Document:

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                                                                     EXHIBIT 4-A

                                                                  EXECUTION COPY

                               SECOND AMENDMENT TO
                           LOAN AND SECURITY AGREEMENT

     THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Second Amendment")
is made as of the 31st day of October, 2004 by and among TruServ Corporation, a
Delaware corporation ("TruServ"), TruServ Acceptance Company, an Illinois
corporation ("TruServ Acceptance"), TruServ Logistics Company, an Illinois
corporation ("TruServ Logistics"), General Paint & Manufacturing Company
("General Paint") and True Value.com Corporation, a Delaware corporation ("True
Value.com"), Bank of America N.A., as Syndication Agent ("Syndication Agent")
and Congress Financial Corporation (Central), Merrill Lynch Capital, a Division
of Merrill Lynch Business Financial Services, Inc., and LaSalle Business Credit,
LLC as Co-Documentation Agents ("Co-Documentation Agents"), the lenders who are
signatories hereto ("Lenders"), and Fleet Capital Corporation, a Rhode Island
corporation ("FCC"), as agent for Lenders hereunder (FCC, in such capacity,
being "Agent"). TruServ, TruServ Acceptance, TruServ Logistics, General Paint
and True Value.com are sometimes hereinafter referred to individually as a
"Borrower" and collectively as "Borrowers."

                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS, Borrowers, Syndication Agent, Co-Documentation Agents, Agent and
Lenders entered into a certain Loan and Security Agreement dated as of August
29, 2003, as amended by a certain First Amendment to Loan and Security Agreement
dated as of March 19, 2004 entered into by Borrowers, Syndication Agent,
Co-Documentation Agents, Agent and Lenders (said Loan and Security Agreement, as
so amended, is hereinafter referred to as the "Loan Agreement"); and

     WHEREAS, Borrowers desire to amend and modify certain provisions of the
Loan Agreement and, subject to the terms hereof, Agent and Lenders are willing
to agree to such amendments and modifications;

     NOW THEREFORE, in consideration of the premises, the mutual covenants and
agreements herein contained, and any extension of credit heretofore, now or
hereafter made by Agent and Lenders to Borrowers, the parties hereto hereby
agree as follows:

     1. Definitions. All capitalized terms used herein without definition shall
have the meaning given to them in the Loan Agreement.

     2. Amended Definitions. The definitions of "Borrowing Base" and
"Obligations" contained in Appendix A to the Loan Agreement are hereby deleted
and the following are inserted in their stead:

          "Borrowing Base - as at any date of determination thereof, an amount
     equal to the lesser of:

          (i) the Revolving Credit Maximum Amount; or

<PAGE>

          (ii) an amount equal to the sum of

               (a)  85% of the net amount of Eligible Accounts outstanding at
          such date; plus

               (b)  the least of

                    (1)  $160,000,000,

                    (2)  65% of the value of Eligible Inventory (other than that
               portion of Eligible Inventory consisting of Eligible On-Water
               Inventory) on such date plus the lesser of (x) the "Maximum
               On-Water Amount" (as defined below) or (y) 65% of the value of
               Eligible On-Water Inventory on such date and

                    (3)  85% (90% during the Seasonal Advance Months) of the Net
               Appraised Orderly Liquidation Value of Eligible Inventory at such
               date plus

               (c)  an amount (the "Fixed Asset Sublimit") the lesser of (i)
          $25,000,000 reduced by $218,774.18 on October 1, 2003 and the first
          day of each month thereafter (added language underscored) or (ii) the
          sum of (x) the product of the Equipment Percentage multiplied by 80%
          multiplied by the Net Appraisal Orderly Liquidation Value of
          Borrowers' Equipment plus (y) the product of the Real Property
          Percentage multiplied by 65% of the Net Appraised Fair Market Value of
          Borrowers' real Property.

          For purposes hereof, (1) the net amount of Eligible Accounts at any
     time shall be the face amount of such Eligible Accounts less any and all
     returns, rebates, discounts (which may, at Agent's option, be calculated on
     shortest terms), credits, allowances or excise taxes of any nature at any
     time issued, owing, claimed by Account Debtors, granted, outstanding or
     payable in connection with such Accounts at such time, (2) the amount of
     Eligible Inventory shall be determined on a first-in, first-out, lower of
     cost or market basis in accordance with GAAP and (3) the Maximum On-Water
     Amount shall be equal to (i) $20,000,000 from the date of this Agreement
     until December 31, 2003, (ii) $27,000,000 from January 1, 2004 to December
     31, 2004, (iii) $34,000,000 from January 1, 2005 to December 31, 2005 and
     (iv) $40,000,000 from January 1, 2006 until the last day of the Term.

                                      * * *

          Obligations - all Loans, all LC Obligations and all other advances,
     debts, liabilities, obligations, covenants and duties, together with all
     interest, fees and other charges thereon, owing, arising, due or payable
     from any Borrower to Agent, for its own benefit, from any Borrower to Agent
     for the benefit of any Lender, from any Borrower to any Lender or from any
     Borrower to Bank or any other Affiliate of Agent, of any kind or nature,
     present or future, whether or not evidenced by any note, guaranty or other
     instrument, in each case arising under the Agreement or any other Loan
     Document,

                                       2
<PAGE>

     whether direct or indirect (including those acquired by assignment),
     absolute or contingent, primary or secondary, due or to become due, now
     existing or hereafter arising and however acquired, any Product Obligations
     owing to Agent, Bank, any Lender or any Affiliate of Bank, Agent or any
     Lender and any letter of credit reimbursement obligations owed by Borrower
     to Syndication Agent, a Documentation Agent or any of their Affiliates.
     Reimbursement obligations owing with respect to the B of A LCs shall be
     included within Obligations."

     3. Effectiveness. Upon the execution of this Second Amendment by Borrowers,
Agent and Majority Lenders, Lenders or Agent shall endeavor to cause the
cancellation and return of the Letters of Credit issued in support of the B of A
LCs to be returned to Bank, and it is understood that: (i) from April 1, 2004 no
fees or other charges shall accrue pursuant to Section 2.4 for any Letter of
Credit or LC Guaranty issued in support of the B of A LCs and (ii) such letter
of credit fees shall be payable, however, with respect to the B of A LCs
pursuant to Section 2.4 of the Loan Agreement.

     4. Reliance Letters. Section 2.10 of the Loan Agreement is hereby deleted
and the following is inserted in its stead:

          "2.10 Collateral Protection Expenses; Appraisals. All out-of-pocket
     expenses incurred in protecting, storing, warehousing, insuring, handling,
     maintaining and shipping the Collateral, and any and all excise, property,
     sales, and use taxes imposed by any state, federal, or local authority on
     any of the Collateral or in respect of the sale thereof shall be borne and
     paid by Borrowers. If Borrowers fail to promptly pay any portion thereof
     when due, Agent may, at its option, but shall not be required to, pay the
     same and charge Borrowers therefor. Additionally, Agent may, from time to
     time, at Borrowers' expense, obtain appraisals from appraisers (who may not
     be personnel of Agent), stating the then current Net Appraised Fair Market
     Value of all or any portion of the real Property or the fair market value
     or Net Orderly Liquidation Value of all or any other Property of any
     Borrower or any of its Restricted Subsidiaries, including without
     limitation the Inventory or Equipment of any Borrower and its Restricted
     Subsidiaries. Borrowers shall reimburse Agent for the reasonable cost of
     any such appraisal, which reimbursement amounts shall be due and payable as
     provided in Section 2.11; provided that unless an Event of Default has
     occurred and is continuing, Borrowers shall not be required to reimburse
     Agent for the cost of any appraisal of any Property not included in the
     Borrowing Base. To the extent not obtained prior to the Closing Date,
     Borrowers shall cooperate with Agent in obtaining reliance letters in form
     and substance reasonably acceptable to Agent, from the appraisers who
     issued the appraisals of Borrowers' real Property and Equipment most recent
     to the Closing Date. In the event that such reliance letters are not
     obtained prior to November 1, 2003, then Borrowers agree that Agent may
     obtain new appraisals of such real Property and Equipment at Borrowers'
     expense." ["WHICH ACTION AGENT SHALL TAKE" DELETED.]

     5. Updated Environmental Surveys. Subsection 8.2.19 of the Loan Agreement
is hereby deleted and the following is inserted in its stead:

                                       3
<PAGE>

                  "8.2.19 Updated Environmental Surveys. Borrowers shall comply
         with the recommendations of the consultants that prepared the Phase I
         environmental surveys for Borrowers' owned Properties delivered to
         Agent prior to the Closing Date and any further recommendations
         resulting from the additional testing, investigations or actions
         recommended in such surveys to the extent such compliance is necessary
         to insure that Borrowers remain in compliance with subsection 7.1.18.
         Borrowers acknowledge and agree that Agent may establish reserves in
         accordance with subsection 1.1.1 with respect to the cost of any
         environmental remediation action that is required to comply with
         subsection 7.1.18. Upon request by Agent, Borrowers shall deliver
         updated Phase I, or if applicable, because of the recommendations of
         Borrowers' environmental consultants, Phase II environmental surveys
         for said Properties."

     6. No Default or Event of Default. Agent and Borrowers agree that no
Default or Event of Default resulted from the failure of Borrowers to comply
with the provisions of subsection 8.2.19 prior to the date of this Second
Amendment. The provisions contained in this Section 5 of this Second Amendment
shall not apply to any other section of the Loan Agreement other than subsection
8.2.19 or any other period other than the period from the Closing Date until the
date hereof.

     7. Execution in Counterparts. This Second Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

     8. Continuing Effect. Except as otherwise specifically set out herein, the
provisions of the Loan Agreement shall remain in full force and effect.

     9. Successors and Assigns. This Second Amendment shall be binding upon and
inure to the benefit of the successors and assigns of each Borrower, Agent and
each Lender permitted under Section 11.9 of the Loan Agreement.

     10. Governing Law. This Second Amendment shall be governed by and construed
in accordance with the laws of the State of Illinois.

                            (SIGNATURE PAGE FOLLOWS)

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<PAGE>

       (SIGNATURE PAGE TO SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT)

     IN WITNESS WHEREOF, this Second Amendment has been duly executed as of the
day and year specified at the beginning hereof.

                                  TRUSERV CORPORATION, as a Borrower

                                  By:  /s/ BARBARA L. WAGNER
                                     -----------------------
                                       Name:  Barbara L. Wagner
                                       Title: Vice President and Treasurer

                                  TRUSERV ACCEPTANCE COMPANY, as a Borrower

                                  By:  /s/ BARBARA L. WAGNER
                                     -----------------------
                                       Name:  Barbara L. Wagner
                                       Title: Vice President and Treasurer

                                  TRUSERV LOGISTICS COMPANY, as a Borrower

                                  By:  /s/ BARBARA L. WAGNER
                                     -----------------------
                                       Name:  Barbara L. Wagner
                                       Title: Vice President and Treasurer

                                  GENERAL PAINT & MANUFACTURING COMPANY, as
                                  a Borrower

                                  By:  /s/ BARBARA L. WAGNER
                                     -----------------------
                                       Name:  Barbara L. Wagner
                                       Title: Vice President and Treasurer

                                  TRUE VALUE.COM CORPORATION, as a Borrower

                                  By: /s/ BARBARA L. WAGNER
                                      ---------------------
                                       Name:  Barbara L. Wagner
                                       Title: Vice President and Treasurer

<PAGE>

       (SIGNATURE PAGE TO SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT)

                                  FLEET CAPITAL CORPORATION, as
                                  Agent and as a Lender

                                  By:  /s/ DEBRA A. RATHBERGER
                                     -------------------------
                                       Name:  Debra A. Rathberger
                                       Title: Senior Vice President

       (SIGNATURE PAGE TO SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT)

                                  CONGRESS FINANCIAL CORPORATION
                                  (CENTRAL), as Co-Documentation Agent
                                  and as a Lender

                                  By:  /s/ ANTHONY VIZGIRDA
                                       ---------------------
                                       Name:  Anthony Vizgirda
                                       Title: First Vice President

       (SIGNATURE PAGE TO SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT)

                                  MERRILL LYNCH CAPITAL, a Division of
                                  Merrill Lynch Business Financial
                                  Service, Inc., as Co-Documentation
                                  Agent and as a Lender

                                  By:
                                     ------------------------------------
                                      Name:
                                            -----------------------------
                                      Title:
                                            -----------------------------

       (SIGNATURE PAGE TO SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT)

                                  LASALLE BUSINESS CREDIT, LLC, as
                                  Co-Documentation Agent and as a  Lender

                                  By:
                                     ------------------------------------
                                      Name:
                                            -----------------------------
                                      Title:
                                            -----------------------------

<PAGE>

       (SIGNATURE PAGE TO SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT)

                                  THE CIT GROUP/BUSINESS CREDIT, INC.,
                                  as a Lender

                                  By:
                                     ------------------------------------
                                      Name:
                                            -----------------------------
                                      Title:
                                            -----------------------------

       (SIGNATURE PAGE TO SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT)

                                  M & I MARSHALL & ILSLEY BANK, as a Lender

                                  By:  /s/ RONALD J. CAREY
                                     ---------------------
                                     Name: Ronald J. Carey
                                     Title: Vice President

                                  By:  /s/ JAMES R. MILLER
                                     ---------------------
                                     Name: James R. Miller
                                     Title: Vice PresidentEx-10.1 SunTrust Loan Agreement

 

EXHIBIT 10.1

LOAN AGREEMENT

     THIS LOAN AGREEMENT is made and entered into this November 1, 2004, by and
between SADDLEBROOK RESORTS, INC., whose address is 5700 Saddlebrook Way,
Wesley Chapel, Florida 33543 (the “Borrower”) and SUNTRUST BANK, a Georgia
banking corporation, having offices at 401 East Jackson Street, Commercial
Banking — 20th Floor, Tampa, Florida 33602 (“Lender”).

     This Agreement is made under the following circumstances:

     A. Borrower has applied to Lender for the Revolving Loan (as hereinafter
defined) to support Borrower’s working capital and other general corporate
needs.

     B. Borrower has applied to Lender for the Term Loan (as hereinafter
defined) to re-finance the Real Property (as hereinafter defined).

     B. Lender has agreed to make the Loan (as hereinafter defined) to the
Borrower, and Borrower has agreed to accept such Loan on the terms and
conditions hereinafter set forth and as provided in the other Loan Documents
(as hereinafter defined), including the Commitment Letter (as hereinafter
defined).

     C. Simultaneously with the execution of this Loan Agreement and as a part
of the same transaction, Borrower has executed and delivered to Lender the
Notes, which are secured by the Mortgage (as hereinafter defined) that
encumbers the Real Property and constitutes a first lien thereon, and by other
Loan Documents.

     NOW, THEREFORE, in consideration of the foregoing, the making of the Loan,
and the mutual covenants, agreements, conditions, undertakings and warranties
of the parties herein and in the other Loan Documents, it is covenanted and
agreed as follows:

1.

DEFINITIONS

     1.1 As used in this Agreement, the following terms shall have the meanings
indicated:

     AGREEMENT: This Loan Agreement.

     COLLATERAL: The Real Property, Personal Property (as hereinafter
defined), Tenant Leases (as hereinafter defined), Tenant Income (as hereinafter
defined), and Property Contracts (as hereinafter defined).

     COMMITMENT LETTER: The letter from Lender to Borrower dated August 18,
2004, outlining the general terms of the Loan, the provisions of which letter
are incorporated herein by reference to the extent not inconsistent with this
Agreement or the other Loan Documents.

     DEBT SERVICE COVERAGE RATIO: The debt service coverage for each calendar
year beginning with 2004 shall be equal to the quotient obtained via the
formula whose numerator is the total of Borrower’s net income, depreciation,
amortization and Interest Expense minus (a) distributions to shareholders (not
including distributions made to shareholders to pay the pro rata share of
Federal Income Tax associated with

 

their ownership in Saddlebrook Resorts, Inc during the prior fiscal year),
and (b) fundings of shareholder loans; and whose denominator is the scheduled
principal and interest payments for all of Borrower’s debts during the same
calendar year. Borrower shall maintain a minimum Debt Service Coverage Ratio
during the term of the Loan of not less than 1.20:1.00. Borrower’s Debt
Service Coverage Ratio shall be calculated annually during the Loan term.
Anything to the contrary contained herein or in Section 4 hereof
notwithstanding, Borrower’s failure to maintain the minimum Debt Service
Coverage Ratio required hereunder shall constitute an Event of Default
hereunder and under the Mortgage and shall entitle Lender to the remedies set
forth in Section 4 hereof; provided, however, that to the extent that there is
no other pending Event of Default, Borrower shall have the right to cure its
failure to maintain the minimum Debt Service Coverage Ratio within thirty (30)
days by proposing and implementing such additional collateral, guarantees, and
further assurances as may be reasonably acceptable to Lender.

     FINANCIAL CONTRACT: (1) An agreement (including terms and conditions
incorporated by reference therein) which is a rate swap agreement, basis swap,
forward rate agreement, commodity swap, commodity option, equity or equity
index swap, bond option, interest rate option, foreign exchange agreement, rate
cap agreement, rate floor agreement, rate collar agreement, currency swap
agreement, cross-currency rate swap agreement, currency option, any other
similar agreement (including any option to enter into any of the foregoing);
(2) any combination of the foregoing; or (3) a master agreement for any of the
foregoing together with all supplements.

     LIQUID ASSETS: Unencumbered cash and marketable securities.

     LOAN: The $5,000,000.00 revolving loan (the “Revolving Loan”) and the
$12,000,000.00 term loan (the “Term Loan”) contemplated by this Agreement and
the Commitment Letter shall be collectively referred to herein as the “Loan”.

     LOAN DOCUMENTS: Shall have the meaning ascribed to it in the Mortgage.

     LOAN INTEREST: The interest payable pursuant to the terms of the Notes.

     MAXIMUM LOAN TO VALUE: The Loan amount divided by the acceptable appraised
value of the Real Property. The Maximum Loan to Value shall be Sixty Three
Percent (63.00%).

     MORTGAGE: The Second Amended and Restated Mortgage, Security Agreement
and Fixture Filing of even date herewith encumbering the Real Property and
other collateral, executed and delivered by Borrower to Lender to secure the
Notes.

     NOTES: The Promissory Note of even date herewith from Borrower in favor
of Lender in the amount of $12,000,000.00 and the Revolving Line of Credit
Promissory Note of even date herewith from Borrower in favor of Lender in the
amount of $5,000,000.00.

     PERSONAL PROPERTY: All equipment, inventory, accounts, chattel paper and
general intangibles now owned or hereafter acquired by Borrower, or any other
party at any time located at, arising out of the use of, and/or used in
connection with the operation of the Real Property.

2

 

     PROPERTY CONTRACTS: All agreements which in any way relate to the use,
occupancy, maintenance or enjoyment of the Real Property, including, but not
limited to, utility contracts, maintenance agreements, management agreements
and service contracts, agreements relating to water rights, and any agreements
guaranteeing the performance of the obligations contained in any of the
foregoing agreements.

     REAL PROPERTY: The Real Estate as defined in the Mortgage.

     TENANT INCOME: All of the rents, revenues, proceeds and other benefits
derived from any Tenant Leases (as hereinafter defined), but excluding
therefrom that portion of income attributable to condominium owners for the
condominium rental pool program and rental arrangements.

     TENANT LEASES: All leases, subleases, licenses, concessions, or other
agreements which grant a possessory interest in and to, or the right to use the
Real Property, or any portion thereof.

     TITLE COMPANY: Chicago Title Insurance Company.

     TITLE INSURANCE BINDER: Commitment No. 20040678 (dated October 20, 2004, at
8:00 a.m.), as endorsed, issued to Lender by the Title Company.

2.

BORROWER’S REPRESENTATIONS AND WARRANTIES

     Borrower represents and warrants as follows:

     2.1 Borrower has full power and authority to consummate the transactions
contemplated by this Agreement.

     2.2 Borrower has full power and lawful right to convey and mortgage the
Real Property, and the same is free and clear of all encumbrances except the
Mortgage, current taxes which are not yet due and payable, and covenants,
restrictions and easements of record acceptable to Lender.

     2.3 To the best of borrower’s knowledge, no materials of any kind have
been placed on the Real Property by anyone, and no work or labor has been
performed thereon, for 90 days prior to the date of this Agreement; there are
no unpaid bills whatsoever for labor, materials, supplies or services furnished
upon the Real Property; and no Notice of Commencement or claim of lien
affecting the Real Property has been filed in the public records of the county
in which the Real Property is located, and no such Notice of Commencement or
claim of lien will be so filed prior to the recording of the Mortgage.

     2.4 All utilities services of whatever nature necessary for the current
use and operation of the Real Property, are and will be available for the use
at the boundaries of the Real Property.

3

 

     2.5 Adequate vehicular, pedestrian and utility access to and from the Real
Property from publicly owned and maintained paved roadways are and will be
available when needed at the Real Property.

     2.6 To the best of Borrower’s knowledge, all representations made by
Borrower in any documents (including financial statements) that have been
furnished to Lender in connection with Borrower’s applying for the Loan are
true, complete and correct in all respects as of the date hereof, and Borrower
has not suffered any material adverse change in financial position since the
respective dates those documents were furnished to Lender.

     2.7 Any licenses and permits required by applicable law to allow for the
operation of the Real Property as currently and customarily operated are in
full force and effect.

     2.8 There are no actions, suits, or proceedings pending, or, to the
knowledge of Borrower, threatened against or affecting Borrower or any of the
Collateral, or involving the validity or enforceability of the Mortgage or the
priority of the lien thereof, at law or in equity, or before or by any
governmental authority, and Borrower is not in default with respect to any
order, writ, injunction, decree or demand of any court or any governmental
authority, or in material breach of any contract with any third party.

     2.9 To the best of borrower’s knowledge, the execution and delivery of the
Loan Documents, and the performance and consummation of the transactions
thereby contemplated will not result in any breach of, or constitute a default
under, any mortgage, lease, bank loan or credit agreement, corporate charter,
bylaws, partnership agreement, joint venture agreement, or other instrument to
which Borrower is a party or by which Borrower may be bound or affected.

     2.10 No Event of Default, presently exists under the Loan Documents, and
no event has occurred and is continuing which, with notice, the passage of time
or both, would constitute an Event of Default under the Loan Documents.

     2.11 The proceeds of the Loan will be used solely for the purposes
specified herein and in the other Loan Documents.

     2.12 The Loan has been duly authorized by all necessary action by the
Borrower, and the Loan Documents have been duly executed and delivered by the
Borrower and constitute legal, valid and binding obligations of the respective
parties thereto.

     2.13 The Borrower is are financially responsible, and fully capable and
willing to fulfill their respective obligations under this Agreement, the Notes
and the other Loan Documents, including the obligations to make payments in the
amounts and at the times required thereby, and to operate, repair and maintain
the Real Property.

4

 

     2.14 Each of the representations and warranties set forth in this Section
2 will be true on the date of each advance hereunder, shall survive the making
of this Agreement and the issuance of the Notes, and shall be deemed to remain
so represented and warranted pending contrary written notice to Lender. The
acceptance of any advance hereunder by Borrower shall be deemed to be a
reaffirmation of each and every one of said representations and warranties.

3.

BORROWER’S COVENANTS

     Borrower covenants and agrees with Lender as follows:

     3.1 Borrower will furnish to Lender, at Borrower’s expense, forthwith and
prior to the disbursement of any Loan funds, the Title Insurance Binder
covering the Real Property in the sum of the Notes, issued by the Title
Company. Said Binder shall insure that upon closing, Borrower will be vested
with a good, valid, and insurable fee simple title, free and clear of all
exceptions whatsoever, except for the Mortgage, current taxes not yet due and
payable, and covenants, restrictions and easements of record acceptable to
Lender, and shall insure Lender, or its nominee or assignee, that the Mortgage
is a good and valid first lien on the Real Property, subject only to the
exceptions noted in this Agreement. Anything to the contrary contained herein
notwithstanding, the Title Company shall issue one policy of title insurance in
favor of Lender, in the full amount of the Loan and covering all of the Real
Property.

     3.2 Borrower will furnish to Lender, at Borrower’s expense, forthwith and
prior to disbursement of any Loan funds, a current survey showing the Real
Property to be free from all encroachments and encumbrances, which survey shall
meet all the requirements of the Commitment Letter and the Title Company. At
the request of Lender, Borrower will, from time to time, furnish a supplemental
survey or surveys of the Real Property. All such surveys shall be made by
licensed Florida civil engineers or surveyors acceptable to Lender, shall be
paid for by Borrower, and shall be in form and content as may be required by
Lender including as provided in the Commitment Letter.

     3.3 During the term of the Loan, Borrower shall maintain the Maximum Loan
to Value percentage as set forth in the Definitions in Section 1 hereof.
Lender shall have the right to order appraisals of the property, at Lender’s
cost, as reasonably necessary during the term of the Loan to substantiate and
confirm the value of the Real Property and Borrower’s compliance with the
Maximum Loan to Value requirements hereunder.

     3.4 Borrower shall furnish and pay the premiums for the insurance required
by the Mortgage and the other Loan Documents. The insurance policies shall each
be in accordance with the requirements of the Mortgage and the other Loan
Documents, as applicable, and otherwise be acceptable to Lender.

     3.5 Borrower covenants and agrees to have any liens which may be recorded
against the Real Property or any part thereof, or any of the Collateral, other
than those in

5

 

favor of Lender, in each instance released or otherwise discharged within
thirty (30) days after the recording thereof.

     3.6 During the term of the Loan, Borrower shall not transfer ownership of
the Collateral or any portion thereof, and there shall be no transfer of
ownership interests or control in Borrower or Managing Agent (as hereinafter
defined), without the prior written consent of Lender. Anything to the
contrary contained herein notwithstanding, the following transfers of ownership
interests in Borrower shall not require Lender’s prior written consent, but
Borrower shall provide prompt written notice to Lender of the occurrence of any
such transfer: (a) transfers by Thomas L. Dempsey and/or Eleanor R. Dempsey to
members of their immediate family (defined, for the purposes of this Section,
as children, spouses of children, or grandchildren) or to trusts in which they
or members of their immediate family are beneficiaries, provided that Thomas L.
Dempsey and/or Eleanor R. Dempsey maintain at least fifty-one percent (51%)
ownership and control of Borrower’s outstanding voting stock; and/or (b)
transfers due to the demise of both Thomas L. Dempsey and Eleanor R. Dempsey,
provided that at least fifty-one percent (51%) of Borrower’s outstanding voting
stock is owned by the immediate family of Thomas L. Dempsey.

     3.7 Without the prior written consent of Lender in each instance, Borrower
will not convey, encumber, suffer or impose a security interest on the Real
Property or any part thereof, except for the Mortgage and all advances pursuant
thereto or to this Agreement, and any permitted conveyances under the Mortgage;
further, without such consent, Borrower shall not assign in whole or in part
any of its rights under this Agreement or to any advance to be made hereunder.
All proposed easements affecting the Real Property, accompanied by a drawing or
survey adequate in Lender’s opinion to show the proposed location thereof,
shall be submitted to Lender for approval prior to the execution thereof by
Borrower or any Mortgagor.

     3.8 During the term of the Loan, Borrower shall not, without the prior
written consent of Lender in each instance (which consent shall not be
unreasonably withheld), enter into any Property Contracts or other agreements
which pertain to the Collateral and which: (a) have a duration of thirty-six
(36) months or longer, or (b) involve aggregate consideration in the amount of
One Million Dollars ($1,000,000.00) or more outstanding for such items in any
one (1) Loan year.

     3.9 Borrower will permit Lender and its authorized employees, agents and
representatives to enter upon the Real Property, inspect the Real Property
(including all buildings, structures, landscaping, walls, drives, approaches,
sidewalks, curbs, paving, and utility lines of every description or nature,
together with all chattels, furniture, furnishings and equipment located on the
Real Property), and to review all books and records of Borrower relating to the
Real Property. Borrower will cooperate with Lender and Lender’s authorized
employees, agents and representatives in all reasonable respects to enable
Lender to effectively perform the foregoing matters. It is expressly agreed
that any inspections made by or on behalf of Lender shall be made solely and
exclusively for the protection and benefit of Lender, and neither Borrower nor
any third party shall be

6

 

entitled to claim any loss or damage against Lender or its employees,
agents or representatives arising out of or in connection with such inspections
by Lender.

     3.10 During the term of the Loan, the Real Property shall be inspected on
an annual basis by the United States Golf Association Turf Advisory Service or
other entity satisfactory to Lender and a copy of the report resulting from
said inspection shall be promptly submitted to Lender. Said inspection shall
be performed on or about each anniversary of the date of this Agreement, or at
such other time as Lender, in its sole discretion, may be determine to be
appropriate, given the location of the Real Property. All costs related to
such inspections shall be paid by Borrower.

     3.11 The Real Property shall be managed by Borrower during the term of the
Loan. Borrower may engage a professional management company (the “Managing
Agent”) to manage the Real Property with the prior written consent of Lender,
provided that the Managing Agent and the management contract (the “Management
Contract”) between the Managing Agent in Borrower are satisfactory to Lender in
Lender’s sole discretion, and provided that Managing Agent and Borrower agree
with Lender as follows: (a) to assign to Lender or a third party designated by
Lender all of Borrower’s rights under the Management Contract; (b) that the
Management Contract may not be modified or terminated during the term of the
Loan without Lender’s prior written consent, (c) that in the event of a default
by Borrower under the Management Contract, Lender shall receive notice of such
default and that Borrower, or Lender on Borrower’s behalf, shall each be given
a reasonable opportunity to cure such default.

     3.12 Borrower covenants, warrants and agrees to pay promptly before
delinquency and discharge any taxes or assessments upon the Real Property, or
any of the Collateral, which may become due and payable during the term of this
Agreement or the other Loan Documents.

     3.13 To the ends that the agreements of Borrowers set forth herein and in
the other Loan Documents shall be effectively and fully performed, and that the
intent and purpose of this Agreement be fulfilled, Borrower agrees to promptly
execute any and all such other and further instruments as may reasonably be
required by Lender from time to time in order to carry out the provisions of
this Agreement, or for the purpose of protecting, maintaining or enforcing
Lender’s security for the Loan.

     3.14 Borrower agrees to pay all costs, including reasonable attorneys’
fees and legal assistants’ fees and costs, incurred by Lender with respect to
any dispute regarding, or arising from the enforcement of, this Agreement and
of the Loan Documents, whether or not suit is filed and including all
bankruptcy, regulatory, agency and appellate proceedings. The Lender shall
have the right to commence, to appear in, or to defend any action or proceeding
purporting to affect the rights or duties of the parties hereunder and in
connection therewith employ counsel and pay reasonable fees therefor, which the
Borrower agrees to repay to Lender upon demand.

7

 

     3.15 Borrower shall maintain the required Debt Service Coverage Ratio in
accordance with Section 1 of this Agreement.

     3.16 Borrower shall keep proper books of record and account in which full,
true and correct entries shall be made of all dealings or transactions of or in
relation to the Real Property, in accordance with generally accepted accounting
principles consistently applied.

     3.17 During the Loan term, Lender shall be furnished with complete copies
of Borrower’s annual United States income tax returns (including all
schedules) within thirty (30) days after filing with the Internal Revenue
Service.

     3.18 Within one hundred twenty (120) days after each fiscal year end of
Borrower during the Loan term, Lender shall be furnished with an annual audited
financial statement, prepared by a certified public accountant acceptable to
lender and certified as true and correct by an officer by Borrower, including a
profit and loss statement, balance sheet, reconciliation of net worth,
statement of cash flows and notes to financial statements, all in reasonable
detail.

     3.19 Within thirty (30) days after the end of each calendar month during
the Loan term, Lender shall be furnished with internally prepared monthly
financial statements of Borrower, certified as true and correct by an officer
of Borrower, including a profit and loss statement prepared both on a
month-to-date and year-to-date basis.

     3.20 All financial submissions shall be acceptable to Lender in form, and
shall reflect financial conditions and circumstances of Borrower and the Real
Property (as applicable) that are acceptable to Lender. All other financial
submissions required by this Agreement or the other Loan Documents shall be
delivered to Lender within the respective times set forth therein or, in the
absence of such a time provision, within 15 days after Lender’s written request
therefore in each instance. Upon each reasonable request by Lender, Borrower
shall promptly furnish to Lender supplemental financial information within 15
days after such request.

     3.21 During the Loan term, Borrower shall furnish to Lender, before the
execution thereof by Borrower, copies of all proposed sales contracts for the
Real Property or any part thereof, which shall be in form and content
acceptable to Lender, and no such contracts will in any instance be entered
into by Borrower without Lender’s prior written consent.

     3.22 Unless expressly modified or terminated by a document executed at the
closing of the Loan, and except to the extent inconsistent with the other Loan
Documents, the terms and conditions of the Commitment which bind and obligate
Borrower shall survive such closing, and a failure to comply with such terms
and conditions shall constitute an Event of Default of the Loan. Lender’s
obligations under the Commitment shall not survive the closing of the Loan
unless expressly provided for in a document executed at such closing.

8

 

     3.23 The Loan is made exclusively to Borrower, and Borrower’s obligations
of any nature under the Loan Documents are not assignable by Borrower without
Lender’s prior written consent in each instance. Any attempted such assignment
without Lender’s prior written consent shall be null and void, and at Lender’s
sole option shall terminate all further obligations of Lender hereunder and
constitute an Event of Default of the Loan.

     3.24 Whenever Lender utilizes legal counsel in connection with the Loan,
it is agreed and understood that such counsel represents Lender only, and
nobody else, including Borrower or any third party. Further, neither Borrower
nor any third party may rely upon, or represent to anyone else that they may
rely upon, Lender’s or its counsel’s review, opinion, approval or acceptance of
any document, data or information used by Lender in connection with the Loan,
including (by way of example only) appraisals; surveys and matters of title;
zoning and other regulatory matters; utilities; financial information,
evaluations, statements and projections; soil and environmental testing; any
certification, written opinion, survey or audit results obtained from any
source relating to compliance with the requirements of the Americans With
Disabilities Act of 1990; or, any statement, from any source, regarding the use
of the Real Property. It is the understanding, agreement and intent of Borrower
and Lender that each such review, opinion, approval or acceptance is solely and
exclusively for Lender’s benefit.

     3.25 During the term of the Loan, Borrower shall keep Lender apprised of
each change that may occur in the officers or directors of Borrower, and shall
notify Lender in writing of the identity and specimen signature of each new
officer, and of the termination of the term of office of any officer, in each
instance.

4.

DEFAULTS

     4.1 The occurrence of any of the following shall, in each instance,
constitute a default of the Loan (each, an “Event of Default”), cumulative to
other default provisions of the Loan Documents: (a) Borrower fails to make any
payment of interest when due under the Notes or Mortgage, or fails to pay any
other sum when due under the Loan Documents (subject to applicable notice
and/or cure periods provided therein), (b) Borrower fails to make any payment
of principal when due under the Notes (subject to applicable notice and/or cure
periods provided therein), (c) Borrower fails to perform according to the terms
of this Agreement or any of the Loan Documents other than with respect to the
payment of principal, interest, or other sums payable pursuant to the Loan
Documents (subject to applicable notice and/or cure periods provided therein);
(d) a breach by Borrower, or any Guarantor or any Mortgagor of any other term,
covenant, condition, obligation or agreement under this Agreement or any of the
Loan Documents, and the continuance of such breach for a period of thirty (30)
days after written notice thereof shall have been given to Borrower. However,
if the nature of the breach is such that, despite Borrower’s duly diligent
efforts to cure the breach, the same is essentially impervious to cure within
the aforesaid period, then Borrower shall have a reasonable time (not to exceed
60 days after Lender’s notice mentioned above) to cure the breach,

9

 

provided that, and only if, Borrower commences cure within the aforesaid
period, and continuously and diligently seeks to complete such cure to
completion.

     In the event of any of the foregoing, Borrower shall be considered in
default hereunder and Lender may, at its option and in its sole discretion, and
without prejudice to any other right or remedy Lender may have as a matter of
law:

	(a)	 	At its option, declare all sums evidenced by the Notes and
secured by the Mortgage, and all sums due hereunder, to be
immediately due and payable, and unless same are paid on demand, may
exercise all of Lender’s rights and remedies under the Loan
Documents including, without limitation, foreclosing the Mortgage;
or
	 
	(b)	 	Enter upon and take possession of the Real Property, and
employ watchmen to protect the Real Property and/or the other
Collateral from injury.

     4.2 Borrower agrees to pay Lender, on demand, all costs and expenses,
including reasonable attorney’s fees (including attorney’s fees incurred in all
appellate, regulatory, agency and bankruptcy proceedings) incurred by Lender
incident to any Event of Default, or incident to the enforcement of any
provision hereof or incident to the collection of all indebtedness of Borrower
to Lender, and all such sums, even though they may, when added to the monies
advanced and disbursed under this Agreement, exceed the amount of the Notes,
shall be secured by the lien of the Mortgage as though the same were a part of
the debt originally described in and secured thereby. If said sums are not
paid by Borrower immediately on demand, Lender may declare all such sums, and
all other sums secured by the Mortgage, immediately due and payable and may
proceed to enforce any and all rights and remedies provided it under the Loan
Documents, including, without limitation, foreclosing the Mortgage.

5.

PROHIBITION OF ADDITIONAL INDEBTEDNESS

     5.1 During the term of the Loan, Borrower shall make no additional
borrowings or incur any additional debt exceeding $100,000.00 on an individual
basis or $500,000.00 in the aggregate annually, without Lender’s prior written
consent in each instance.

6.

MISCELLANEOUS PROVISIONS

     6.1 Notices. All notices and communications under this Agreement shall be
in writing and shall be given by either (a) hand-delivery, (b) first class mail
(postage prepaid), or (c) reliable overnight commercial courier (charges
prepaid), to the addresses listed in the Mortgage. Notice shall be deemed to
have been given and received: (i) if by hand delivery, upon delivery; (ii) if
by mail, three (3) calendar days after the date first deposited in the United
States mail; and (iii) if by overnight courier, on the date scheduled for
delivery. A party may change its address by giving written notice to the other
party as specified herein.

10

 

     6.2 Remedies Cumulative. The rights and remedies of Lender as provided in
this Agreement or in any other Loan Document shall be cumulative and
concurrent, may be pursued separately, successively or together, may be
exercised as often as occasion therefor shall arise, and shall be in addition
to any other rights or remedies conferred upon Lender at law or in equity. The
waiver by Lender of, or its failure to exercise, any right or remedy under any
other Loan Document shall not in any way affect this Agreement or the rights of
Lender hereunder.

     6.3. No Implied Waiver. Lender shall not be deemed to have waived any of
its rights or remedies hereunder unless such modification or waiver is in
writing and signed by Lender, and then only to the extent specifically set
forth therein. A waiver in one event shall not be construed as continuing, or
as a waiver of or bar to such right or remedy on a subsequent event.

     6.4 Partial Invalidity. The invalidity or unenforceability of any one or
more provisions of this Agreement shall not render any other provision invalid
or unenforceable. In lieu of any invalid or unenforceable provision, there
shall be added automatically a valid and enforceable provision as similar in
terms to such invalid or unenforceable provision as may be possible.

     6.5 Binding Effect. The covenants, conditions, waivers, releases and
agreements contained in this Agreement shall bind, and the benefits thereof
shall inure to, the parties hereto and their respective heirs, executors,
administrators, successors and assigns and are intended and shall be held to be
real covenants running with the land; provided, however, that this Agreement
cannot be assigned by Borrower without the prior written consent of Lender in
each instance, and any such assignment or attempted assignment by Borrower
shall be void and of no effect with respect to Lender.

     6.6 Modifications. This Agreement may not be supplemented, extended,
modified or terminated except by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification or discharge is
sought.

     6.7 Governing Law. The Loan Documents (including this instrument) shall
be governed by and construed in accordance with the substantive laws of the
State of Florida without reference to conflict of laws principles.

     6.8 Joint and Several Liability. If Borrower consists of more than one
person or entity, the word “Borrower” shall mean each of them and their
liability shall be joint and several.

     6.9 Disclosure of Financial Information. Lender is hereby authorized to
disclose any financial or other information about the undersigned party(ies) to
any regulatory body or agency having jurisdiction over Lender; to any present,
future or prospective participant or successor in interest in any loan or other
financial accommodation made by Lender to the undersigned party(ies); and, as
required by legal

11

 

process. The information provided may include, without limitation,
amounts, terms, balances, payment history, return item history, and any
financial or other information about the undersigned party(ies) that Lender may
have or lawfully obtain. The provisions of this Section shall survive
termination of this document, and repayment or other disposition of the Loan.

     6.10 “Including” Not Limiting. Unless otherwise specifically provided,
the word “including” as used in this instrument shall mean “including but not
limited to.”

     6.11 “Hereof” Etc. Unless otherwise specifically provided, the terms
“hereof”, “hereunder” and like terms as used in this instrument shall apply to
the entirety of this instrument rather than to a particular Section or
subsection.

     6.12 Attorneys Fees and Costs. In any action or proceeding arising out of
or with respect to the Loan Documents, or any security for the Loan, Borrower
shall pay or reimburse Lender for all costs, reasonable attorney’s fees
(including attorney’s fees incurred in all appellate, regulatory, agency and
bankruptcy proceedings) and other reasonable expenses incurred by Lender

     6.13 Cross-Collateralization and Cross-Default. Anything to the contrary
contained herein notwithstanding, Borrower hereby agrees that any default under
this Agreement and the other Loan Documents shall constitute a default under
each and every other loan or commitment issued by Borrower, any Guarantor, or
any Mortgagor to Lender and that a default under any other loan or commitment
issued by Borrower, any Guarantor, or any Mortgagor to Lender shall constitute
a default hereunder. The Real Property and other Collateral for the Loan shall
also serve as security and collateral for all other indebtedness of Borrower to
Lender and the collateral for any other indebtedness of Borrower to Lender
shall serve as security and collateral for the Loan. Borrower agrees to
execute any documentation required by Lender to evidence such
cross-collateralization and cross-default.

     6.14 Waiver of Jury Trial. BORROWER AND LENDER HEREBY KNOWINGLY,
VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE THE RIGHT EITHER OF THEM MAY
HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION, WHETHER IN CONTRACT OR
TORT, AT LAW OR IN EQUITY, BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT, THE NOTES, THE MORTGAGE, AND ANY OTHER DOCUMENT
OR INSTRUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTION OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER
AGREEING TO ENTER INTO THIS AGREEMENT. FURTHER, BORROWER HEREBY CERTIFIES THAT
NO REPRESENTATIVE OR AGENT OF LENDER, NOR THE LENDER’S COUNSEL, HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF
SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL

12

 

PROVISION. NO REPRESENTATIVE OR AGENT OF THE LENDER, NOR LENDER’S COUNSEL, HAS
THE AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.

     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered of
the day and year first above written.

	 	 	 	 	 
	 	LENDER:

SUNTRUST BANK,

a Georgia banking corporation

 	 
	 	By:  	/s/  Lex Smith
 	 
	 	Print Name:  Lex Smith
	 	Title:  Senior Vice President
	 

	 	 	 	 	 
	 	BORROWER:

SADDLEBROOK RESORTS, INC.,

a Florida corporation

 	 
	 	By:  	/s/ Thomas L. Dempsey
 	 
	 	 	Thomas L. Dempsey 	 
	 	 	Its Chief Executive Officer 	 
	 

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