FIRST AMENDMENT TO FORBEARANCE AGREEMENT
Exhibit
10.1
FIRST
AMENDMENT
TO
FORBEARANCE AGREEMENT
This
First Amendment to Forbearance Agreement (this “Amendment”)
is
made as of this __ day of July, 2007, by and among LASALLE BANK NATIONAL
ASSOCIATION, AS TRUSTEE OF MARATHON REAL ESTATE CDO 2006-1 GRANTOR TRUST,
successor-in-interest to Marathon Structured Finance Fund, L.P., a Delaware
limited partnership (the “Lender”).
SOUTH
BEACH RESORTS, LLC, a Florida limited liability company (the “Borrower”),
XXXX
XXXXXX, an individual resident of the State of Florida (“Pauzar”),
and
XXXXXXX XXXXXX, an individual resident of the State of Florida (“Wright”,
and
together with Pauzar, the “Principals”,
and
the Principals, together with Borrower, the “Borrowing
Parties”).
RECITALS
A. Lender
and Borrower are parties to that certain Loan Agreement dated as of June 30,
2005 (the “Loan
Agreement”),
pursuant to which Lender agreed to make a loan to Borrower (the “Loan”)
in the
amount of up to Nine Million and NO/100 Dollars ($9,000,000.00).
B. The
Loan
is evidenced by that certain Promissory Note dated June 30, 2005 (the
“Note”),
and
is secured by the lien of that certain Mortgage, Assignment of Rents and
Security Agreement dated June 30, 2005 and recorded among the land records
of
Dade County, Florida on July 11, 2005 in Official Records Book 23557, Page
3073
(the “Mortgage”).
C. Payment
of certain obligations of Borrower pursuant to the Loan Documents is guaranteed
by the Principals pursuant to the terms of, inter alia, that certain Guaranty
(Exceptions to Nonrecourse Liability) dated as of June 30, 2005 (the
“Guaranty”).
As
used herein, the term “Loan
Documents”)
shall
mean the Loan Agreement, the Note, the Mortgage, the Guaranty and any and all
other documents evidencing, securing and/or governing the Loan whether now
existing or hereafter executed and delivered.
D. The
Loan
matured by its terms on January 11, 2007 and Borrower failed to repay the Loan
in accordance with the terms of and as required by the Loan Documents (the
“Existing
Default”).
E. Pursuant
to the terms of that certain Forbearance Agreement among Lender and the
Borrowing Parties dated as of February 2, 2007 (as amended and modified hereby,
the “Forbearance
Agreement”),
Lender agreed, among other things, to forbear from exercising any right or
remedy against the Borrowing Parties with respect to the Existing Default during
the Initial Forbearance Period and the Extended Forbearance Period.
F. Borrower
has requested that Lender continue to waive the Existing Default, and Lender
has
conditionally agreed to waive such Existing Default, on the terms set forth
below provided, however, that in the event that any Event of Default or Other
Default occurs during the Forbearance Period or prior to the payment in full
of
the Obligations of the Borrower to Lender, such waiver shall be null and
void.
NOW,
THEREFORE, in consideration of the mutual undertakings set forth below and
other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties agree as
follows:
AGREEMENT
1. Incorporation
of Recitals; Defined Terms.
Borrower
and Lender agree that the Recitals above are a part of this Amendment. Unless
otherwise expressly defined in this Amendment, terms defined in the Forbearance
Agreement or in the Loan Agreement shall have the same meaning under this
Amendment.
(a) As
used
herein, the term “Forbearance
Period”
shall
mean the Initial Forbearance Period, the Extended Forbearance Period, or the
Second Extended Forbearance Period, as the case may be.
2. Acknowledgements.
Borrowing Parties hereby acknowledge, ratify, admit, stipulate and agree,
without precondition or qualification, as follows:
(a) Each
of
the Recitals contained above in this Amendment is true, correct and complete
in
all material respects.
(b) Borrower
and Principals (i) entered into the Loan Documents to which they are parties,
and (ii) are entering into this Amendment of their own free will, without
coercion or threat of any kind from Lender or from any other Person, fully
understanding the terms hereof (including the waiver of certain material rights
afforded by law), and are fully aware that they may have potentially
advantageous alternatives to entering into this Amendment. Borrower and
Principals acknowledge, stipulate and agree that any other alternative would
present a material risk to their detriment.
(c) The
Loan
Documents constitute valid and binding obligations of Borrower and Principals,
enforceable against each of them in accordance with their respective
terms.
(d) As
of
July 11, 2007, the Obligations shall consist of the following:
|
Principal
|
$6,248,900.00
|
|
Interest
Due
|
$64,441.78
|
|
Tax
Escrow
|
$6,940.00
|
|
Insurance
Escrow
|
$8,500.00
|
In
addition, Borrower is obligated to pay to and reimburse Lender for all amounts
incurred in connection with the Obligations and/or the Existing Default,
including, without limitation, costs and expenses of Lender’s legal counsel,
which amounts constitute part of the aggregate Obligations.
(e) Except
as
specifically provided in Section 6(b) and (c) below, Borrower’s obligation to
repay the Obligations is unconditional and without defense, counterclaim,
recoupment or offset. The Obligations are immediately due and payable in
full.
(f) (i)
There
exist one or more defaults under the terms of the Loan Documents, (ii) any
and
all notices required to be given by Lender have in fact been given and received,
(iii) all applicable grace periods have expired without cure having been
effected, and (iv)Borrowing Parties hereby waive all such notice provisions
and
grace periods in connection with the
Existing
Default.
(g) Borrower
has no defenses, rights of set-off or recoupment, causes of action or claims
or
counterclaims with respect to the Obligations and/or the liens and security
interests granted to Lender
pursuant to the terms of the Loan Documents, and all of such liens and security
interests are enforceable by Lender.
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(h) Borrowing
Parties shall derive material benefit by virtue of the execution and delivery
of
this Agreement and the performance of the parties’ obligations
hereunder.
3. Reaffirmation
of Obligations.
Borrowing Parties reaffirm and ratify that Borrower is indebted and obligated,
directly or indirectly, to Lender in an amount equal to the Obligations set
forth in Section 2(d) above. Interest shall continue to accrue on and forms
a
part of the Obligations pursuant to the terms of the Loan Documents as set
forth
herein. Borrower reaffirms and ratifies that, pursuant to the terms of the
Loan
Documents, it is liable to pay or reimburse applicable costs, fees and
reasonable attorneys’ fees and expenses related to the Obligations incurred by
Lender, all of which form a part of the Obligations. Borrower hereby promises
to
pay to the order of Lender the Obligations, plus any and all accrued interest
thereon and accrued costs, fees and reasonable attorneys’ fees and expenses in
accordance with the Loan Documents as modified by the terms hereof.
4. Bankruptcy
Proceedings.
All
representations and warranties set forth in Section 4 of the Forbearance
Agreement are true and correct on and as of the date hereof and all
acknowledgements, covenants and agreements set forth in Section 4 of the
Forbearance Agreement are each hereby ratified, remain in full force and effect
and constitutes the valid and legally binding obligations of Borrower and/or
Principals, as the case may be, enforceable in accordance
therewith.
5. Release;
Lender’s Liability.
(a)
Borrower, Principals, their successors and assigns (including, without
limitation, any estate, debtor, trustee, receiver or assignee for the benefit
of
creditors) to the fullest extent permitted by law (collectively, the
“Releasing
Parties”),
hereby release, remise, forever discharge and forgive Lender, its shareholders,
directors, affiliates, officers, employees, servicers, agents, attorneys,
representatives, predecessors, successors and assigns (collectively, the
“Released
Parties”),
of
and from any and all claims, causes, causes of action, demands, counterclaims,
cross claims, damages, complaints, suits, bonds, losses, liabilities,
obligations, commitments, contribution, indemnity or otherwise, at law or equity
or mixed, known, unknown, suspected, unsuspected, asserted, unasserted, which
the Releasing Parties or any of them, now have, had or may in the future have
against the Released Parties or any of them which arose prior to the execution
and delivery of this Agreement and relate to the Loan Documents and/or the
Obligations.
(b) Lender
shall not be liable for any claims, suits, actions, costs, damages, liabilities
or expenses, or incidental, consequential, special or punitive damages
(“Liabilities”)
in
connection with the subject matter of this Amendment other than Liabilities
caused by the gross negligence or willful misconduct of Lender, and Borrower
hereby agrees to indemnify and hold harmless Lender and its affiliates and
the
directors, officers, employees and agents of any of them, and the successors
and
assigns of Lender from and against any and all Liabilities arising from or
in
connection with any acts or omissions taken by Borrower in connection with
this
Amendment or the performance of Borrower’s duties under this Amendment, other
than those Liabilities caused by the gross negligence or willful misconduct
of
Lender.
6. Forbearance
Period.
(a)
During the Second Extended Forbearance Period (as defined below), Lender agrees
to forbear from exercising any right or remedy against Borrowing Parties with
respect to the Existing Default, provided (i) there shall occur no Event of
Default other than the Existing Default, and (ii) Borrower shall continue to
make monthly Payments of accrued interest on the Payment Date as contemplated
by
Section 2.2.1 of the Loan Agreement. Nothing herein shall be construed as an
agreement
by Lender from asserting any affirmative defense, cross-claim, counterclaim
or
third-party claim in any action or proceeding that is now pending or may
hereafter be commenced. Lender’s agreement to forbear from exercising any rights
or remedies in accordance with this paragraph shall commence as of 5:00 PM
Eastern time, July 11, 2007 and continue until 5:00 PM
Eastern
time, October 11, 2007, unless earlier terminated as a result of the occurrence
of an Additional Default (as defined in
the
Forbearance Agreement) (the “Second
Extended Forbearance Period”).
Upon
and after the expiration of the Second Extended Forbearance Period, Lender
shall
be free to exercise any right or remedy to which Lender heretofore or hereafter
shall be entitled without regard to this paragraph. Nothing contained herein
shall be deemed to limit Borrower’s obligations to make all payments due under
the Loan Documents other than the repayment of the principal balance, all of
which obligations shall remain in full force and effect.
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(b) During
the Second Extended Forbearance Period, so long as no Additional Default shall
occur, Borrower shall not be obligated to pay the Late Charges accruing as
contemplated by Section 8 of the Note. Provided that Borrower pays the
Obligations in full prior to the expiration of the Second Extended Forbearance
Period, Lender shall waive such Late Charges in their entirety.
(c) During
the Second Extended Forbearance Period, so long as no Additional Default shall
occur, although shall accrue at the Default Rate as contemplated by Section
7.2
of the Note, Borrower shall continue to pay interest at the Interest Rate,
and
the difference between interest accruing at the Interest Rate and the Default
Rate (the “Interest
Differential”)
shall
be deferred. Provided that Borrower pays the Obligations in full prior to the
expiration of the Second Extended Forbearance Period, Lender shall waive the
Interest Differential in its entirety.
7. Costs
and Expenses.
Borrower
shall be liable to and shall pay to Lender all of the following:
(a) Interest.
Upon execution and delivery hereof, Borrower shall pay all accrued interest
due
under the Loan Documents to Lender including the installment due July 11,
2007.
(b) Legal
Fees. Borrower shall pay all of Lender’s
reasonable
attorneys’ fees and expenses incurred in connection with the preparation and
negotiation of this Amendment and the enforcement of Lender’s rights and
remedies hereunder or under the Loan Documents, as the case may be.
(c) Lender’s
Costs and Expenses. Borrower shall pay all costs and expenses incurred by or
on
behalf of Lender relating the Loan, Borrower’s default, and the execution and
delivery of this Amendment.
(d) In
addition to the foregoing, upon execution and delivery hereof, Borrower shall
pay to Lender a fee in the amount of Fifty Thousand and No/100 Dollars
($50,000.00) as consideration for Lender’s agreement to forbear from exercising
its rights and remedies with respect to the Existing Default as provided
hereunder.
8. Good
Faith.
Borrowing Parties acknowledge and warrant that Lender has acted in good faith
and has conducted itself in a commercially reasonable manner in its
relationships with Borrowing Parties in connection with this Amendment and
generally in connection with the Loan Agreement and the Obligations, Borrowing
Parties hereby waiving and releasing any claims to the
contrary.
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9. Value.
As a
consequence of Lender’s covenants, releases, waivers, settlement, and
forbearance hereunder, Borrowing Parties have received reasonably equivalent
value, as construed under Section 548 of the Bankruptcy Code, and fair
consideration, as construed under applicable local and state laws, for their
obligations as set forth in this Amendment.
10. Representations
and Warranties.
Borrower
and each Principal represents and warrants to Lender for itself as
follows:
(a) Borrower
is a limited liability company duly formed, validly existing and in good
standing under the laws of the state in which it was formed.
(b) Borrower
has the power and authority to execute and deliver this Amendment and to perform
its obligations hereunder, and has taken all necessary and appropriate limited
liability action to authorize the execution, delivery and performance of this
Amendment.
(c) The
Forbearance Agreement, as amended by this Amendment, and each of the other
Loan
Documents are each hereby ratified, each remain in full force and effect, and
each constitutes the valid and legally binding obligation of Borrower and/or
Principals, as the case may be, enforceable in accordance with its
terms.
(d) All
of
Borrower’s and Principals’ representations and warranties contained in the
Forbearance Agreement, Loan Agreement and the other Loan Documents are true
and
correct on and as of the date of Borrower’s and Principals’ execution of this
Amendment.
(e) After
giving effect to this Amendment, no Event of Default and no event which, with
notice, lapse of time or both would constitute an Event of Default, has occurred
and is continuing under the Forbearance Agreement, the Loan Agreement or the
other Loan Documents.
11. Remedies.
Upon the
occurrence of an Additional Default, Lender shall be entitled immediately to
terminate this Amendment and the Forbearance Agreement without notice to the
Borrowing Parties, whereupon Lender shall be entitled to pursue all of its
rights and remedies under the Loan Documents, at law or in equity.
12. Notices.
Any
notice or other communication required or permitted to be given shall be given
in accordance with Section 14 of the Forbearance Agreement.
13. CONSENT
TO JURISDICTION.
BORROWER
PARTIES HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED
WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND IRREVOCABLY AGREES THAT,
SUBJECT TO LENDER’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AMENDMENT OR THE FORBEARANCE AGREEMENT OR THE LOAN DOCUMENTS
SHALL BE LITIGATED IN SUCH COURTS. BORROWER PARTIES EXPRESSLY SUBMIT AND CONSENT
TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM
NON
CONVENIENS. BORROWER PARTIES HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL
PROCESS AND AGREE THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON BORROWER
PARTIES BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED
TO
BORROWER PARTIES, AT THE ADDRESS SET FORTH IN THE FORBEARANCE AGREEMENT AND
SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN
POSTED.
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14. WAIVER
OF JURY TRIAL.
BORROWING PARTIES WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT
THEY
MAY HAVE TO A TRIAL BY JURY OF ANY CLAIM, COUNTERCLAIM, ACTION OR OTHER
PROCEEDING ARISING UNDER OR RELATING TO THIS AMENDMENT, THE FORBEARANCE
AGREEMENT, THE LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
15. Applicable
Law.
This
Amendment shall be governed by and interpreted in accordance with the laws
of
the State of New York applicable to contracts made and performed in New York
(without regard to principles of conflict of laws that would defer to the
substantive laws of another jurisdiction).
16. Severability.
The
invalidity, illegality or unenforceability or any provision of this Amendment
shall not affect or impair the validity, legality or enforceability of the
remainder of this Amendment, and to this end, the provisions of this Amendment
are declared to be severable.
17. Amendment
is a Loan Document; Entire Agreement.
This
Amendment shall constitute a Loan Document. This Amendment and the Loan
Documents are complete, integrated documents, set forth all of the terms,
conditions and agreements between the parties hereto and supersede any and
all
prior and contemporaneous terms, conditions, and agreements between the parties
hereto. There are no other agreements, promises, representations or warranties
made or given in connection with any of the foregoing or concerning the subject
matter hereof that are not contained herein or in the Loan
Documents.
18. Counterparts.
This
Amendment may be executed in any number of duplicate originals or counterparts,
each of such duplicate originals or counterparts shall be deemed to be an
original and taken together shall constitute but one and the same instrument.
The parties agree that their respective signatures may be delivered by fax.
Any
party who chooses to deliver its signature by fax agrees to provide a
counterpart of this Amendment with its inked signature promptly to each other
party.
19. Survival.
Any and
all representations, warranties, covenants, promises and understandings of
any
kind or nature whatsoever contained herein or in the Loan Documents shall
survive the execution and delivery hereof until the Obligations are indefeasibly
repaid in full to Lender.
20. Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective representatives, successors and assigns.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF, the parties hereto have executed this Amendment under seal
as
of the date and year first written above.
|
WITNESS:
_________________________________
Name:
|
BORROWER:
SOUTH
BEACH RESORTS, LLC,
a
Florida limited liability company
By: SBR
Holding Company, LLC,
a
Florida limited liability company
a
Nevada corporation
By:_/s/
Xxxxxxx Xxxxxx
Xxxxxxx
X. Xxxxxx
Chief
Executive Officer
|
|
_________________________________
Name:
|
PRINCIPALS:
/s/
Xxxxxxx
Xxxxxx
Xxxx
Xxxxxx, individually
|
|
_________________________________
Name:
|
/s/
Xxxxxxx
Xxxxxx
Xxxxxxx
Xxxxxx, individually
|
|
_________________________________
Name:
|
LENDER:
LASALLE
BANK, NATIONAL ASSOCIATION, as Trustee of Marathon Real Estate CDO
2006-1
Grantor Trust
By: /s/
Xxx
Xxxxxx
Name:
Xxx Xxxxxx
Title:
Assistant Vice President
|
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