THIRD MODIFICATION AGREEMENT
(AD&C Loan Agreement)
THIS THIRD MODIFICATION AGREEMENT (AD&C Loan Agreement) ("Third
Modification Agreement"), dated effective as of the 15th day of February, 2006
("Effective Date"), is entered into by and between BLUEGREEN VACATIONS
UNLIMITED, INC., a Florida corporation ("BVU") and BLUEGREEN/BIG CEDAR
VACATIONS, LLC, a Delaware limited liability company ("BCV" and collectively
with BVU, "Borrower") and RESIDENTIAL FUNDING CORPORATION, a Delaware
corporation ("Lender") with respect to the Loan Documents defined below.
R E C I T A L S:
A. BVU and Lender are parties to that certain Loan Agreement dated as of
February 10, 2003, as amended by a Modification Agreement dated as of September
10, 2003, as amended by letter agreement dated as of September 10, 2003 and as
amended by a Second Modification Agreement dated as of September 15, 2004
(collectively, "Loan Agreement"), pursuant to which Lender agreed to make a
revolving acquisition, development and construction loan to Borrower on the
terms and conditions set forth therein in a maximum principal amount of
$75,000,000 ("Loan"). BCV agreed to become a borrower under and to be bound by
the terms of the Loan Agreement and to be jointly and severally liable for the
Loan pursuant to that certain Project Commitment (Big Cedar Wilderness Club)
dated October 10, 2003 between Borrower and Lender ("Big Cedar Project
Commitment"). BCV's monetary liability under the Loan, however, is limited
pursuant to the terms of the Big Cedar Project Commitment as provided therein.
The documents executed in connection with the Loan are collectively referred to
herein as the "Loan Documents." All terms used herein with initial capital
letters, unless otherwise defined herein, shall have the same meanings given
such terms in the Loan Agreement.
B. Bluegreen Corporation, a Massachusetts corporation, executed a Full
Guaranty dated as of February 10, 2003 (as amended, "Guaranty") in favor of
Lender Guarantying the payment and performance of the obligations of Borrower
under the Loan Documents.
C. The total outstanding balance of the Loan presently owed by Borrower to
Lender as of February 10, 2006 is $35,605,695.57 ("Loan Balance"), plus any and
all accrued and unpaid interest thereon and certain costs and expenses of Lender
to the extent due and owing under the Loan Documents.
D. Borrower has requested that Lender modify the Loan and the other Loan
Documents to, among other things: (i) extend the Approval Period during which
new projects will be considered for approval for funding from proceeds of the
Loan, (ii) extend the Maturity Date applicable to the Loan, (iii) decrease the
margin applicable to the LIBOR rate of interest accruing on the Loan from 4.75%
to 4.50%, and (iv) increase the Loan Amount under the Loan Agreement from
$75,000,000 to $150,000,000. Lender is willing to so modify the Loan, the Loan
Agreement and the other Loan Documents, subject to the terms and conditions
herein.
E. All of the documents executed in connection with this Third
Modification
Agreement, inclusive of the Third Modification Agreement, shall be referred to
herein as the "Modification Documents."
A G R E E M E N T:
NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter stated, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Acknowledgement of Existing Indebtedness.
1.1 Borrower acknowledges that it is truly and justly indebted to Lender
in the amount of the Loan Balance, plus all accrued and unpaid interest on the
Loan and all other costs, fees and expenses that are, under the Loan Agreement
or the other Loan Documents, properly chargeable to Borrower.
1.2 Borrower acknowledges that, as of the date hereof, it has (i) no
defense, counterclaim, offsets, cross-complaint, claim or demand of any nature
whatsoever which can be asserted as a basis to seek affirmative relief or
damages from Lender or to reduce or eliminate all or any part of its liability
to repay the Loan, and (ii) no other claim against Lender with respect to any
aspect of the transactions in respect of which the Loan was made.
2. Modification to Loan Documents.
2.1 Modification of Loan Agreement: As material inducements to Lender to
enter into this Third Modification Agreement, and acknowledging Lender's
reliance upon such inducements, the parties agree that the Loan Agreement is
amended in the following respects:
(a) Modification of Definitions within Loan Agreement:
(i) The definition of the term "Approval Period Termination
Date" is hereby amended by deleting such definition in its entirety and
replacing and substituting in lieu thereof the following:
"Approval Period Termination Date" means the date which is 24
months after the Effective Date of this Third Modification
Agreement (i.e. February 15, 2008).
(ii) The definition of the term "Commitment Fee" is hereby
amended by deleting such definition in its entirety and replacing and
substituting in lieu thereof the following:
"Commitment Fee" means 3/4 of 1% of the Loan Amount, i.e.
$1,125,000, of which Borrower has paid $562,500 as of the
Effective Date of this Third Modification and the remainder of
which is required to be paid by Borrower on the dates set
forth in Section 2.4.
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(iii) The definition of the term "Interest Rate" is hereby
amended to mean the variable interest rate per annum equal to LIBOR plus
4.50%.
(iv) The definition of the term "Loan Amount" is hereby
amended to mean $150,000,000 (with the understanding that all references
in the Loan Agreement stating the prior acquisition, development and
construction loan amount of $75,000,000 is concurrently amended to read
$150,000,000).
(v) The definition of the term "Maturity Date" is hereby
amended by deleting such definition in its entirety and replacing and
substituting in lieu thereof the following:
"Maturity Date" means the first to occur of (i) the Project
Loan Repayment Date set forth in the last Project Commitment
incorporated into this Loan Agreement, (ii) the date which is
66 months from the Approval Period Termination Date or (iii)
any earlier date on which the Loan is accelerated or otherwise
required to be repaid pursuant to the terms of the Loan
Agreement.
(b) Modification of Loan Agreement Terms:
(i) Section 2.4 of the Loan Agreement is hereby amended by
deleting the existing Section 2.4 in its entirety and replacing and
substituting in lieu thereof the following Section 2.4:
Section 2.4 Commitment Fee
Lender acknowledges receipt of $562,500.00 of the Commitment
Fee as of the Effective Date of this Third Modification
Agreement. Borrower will pay to Lender the remaining amount of
the Commitment Fee 90 days from the Effective Date of this
Third Modification Agreement.
(ii) Section 5.5(2) of the Loan Agreement is hereby amended by
deleting the existing Section 5.5(2) in its entirety and replacing and
substituting in lieu thereof the following Section 5.5(2):
5.5(2) Ratio of Total Liabilities to Net Worth. At all times,
the ratio of the Debt of Bluegreen Corporation determined in
accordance with GAAP consistently applied on a consolidated
basis, not including non-recourse, receivables-backed debt of
up to $500 million and not including, but not limited to,
contingent liabilities, to its Net Worth shall not exceed
2.5:1.
2.2 Modification of Other Loan Documents. Without limiting Lender's right
to require that all other Loan Documents be expressly amended by a separate
instrument in order to effect the intent of this Third Modification Agreement,
all of the Loan Documents are hereby deemed to be amended to include this Third
Modification Agreement and the other Modification Documents with the additional
understanding and agreement that any reference to the Loan
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Amount shall be equal to $150,000,000.
3. Fees, Costs and Expenses.
Borrower agrees to pay to Lender all reasonable costs and expenses
incurred by Lender in connection with this Third Modification Agreement and the
other modification of the Loan Documents, including, without limitation,
attorneys' fees and expenses incurred. Such legal fees and expenses shall
include, without limitation, the costs associated with this Third Modification
Agreement. Borrower agrees to pay such costs and expenses to Lender immediately
upon the execution of this Third Modification Agreement.
4. Reaffirmation of Existing Security Interests. Borrower hereby confirms and
agrees that Lender's security interest in all of the collateral previously
pledged to Lender pursuant to the Loan Documents shall continue to secure the
payment and performance of all of Borrower's Obligations to Lender, as modified
by this Third Modification Agreement.
5. Representations, Warranties And Agreements Of Borrower. As material
inducements to Lender to enter into this Third Modification Agreement, and
acknowledging Lender's reliance upon the truth and accuracy thereof, Borrower
represents, warrants, acknowledges and agrees that to Borrower's actual, present
knowledge:
5.1 The recitals set forth above are true and correct.
5.2 All financial statements and other information delivered to Lender by
or on behalf of Borrower or Guarantor in connection with this Third Modification
Agreement were true and correct as of the respective dates thereof, and that
their has not been a Material Adverse Change in either of Borrower's or
Guarantor's financial condition since that presented by the latest financial
statements and other information provided to Lender. Lender acknowledges that
the financial restatements publicly disclosed in Guarantor's current report on
Form 8-K dated December 19, 2005 will not constitute a breach of Section 5.2 or
5.3 herein or Section 4.6 of the Loan Agreement.
5.3 As of the date hereof, no Event of Default or Incipient Default exists
with respect to the Loan Documents.
5.4 As of the date hereof, Borrower is not the subject of a pending
bankruptcy proceeding and Borrower is not aware of any threatened bankruptcy
proceeding against Borrower.
5.5 As of the date hereof, Guarantor is not the subject of a pending
bankruptcy proceeding, and Borrower is not aware of any threatened bankruptcy
proceeding against Guarantor.
5.6 There are no proceedings pending or threatened against or affecting
Borrower (or to the best of Borrower's knowledge, threatened against or
affecting Guarantor) in any court, before any governmental authority, or
arbitration board or tribunal which may result in a Material Adverse Change.
Lender acknowledges that Borrower has disclosed to Lender the proceeding
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filed by the State of Tennessee as disclosed in Guarantor's September 30, 2005
Form 10-Q.
5.7 All of the representations and warranties contained in the Loan
Agreement and the other Loan Documents are true and correct as of the date
hereof and are hereby reaffirmed and ratified.
5.8 This Third Modification Agreement and any documents and instruments
executed in connection herewith have been authorized by all necessary action and
when executed will be the legal, valid and binding obligations of Borrower.
5.9 Borrower's execution, delivery and performance of this Third
Modification Agreement does not and will not (i) violate any law, rule,
regulation or court order to which Borrower is subject, (ii) conflict with or
result in a breach of the articles of formation, bylaws, operating agreement,
partnership agreement or other formation document of Borrower or any agreement
or instrument to which Borrower is a party or by which its properties are bound,
or (iii) result in the creation or imposition of any lien, security interest or
encumbrance on any property of Borrower, whether now owned or hereafter
acquired, other than liens in favor of Lender.
5.10 Borrower acknowledges that Borrower has consulted with counsel and
with such other experts and advisors as it has deemed necessary in connection
with the negotiation, execution and delivery of this Third Modification
Agreement. This Third Modification Agreement shall be construed without regard
to any presumption or rule requiring that it be construed against the party
causing this Third Modification Agreement or any part hereof to be drafted.
5.11 All terms, conditions and provisions of the Loan Agreement, the
applicable promissory note and the other Loan Documents are hereby reaffirmed,
ratified and continued in full force and effect and shall remain unaffected and
unchanged except as specifically amended hereby.
6. Conditions Precedent To Effectiveness. The effectiveness of this Third
Modification Agreement is subject to the full and complete satisfaction of each
and every one of the following conditions precedent:
6.1 Lender shall have received the following documents duly executed and
in form and substance acceptable to Lender:
(a) this Third Modification Agreement;
(b) an Amendment No. 3 to the Note;
(c) a Consent and Agreement of Guarantor;
(d) Resolutions of Borrower and Guarantor authorizing the
execution of the Modification Documents;
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(e) an opinion from counsel to Borrower and Guarantor as to such
matters as Lender may require, which counsel shall be
reasonably satisfactory to Lender; and
(f) such other documents that Lender in its discretion may
require.
6.2 Lender shall have received from Borrower any amounts due to Lender
pursuant to Section 3 of this Third Modification Agreement.
7. Miscellaneous Terms.
7.1 Complete Agreement. Notwithstanding anything to the contrary contained
herein or in any other instrument executed by the parties and notwithstanding
any other action or conduct undertaken by the parties on or before the date
hereof, the agreements, covenants and provisions contained herein shall
constitute the only evidence of Lender's agreement to modify the Loan Agreement
and the other Loan Documents. Accordingly, no express or implied consent to any
further modifications shall be inferred or implied by Lender's execution of this
Third Modification Agreement. The Loan Agreement and this Third Modification
Agreement, together with the other Loan Documents, constitute the entire
agreement and understanding among the parties relating to the subject matter
hereof, and supersedes all prior proposals, negotiations, agreements and
understandings relating to such subject matter. In entering into this Third
Modification Agreement, Borrower acknowledges that it is relying on no
statement, representation, warranty, covenant or agreement of any kind made by
the Lender or any employee or agent of the Lender, except for the agreements of
Lender set forth herein.
7.2 No Waiver. Lender's execution of this Third Modification Agreement
shall not constitute a waiver (either express or implied) of the requirement
that any further modification of the Loan Agreement or of any other Loan
Document shall require the express written approval of Lender. No such approval
(either express or implied) has been given as of the date hereof.
7.3 Full Force and Effect; Conflict. Other than as specifically set forth
herein, the remaining terms of the Loan Agreement and the other Loan Documents
shall remain in full force and effect. Notwithstanding anything to the contrary
contained in the Loan Agreement or the other Loan Documents, in the event of a
conflict between the terms of this Third Modification Agreement (on the one
hand) and the Loan Agreement or other Loan Documents (on the other hand), the
terms of this Third Modification Agreement shall control. Nothing contained in
this Third Modification Agreement is intended to or shall be construed as
relieving any person or entity, whether a party to this Third Modification
Agreement or not, of any of such person's or entity's obligations to Lender.
7.4 Successors and Assigns. The Loan Documents as modified herein shall be
binding upon and shall inure to the benefit of Borrower and Lender and their
successors and assigns and the executors, legal administrators, personal
representatives, heirs, devisees, and beneficiaries of Borrower, provided,
however, Borrower may not assign any of its rights or delegate any of its
obligations under the Loan Documents and any purported assignment or delegation
shall be void.
7.5 Severability. If any one or more of the provisions of a Modification
Document is held to be invalid, illegal or unenforceable in any respect or for
any reason (all of which invalidating laws are waived to the fullest extent
possible), the validity, legality and enforceability of any
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remaining portions of such provision(s) in every other respect and of the
remaining provision(s) of such Modification Document shall not be in any respect
impaired. In lieu of each such unenforceable provision, there shall be added
automatically as a part of such Modification Document a provision that is legal,
valid and enforceable and is as similar in terms to such unenforceable
provisions as may be possible.
7.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same document. Signature pages may be
detached from the counterparts and attached to a single copy of this Third
Modification Agreement to physically form one document.
7.7 BCV Obligations. Nothing herein shall modify or increase BCV's
monetary obligations under the Loan to the extent that such obligations are
limited pursuant to Section 4 of the Big Cedar Project Commitment. Furthermore,
the parties acknowledge that pursuant to Section 7.4(c) of the Loan Agreement,
upon payment in full of the Project Loan issued under the terms of the Big Cedar
Project Commitment, the Project Security Instruments corresponding to the Big
Cedar Project Commitment shall be released provided that no Event of Default or
Potential Default shall exist under the Loan Agreement.
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DATED as of the date first above stated.
BORROWER:
BLUEGREEN VACATIONS UNLIMITED, INC.,
a Florida corporation
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
BLUEGREEN/BIG CEDAR VACATIONS, LLC,
a Delaware limited liability company
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
LENDER
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By
--------------------------------------
Print Name: Xxxx Xxxxxx
Its: Managing Director
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