EXHIBIT 10.168
MODIFICATION AGREEMENT
(Receivables Loan and Security Agreement)
THIS MODIFICATION AGREEMENT (Receivables Loan and Security Agreement)
("Modification Agreement"), dated effective as of the 10th day of September,
2003 ("Effective Date"), is entered into by and between BLUEGREEN CORPORATION, a
Massachusetts corporation ("Bluegreen"), BLUEGREEN VACATIONS UNLIMITED, INC., a
Florida corporation ("BVI") and BLUEGREEN/BIG CEDAR VACATIONS, LLC, a Delaware
limited liability company ("Big Cedar") 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. Bluegreen, BVI and Big Cedar (collectively, "Borrower") and Lender are
parties to that certain Loan and Security Agreement dated as of February 10,
2003 ("Loan Agreement"), pursuant to which Lender agreed to make a revolving
receivables loan to Borrower on the terms and conditions set forth therein in a
maximum principal amount of $50,000,000 ("Loan"). The documents executed in
connection with the Loan are collectively referred to as the "Loan Documents."
B. The total outstanding balance of the Loan presently owed by Borrower to
Lender as of September 3, 2003 is $14,988,856.24 ("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.
C. Borrower has requested that Lender modify the Loan and the other Loan
Documents to, among other things: (i) extend the Advance Period for the making
of Advances under the Loan Agreement and thereby concurrently extend the
Maturity Date, and (ii) increase the Loan Amount under the Loan Agreement from
$50,000,000 to $75,000,000. Lender is willing to so modify the Loan, the Loan
Agreement and the other Loan Documents, subject to the terms and conditions
herein.
D. All of the documents executed in connection with this Modification
Agreement, inclusive of the 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 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 "A&D Loan" is hereby amended by
deleting such definition in its entirety and replacing and substituting in
lieu thereof the following:
"A&D Loan" means the revolving acquisition, development and
construction loan made by Lender to Borrower's Affiliates in
the maximum principal amount of $45,000,000 pursuant to the
terms and conditions of the A&D Loan Agreement.
(ii) The definition of the term "Advance Period" is hereby
amended by deleting such definition in its entirety and replacing and
substituting in lieu thereof the following:
"Advance Period" means the period commencing on the Effective
Date of this Modification Agreement and ending on the close of
the Business Day (or if not a Business Day, the first Business
Day thereafter) on the date following 24 months from the
Effective Date of this Modification Agreement.
(iii) The definition of the term "Loan Amount" is hereby
amended to mean $75,000,000 (with the understanding that all references in
the Loan Agreement stating the prior receivables loan amount of
$50,000,000 is concurrently amended to read $75,000,000).
(iv) The definition of the term "Loan Fee" is hereby amended
by deleting such definition in its entirety and replacing and substituting
in lieu thereof
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the following:
"Loan Fee" means a one-time fee equal to 3/4 of 1% of the Loan
Amount, i.e. $562,500, which is required to be paid by
Borrowers on the dates set forth in Section 2.14.
(v) The definition of the term "Non-Utilization Fee" is hereby
amended by deleting such definition in its entirety and replacing and
substituting in lieu thereof the following:
"Non-Utilization Fee" means a fee equal to .5% of the excess
of (a) (i) $35,000,000 for the testing date of March 31, 2004
or (ii) $50,000,000 for the testing date of March 31, 2005
over (b) the average calendar month-end aggregate outstanding
balance of the Loan and the A&D Loan, which average shall be
determined on the dates set forth in Section 2.11(c) and
calculated over the period of time set forth in that section.
(b) Modification of Loan Agreement Terms:
(i) Section 2.11(c) of the Loan Agreement is hereby amended by
deleting the existing Section 2.11(c) in its entirety and replacing and
substituting in lieu thereof the following Section 2.11(c).
(c) Non-Utilization. Borrower shall pay to Lender a
Non-Utilization Fee in the event that the average calendar
month-end aggregate outstanding balance of the Loan and the
A&D Loan (i) as of March 31, 2004 does not exceed $35,000,000
and (ii) as of March 31, 2005 does not exceed $50,000,000. The
test measured as of March 31, 2004 shall cover the prior 6
calendar months and the test measured as of March 31, 2005
shall cover the prior 12 calendar months. Borrower shall not
be required to pay a Non-Utilization Fee with respect to any
other time periods during the term of the Loan. Lender shall
calculate the Non-Utilization Fee (if any) which is due with
respect to such anniversary and shall send to Borrower an
invoice setting forth (x) the amount of the Non-Utilization
Fee, (xi) the underlying calculations of such fee and (xii)
whether Lender intends to add such due and payable fee to the
principal balance of the Loan, which shall be at Lender's sole
and absolute discretion. If Lender decides to not add the
Non-Utilization Fee to the principal balance of the Loan, then
Borrower will pay such fee within 10 Business Days of
Borrower's receipt of such invoice.
(ii) Section 2.14 of the Loan Agreement is hereby amended by
deleting the existing Section 2.14 in its entirety and replacing and
substituting in lieu thereof the following Section 2.14:
Section 2.14 Loan Fee
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Lender acknowledges receipt of $375,000 of the Loan Fee as of
June 30, 2003. Borrower will pay to Lender the remaining
amount of the Loan Fee on the following dates: (i) a good
faith deposit of $10,000 was paid by Borrower to Lender on the
date that Borrower accepted the term sheet for the
modification of the Loan; and (ii) the remaining amount of the
Loan Fee in the amount of $177,500 shall be paid to Lender
within 90 days of the Effective Date of this Modification
Agreement.
(iii) Section 6.2(a) of the Loan Agreement is hereby amended
by deleting the existing Section 6.2(a) in its entirety and replacing and
substituting in lieu thereof the following Section 6.2(a):
Section 6.2(a) Quarterly Financial Reports.
(1) As soon as possible after each fiscal quarter of
Bluegreen Corporation (other than the last quarter of any
fiscal year) and in any event within 5 days after submission
to the Securities and Exchange Commission, the following: (i)
a copy of Bluegreen Corporation's 10Q filing certified by the
Chief Financial Officer of Bluegreen Corporation to fairly
present the financial condition of said entity on a fully
consolidated basis as at the end of such fiscal quarter and
the results of the operations of Bluegreen Corporation on a
fully consolidated basis for the period ending on such date;
(ii) copies of any and all other financial reports and
corrections thereto and to the 10Q filings required of
Bluegreen Corporation under federal laws and regulations.
(2) As soon as possible and in any event within 45 days
after the end of each fiscal quarter of Bluegreen/Big Cedar
(other than the last quarter of any fiscal year), the
following: (i) unaudited financial statements of Bluegreen/Big
Cedar on a fully consolidated basis, which financial
statements must include (A) a balance sheet as at the end of
such fiscal quarter and (B) statements of income for the
period from the beginning of the then current fiscal year to
the end of such fiscal quarter and setting forth in
comparative form figures for the corresponding period of the
preceding fiscal year, all in reasonable detail and in
accordance with GAAP consistently applied; and (ii) if
requested by Lender, a summary report of accounts payable
aging.
(iv) Section 6.2(i)(2) of the Loan Agreement is hereby amended
by deleting the existing Section 6.2(i)(2) in its entirety and replacing
and substituting in lieu thereof the following Section 6.2(i)(2):
Section 6.2(i)(2) Sales Reports. If requested by Lender,
Borrower will cause to be furnished to Lender on or before the
20th day after each calendar month end: (i) a sales report
showing the number of sales and
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closings of Time-Share Interests and the aggregate dollar
amount thereof and (ii) a report showing the number of tours
during such month together with the net closing percentage and
volume per tour data.
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 Modification Agreement, all of
the Loan Documents are hereby deemed to be amended to include this Modification
Agreement and the other Modification Documents with the additional understanding
and agreement that any reference to the Loan Amount shall be equal to
$75,000,000 and that any reference to the AD&C Loan shall be equal to
$45,000,000.
3. Fees, Costs and Expenses.
Borrower agrees to pay to Lender all reasonable costs and expenses
incurred by Lender in connection with this 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 Modification Agreement. Borrower
agrees to pay such costs and expenses to Lender immediately upon the execution
of this 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 Modification Agreement.
5. Representations, Warranties And Agreements Of Borrower.
As material inducements to Lender to enter into this Modification
Agreement, and acknowledging Lender's reliance upon the truth and accuracy
thereof, Borrower represents, warrants, acknowledges and agrees that:
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 any Borrower in connection with this Modification Agreement were
true and correct as of the respective dates thereof, and that Borrower's
financial condition has not adversely and materially altered as of the date of
this Modification Agreement from that presented by the latest such financial
statements and other information provided to Lender.
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, no Borrower is the subject of a pending
bankruptcy proceeding and no Borrower is aware of any threatened bankruptcy
proceeding against any Borrower.
5.5 There are no proceedings pending or threatened against or affecting
any Borrower in any court, before any governmental authority, or arbitration
board or tribunal which may now
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or in the future materially adversely affect any Borrower.
5.6 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.
5.7 This 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 each Borrower.
5.8 Each Borrower's execution, delivery and performance of this
Modification Agreement does not and will not (i) violate any law, rule,
regulation or court order to which such 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 such Borrower or any
agreement or instrument to which such 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 such Borrower, whether now
owned or hereafter acquired, other than liens in favor of Lender.
5.9 Each Borrower acknowledges that such 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 Modification
Agreement. This Modification Agreement shall be construed without regard to any
presumption or rule requiring that it be construed against the party causing
this Modification Agreement or any part hereof to be drafted.
5.10 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 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 Modification Agreement;
(b) an Amendment No. 1 to the Note;
(c) amendments applicable to the A&D Loan Documents;
(d) Resolutions of each Borrower authorizing the execution of the
Modification Documents;
(e) an opinion from counsel to Borrower as to such matters as
Lender may
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require, which counsel shall be reasonably satisfactory to
Lender; and
(f) such other documents that Lender in its discretion may
require.
6.2 Borrower shall provide to Lender a summary of all material pending or
threatened actions, suits or proceedings affecting any Borrower or any
Time-Share Project, which summary shall be satisfactory to Lender.
6.3 Borrower shall provide to Lender, for Lender's review and approval,
the loan documents evidencing the 10.5% senior secured notes payable in the
amount of $110,000,000 due in 2008, which documents (and the applicable remedies
of the holders of such notes) shall be satisfactory to Lender.
6.4 Lender shall have received from Borrower any amounts due to Lender
pursuant to Section 3 of this Modification Agreement.
6.5 Borrower's Affiliate shall have satisfied the conditions precedent to
closing that certain Modification Agreement (AD&C Loan Agreement) dated as of
even date herewith.
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
Modification Agreement. The Loan Agreement and this 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 Modification Agreement,
each 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 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 Modification Agreement (on the one hand) and
the Loan Agreement or other Loan Documents (on the other hand), the terms of
this Modification Agreement shall control. Nothing contained in this
Modification Agreement is intended to or shall be construed as relieving any
person or entity,
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whether a party to this 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 each Borrower and Lender and
their successors and assigns and the executors, legal administrators, personal
representatives, heirs, devisees, and beneficiaries of each Borrower, provided,
however, no Borrower may 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 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
Modification Agreement to physically form one document.
[Signatures on Following Page]
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DATED as of the date first above stated.
BORROWER:
BLUEGREEN CORPORATION, a
Massachusetts corporation
By: /S/ JOHN F. CHISTE
---------------------------------------
Printed Name: JOHN F. CHISTE
Title: TREASURER & CFO & SENIOR V.P.
BLUEGREEN VACATIONS UNLIMITED, INC.
a Florida corporation
By: /S/ JOHN F. CHISTE
---------------------------------------
Printed Name: JOHN F. CHISTE
Title: TREASURER
BLUEGREEN/BIG CEDAR VACATIONS, LLC.
a Delaware limited liability company
By: /S/ JOHN F. CHISTE
---------------------------------------
Printed Name: JOHN F. CHISTE
Title: VICE PRESIDENT
LENDER
RESIDENTIAL FUNDING CORPORATION,
a Delaware corporation
By /S/ JEFF OWINGS
----------------------------------------
Print Name: Jeff Owings
Its: Managing Director