EXHIBIT 7.38
THIRD AMENDMENT TO CREDIT AGREEMENT
AND NOTES
THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND NOTES ("Amendment") is entered
into as of November 30, 2002 (the "Amendment Date"), by and between IMAGINE
INVESTMENTS, INC., a Delaware corporation ("Lender"), whose address is ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and RIVERSIDE GROUP,
INC., a Florida corporation ("Borrower"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, On or about April 1, 1999, Borrower borrowed the aggregate sum of
Ten Million Dollars ($10,000,000) from several different entities (collectively,
the "Original Note Holders" and each individually, an "Original Note Holder")
pursuant to a Credit Agreement dated as of April 1, 1999 (the "Credit
Agreement") and a promissory note made by Borrower in favor of each Original
Note Holder (collectively, the "Original Notes" and each individually, an
"Original Note");
WHEREAS, On or prior to June 25, 2002, Lender purchased or otherwise
acquired from the Original Note Holders all of their respective rights, titles
and interests in the Original Notes (collectively, the "Notes" and each
individually, a "Note"), the Credit Agreement, all other loan documents and
security documents related thereto (collectively, the "Loan Documents") and the
collateral securing the Notes;
WHEREAS, on June 25, 2002, Lender and Borrower entered into an Amendment to
Credit Agreement and Notes (the "First Amendment"), wherein the Lender agreed to
renew and extend the maturity of the indebtedness, liabilities and obligations
(the "Indebtedness") evidenced by the Notes and the other Loan Documents to
September 30, 2002; and
WHEREAS, Borrower has requested and, subject to the terms and conditions of
this Amendment, Lender has agreed to renew and extend the maturity of the
Indebtedness evidenced by the Notes and the other Loan Documents to January 31,
2003.
NOW, THEREFORE, notwithstanding anything to the contrary contained in the
Notes 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 Credit Agreement and the First
Amendment.
2. Reaffirmation of Indebtedness. Borrower and Lender hereby acknowledge
and confirm that: (a) the outstanding principal balance of and accrued interest
on the Indebtedness as of the Amendment Date is $12,243,598.10, (b) Borrower's
obligation to repay the outstanding principal balance and accrued interest of
each 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 Notes 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. Notwithstanding anything to the contrary contained in the
Notes or the other Loan Documents, the interest on the unpaid principal of the
Indebtedness continues to accrue at the rate of eleven percent (11%) per annum,
effective as of September 30, 2000, until all of the Indebtedness
AMENDMENT TO CREDIT AGREEMENT AND NOTES Page 1
(including, without limitation, principal and interest) is indefeasibly paid in
full. The Lender and the Borrower hereby reaffirm this amendment.
4. Extension of Maturity Date. Each of the Notes and the other Loan
Documents is hereby amended to extend the maturity date of the Indebtedness
(regardless of the stated date of the maturity of the Indebtedness for such Note
or Loan Document) to January 31, 2003, at which time all Indebtedness
(including, without limitation, principal and interest) shall become due and
payable in full.
5. Reinstatement of Notes 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 Default
or Event of Default or any other default or event of default that has occurred
and is continuing under any of the Notes or the other Loan Documents hereby
agrees to take no action with respect to any such Default or Event of Default or
any other default or event of default that has occurred and is continuing under
any of the Notes or the other Loan Documents which heretofore has occurred,
until January 31, 2003. Borrower and Lender hereby agree that the Notes and the
Loan Documents are fully reinstated in accordance with their terms and
conditions, as amended, by this Amendment, as if no Default or Event of Default
or any other default or event of default that has occurred and is continuing
under any of the Notes or the other Loan Documents had occurred in the payment
of the Indebtedness prior to the date of this Agreement, but no later than
January 31, 2003. 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 Credit 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
Notes and the other Loan Documents as amended through even date herewith shall
remain in full force and effect and such Notes 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 Notes as modified by this Agreement and the
AMENDMENT TO CREDIT AGREEMENT AND NOTES Page 2
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 Notes and the other Loan Documents, as amended by this Amendment;
(c) the Notes 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 any of the Notes, 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.
AMENDMENT TO CREDIT AGREEMENT AND NOTES Page 3
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 NOTES 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 November 30, 2002.
LENDER:
IMAGINE INVESTMENTS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President
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BORROWER:
RIVERSIDE GROUP, INC.,
a Florida corporation
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Senior Vice President and CFO
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