SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Second Amendment to Loan and Security Agreement (the "SECOND
AMENDMENT") dated as of this 3rd day of June, 1997 is by and between (i) SEA
GARDENS BEACH AND TENNIS RESORT, INC., a Florida corporation whose address is
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 ("SEA
GARDENS, INC."), (ii) VACATION BREAK RESORTS, INC., a Florida corporation, whose
address is 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxx Plaza, Suite 200, Fort Lauderdale,
Florida 33309, ("VBR, INC."), and (iii) VACATION BREAK RESORTS AT STAR ISLAND,
INC., a Florida corporation whose address is 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxx
Xxxxx, Xxxxx 000. Xxxx Xxxxxxxxxx, Xxxxxxx 00000, ("STAR ISLAND, INC.") and
XXXXXX FINANCIAL, INC., a Delaware corporation whose address is 000 Xxxx Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 ("LENDER"). All references herein to
"Borrower" shall be deemed separate, individual references to each of Sea
Gardens, Inc., VBR, Inc. and Star Island, Inc. respectively.
R E C I T A L S:
WHEREAS, Lender and Borrower previously entered into a Loan and
Security Agreement dated as of December 19, 1995 (the "Loan Agreement");
WHEREAS, Lender and Borrower previously entered into an Amendment to
Loan and Security Agreement dated as of April 30, 1997 (the "Amendment");
WHEREAS, The parties wish to further amend the Loan Agreement on the
terms and conditions set forth herein;
NOW, THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, the parties hereto hereby amend the Loan Agreement
as follows:
1. All capitalized terms used herein, but not defined, shall have the
meanings ascribed to them in the Loan Agreement.
2. Section 2.2 of the Loan Agreement is deleted in its entirety and the
following new section is inserted in lieu thereof:
2.2 TERM. The Loan shall be for a term of One Hundred
Twenty-Four (124) full months plus the number of days from the
Closing Date to the end of the month in which the Closing Date
occurs.
3. Section 6.8 of the Loan Agreement is deleted in its entirety and the
following, new section is inserted in lieu thereof:
6.8 NET WORTH. Corporate Guarantor agrees to maintain a
minimum net worth. determined in accordance with GAAP, of
Fifteen Million Dollars ($1S,000,000.00) at all times that
the Indebtedness is outstanding or Lender is obligated to make
Advances. Borrower agrees to maintain a net profit margin on
all timeshare sales operations of ten (10%) percent (earnings,
calculated before income taxes and excluding earnings from
minority interest, less actually incurred expenses).
4. Section 7.8 of the Loan Agreement is deleted in its entirety and the
following new section is inserted in lieu thereof:
7.8 MAXIMUM LOAN AMOUNT. At no time shall Lender be required
to make additional Advances to Borrower pursuant to the terms
and conditions of the Agreement so that the outstanding
principal balance under Borrower's Twenty Five Million Dollar
($25,000,000.00) Promissory Note and Borrower's Eight Million
Dollar ($8,000,000.00) Promissory Note exceed Twenty Five
Million Dollars ($25,000,000.00) in the aggregate.
5. Section 11.1 of the Loan Agreement is amended by inserting the
following new notice address for Lender:
Notice to Lender: Xxxxxx Financial, Inc.
Xxxxxx Sales Finance
Attn: Portfolio Manager, Vacation
Ownership Group
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
With a copy to: Xxxxxx Financial, Inc.
Xxxxxx Sales Finance
Attn: General Counsel
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
6. Section 11.18 of the Loan Agreement is amended by adding the
following new paragraph at the end thereof:
In addition to the original Commitment Fee equal to One
Hundred Fifty Thousand Dollars ($150,000.00) and as a condition to the
execution of this Second Amendment by Lender, Borrower shall pay to
Lender an additional Commitment Fee equal to One Hundred Thousand
Dollars ($100,000.00) which Commitment Fee is in consideration of
Lender's agreement to enter into the Second Amendment increasing the
Loan amount by an additional Ten Million Dollars ($ 10,000,000.00)
subject to the terms and conditions set forth herein and which amount
Borrower agrees Lender has earned of which
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$50,000.00 has already been earned and paid to Lender, with the
remaining being paid once the loan balance is Twenty Million Dollars
($20,000,000.00).
7. The definition of "AVAILABILITY" appearing in the APPENDIX is
amended by deleting the references to "Fifteen Million Dollars" appearing in
subsections (a)(iii) and (b)(i) of the definition of "AVAILABILITY" and the new
references to "Twenty Five Million Dollars" are inserted in lieu thereof.
8. The definition of "CONSTRUCTION LENDER" appearing in the APPENDIX is
deleted in its entirety and the following new definition of "CONSTRUCTION
LENDER" is inserted in lieu thereof:
CONSTRUCTION LENDER. Textron Financial, Inc. for Vacation Break Resorts
at Star Island I, a Condominium and Vacation Break Resorts at Star
Island II; Colonial Bank for Vacation Break Resorts at Star island III;
and Sun Trust Bank, South Florida, National Association for the Sea
Gardens Resort and the Santa Xxxxxxx Resort.
9. The definition of "DECLARATION" appearing in the Appendix is amended
by adding the following new Declaration at the end thereof:
(vii) the Declaration of Fort Lauderdale Beach Resort dated
____________ and recorded in Book _______, Page _______, Document
______ of the official records of _____________ County, Florida is now
and hereafter amended or restated.
10. Paragraph (b) within the definition of "ELIGIBLE NOTE RECEIVABLE"
appearing in the APPENDIX is amended by deleting the last two (2) lines of the
paragraph and inserting the following language thereof:
at another timeshare resort and at least two timely monthly payments
have been received;
11. Paragraph (d) within the definition of "ELIGIBLE NOTE RECEIVABLE"
appearing in the APPENDIX is amended by deleting the first three (3) lines of
the paragraph and inserting the following language in lieu thereof:
(d) The weighted average interest rate on all Financed Notes
Receivable is not less than 13.5% per annum; provided, however, a
maximum of ten percent (10%) of the total notes
12. A new paragraph (aa) is inserted in the definition of "ELIGIBLE
NOTE RECEIVABLE" appearing in the APPENDIX as follows:
(aa) Anything contained herein to the contrary notwithstanding, a Note
Receivable relating to the Fort Lauderdale Beach Resort shall not be
considered an Eligible Note Receivable until such time as Lender has
reviewed and approved all documentation relating to the Fort Lauderdale
Beach Resort including but not limited to the following: (i) survey;
(ii) management and other agreements; (iii)
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compliance documents; (iv) evidence of insurance, (v) title insurance;
(vi) Phase I environmental report; (vii) consumer purchase documents,
(viii) Declaration and Public Offering Statement and (ix) and such
other agreements, documents, instruments and certificates as Lender may
request concerning the Fort Lauderdale Beach Resort.
13. The definition of "ESCROWED SALE AVAILABILITY" appearing in the
APPENDIX is deleted in its entirety and the following new definition of
"ESCROWED SALE AVAILABILITY" is inserted in lieu thereof:
ESCROWED SALE AVAILABILITY. Advances may be made as follows for the
purpose of financing Escrowed Sales during the Revolving Period. With
respect to Escrowed Sales at Star Island Resort, the lesser of (i)
Eight Million Dollars ($8,000,000) minus outstanding Advances
previously made to finance Escrowed Sales at Star Island Resort, or
(ii) an amount equal to sixty-five percent (65%) of the sales price of
each Interval which is the subject of a Financed Note Receivable to be
assigned to Lender in connection with any then current Advance for the
purpose of financing Escrowed Sales at Star Island Resort.
After expiration of the Revolving Period, Escrowed Sales Availability
shall be zero.
14. A new definition of "FORT LAUDERDALE RESORT" is inserted in the
APPENDIX as follows:
FORT LAUDERDALE RESORT. That certain timeshare vacation resort located
in Fort Lauderdale, Florida on the land more particularly described in
Exhibit D, commonly known as the Fort Lauderdale Beach Resort,
including, all related common elements, limited common elements,
parking areas and other amenities as established by the Declaration.
15. The definition of "INTEREST RATE" appearing in the APPENDIX is
deleted in its entirety and the following new definition of "INTEREST RATE" is
inserted in lieu thereof:
INTEREST RATE. A floating rate per annum equal to the Base Rate plus
three and three-quarters percent (3.75%) (the aggregate rate referred
to as the "Interest Rate"). "Base Rate, shall mean the rate published
each business day in THE WALL STREET JOURNAL for notes maturing three
(3) months after issuance under the caption "Money Rates, London
Interbank Offered Rates (LIBOR)". The Interest Rate for each calendar
month shall be fixed based upon the Interest Rate published prior to
and in effect on the first (1st) business day of such month. Interest
shall be calculated based on a 360 day year and charged for the actual
number of days elapsed.
16. The definition of "RESORT" appearing in the Appendix is deleted in
its entirety and the following new definition of "RESORT" is inserted in lieu
thereof:
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RESORT. Each of the Sea Gardens Resort, Santa Xxxxxxx Resort, the Star
Island Resort and Fort Lauderdale Resort, respectively.
17. The definition of "REVOLVING PERIOD" appearing in the APPENDIX is
deleted in its entirety and the following new definition of "REVOLVING PERIOD"
is inserted in lieu thereof:
"REVOLVING PERIOD" means the period commencing on the Closing Date and
ending on May 31, 1999.
18. FURTHER ASSURANCES. Borrower shall execute and deliver to Lender
such additional documents and agreements as may be reasonably required by Lender
and its counsel from time to time to evidence and secure the Loan and to
evidence, perfect and preserve the obligations of Borrower and the Guarantor
pursuant to this Second Amendment and the other Loan Documents. In the event of
any inconsistency between this Second Amendment and the other Loan Documents,
the provisions of this Loan Agreement shall prevail and control.
19. RATIFICATION BY BORROWER. Borrower hereby ratifies and confirms the
Loan Documents amended pursuant hereto, and agrees that as modified pursuant
hereto, the Note, and the other Loan Documents are, and continue to be, in full
force and effect and are enforceable in accordance with their respective terms.
Borrower hereby incorporates by reference all covenants, warranties and
representations contained in the Loan Documents and reaffirms such covenants,
warranties and representations as of the date hereof:
20. RATIFICATION AND REAFFIRMATION BY GUARANTORS. Each of the
Guarantors hereby (a) reaffirms that it/he is legally and validly indebted to
the Lender pursuant to and in accordance with the Guaranty, (b) acknowledges and
consents to the Guaranty and the Loan Documents in accordance with the terms
hereof (c) acknowledges and affirms that the Guaranty remains in full force and
effect. Any references in the Guaranty Agreement to the Loan shall mean the Loan
as amended and affected pursuant hereto.
21. RATIFICATION AND _REAFFIRMATION BY SUBORDINATING CREDITORS. Each of
the Subordinating Creditors hereby (a) reconfirms the covenants and obligations
contained in the Subordination Agreement with respect to any and all amounts at
any time owing by Borrower to Lender under the Loan Agreement as amended herein
(b) acknowledges and consents to the Subordination Agreement and the Loan
Documents in accordance with the terms hereof (c) acknowledges and affirms that
the Subordination Agreement remains in full force and effect. Any references in
the Subordination Agreement to the Loan shall mean the Loan as amended and
affected pursuant hereto.
22. CONFIRMATION OF HAZARDOUS MATERIALS INDEMNITY AGREEMENT. The
Principals each hereby (a) ratify and confirm all of their respective covenants
and obligations under the Hazardous Materials Indemnity Agreement given by the
Principals in favor of Lender and (b) acknowledge that all obligations
thereunder remain in full force and effect. Any references in the Hazardous
Materials Indemnity Agreement to the Loan shall mean the Loan as amended and
affected pursuant hereto.
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23. NO WAIVER. Execution of this Second Amendment by Lender shall be
without prejudice to Lender's rights at any time in the future to exercise any
and all rights conferred upon it by any of the Loan Documents in accordance with
their original terms as previously and hereby amended. Neither this Second
Amendment nor any provision hereof or of any other documents modifying the Loan
Documents shall constitute, or shall be construed to constitute, a waiver of any
default, right, or remedy of Lender under the Note or the other Loan Documents
subsequent to the date hereof. Any failure by Lender at any point in time during
the term of the Note, the other Loan Documents or this Second Amendment to
insist upon strict and timely compliance with the terms and provisions of each
such document shall not be deemed a waiver either expressly or impliedly by
Lender of any of its rights, under any such document, not shall the same excuse
Borrower's obligation to strictly and timely perform its obligations hereunder
and thereunder.
24. RELEASE. The Borrower and each Guarantor, by execution of this
Second Amendment, hereby declare that as of this date it has no claim, set-off,
counterclaim, defense' or other cause of action against Lender including, but
not limited to, a defense of usury, any claim or cause of action at common law,
in equity, statutory or otherwise, in contract or in tort, for fraud,
malfeasance, misrepresentation, financial loss, usury, deceptive trade practice,
or any other loss, damage or liability of any kind, including without limitation
any claim for exemplary or punitive damages arising out of any transaction
between Borrower, Guarantors, Subordinating Creditors, Principals and Lender in
connection with the Loan, the Note or any of the other Loan Documents, any
security therefore or this Second Amendment, or any document mentioned herein.
Further, to the extent that any such set-off, counterclaim, defense, or other
cause of action may exist or might hereafter arise based on facts known or
unknown which exist as of this date, such set-off, counterclaim, defense and
other cause of action is hereby expressly and knowingly waived and released by
Borrower and Guarantor.
25. COUNTERPARTS. This Loan Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
26. APPLICABLE LAW. The validity and effect of this Second Amendment
shall be governed by and construed in accordance with the laws of the State of
Illinois applicable to contracts to be performed in that state.
27. EFFECTIVE DATE. This Second Amendment shall not be effective until
a fully executed copy of this Second Amendment has been executed by all parties
and delivered to Lender.
28. MODIFICATIONS SEVERABILITY. There are and were no oral or written
representations, warranties, understandings, stipulations, agreements, or
promises made by either party, or by any agent. employee, or other
representative of either party, pertaining to the subject matter of this Second
Amendment which have not be incorporated into this Second Amendment. This Second
Amendment shall not be modified, changed, terminated, amended, superseded,
waived, or extended except by a written instrument executed by the parties
hereto. If any term, covenant, or condition of this Second Amendment is held to
be invalid, illegal, or unenforceable as to a
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particular person, entity, or situation, this Second Amendment shall, at the
option of Lender, be construed and enforced without such provision, but will
otherwise be enforced to the fullest extent permitted by law as to such person,
entity, or situation, and this Second Amendment will also be enforced to the
fullest extent permitted by law as to any other person, entity, or situation.
Except as specifically modified by the terms of this Second Amendment, the Note,
the Guaranty and all of the remaining Loan Documents shall not be affected by
this Second Amendment and each shall remain in full force and effect. This
Second Amendment does not constitute the extinguishment of the debt evidenced by
the Note before modification. Nothing herein contained shall be construed to
impair Lender's security under Loan Documents nor to limit or impair any rights
or powers that Lender now enjoys or may hereafter enjoy under the Loan Documents
for recovery of the indebtedness secured thereby.
29. FEES AND EXPENSES. Each Borrower agrees that it is responsible for
all costs, expenses and fees, including, but not limited to, reasonable Lender's
attorneys' fees and all title insurance costs, in connection with this Second
Amendment, the administration of the Loan Documents and this Second Amendment
and enforcement actions with respect thereto.
30. WARRANTIES AND REPRESENTATIONS OF BORROWER. Each Borrower hereby
warrants and represents to the Lender that:
(a) the persons executing this Second Amendment on behalf of
Borrower have full authority to execute this Second Amendment on behalf
of Borrower and to bind Borrower thereby;
(b) the execution and delivery by Borrower of this Second
Amendment and the performance thereunder by Borrower has not and will
not result in a breach of, or constitute a default under, any mortgage,
lease, bank loan, credit arrangement, or other instrument or agreement
to which either Borrower is a party or by which either Borrower or the
property security the Loan may be bound or affected;
(c) all covenants and representations made by the Borrower in
the Loan Documents and all recitals and representations made in this
Second Amendment and other Loan Documents evidencing or securing this
Second Amendment are true and accurate as of the date hereof;
(d) Borrower is a corporation duly organized and validly
existing under the laws of the State of Florida,
(e) there exists no action, suit, proceeding or investigation
at law or in equity before any court, public board or body pending or
threatened against or affect Borrower or the property securing the Loan
wherein an unfavorable decision, ruling or finding would materially
adversely affect the business, operations, properties or financial
condition of Borrower or the property securing the Loan;
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(f) since the date of the Loan, there has been no material
adverse change in the condition, financial or otherwise, of the
Borrower, except as has been disclosed to Lender by the Borrower;
Borrower has filed all tax returns which are required by federal or
state law to be filed and has paid all of the Borrower's taxes that
have become due, no material adverse change has occurred in connection
with the property securing the Loan, except as has been disclosed to
Lender by the Borrower; the Borrower has not been involved as a debtor
in any bankruptcy, reorganization or insolvency proceeding, or in any
proceeding seeking the appointment of receiver, conservator,
liquidating agent or similar person for all or a substantial portion of
the properly owned by Borrower has not made an assignment for the
benefit of creditors or taken any other similar action for the
protection or benefit of creditors. As used herein, the term "material
adverse change" shall mean a severe financial reversal which could be
reasonably expected to create the possibility that the Borrower would
become insolvent within a period of two (2) years from the date hereof,
(g) all financial statements delivered to the Lender were true
and accurate as of the date of delivery to Lender;
(h) the execution, delivery and performance by the Borrower of
this Second Amendment, the Note and other Loan Documents, as amended as
of the date hereof, have been duly and validly authorized and all
consents and approvals which are necessary for authorization, binding
effect, performance, and enforceability of this Second Amendment, the
Note and the remaining Loan Documents have been received.
IN WITNESS WHEREOF, the parties lave executed this Second Amendment to
Loan and Security Agreement as of the date first written above.
WITNESSES: BORROWER AND PRINCIPALS
SEA GARDENS BEACH AND TENNIS
RESORT, INC.
______________________________
Name: By: /S/ XXXXX X. CAIRO
----------------------
Xxxxx X. Cairo
Its: COO/CFO
______________________________ Duly Authorized
Name:
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VACATION BREAK RESORTS, INC.
______________________________
Name:
By: /S/ XXXXX X. CAIRO
______________________________ ----------------------
Name: Xxxxx X. Cairo
Its: COO/CFO
Duly Authorized
VACATION BREAK RESORTS AT
STAR ISLAND, INC.
______________________________
Name:
By: /S/ XXXXX X. CAIRO
______________________________ ----------------------
Name: Xxxxx X. Cairo
Its: COO/CFO
Duly Authorized
PRINCIPALS AND CONTINUING
GUARANTORS:
VACATION BREAK USA, INC.
______________________________
Name:
By: /S/ XXXXX X. CAIRO
______________________________ ----------------------
Name:
Its:
Duly Authorized
XXXXX X. XXXXXX
______________________________
Name:
______________________________ By:_________________________
Name:
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SUBORDINATING CREDITORS:
VACATION BREAK, U.S.A., INC.
______________________________
Name:
By: /S/ XXXXX X. CAIRO
______________________________ --------------------------
Name: Its:__________________
Duly Authorized
ATLANTIC MARKETING REALTY, INC.
______________________________
Name:
By: /S/ XXXXX X. CAIRO
______________________________ -------------------------
Name: Its:_________________________
Duly Authorized
XXXXX X. XXXXXX
______________________________
Name:
______________________________ By:_________________________
Name:
LENDER:
XXXXXX FINANCIAL, INC.
______________________________
Name:
______________________________ By:___________________________
Name: Its:__________________________
Duly Authorized
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XXXXX XX XXX XXXX )
)ss.:
COUNTY OF ________ )
The foregoing instrument was acknowledged before me this 3rd day of
June, 1997 by Xxxxx X. Cairo, COO/CFO of Sea Gardens Beach and Tennis Resort,
Inc., a Florida corporation on behalf of the corporation.
________________________________
Notary Public
My Commission Expires:__________
STATE OF NEW YORK )
)ss.:
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this 3rd day of
June, 1997 by Xxxxx X. Cairo, COO/CFO of Vacation Break Resorts, Inc., a Florida
corporation on behalf of the corporation.
________________________________
Notary Public
My Commission Expires:__________
STATE OF NEW YORK )
)ss.:
COUNTY OF ______ )
The foregoing instrument was acknowledged before me this 3rd day of
June, 1997 by Xxxxx X. Cairo, COO/CFO of Vacation Break Resorts at Star Island,
Inc., a Florida corporation on behalf of the corporation.
________________________________
Notary Public
My Commission Expires:__________
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XXXXX XX XXX XXXX )
)ss.:
COUNTY OF )
The foregoing, instrument was acknowledged before me this 3rd day of
June, 1997 by Xxxxx X. Cairo of Vacation Break, U.S.A., Inc. a Florida
corporation on behalf of the corporation.
________________________________
Notary Public
My Commission Expires:__________
STATE OF NEW YORK )
)ss.:
COUNTY OF _______ )
The foregoing instrument was acknowledged before me this 3rd day of
June, 1997 by Xxxxx X. Xxxxxx.
________________________________
Notary Public
My Commission Expires:__________
STATE OF NEW YORK )
)ss.:
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this 3rd day of
June, 1997 by Xxxxx X. Cairo, COO/CFO of Atlantic Market Group, Inc., a Florida
corporation on behalf of the corporation.
________________________________
Notary Public
My Commission Expires:__________
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XXXXX XX XXXXXXXX )
)ss.:
COUNTY OF XXXX )
The foregoing instrument was acknowledged before me :his 3rd day of
June, 1997 by Xxxxx Xxxxxx of Xxxxxx Financial, Inc., a Delaware corporation on
behalf of the corporation.
________________________________
Notary Public
My Commission Expires:__________
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