Borrowers and Guarantors executed and delivered to Lender a Pledge of
Deposit Accounts (the "Deposit Account Pledge") and Account Custody and Control
Agreement (the "Control Agreement") with respect to the deposit accounts of
Borrowers and Guarantors as described therein (the "Deposits Accounts").
WHEREAS, on or about June 18, 2001, the Lender, Borrowers and Guarantors
entered into a First Amendment to the Amended and Restated Loan and Security
Agreement, in which Borrowers, inter alia, agreed to pledge to Lender a
certificate of deposit in the amount of one million dollars (the "CD") and to
grant Lender a first mortgage in certain real property located in Tampa, Florida
and the leases and rents thereof (the "Tampa Property") and in Las Cruces, New
Mexico and the leases and rents thereof (the "Las Cruces Property"), and in
connection therewith, certain of Borrowers executed a Pledge of Certificate of
Deposit in the amount of $1 million (the "CD Pledge"), a Mortgage and Security
Agreement and an Assignment of Rents relating to the Tampa Property (the
"Florida Mortgage" and the "Florida Assignment of Rents," respectively), and a
Mortgage and Security Agreement and an Assignment of Rents relating to the Las
Cruces Property (the "New Mexico Mortgage" and "New Mexico Assignment of Rents,"
respectively).
WHEREAS, Borrowers and Guarantors have executed and delivered to Lender
various UCC-1 Financing Statements ( the "Financing Statements") which have been
filed or recorded with the proper filing and recording offices in the applicable
states to perfect Lenders' liens in the Collateral described in the Financing
Statements which are subject to perfection by recording or filing.
WHEREAS, the Existing Holiday RV Documents, Existing County Line
Documents, Deposit Account Pledge, Control Agreement, Amended and Restated Loan
and Security Agreement, First Amendment to the Amended and Restated Loan and
Security Agreement, Financing Statements, CD Pledge, Florida Mortgage, Florida
Assignment of Rents, New Mexico Mortgage, and New Mexico Assignment of Rents are
collectively the "Loan Documents."
WHEREAS, pursuant to the terms of the Amended and Restated Loan and
Security Agreement, as amended, all sums due Lender under the Loan Documents
became fully due and payable on the "Termination Date"-November 30, 2001, and at
that time, Lenders' obligation to advance any funds to any of Borrowers also
terminated.
WHEREAS, Borrowers and Guarantors are in default of the Loan Documents due
to the failure to pay all sums due at maturity and to make timely payments due
Lender for "sold and unpaid" vehicles and Borrowers and Guarantors also are in
default of certain of the financial covenants under the Loan Documents.
WHEREAS, as of January 8, 2002, the following principal and non-default
interest was due Lender under the Loan Documents:
Principal $18,549,787.00
Interest at non-default rate 132,112.67
WHEREAS, the above-stated amounts of principal and interest plus all other
sums due under the Loan Documents and this Agreement or otherwise shall be
collectively called the "Liabilities."
WHEREAS, Borrowers and Guarantors have represented to Lender that they
have received an infusion of equity in the amount of at least $1,500,000.00 as
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of the date hereof, which is subordinate to the "Liabilities" due Lender (the
"New Equity") and requested that Lender forbear from enforcing it rights due to
the "Termination Date" and foregoing described defaults and have further
requested that Lender advance up to two million dollars ($2,000,000.00) for the
purchase of new, approved inventory.
WHEREAS, Borrowers and Guarantors represent to Lender that, except with
respect to County Line where Deere Credit, Inc. has an existing security
interest in certain used inventory and Little Valley Auto & RV Sales, Inc.
("Little Valley") where Deutsche Financial Services, Inc. and Bomardier Capital,
Inc. have security interests in certain personal property, there are no security
interests against any of the inventory of the Borrowers or Guarantors except
those of Lender. Lender acknowledges that it does not have a security interest
in the inventory of Little Valley.
WHEREAS, Lender is willing to forbear and advance up to two million
dollars ($2,000,000.00) solely for the purchase of new, approved inventory on
the terms and conditions set out herein (the "New Advances").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Borrowers and
Guarantors hereby agree with Lender as follows:
AGREEMENT
1. The above Recitals are incorporated herein as if fully set out
below.
2. This Agreement does not novate or supercede the Loan Documents
and only supplements them, and Borrowers and Guarantors reaffirm and ratify the
terms of the Loan Documents and agree that, except as expressly otherwise
provided herein, their terms and conditions are and shall remain in full force
and effect. Hall Enterprises, Inc. shall be deemed a "Borrower" under the
Amended and Restated Loan and Security Agreement and this Agreement.
3. Borrowers and Guarantors acknowledge that material defaults under
the Loan Documents have occurred and are continuing and that they have been
given proper notice of the defaults under the Loan Documents and that Lender's
entering into this Agreement shall not constitute waiver or excuse of the same
by Lender.
4. Borrowers and Guarantors acknowledge and agree that, by virtue of
the occurrence of such defaults, Lender would be entitled to immediate
possession of the Collateral or to foreclose the same, and to sell, lease,
liquidate or otherwise dispose of such Collateral as permitted by the Loan
Documents and this Agreement and applicable law and apply the proceeds of such
disposition to the Liabilities of Borrowers or Guarantors to Lender under their
respective Loan Documents without regard to any claim for marshalling or the
application of any election of remedies principles, including but not limited to
the "single action rule" or "security first" rule of any particular state.
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5. Borrowers and Guarantors acknowledge and agree that the
obligations of Borrowers and Guarantors under the Loan Documents are the valid
and binding obligations of each such Borrower and Guarantor. Further, each of
Borrowers and Guarantors represent and warrant that, as of the date hereof,
there is no claim, counterclaim, setoff, or defense to the Loan Documents or
Lender's exercise of any right or remedy available to Lender under any Loan
Documents or at law or in equity. Borrowers and Guarantors waive and
affirmatively agree not to allege or otherwise pursue any and every defense,
affirmative defense, counterclaim, cause of action, setoff or other right that
they have or may have as of the date hereof, whether known or unknown, legal or
equitable, including, without limitation, any contest of (a) any defaults; (b)
any provisions of any Loan Documents; (c) the right of Lender to all of the
Collateral and all products and proceeds thereof; (d) the security interest of
Lender in any property, whether real or personal, tangible or intangible, or any
right or other interest, now or hereafter arising in connection with the
Collateral; or (e) the conduct of Lender in administering any financing
arrangement by and among Borrowers, Guarantors and Lender, or any of them.
6. Borrowers and Guarantors acknowledge and agree that Lender has a
valid and duly perfected security interest in and to the Collateral, which
includes the property described in Exhibit 1 attached hereto. To secure the
obligations of Borrowers and Guarantors under the Loan Documents and this
Agreement, including for the Liabilities which includes the New Advances,
Borrowers and Guarantors ratify and reaffirm their prior pledges under the Loan
Documents, including the Amended and Restated Loan and Security Agreement,
Deposit Account Pledge, Control Agreement, CD Pledge, Florida Mortgage, Florida
Assignment of Rents, New Mexico Mortgage, and New Mexico Assignment of Rents,
and they further re-pledge and grant to Lender a lien and security interest in
the Collateral as described in Exhibit 1 attached hereto, including but not
limited to, as to Borrowers and Hall Enterprises, Inc. all inventory (new and
used vehicles and boats and parts and accessories), fixtures, equipment,
accounts, chattel paper, instruments, and general intangibles, whether now or
hereafter existing, and the CD and Deposit Accounts as to all Borrowers and
Guarantors to the extent of their interests therein, and all replacements,
substitutions, and additions thereto and the proceeds of any of the foregoing.
To the extent necessary, this Agreement constitutes an amendment to the Account
Pledge, CD Pledge, and Control Agreement.
7. Subject to strict compliance by Borrowers and Guarantors with the
terms of this Agreement and there being no further material defaults under the
Loan Documents and none of Borrowers or Guarantors have commenced or have
commenced against them any insolvency proceeding or have instituted against
Lender any legal proceedings, Lender agrees to forebear from enforcing any of
its rights and remedies through January 23, 2002 at 5:00 p.m. (eastern standard
time) (the "Extension Date"). Absent Lender's execution of a written agreement
further extending the forbearance beyond the Extension Date (Borrowers and
Guarantors acknowledge that Lender has no obligation whatsoever to extend the
same), all sums due and owing Lender at that time, including all amounts due
under the Loan Documents and this Agreement shall be fully due and payable
without further notice or demand and Lender shall be entitled to exercise all of
its rights and remedies under the Loan Documents, this Agreement, at law and in
equity.
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8. Provided no further default under the Loan Documents or a breach
of this Agreement, Lender waives right to access and collect default interest
due to the defaults and failure to pay all sums when due at the Termination
Date, and Lender agrees, subject to the terms of this Agreement and the advance
conditions of the Loan Documents, to make advances to up to two million dollars
($2,000,000.00) dollar-for-dollar to the extent of New Equity actually received
by the Borrowers, with the advances being available solely for the purchase of
new, approved inventory.
9. On or before January 9, 2002 at 6:00 p.m. (eastern standard
time), Borrowers or Guarantors shall pay down the current "sold and unpaid"
amount outstanding to no more than $485,000 and they further agree and covenant
that the amount of "sold and unpaid inventory thereafter through the Extension
Date shall not exceed $485,000 at all times.
10. Borrowers and Guarantors further agree that units of inventory
subject to curtailment shall at all times through the Extension Date be less
than or equal to three million, two hundred thousand dollars ($3,200,000.00).
11. For any inventory financed by Lender, Borrowers and Guarantors
further agree to cause any proceeds from indirect or retail lenders of customers
of Borrowers and Guarantors to fund and pay directly to Lender all sums which
otherwise would be payable to any of them, and such payments shall be made by
said indirect or retail lenders by wire or such other form of payment acceptable
to Lender to the following address: c/o Banc of America Specialty Finance, Inc.,
attention Xxxxx Xxxxxx, XX 0000000, 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxx
00000 (800) 876-8544, extension 2950. If any Borrower or Guarantor receives a
payment from a retail or indirect lender which is required to be made to Lender
under this provision, an authorized official of the Borrowers or Guarantors, as
applicable, shall immediately cause said sums to be transferred to Lender by
wire transfer or check but in no event later than the next business day.
12. On or before the day prior to the Extension Date at 5:00 p.m.
(eastern standard time), Borrowers and Guarantors shall deliver at their expense
to Lender c/o Xxxxxx X. Xxxxxx xxxx flow projections and pro forma balance sheet
and income statements with prior year same-store comparisons regarding the
operations of the foregoing entities for the next 12 months and promptly provide
at their expense to Lender upon request, any other financial documentation and
information reasonably requested by Lender. Upon request, Borrowers and
Guarantors agree to provide at their expense copies of back-up documentation for
any financial information provided to Lender.
13. Borrowers and Guarantors shall permit Lender and its agents and
consultants to have access to the Collateral, the premises upon which Collateral
is situated, and their books and records at all times from and after the
Effective Date so that Lender can review and evaluate the Collateral and the
operations and financial condition of Borrowers and Guarantors and their
compliance with the terms of the Loan Documents and this Agreement. Lender
agrees not to unreasonably interfere with the operations of Borrowers and
Guarantors during the forbearance period, absent a further default under the
Loan Documents or a breach of this Agreement.
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14. Borrowers and Guarantors also agree that all contracts,
agreements, instruments and documents between them and Lender, including but not
limited to the Loan Documents in this agreement, are and shall be governed by
and construed under the internal laws of the State of Florida, without
application of or regard to any conflicts of laws rules to the fullest extent
permitted by law.
15. Nothing herein shall be deemed to make Lender and any Borrower
or Guarantor partners, co-venturers or co-participants of any kind or nature in
any business or obligation of the other or make Lender a mortgagee in
possession.
16. Each of Borrowers and Guarantors represents and warrants that it
has taken all corporate action, including any approval of its respective
shareholders and directors, necessary to its execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby and the
performance of their respective obligations hereunder, and each of them has
entered into this Agreement fully understanding its terms and conditions and
voluntarily and without duress and with the advice of counsel.
17. In addition to the other conditions provided for herein,
Lender's obligation to forbear or advance funds hereunder is subject to (a)
Borrowers and Guarantors having received the infusion of New Equity, (b) there
being no material adverse change to the financial condition of Borrowers and
Guarantors from January 7, 2002 through the date hereof date, (c) satisfaction
of the obligation under paragraph 10, and (d) the Loan Documents and this
Agreement shall remain in full force and effect and the security interests
created thereunder and hereunder remaining valid and perfected at all times.
18. Borrowers and Guarantors agree to be liable for the actual
attorneys' fees and expenses (including but not limited to audit fees,
appraisals, security, receiver fees) incurred by Lender: (a) from November 30,
2001 through the execution of this Agreement in connection with the defaults,
negotiating, drafting, and closing this Agreement up to the amount of $10,000.00
("Lender's Expenses"), and (b) after execution of this Agreement in connection
with the enforcement of Lender's rights and remedies, including fees and
expenses incurred in collecting or liquidating the Collateral. Borrowers and
Guarantors agree to pay Lender's Expenses on or before the Extension Date.
19. Guarantors, including Hall Enterprises, Inc., consent to and
join in this Agreement and agree to bound by its terms and conditions.
20. This Agreement constitutes the entire understanding and
agreement between the parties hereto, and shall be binding on the successors and
assigns of each of Borrowers and Guarantors and shall inure to the benefit of
Lender and its successors and assigns.
21. This Agreement may be executed in counterpart and each of the
counterparts shall be effective and enforceable.
22. The parties hereby waive any right to jury trial with respect to
any dispute arising out of this Agreement and agree that any litigation arising
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out of or pertaining to this Agreement shall be brought exclusively in the
Circuit Court for Hillsborough County, Florida except with respect to actions
required to brought in the jurisdiction where Collateral is located for purposes
of enforcing rights against that Collateral.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
"Borrowers"
HOLIDAY RV SUPERSTORES, INC.
By_______________________________________
Name: ________________________________
Title: _______________________________
HOLIDAY RV SUPERSTORES OF SOUTH CAROLINA, INC.
By_______________________________________
Name: ________________________________
Title: _______________________________
HOLIDAY RV SUPERSTORES WEST, INC.
By_______________________________________
Name: ________________________________
Title: _______________________________
HOLIDAY RV SUPERSTORES OF NEW MEXICO, INC.
By_______________________________________
Name: ________________________________
Title: _______________________________
HALL ENTERPRISES, INC.
By_______________________________________
Name: ________________________________
Title: _______________________________
"Lender"
BANC OF AMERICA SPECIALTY FINANCE, INC.
By_______________________________________
Name: ________________________________
Title: _______________________________
BANK OF AMERICA, N.A.
By_______________________________________
Name: ________________________________
Title: _______________________________
"GUARANTORS"
HOLIDAY RV RENTAL/LEASING, INC.
By______________________________________
Name: _______________________________
Title:_______________________________
LITTLE VALLEY AUTO & RV SALES, INC.
By_______________________________________
Name: ________________________________
Title: _______________________________
HALL ENTERPRISES, INC.
By_______________________________________
Name: ________________________________
Title: _______________________________
HOLIDAY RV ASSURANCE SERVICE, INC., F/K/A HOLIDAY RV ASSURANCE CORPORATION
By_______________________________________
Name: ________________________________
Title: _______________________________
RECREATION USA INSURANCE CORPORATION
By_______________________________________
Name: ________________________________
Title: _______________________________
