UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 30, 2020
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BLUEGREEN VACATIONS HOLDING CORPORATION |
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(Exact name of registrant as specified in its charter) |
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Florida |
001-09071 |
59-2022148 |
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(State or other jurisdiction |
(Commission |
(IRS Employer |
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of incorporation) |
File Number) |
Identification No.) |
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401 East Las Olas Boulevard, Suite 800, Fort Lauderdale, Florida |
33301 |
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(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: 954-940-4900
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BBX Capital Corporation |
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(Former name or former address, if changed since last report.) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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Class A Common Stock, $.01 par value
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BVH |
New York Stock Exchange |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.[ ]
Introduction
On September 30, 2020, Bluegreen Vacations Holding Corporation (formerly BBX Capital Corporation) (“BVH”) completed its previously announced spin-off (the “Spin-Off”) of BBX Capital, Inc. (formerly BBX Capital Florida LLC) (“New BBX Capital”). As described in further detail below, the Spin-Off resulted in (i) New BBX Capital becoming a separate, public company and (ii) the separation of BVH’s investment in Bluegreen Vacations Corporation (“Bluegreen Vacations”), which continues to be held by BVH, from all of BVH’s other businesses and investments, which are held by New BBX Capital. Information regarding the Spin-Off, including the expectation that the matters described in this Current Report on Form 8-K would occur upon consummation of the Spin-Off, were previously disclosed by BVH and New BBX Capital, including in (i) BVH’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission and mailed to BVH’s shareholders on August 27, 2020 (the “Spin-Off Proxy Statement”) and (ii) New BBX Capital’s Registration Statement on Form 10, as amended, including the Information Statement dated August 27, 2020 which forms a part thereof and was mailed to BVH’s shareholders on or about September 28, 2020 in contemplation of the closing of the Spin-Off.
BVH effected the Spin-Off on September 30, 2020 by distributing to its shareholders 100% of the shares of New BBX Capital’s Class A Common Stock and Class B Common Stock. Specifically, BVH distributed to its shareholders one share of New BBX Capital’s Class A Common Stock for each share of BVH’s Class A Common Stock held of record as of the close of trading on September 22, 2020, the record date for the distribution, and one share of New BBX Capital’s Class B Common Stock for each share of BVH’s Class B Common Stock held of record as of the close of trading on September 22, 2020. Each share of New BBX Capital’s Class A Common Stock and Class B Common Stock distributed in connection with the Spin-Off has attached thereto an accompanying preferred share purchase right issued under New BBX Capital’s previously announced Rights Agreement. As a result of the distribution, BVH no longer owns any interest in New BBX Capital, and the shareholders of BVH who received shares of New BBX Capital’s stock in the distribution have become the initial shareholders of New BBX Capital following the Spin-Off. Shareholders of BVH also retained their shares of BVH’s Class A Common Stock and/or Class B Common Stock.
In connection with the Spin-Off, New BBX Capital was converted from a Florida limited liability company to a Florida corporation, and its name was changed from BBX Capital Florida LLC to BBX Capital, Inc. Other than BVH’s investment in Bluegreen Vacations, New BBX Capital holds all of the businesses and investments previously held by BVH, including (i) BBX Capital Real Estate LLC, which is engaged in the acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint ventures, owns a 50% equity interest in The Altman Companies, a developer and manager of multifamily apartment communities, and manages the legacy assets retained in connection with the sale of BankAtlantic in 2012, including portfolios of loans receivable, real estate properties, and judgments, (ii) BBX Sweet Holdings, LLC, which owns interests in a number of companies operating in the candy and confectionery industry, and (iii) Renin Holdings, LLC, which is engaged in the design, manufacture, and distribution of sliding doors, door systems and hardware, and home décor products. As described in further detail under Item 1.01 below, in connection with the completion of the Spin-Off, BVH issued a $75 million promissory note in favor of New BBX Capital.
New BBX Capital’s Class A Common Stock and Class B Common Stock commenced trading on the OTC Pink Market on October 1, 2020. On October 1, 2020, New BBX Capital’s Class A Common
Stock was approved for trading on the OTCQX beginning with the opening of trading on October 2, 2020. Based on the limited public float of New BBX Capital’s Class B Common Stock, those shares will continue to trade on the OTC Pink Market. The trading symbol for New BBX Capital’s Class A Common Stock is “BBXIA,” and the trading symbol for New BBX Capital’s Class B Common Stock is “BBXIB.” The CUSIP number for New BBX Capital’s Class A Common Stock is 073319 105, and the CUSIP number for New BBX Capital’s Class B Common Stock is 073319 204.
BVH remains a separate, public company with its Class A Common Stock and Class B Common Stock continuing to trade on the NYSE and OTCQX, respectively, but under new ticker symbols described below. As a result of the Spin-Off, BVH has become a holding company for Bluegreen Vacations, a leading vacation ownership company that markets and sells vacation ownership interests and manages resorts in popular leisure and urban destinations. Bluegreen Vacations’ common stock is listed on the NYSE (NYSE: BXG). BVH currently holds approximately 93% of Bluegreen Vacation’s outstanding common stock.
As previously disclosed, BVH’s shareholders approved a change in BVH’s name from BBX Capital Corporation to Bluegreen Vacations Holding Corporation in connection with the Spin-Off. The name change has become effective and, in connection therewith, BVH obtained new ticker symbols for its Class A Common Stock and Class B Common Stock. Effective with the opening of trading on October 1, 2020, the ticker symbol for BVH’s Class A Common Stock on the NYSE changed from “BBX” to “BVH,” and the ticker symbol for BVH’s Class B Common Stock on the OTCQX changed from “BBXTB” to “BVHBB.” BVH’s Class A Common Stock and Class B Common Stock were also assigned new CUSIP numbers. The new CUSIP number for BVH’s Class A Common Stock is 096308 101, and the new CUSIP number for BVH’s Class B Common Stock is 096308 200.
Alan B. Levan will continue to serve as Chairman and Chief Executive Officer of BVH and will also be Chairman of New BBX Capital. Mr. Alan Levan also became President of BVH upon completion of the Spin-Off and Mr. Jarett Levan’s resignation from such position, as described below. John E. Abdo will continue to serve as Vice Chairman of BVH and will also be Vice Chairman of New BBX Capital. Effective September 30, 2020, Jarett S. Levan, who has become the President and Chief Executive Officer of New BBX Capital, resigned as President of BVH, and Seth M. Wise, who has become Executive Vice President of New BBX Capital, resigned as Executive Vice President and as a director of BVH. Mr. Jarett Levan will remain as a director of BVH. See Item 5.02 below for additional information regarding management and director changes at BVH in connection with the Spin-Off, including other resignations by directors of BVH who have now become directors of New BBX Capital and information regarding the reconstitution of the committees of BVH’s Board of Directors.
Item 1.01 Entry into a Material Definitive Agreement.
As previously described, on September 30, 2020, BVH issued a $75 million promissory note in favor of New BBX Capital (the “Promissory Note”) in connection with the completion of the Spin-Off. Amounts outstanding under the Promissory Note accrue interest at a rate of 6% per annum. The Promissory Note requires payments of interest only on a quarterly basis; provided, however, that interest payments may be deferred at the option of BVH, with interest on the entire outstanding balance thereafter to accrue at a cumulative, compounded rate of 8% per annum until such time as BVH is current on all accrued payments under the Promissory Note, including deferred interest. All outstanding amounts under the Promissory Note will become due and payable in five years or earlier upon certain events. The foregoing description of the Promissory Note is a summary only, does not purport to be
complete, and is qualified in its entirety by reference to the Promissory Note, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
The information set forth in the “Introduction” above with respect to the resignations of Jarett S. Levan and Seth M. Wise as executive officers of BVH is incorporated into this Item 1.02 by reference. In connection with such resignations, BVH’s employment agreements with Mr. Jarett Levan and Mr. Wise were terminated, effective September 30, 2020. Other than any accrued and unpaid compensation through September 30, 2020, no additional payments or other compensation is to be paid to Mr. Jarett Levan or Mr. Wise under their respective employment agreements, including, without limitation, that neither Mr. Jarett Levan nor Mr. Wise is entitled to any payment or other compensation in connection with the termination of their employment agreements. As previously disclosed, Mr. Jarett Levan and Mr. Wise are, subject to the approval of New BBX Capital’s compensation committee, expected to enter into new employment agreements with New BBX Capital in place of their employment agreements with BVH.
Pursuant to the previously disclosed Separation and Distribution Agreement entered into by BVH and New BBX Capital in connection with the Spin-Off, except for shared services agreements between BVH or its subsidiaries and New BBX Capital or its subsidiaries and the Separation and Distribution Agreement and other agreements and instruments entered into in connection with the Spin-Off, including the Promissory Note and the previously disclosed Tax Matters Agreement, Employee Matters Agreement and Transition Services Agreement, all previous agreements between BVH and New BBX Capital were terminated as between them in connection with the completion of the Spin-Off on September 30, 2020. In connection with the foregoing, effective September 30, 2020, New BBX Capital and its subsidiaries exited the Agreement to Allocate Consolidated Income Tax Liabilities, Income Tax Liabilities and Benefits dated May 8, 2015 (the “Tax Agreement”) of BVH, New BBX Capital, and their respective subsidiaries (collectively, the “Affiliated Group”). Under the Tax Agreement, the parties calculated their respective income tax liabilities and attributes as if each of them was a separate filer. If any tax attributes were used by another party to the Tax Agreement to offset its tax liability, the party providing the benefit would be entitled to receive an amount for the tax benefits realized. It was agreed in connection with New BBX Capital’s exit from the Tax Agreement that (i) no amounts will be either due to or from New BBX Capital or its subsidiaries, on the one hand, and the other members of the Affiliated Group, on the other hand, pursuant to the terms of the Tax Agreement, and (ii) BVH will retain all benefits and will bear all burdens associated with any taxes paid or payable by the Affiliated Group for any tax years covered by the Tax Agreement, including the right to any refunds or liability for additional taxes payable by any members of the Affiliated Group during those years.
In addition, as previously disclosed, BVH, New BBX Capital, and certain of their subsidiaries, as borrowers (the “Borrowers”), were parties to a Loan and Security Agreement, dated March 6, 2018, with IBERIABANK, as administrative agent and a lender, as amended by the Loan Extension and Modification Agreement, dated July 17, 2019 (the “Loan Agreement”). The Loan Agreement provided for a $50 million revolving line of credit to the Borrowers. Effective September 30, 2020, the Loan Agreement was terminated at the request of BVH and New BBX Capital in connection with the completion of the Spin-Off. In connection with the termination, IBERIABANK released the security interest over all collateral granted to the lenders under the facility. No amounts were outstanding under the Loan Agreement at September 30, 2020 or June 30, 2020.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth in the “Introduction” above with respect to the Spin-Off of New BBX Capital, including (i) the separation of BVH’s investment in Bluegreen Vacations, which continues to be held by BVH, from BVH’s other businesses and investments, which are held by New BBX Capital, (ii) the distribution of 100% of the shares of New BBX Capital’s Class A Common Stock and Class B Common Stock to BVH’s shareholders such that BVH no longer holds any interest in New BBX Capital, and (iii) the $75 million Promissory Note issued by BVH in favor of New BBX Capital, is incorporated by reference into this Item 2.01. Unaudited pro forma financial information for BVH giving effect to the Spin-Off and related transactions is attached as Exhibit 99.1 hereto.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Executive Officers
As described under “Introduction” above, in connection with the consummation of the Spin-Off, effective September 30, 2020, (i) Mr. Jarett Levan resigned as President of BVH, (ii) Mr. Alan Levan, BVH’s Chairman and Chief Executive Officer, has succeeded Mr. Jarett Levan as BVH’s President, and (iii) Seth M. Wise resigned as Executive Vice President and as a director of BVH. As a result, BVH’s executive officers are: Alan B. Levan, Chairman, Chief Executive Officer, and President; John E. Abdo, Vice Chairman; and Raymond S. Lopez, Executive Vice President, Chief Financial Officer and Chief Risk Officer.
As disclosed in the Spin-Off Proxy Statement, subject to the discretion of the Compensation Committee of Bluegreen Vacations’ Board of Directors, it is expected that BVH’s executive officers, each of whom is an executive of Bluegreen Vacations, will receive a significant portion of their compensation for their services on behalf of BVH and Bluegreen Vacations from Bluegreen Vacations. In connection therewith, effective September 30, 2020, Mr. Alan Levan, Mr. Abdo, and Mr. Lopez agreed to reduced annual base salaries under their respective employment agreements, with BVH going forward paying annual base salaries of $200,000 to each of Mr. Alan Levan and Mr. Abdo and $100,000 to Mr. Lopez.
Board of Directors
In addition to the above-described resignation of Seth M. Wise as a director of the Company, the following directors also resigned from BVH’s Board of Directors in connection with the completion of the Spin-Off on September 30, 2020 and have become directors of New BBX Capital: Norman H. Becker; Andrew R. Cagnetta, Jr.; Steven M. Coldren; Gregory A. Haile; Willis N. Holcombe; Anthony P. Segreto; and Neil Sterling.
Effective September 30, 2020, Lawrence A. Cirillo was appointed to BVH’s Board of Directors. Mr. Cirillo, age 81, has served as a director of Bluegreen Vacations since 2003. Mr. Cirillo was Principal Partner and President of Atlantic Chartering, an oil tanker brokerage company, from 1979 until Atlantic Chartering merged with Seabrokers, Inc., a subsidiary of Clarkson, Ltd. Mr. Cirillo served as a Vice President of Seabrokers, Inc. until 2000. Since 2000, Mr. Cirillo has served as an oil tanker broker with Southport Maritime, Inc.
After giving effect to the foregoing, BVH’s Board of Directors now consists of seven directors, who are Alan B. Levan, Chairman; John E. Abdo, Vice Chairman; Jarett S. Levan; and independent directors Lawrence A. Cirillo, Darwin Dornbush, Joel Levy and William Nicholson. In connection with the changes to the Board of Directors, the committees of BVH’s Board of Directors have been reconstituted as follows: (i) BVH’s Audit Committee is now comprised of Joel Levy, Chairman, Lawrence A. Cirillo, Darwin Dornbush, and William Nicholson; (ii) BVH’s Compensation Committee is now comprised of William Nicholson, Chairman, Lawrence A. Cirillo, and Darwin Dornbush; and (iii) BVH’s Nominating/Corporate Governance Committee is now comprised of Darwin Dornbush, Chairman, Lawrence A. Cirillo, and William Nicholson.
As disclosed in the Spin-Off Proxy Statement, while historically BVH’s independent directors received an annual cash fee of $100,000 for their service on BVH’s Board of Directors, as it is anticipated that BVH’s directors, including the independent directors, will also serve on the Bluegreen Vacations’ Board of Directors and that the independent directors will receive fees for doing so, future director compensation by BVH is expected to be less than amounts historically paid. It is currently anticipated that, excluding fees for service on Board committees, each independent director will receive total annual director compensation from BVH and Bluegreen Vacations in an amount not to exceed $100,000 in the aggregate.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
As described under “Introduction” above, in connection with the Spin-Off, BVH’s name has been changed from BBX Capital Corporation to Bluegreen Vacations Holding Corporation. The name change was effected by filing Articles of Amendment to BVH’s Amended and Restated Articles of Incorporation, as amended, with the Florida Department of State (the “Name Change Amendment”). A proposal to approve the Name Change Amendment was included in the Spin-Off Proxy Statement, and as previously disclosed, the Name Change Amendment was approved by BVH’s shareholders at a special meeting of shareholders held on September 25, 2020. A copy of the Name Change Amendment is attached as Exhibit 3.1 hereto.
Item 9.01 Financial Statements and Exhibits
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Pro Forma Financial Information: |
Unaudited pro forma financial information for BVH giving effect to the Spin-Off and related transactions is attached as Exhibit 99.1 hereto.
(d) Exhibits:
Exhibit No. Description
3.1 Articles of Amendment to Amended and Restated Articles of Incorporation, as Amended
10.1 Promissory Note dated September 30, 2020 issued by Bluegreen Vacations Holding Corporation in favor of BBX Capital, Inc.
10.2 Lenders’ letter confirming the termination of the Loan and Security Agreement dated March 6, 2018, with IBERIABANK, as administrative agent and a lender, as amended by the Loan Extension and Modification Agreement, dated July 17, 2019.
99.1 Unaudited pro forma financial information
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 2, 2020
Bluegreen Vacations Holding Corporation
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By: /s/ Raymond S. Lopez |
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Raymond S. Lopez |
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Executive Vice President, Chief Financial Officer and Chief Risk Officer
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7
ARTICLES OF AMENDMENT
TO THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
BBX CAPITAL CORPORATION
The Amended and Restated Articles of Incorporation, as amended, of BBX Capital Corporation, a Florida corporation (the “Corporation”), are hereby amended pursuant to the provisions of Section 607.1006 of the Florida Business Corporation Act, and such amendment is set forth as follows:
FIRST: Article I is hereby deleted in its entirety and replaced with the following:
ARTICLE I
NAME
The name of the Corporation is Bluegreen Vacations Holding Corporation.
ADOPTION OF AMENDMENT: The foregoing amendment was duly adopted and approved by the Board of Directors of the Corporation on June 16, 2020 and by the Corporation’s shareholders by a vote thereof at a special meeting of the Corporation’s shareholders on September 25, 2020. The number of votes cast for the amendment at the special meeting was sufficient for approval.
EFFECTIVE DATE OF AMENDMENT: This amendment shall be effective on September 28, 2020.
IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be duly executed in its corporate name this 25th day of September, 2020.
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BBX CAPITAL CORPORATION |
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By: |
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/s/ Raymond S. Lopez |
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Name: |
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Raymond S. Lopez |
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Title: |
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Chief Financial Officer |
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PROMISSORY NOTE
$75,000,000.00 September 30, 2020
FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, Bluegreen Vacations Holding Corporation (formerly BBX Capital Corporation), a Florida corporation (“Maker”), promises to pay to the order of BBX Capital, Inc., a Florida corporation (“Holder”), without setoff, the principal sum of Seventy-Five Million Dollars ($75,000,000.00) (the “Principal”), plus interest on the Principal from time to time remaining unpaid, commencing on the date first set forth above (the “Effective Date”) and, subject to Section 1(b), calculated at a fixed rate of six percent (6%) per annum (computed on the basis of a 360-day year of 12 consecutive, 30-day months for the number of days actually elapsed) (collectively with interest on the Principal and any interest accruing pursuant to Section 1(b), “Interest”), and payable as hereinafter set forth. This Promissory Note constitutes the “Promissory Note” referred to in the Separation and Distribution Agreement dated September 25, 2020 by and among Maker, on the one hand, and Holder or its predecessor, on the other hand (the “Separation Agreement”).
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1. Payments. |
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(a) Subject to Section 1(b) below, payments of Interest shall be paid by Maker to Holder on the first day of each calendar quarter (each such date, a “Payment Date”) until all unpaid Principal and accrued Interest is paid in full. The first Payment Date shall be January 1, 2021. |
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(b) Maker shall have the right, by providing written notice to Holder at least thirty (30) days prior to any Payment Date, to defer payment of Interest otherwise payable on such Payment Date (each, a “Deferred Payment”). In the event of such a deferral, commencing on the applicable Payment Date and continuing until all payments of Interest and Deferred Payments, are brought current and paid to Holder, Interest on the outstanding balance shall accrue at a fixed rate of eight percent (8%), compounded quarterly. Payments of Interest hereunder shall be applied first against accrued and unpaid Deferred Payments and then against accrued and unpaid interest on the Principal. |
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(c) Maker shall repay in full to Holder all unpaid Principal and accrued and unpaid Interest, including any Deferred Payments, on the fifth (5th) anniversary of the Effective Date. |
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(d) Maker shall have the right at any time and from time to time to prepay amounts outstanding hereunder, in whole or in part, without premium or penalty. In addition, in the event of a Bluegreen Sale (as defined below), then Maker shall provide prompt written notice thereof to Holder and Holder may, by written demand delivered to Maker within thirty (30) days after its receipt of the above-described written notice from Maker, require Maker to promptly (but in no event later than two business days) prepay all amounts outstanding hereunder. For purposes hereof, a “Bluegreen Sale” means a sale to an unaffiliated third party of all or substantially all of (i) the assets of Bluegreen Vacations Corporation (“Bluegreen”), (ii) the outstanding shares of
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Bluegreen’s common stock or (iii) the shares of Bluegreen’s common stock held by Maker or its subsidiary (in each case, whether by a purchase and sale transaction, merger, consolidation or other similar business combination transaction). Prepayments, whether voluntary or mandatory, shall first be applied first against accrued and unpaid Deferred Payments, then against accrued and unpaid interest on the Principal, and thereafter applied to the Principal hereunder. |
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(e) All payments made to Holder hereunder shall be made: (i) in immediately available funds of lawful money of the United States of America; and (ii) to Holder at 401 East Las Olas Boulevard, Suite 800, Fort Lauderdale, Florida 33301, or at such other place as Holder may from time to time designate to Maker in writing (including, without limitation, by automatic deposit or wire transfer to an account designated in writing by Holder). |
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2. Authority. Maker represents that (a) it has full power and authority to execute, deliver and perform its obligations hereunder, (b) that the person executing this Promissory Note on its behalf has been duly authorized by Maker to so execute this Promissory Note, (c) subject to the completion of the Distribution (as defined in the Separation Agreement) in accordance with the Separation Agreement, this Promissory Note will constitute the valid and binding obligation of Maker, and (d) that this Promissory Note does not conflict with, or constitute any default under, any agreement or instrument binding upon Maker. |
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3. Events of Default. Maker shall be in default hereunder (each, a “Default”) if: (a) Maker shall be adjudicated as bankrupt or insolvent, or admits in writing its inability to pay its debts as they mature, or makes a general assignment for the benefit of creditors; (b) Maker shall apply for or consent to the appointment of a receiver, trustee, or similar officer for Maker or for all or any substantial part of its property, or such receiver, trustee or similar officer shall be appointed without the application or consent of Maker and such appointment shall continue undischarged for a period of sixty (60) days; (c) Maker shall institute (by petition, application, answer, consent or otherwise) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding relating to Maker under the laws of any jurisdiction, or any such proceeding shall be instituted (by petition, application or otherwise) against Maker and shall remain undismissed for a period of sixty (60) days; or (d) unless Maker timely and properly elects to defer payment of the otherwise required amount in accordance with Section 1(b) above, Maker fails to make any payment due hereunder when due and does not cure such failure within ten (10) days after receiving written notice thereof from Holder. |
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4. Default Remedies. Upon the occurrence of a Default, the entire unpaid Principal, together with accrued and unpaid Interest and Default Payment Interest, if any, shall be immediately due and payable without notice or demand, and all amounts then due hereunder shall bear interest at the rate equal to the lesser of fifteen percent (15%) per annum or the Highest Lawful Rate (as hereinafter defined). In addition, Maker agrees to pay all documented out-of-pocket costs of collection, including, without limitation, reasonable and documented out-of-pocket attorneys’ fees and expenses, in the event of a Default, whether or not a lawsuit is brought. No remedy made available by any provision hereof is intended to be exclusive of any other remedy, and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. |
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5. No Usury. Holder shall never be entitled to receive, collect, or apply as interest on amounts outstanding hereunder (for purposes of this section, the words “interest” and “Interest” shall be deemed to include any sums treated as interest under applicable law governing matters of usury and unlawful interest), any amount in excess of the Highest Lawful Rate, and in the event Holder is ever deemed to receive, collect, or apply as interest any such excess, such amount which would be excessive interest shall be deemed a partial prepayment of the Principal and shall be treated hereunder as such. If the Principal is paid in full, any remaining excess shall be promptly paid to Maker, without interest. In determining whether or not the interest paid or payable under any specific contingency exceeds the Highest Lawful Rate, Maker and Holder shall, to the maximum extent permitted under applicable law: (i) characterize any non-Principal payment as an expense, fee or premium rather than as interest; (ii) exclude voluntary prepayments and the effects thereof; and (iii) spread the total amount of interest throughout the entire contemplated term hereof. For purposes hereof, the term “Highest Lawful Rate” shall mean the maximum rate of interest which Holder is allowed to contract for, charge, take, reserve or receive under applicable law after taking into account, to the extent required by applicable law, any and all relevant payments or charges hereunder. |
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6. Taxes. Maker agrees to promptly pay, indemnify and hold harmless Holder from all federal, state and local taxes of any kind (except for federal or Florida franchise or income taxes based on Holder’s net income) with respect to or resulting from the execution or delivery hereof or advances made pursuant hereto. |
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7. Governing Law; Venue. This Promissory Note shall be governed by, and construed in accordance with, the laws of the State of Florida, without regard to conflicts of law principles. Maker and, by its acceptance hereof, Holder each (i) irrevocably consents to the exclusive jurisdiction of any state or federal court sitting in Broward County, Florida, in any litigation in connection with or to enforce this Promissory Note and (ii) irrevocably waives any objection that it may now or hereafter have to the laying of venue of any such litigation brought in any such court and any claim that any such litigation brought in any such court has been brought in an inconvenient forum. |
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8. Miscellaneous. |
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(a) Maker waives demand, presentment, protest, dishonor and notice of maturity, non-payment or protest and all other requirements to hold Maker liable. Maker shall raise no defense other than that payment has been made. Maker shall not raise any claims of set off in any action or proceeding. |
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(b) If a payment of any amount hereunder, or any notice required hereunder, becomes due on a Saturday, Sunday or other legal holiday on which banks in the State of Florida are closed, then the due date shall be extended to the next succeeding business day. |
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(c) If any provision hereof or portion thereof is declared or found by a court of competent jurisdiction to be unenforceable or null and void, such provision or portion thereof shall be deemed stricken and severed from this Promissory Note, and the remaining provisions and portions thereof shall continue in full force and effect. |
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(d) This Promissory Note may not be transferred or assigned by Holder without the prior written consent of Maker, such consent not to be unreasonably withheld, delayed or conditioned. |
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(e) This Promissory Note may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Maker or Holder, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought. |
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(f) A delay by Holder in exercising a right or remedy shall not constitute a waiver thereof. No waiver by Holder of any Default hereunder shall be deemed to constitute a waiver of any subsequent or other Default. No exercise of any right or remedy hereunder shall preclude the exercise of any other right or remedy which Holder may have in law or in equity to enforce the paying of this Promissory Note or the collection of the amounts owed hereunder. |
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(g) The headings contained herein are for reference purposes only and shall not affect in any way the meaning or interpretation hereof. |
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, Maker has duly executed this Promissory Note as of the day and year first above written.
BLUEGREEN VACATIONS HOLDING CORPORATION,
a Florida corporation
By: /s/ Raymond S. Lopez
Name: Raymond S. Lopez
Title: Chief Financial Officer
Exhibit 10.2
Effective September 30, 2020
Brett Shepard, Chief Accounting Officer
BBX Capital Corporation
401 East Las Olas Boulevard
Suite 800
Fort Lauderdale, Florida 33301
Re:Senior Secured Loan Facility in the amount of $50,000,000.00 made on March 6, 2018 (the "Loan") by IBERIABANK, a division of First Horizon Bank, a Tennessee state-chartered bank, formerly known as IBERIABANK, a Louisiana state-chartered bank, in its capacity as Administrative Agent and a Lender and BBX CAPITAL CORPORATION, a Florida corporation, FOOD FOR THOUGHT RESTAURANT GROUP-FLORIDA, LLC, a Florida limited liability company, BBX CAPITAL FLORIDA LLC, a Florida limited liability company, WOODBRIDGE HOLDINGS CORPORATION, a Florida corporation, formerly known as WOODBRIDGE HOLDINGS, LLC, a Florida limited liability company and BBX SWEET HOLDINGS, LLC, a Florida limited liability company, collectively, as Borrowers
Dear Brett:
In connection with the above referenced Loan, the Borrowers have requested that the Lender terminate and close out the Loan effective as of September 30, 2020. This letter shall serve as Lender's confirmation of the termination and closing out of the Loan effective as of September 30, 2020, the returning of the "Notes" (as hereinafter defined) and other "Loan Documents" (as hereinafter defined) and the release and return of the "Stock Certificate" (as hereinafter defined).
In furtherance of the foregoing, please note that effective as of September 30, 2020:
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1. |
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The Loan is hereby terminated and, except with respect to any terms and conditions of that certain Loan and Security Agreement dated March 6, 2018 by and between the parties set forth above, as amended by that certain Loan Extension and Modification Agreement dated July 17, 2019, by and between the parties set forth above (collectively, and as further amended, the "Loan Agreement") and any of the other "Loan Documents" as defined in the Loan Agreement, which, by their express terms shall survive the expiration and/or termination of the Loan, the Borrowers shall not have any further obligations and/or liabilities under the Loan and the Loan Documents. |
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2. |
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BBX Capital Corporation, a Florida corporation ("BBX Capital") is hereby released from its liabilities and obligations under that certain Pledge and Security Agreement dated March 6, 2018 made by BBX Capital in favor of Lender, as
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Letter to Brett Sheppard, CAO, BBX Capital Corporation
Effective September 30, 2020
Page 2
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amended and restated by that certain Amended and Restated Pledge and Security agreement dated July 17, 2019 made by BBX in favor of Lender (collectively, the "Pledge Agreement"), which Pledge Agreement is hereby terminated and rendered of no further force and/or effect (except with respect to any terms and conditions of the Pledge Agreement, which, by their express terms shall survive the expiration and/or termination of the Loan). |
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3. |
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No later than five (5) business days from the date of this letter, Lender shall return to Borrowers the following: |
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(a) |
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the original Revolving Promissory Note dated March 6, 2018 in the original principal amount of $35,000,00.00 made by Borrower and payable to Lender and marked "Paid in Full"; |
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(b) |
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the original Revolving Promissory Note dated March 6, 2018 in the original principal amount of $15,000,00.00 made by Borrower and payable to City National Bank of Florida and marked "Paid in Full"; |
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(c) |
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the original Stock Certificate No. 004 representing 14,500 shares of common stock in Woodbridge Holdings Corporation, a Florida corporation (the "Stock Certificate"); and |
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(d) |
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the original Pledge Agreement. |
Please evidence your agreement and acceptance to the terms and condition of this letter by having each Borrower sign and date in the applicable space below its respective signature block on the following page.
This letter may be executed in multiple counterparts, each of which shall constitute an original, but all of which shall constitute one document.
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IBERIABANK, a Louisiana state-chartered bank, as Administrative Agent and a Lender |
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By:/s/J. Scott McCleneghen J. Scott McCleneghen, Executive Vice President |
[BORROWERS' SIGNATURES APPEAR ON FOLLOWING PAGE]
Letter to Brett Sheppard, CAO, BBX Capital Corporation
Effective September 30, 2020
Page 3
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BORROWER: |
BORROWER: |
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BBX CAPITAL CORPORATION, a Florida corporation |
FOOD FOR THOUGHT RESTAURANT GROUP-FLORIDA, LLC, a Florida limited liability company |
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By:/s/Raymond S. Lopez Raymond S. Lopez, Executive Vice President and Chief Financial Officer Date: September 29, 2020 |
By:/s/Raymond S. Lopez Raymond S. Lopez Chief Financial Officer Date: September 29, 2020 |
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BORROWER: |
LENDER: |
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BBX SWEET HOLDINGS, LLC, a Florida limited liability company |
CITY NATIONAL BANK OF FLORIDA, a national banking association |
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By:/s/ Raymond S. Lopez Raymond S. Lopez Chief Financial Officer Date: September 29, 2020 |
By:/s/ Barbara Burke Print Name: Barbara Burke Title: Managing Sr. Vice President Date: September 29, 2020 |
Exhibit 99.1
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION FOR BLUEGREEN VACATIONS HOLDING CORPORATION
The unaudited pro forma consolidated financial statements set forth below have been derived from the historical annual and interim financial statements of Bluegreen Vacations Holding Corporation (formerly BBX Capital Corporation) (“BVH”), including BVH’s unaudited statement of financial condition as of June 30, 2020 and unaudited statement of operations for the six months ended June 30, 2020, which are included in BVH’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 filed with the SEC on August 10, 2020 (the “BVH June 2020 10-Q”), and BVH’s audited statement of operations for the year ended December 31, 2019, which is included in BVH’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 13, 2020 (the “BVH 2020 10-K”). The unaudited pro forma consolidated financial statements should be read in conjunction with BVH’s historical financial statements, accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the BVH June 2020 10-Q and the BVH 2020 10-K.
The unaudited pro forma consolidated statements of operations for the six months ended June 30, 2020 and the year ended December 31, 2019 give effect to BVH’s Spin-Off of BBX Capital, Inc. (formerly BBX Capital Florida LLC) (“New BBX Capital”), as described in the accompanying Current Report on Form 8-K, and the related transactions set forth below as if they had occurred on January 1, 2019. The unaudited pro forma statement of financial condition as of June 30, 2020 gives effect to the Spin-Off and the related transactions set forth below as if they had occurred on June 30, 2020.
The unaudited pro forma consolidated financial statements give effect to the Spin-Off Adjustments as well as the following Transaction Adjustments:
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the $75 million promissory issued by BVH in favor of New BBX Capital in connection with the Spin-Off; |
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• |
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the one-for-five reverse split of BVH’s Class A Common Stock and Class B Common Stock effected on July 22, 2020; and |
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• |
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the recognition of compensation expense related to the acceleration in August 2020 in contemplation of the Spin-Off of the vesting of restricted stock awards previously granted to BVH’s executives (for which unrecognized compensation expenses were $19.8 million as of June 30, 2020) and a total of approximately $19.5 million in cash paid to BVH’s executives for 2020 services and the payout of cash to settle BVH’s long-term incentive program for 2020 (which, in previous years, was generally paid primarily in stock awards). |
In the opinion of BVH’s management, the unaudited pro forma consolidated financial statements reflect adjustments necessary to present fairly BVH’s pro forma results and financial position as of and for the periods indicated. The Spin-Off Adjustments and Transaction Adjustments reflected in the unaudited pro forma consolidated financial statements are based on currently available information and assumptions management believes are, under the circumstances and given the information available at this time, reasonable, and directly attributable to New BBX Capital’s separation from BVH.
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The unaudited pro forma consolidated financial statements are for illustrative and informational purposes only and are not intended to represent what BVH’s results of operations or financial position would have been had the Spin-Off and related transactions occurred on the dates assumed. The unaudited pro forma consolidated financial statements also should not be considered indicative of BVH’s future results of operations or financial position following the Spin-Off.
Prior to the Spin-Off, BVH provided many corporate functions on New BBX Capital’s behalf, including executive services, treasury, tax, accounting, legal, internal audit, human resources, public and investor relations, general management, shared information technology systems, corporate governance activities, and centrally managed employee benefit arrangements. In addition to the adjustments described above, the Transaction Adjustments in the unaudited pro forma consolidated financial statements includes an allocation to New BBX Capital of these expenses incurred by BVH. The expense allocation is (i) based on the allocation methodology used to prepare the carve-out financial statements of New BBX Capital included in the Information Statement, dated August 27, 2020 (the “Information Statement”), which forms a part of New BBX Capital’s Registration Statement on Form 10, as amended, filed by New BBX Capital with the SEC and (ii) considered to be a reasonable estimate of the costs of services provided to New BBX Capital by BVH during the periods presented. However, the allocation may not reflect BVH’s actual expenses following the Spin-Off or the actual costs to be incurred by New BBX Capital following the Spin-Off, which may be impacted by multiple factors, including the organizational structure and strategic direction of the companies in the future.
Costs related to the Spin-Off prior to its completion were borne by BVH. These costs included, without limitation, the compensation expense related to the acceleration in August 2020 in contemplation of the Spin-Off of the vesting of restricted stock awards previously granted to BVH’s executives (for which unrecognized compensation expenses were $19.8 million as of June 30, 2020) and the cash payments to BVH’s executive officers for 2020 services and to settle BVH’s long-term incentive program for 2020 (which, in previous years, was generally paid primarily in stock awards). Accordingly, these costs are reflected in BVH’s unaudited pro forma consolidated statements of operations below.
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BVH and Subsidiaries
Unaudited Consolidated Statements of Operations and Comprehensive Income
For the Six Months Ended June 30, 2020
(In thousands, except per share data)
3
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Other comprehensive loss, net |
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(351 |
) |
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351 |
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— |
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— |
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Comprehensive loss, net of tax |
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(67,817 |
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38,105 |
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5,310 |
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(24,402 |
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Less: Comprehensive (loss) income attributable to noncontrolling interests |
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(3,356 |
) |
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4,312 |
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— |
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956 |
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Comprehensive loss attributable to shareholders |
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$ |
(64,461 |
) |
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33,793 |
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5,310 |
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(25,358 |
) |
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(A) |
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Historical amounts as reported by BVH in the BVH June 2020 10-Q. |
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(B) |
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Reflects the disposal of New BBX Capital’s operations as if the Spin-Off had occurred on January 1, 2019. |
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(C) |
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Represents interest expense on the $75.0 million promissory note issued by BVH in favor of New BBX Capital. Subject to the terms of the note described in the accompanying Current Report on Form 8-K, amounts outstanding will bear interest at a rate of 6.0% per annum. |
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(D) |
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Represents the estimated cost of services provided to New BBX Capital by BVH based on the expense allocation methodology used to prepare the carve-out financial statements of New BBX Capital included in the Information Statement, as described above. |
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(E) |
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Represents income before income taxes reduced by net income attributable to noncontrolling interest taxed as partnerships multiplied by BVH’s estimated annual effective income tax rate of approximately 6.5% for the six months ended June 30, 2020. The annual effective income tax rate was limited during the six months ended June 30, 2020 to the amount that would be recognized if the year-to-date loss was the loss for the full year ending December 31, 2020. |
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BVH and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Operations and Comprehensive Income
For the Year Ended December 31, 2019
(In thousands, except per share data)
5
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Other comprehensive income, net |
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339 |
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(339 |
) |
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— |
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— |
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Comprehensive income (loss), net of tax |
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32,442 |
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(31,168 |
) |
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(15,064 |
) |
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(13,790 |
) |
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Less: Comprehensive income attributable to noncontrolling interests |
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14,412 |
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(224 |
) |
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— |
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14,188 |
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Comprehensive income (loss) attributable to shareholders |
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$ |
18,030 |
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(30,944 |
) |
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(15,064 |
) |
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(27,978 |
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(A) |
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Historical amounts as reported by BVH in the BVH 2020 10-K. |
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(B) |
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Reflects the disposal of New BBX Capital’s operations as if the Spin-Off had occurred on January 1, 2019. |
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(C) |
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Represents interest expense on the $75.0 million promissory note issued by BVH in favor of New BBX Capital. Subject to the terms of the note described in the accompanying Current Report on Form 8-K, amounts outstanding will bear interest at a rate of 6.0% per annum. |
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(D) |
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Represents compensation expense recognized in connection with the Spin-Off as if the expenses had been recognized on January 1, 2019, including $14.9 million of unrecognized share based compensation costs as of January 1, 2019 associated with the accelerated vesting of restricted stock awards and the $14.1 million cash settlement of BVH’s long-term incentive plan (which was historically paid primarily in restricted stock awards) for 2020, partially offset by the allocation of $21.0 million of expenses to New BBX Capital as the estimated cost of services provided to New BBX Capital by BVH based on the expense allocation methodology used to prepare the carve-out financial statements of New BBX Capital included in the Information Statement, as described above. |
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(E) |
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Represents income before income taxes reduced by net income attributable to noncontrolling interest taxed as partnerships and adjusted for permanent differences multiplied by the statutory income tax rate of approximately 24% for the year ended December 31, 2019. |
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(F) |
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The amounts represent the adjustment to the historical weighted average basic and diluted common shares outstanding for the one-for-five reverse split of BVH’s Class A Common Stock and Class B Common Stock effected on July 22, 2020 and the accelerated vesting of outstanding restricted stock awards as of January 1, 2019 (or when the restricted stock awards were granted if the grant date for the applicable award was subsequent to January 1, 2019). |
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BVH and Subsidiaries
Unaudited Consolidated Statement of Financial Condition
As of June 30, 2020
(In thousands, except share data)
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(A) |
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Historical amounts as reported by BVH in the BVH June 2020 10-Q. |
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(B) |
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Reflects the disposal of New BBX Capital’s assets and liabilities as if the Spin-Off had occurred on June 30, 2020. |
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(C) |
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Represents a cash payout to BVH’s executives in August 2020 for their 2020 bonuses and to settle BVH’s long-term incentive program for 2020. |
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(D) |
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Reflects the reversal of accrued executive incentive bonuses as of June 30, 2020 as a result of the cash payout described above. |
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(E) |
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Represents the $75.0 million promissory note issued by BVH in favor of New BBX Capital in connection with the Spin-Off. |
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(F) |
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Reflects the impact of the accelerated vesting of restricted stock awards and, with respect to additional paid-in capital, the $75.0 million promissory note issued by BVH in favor of New BBX Capital in connection with the Spin-Off. |
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(G) |
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Reflects executive compensation expense associated with the accelerated vesting of restricted stock awards and the payout of cash amounts, as described above. |
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