Exhibit 10.1
CREDIT AGREEMENT
$4,300,000 CREDIT FACILITY
BY AND AMONG
AMERICAN LEISURE HOLDINGS, INC.,
A NEVADA CORPORATION
AND
XXXXX CREEK ACQUISITION COMPANY, LLC,
A FLORIDA LIMITED LIABILITY COMPANY,
COLLECTIVELY, "BORROWERS"
AND
STANFORD INTERNATIONAL BANK LIMITED,
AN ANTIGUAN BANKING CORPORATION
"LENDER"
DATED AS OF NOVEMBER 22, 2006
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "AGREEMENT"), dated as of November __, 2006 (the
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"EFFECTIVE DATE"), is made by and among AMERICAN LEISURE HOLDINGS, INC., a
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Nevada corporation ( "ALHI") and XXXXX CREEK ACQUISITION COMPANY, LLC, a Florida
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limited liability company ("RCAC") (ALHI and RCAC shall be collectively referred
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to herein as the "BORROWERs" and individually as a "BORROWER") and STANFORD
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INTERNATIONAL BANK LIMITED, an Antiguan corporation (the "LENDER").
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W I T N E S S E T H
WHEREAS, on July 8, 2005, Lender loaned $7,150,000 to Borrower, evidenced
by a promissory note in that amount with ALHI as guarantor, secured by a
mortgage (the "Mortgage") on certain real property located in Osceola County,
Florida, and described on Exhibit "A" attached hereto (the "Property");
WHEREAS, on January 5, 2006, Lender made a future advance $850,000 loan to
RCAC secured by the Mortgage as modified by a Mortgage Modification Agreement
and Future Advance Certificate executed and delivered on that date by RCAC to
Lender, and RCAC executed and delivered to lender a Renewed, Amended and
Increased Promissory Note in the amount of $8,000,000 guaranteed by ALHI;
WHEREAS, the Borrowers desire to obtain a commitment from the Lender to
make additional future advance loans to the Borrowers; and
WHEREAS, the Lender is willing to extend the commitment to the Borrowers on
the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, and other good and valuable consideration
exchanged between the parties, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I - DEFINITIONS
Section 1.1 Definitions. In addition to terms defined elsewhere in this
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Agreement, the following terms have the meanings indicated which meanings shall
be equally applicable to both the singular and the plural forms of such terms:
1.1.1 "Affiliate" shall mean any Person (other than a Subsidiary)
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which directly or indirectly through one or more intermediaries controls,
or is controlled by or is under common control, with a Borrower, or 5% or
more of the equity interest of which is held beneficially or of record by
any of the Borrowers or a Subsidiary. The term "control" means the
possession, directly of indirectly, of the power to cause the direction of
the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.
1.1.2 "Agreement" means this Credit Agreement, as the same may from
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time to time be amended.
1.1.3 "Borrowers" has the meaning assigned to that term in the
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introduction to this Agreement.
1.1.4 "Borrowing" shall mean the drawing down by a Borrower of a loan
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or loans from the Lender on any given Borrowing Date.
1.1.5 "Borrowing Date" shall mean the date as of which a Borrowing is
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consummated.
1.1.6 "Business Day" shall mean a day on which commercial banks are
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open for business in the state of Florida.
1.1.7 "Code" shall mean the Internal Revenue Code of 1986 as amended
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from time to time, and the regulations and published interpretations
thereof.
1.1.8 "Commencement Date" shall mean the date of execution by the
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Borrowers of this Agreement.
1.1.9 "Commission" shall mean the Securities and Exchange Commission.
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1.1.10 "Default" means any event which, with the lapse of time, the
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giving of notice, or both, would become an Event of Default.
1.1.11 "Default Rate" shall mean 15% per annum.
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1.1.12 "Director" shall mean any member of the Board of Directors of
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ALHI.
1.1.13 "Effective Date" means the date all parties hereto have
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executed this Agreement and the Loan Documents and Borrower has complied
with all conditions precedent thereto.
1.1.14 "Entity Authorizations" shall mean
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(i) If any Borrower is a corporation, certified copies of
Borrower(s)' and/or articles of incorporation and bylaws and current
certificates of good standing and certified resolutions or
authorizations as may be required to establish the power and authority
of each Borrower to execute, deliver and perform its respective
obligations under, as the case may be, the Loan Documents.
(ii) If any Borrower is a limited liability company, certified
copies of Borrower(s)' articles of organization and operating
agreement and current certificates of good standing and certified
resolutions or authorizations as may be required to establish the
power and authority of each Borrower to execute, deliver and perform
its respective obligations under, as the case may be, the Loan
Documents.
1.1.15 "Event of Default" has the meaning assigned to that term in
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Section 7.1 hereof.
1.1.16 "Exchange Act" shall mean the Securities and Exchange Act of
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1934, as amended.
1.1.17 "Governmental Authority" shall mean any court, board, agency,
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commission, office or authority of any nature whatsoever or any
governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx, xxxxxxxxx, xxxx or
otherwise) whether now or here-after in existence.
1.1.18 "Indebtedness" of any Person shall mean (i) all indebtedness or
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liability for borrowed money or for the deferred purchase price of any
property (including accounts payable to trade creditors under customary
trade credit terms) or services for which the Person is liable as
principal, (ii) all indebtedness (excluding unaccrued finance charges)
secured by a Lien on property owned or being purchased by the Person,
whether or not such indebtedness shall have been assumed by the Person,
(iii) any arrangement (commonly described as a sale-and-leaseback
transaction) with any financial institution or other lender or investor
providing for the leasing to the Person of property which at the time has
been or is to be sold or transferred by the Person to the lender or
investor, or which has been or is being acquired from another Person, and
(iv) all obligations of partnerships or joint ventures in respect of which
the Person is primarily or secondarily liable as a partner or joint
venturer or otherwise (provided that in any event for purposes of
determining the amount of the Indebtedness, the full amount of such
obligations, without giving effect to the contingent liability or
contributions of other participants in the partnership or joint venture,
shall be included).
1.1.19 "Inventory" shall mean any and all goods, supplies, wares,
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merchandise, and other tangible personal property, including raw materials,
work in process, supplies and components, and finished goods, whether held
for sale or otherwise or to be furnished under any contract for service,
and also including any products of and accessions to inventory, packing and
shipping materials, and all documents of title, whether negotiable or
non-negotiable, representing any of the foregoing, and the insurance
proceeds from any of the foregoing.
1.1.20 "Investments" shall mean, with respect to any Person, all
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advances, loans or extensions of credit to any other Person, all purchases
or commitments to purchase any stock, bonds, notes, debentures or other
securities of any other Person, and any investment in other Persons,
including partnerships or joint ventures.
1.1.21 "Lender" has the meaning assigned to that term in the
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introduction to this Agreement.
1.1.22 "Lien" shall mean a mortgage, pledge, lien, hypothecation,
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assignment, security interest or other charge or encumbrance or any
segregation of assets or revenues or other preferential arrangement
(whether or not con-stituting a security interest) with respect to any
present or future assets, including fixtures, revenues or rights to the
receipt of income of the Person referred to in the context in which the
term is used.
1.1.23 "Loan" shall mean the aggregate principal amount advanced by
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the Lender as a loan or loans to the Borrowers under Article 2 and Article
6 hereof, or, where the context so requires.
1.1.24 "Loan Documents" shall mean those documents executed or
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submitted in connection with the Loan, including, without limitation, (i)
the Note; (ii) this Credit Agreement; (iii) the Mortgage (as modified by
the Mortgage Modification) and (iv) all other documents and instruments
executed by any Borrower in connection with the Loan and/or as may be
required by Lender or Lender's counsel, including those referred to in
Section 6 hereof.
1.1.25 "Loan Funding Period" shall mean the period between the
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Effective Date and the Maturity Date.
1.1.26 "Maturity Date" shall mean January 31, 2007.
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1.1.27 "Mortgage" shall have the meaning set forth in Section 2.4.
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1.1.28 "Note" shall mean the $12.3 million Second Renewed, Amended and
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Increased Promissory Note described in Section 2.2 hereof and dated the
initial Borrowing Date and payable to the order of the Lender,
substantially in the form of Exhibit "B" attached hereto and made a part
hereof, and any modifications, renewals, replacements or substitutions
therefor made from time to time hereafter, and to the extent applicable.
1.1.29 "Obligations" shall mean the any and all liabilities,
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obligations, covenants, duties and debts, owing by the Borrower to the
Lender, arising under this Agreement or any other Loan Document, including
without limitation, all interest, charges, indemnities, expenses, fees,
attorneys' fees, filing fees and any other sums chargeable to the Borrowers
hereunder or under any other Loan Document, or any other agreement between
the Lender and the Borrowers.
1.1.30 "Permitted Liens" shall mean a mortgage, pledge, lien security
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interest or other charge or encumbrance or any segrega-tion of assets or
revenues or other preferen-tial arrangement (whether or not constituting a
security interest) with respect to any present or future assets, including
fixtures, revenues or rights to the receipt of income of the Person
referred to in the context in which the term is used which are permitted to
exist under this Agreement.
1.1.31 "Person" shall mean any natural person, corporation,
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unincorporated organization, trust, joint-stock company, joint venture,
association, company, partnership or government, or any agency or political
subdivision of any government, or other entity of whatever nature.
1.1.32 "Property" shall have the meaning set forth in the first
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recital to this Agreement.
1.1.33 "Second Modification" shall have the meaning set forth in
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Section 2.5.
1.1.34 "Securities Act" shall mean the Securities Act of 1933, as
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amended and the rules promulgated thereunder.
1.1.35 "Subsidiary" shall mean any Person in which any Borrower or a
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Wholly-Owned Subsidiary may own, directly or indirectly, an equity interest
of more than 50%, or which may effectively be controlled by any Borrower or
a Wholly-Owned Subsidiary, during the term of this Agreement, as well as
all Subsidiaries and other Persons from time to time included in the
consolidated financial statements of the Borrowers.
1.1.36 "Wholly-Owned Subsidiary" shall mean any Subsidiary, 100% of
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the outstanding capital stock of all classes of which is owned by the
Borrowers and/or one or more Wholly-Owned Subsidiaries.
Section 1.2 Accounting Terms. Accounting terms not specifically defined in
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this Agreement shall have the meaning given to them under accounting principles
and practices generally accepted in the United States, applied on a consistent
basis with the financial statements referred to in Section 3.3 hereof, and shall
be determined both as to classification of items and amounts in accordance
therewith. All Subsidiaries shall be consolidated to the fullest extent
permitted by such principles and practices, and any accounting terms, financial
covenants and financial statements referred to herein shall be determined and
prepared on the basis of such consolidation.
Section 1.3 Other Definitional Provisions. The words "hereof," "herein,"
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and "hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, Subsection and Exhibit references are to this Agreement
unless otherwise specified.
ARTICLE II - LOAN
Section 2.1 Loan. Lender shall loan to ALHI a gross amount of $4,300,000 in
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accordance with the draw schedule attached hereto as Exhibit "C"; provided,
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however, that all draw requests must be approved by an independent consultant to
be retained by Lender (the "CONSULTANT"), in his sole and absolute discretion.
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The Borrowers shall pay the Consultant's reasonable fees and expenses promptly
upon receipt of the invoice therefor.
Section 2.2 Note. In consideration of the Loan, the Borrower, jointly and
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severally, shall execute and deliver in favor of Lender the Note in the form and
content substantially the same as attached as Exhibit "B," providing with
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respect to the Loan a maturity date of January 31, 2007, and interest accruing
on the principal balance outstanding from time to time at an annual rate of 12%,
payable in arrears on the maturity date. The portion of the Note representing
the Loan shall be prepayable without premium or penalty.
Section 2.3 Use of Proceeds. The Borrowers will use the net proceeds of the
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Loan for (i) construction of the pool complex at the Tierra del Sol Phase One
project, (ii) furniture, fixtures and equipment, (iii) general and
administrative expenses, (iv) interest and financing costs relating to existing
loans from Lender and its Affiliates to ALHI and its Affiliates and (v)other
corporate expenses and a contingency reserve, all in accordance with the budget
more fully set forth on Exhibit "C."
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Section 2.4 Mortgage. In order to secure payment of the Note, immediately
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upon the execution of this Agreement RCAC shall execute and deliver to Lender a
Second Mortgage Modification Agreement and Future Advance Certificate (the
"SECOND MODIFICATION") in form and substance acceptable to Lender (hereafter the
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Mortgage, as modified through the Second Modification, shall be referred to as
the "MORTGAGE") In addition, Borrowers shall execute and deliver to Lender in
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connection with the Note and Mortgage such additional documents as Lender shall
reasonably request.
Section 2.5 Guaranty. ALHI's chairman, Xxxxxxx Xxxxxx, shall
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unconditionally guarantee payment of the Note pursuant to the execution and
delivery of a Guaranty in form and substance acceptable to Lender (the
"GUARANTY").
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ARTICLE III - REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to make the
Loan provided for herein, the Borrowers make the following representations and
warranties to the Lender all of which are true and correct as of the date hereof
and shall be true and correct as of the date of each draw of loan funds, and all
of which shall survive the execution and delivery of this Agreement, the Note
and the other Loan Documents:
Section 3.1 Corporate Existence and Power. The Borrowers are each duly
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organized validly existing and in good standing under the laws of their
respective states of organization and each is duly qualified or licensed to
transact business in all places where such qualification or license is
necessary. Each Borrower has the power to enter into and perform this Agreement
and the Loan Documents, to the extent that each has executed such documents, and
this Agreement does, and the Loan Documents when duly executed and delivered for
value will, constitute the legal, valid and binding obligations of the Borrowers
enforceable in accordance with their respective terms.
Section 3.2 Authority. The making and performance by the Borrowers of this
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Agreement, the Note, the Loan Documents, and any additional documents pursuant
hereto, has been duly authorized by all necessary legal action of the Borrowers,
and does not and will not violate any provision of law or regulation, or any
writ, order or decree of any court, governmental, regulatory authority or
agency, and does not and will not, with the passage of time or the giving of
notice, result in a breach of, or constitute a default or require any consent
under, or result in the creation of any lien, charge or encumbrance upon any
property or assets of the Borrowers, pursuant to any instrument or agreement to
which any Borrower is a party or by which any Borrower or its properties may be
bound or affected.
Section 3.3 Financial Condition. The financial statements of ALHI set forth
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in the ALHI SEC Filings (as hereinafter defined) were prepared in accordance
with generally accepted accounting principles consistently applied, are complete
and correct and fairly present the consolidated financial condition of ALHI as
of that date. Other than as disclosed by those financial statements, ALHI has no
direct or contingent obligations or liabilities which would be material to the
financial position of ALHI, nor any material unrealized or anticipated losses
from any commitments of ALHI. Since the date of such financial statements, there
has been no material adverse change in the business or financial condition of
any Borrower.
Section 3.4 SEC Filings. As of the date hereof, none of the filings made
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with the SEC by ALHI since July 1, 2002 (the "ALHI SEC FILINGS"), contained any
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untrue statement of a material fact or to the best of Borrowers' knowledge,
omitted any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading, except to the extent such filings have been prior to the date of
this Agreement corrected, updated or superseded by a document subsequently filed
with Commission. ALHI has furnished or made available to the Lender true and
complete copies of all the documents it has filed with the Commission since July
1, 2002, all in the forms so filed, except direct correspondence with the
Commission in response to inquiries.
ALHI has filed all filings required by law or regulation and the ALHI
filings comply in all material respects with the requirements of the Securities
Act and the Exchange Act, and the rules and regulations of the Commission
promulgated thereunder, as the case may be, and none of the filings with the
Commission contain any untrue statement of a material fact or omit any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not misleading.
Section 3.5 Full Disclosure. The financial statements referred to in
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Section 3.3 do not, nor does this Agreement, nor any written statement furnished
by any Borrower to the Lender in connection with the negotiation of this
Agreement or the Loan, contain any untrue statement of a material fact or omit a
material fact necessary to make the statements contained therein or herein not
misleading. There is no fact which any Borrower have not disclosed to the Lender
in writing which materially and adversely affects nor, so far as any Borrower
can now foresee, is reasonably likely to prove to materially and adversely
affect the business or financial condition of any Borrower or the ability of any
Borrower to perform this Agreement, the Note, the Mortgage or any other Loan
Document.
Section 3.6 Litigation. Except to the extent disclosed in the ALHI SEC
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Filings, there are no suits, actions or proceedings pending, or to the knowledge
of the Borrowers, threatened before any court or by or before any governmental
or regulatory authority, commission, bureau or agency or public regulatory body
against or affecting any Borrower which, if adversely determined, would have a
material adverse effect on the business or financial condition of any Borrower.
Section 3.7 Payment of Taxes. As of the date of execution of this
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Agreement, federal income tax returns of each Borrower have been filed with
Internal Revenue Service and no deficiencies have been assessed. Each of the
Borrowers has filed or caused to be filed, or has obtained extensions to file
all federal, state and local tax returns which are required to be filed, and
have paid or caused to be paid, or have reserved on their books amounts
sufficient for the payment of, all taxes as shown on said returns or on any
assessment received by them, to the extent that the taxes have become due,
except as otherwise permitted by the provisions hereof. Each of the Borrowers
has set up reserves which are reasonably believed by each Borrower to be
adequate for the payment of said taxes for the years that have not been audited
by the respective tax authorities.
Section 3.8 No Adverse Restrictions or Defaults. Except as disclosed in the
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ALHI SEC Filings, no Borrower is a party to any agreement or instrument or
subject to any court order or judgment, governmental decree, charter or other
restriction adversely and materially affecting its business, properties or
assets, operations or condition (financial or otherwise). No Borrower is in
material default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any material agreement or
instrument to which it is a party or by which any Borrower and their respective
properties, may be bound or affected, or under any material law, regulation,
decree, order or the like, which default would have a material adverse effect on
such Borrower.
Section 3.9 Authorizations. All material authorizations, consents,
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approvals and licenses required under applicable law or regulation for the
ownership or operation of the property owned or operated by any Borrower or for
the conduct of business in which any Borrower is engaged, have been duly issued
and are in full force and effect, and to the best of Borrowers' actual
knowledge, none of the Borrowers are in default under any material order,
decree, ruling, regulation, closing agreement or other decision or instrument of
any government commission, bureau or other administrative agency or public
regulatory body having jurisdiction over any of the Borrowers, which default
would have a material adverse effect on any of the Borrowers. No approval,
consent or authorization of or filing or registration with any governmental
commission, bureau or other regulatory authority or agency is required with
respect to the execution, delivery or performance of this Agreement, the Note or
any of the Loan Documents executed in connection with the making of the Loan,
other than filings required under applicable securities laws which shall have
been duly made by ALHI as of the Effective Date.
Section 3.10 Title to Property. RCAC owns fee simple title to the Property
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free and clear of all Liens, except for a First Mortgage in the amount of
$7,000,000 in favor of Xxxxxx X. Xxxxxx, Trustee of the Xxxxxx X. Xxxxxx
Revocable Trust dated July 13, 1995, and LK, L.L.C., a West Virginia limited
liability company. Each Borrower and each of their Subsidiaries have,
respectively, good and marketable fee title to all real property, and good and
marketable title to all other property and assets, reflected in the latest
financial statements referred to in Section 3.3 or purported to have been
acquired by any of them subsequent to such date, except property and assets sold
or otherwise disposed of subsequent to such date in the ordinary course of
business. All property and assets of any kind of Borrowers, and each of their
subsidiaries are free from any liens except as disclosed on the financial
statements provided to the Lender and referred to in Section 3.3 hereof and
other matters such as easements, covenants, and restrictions that do not
materially adversely affect their use or enjoyment of such property. Borrowers
and each of their subsidiaries enjoy peaceful and undisturbed possession under
all of the leases under which they are operating, if any, none of which contain
any provisions that will materially impair or adversely affect the operations of
any Borrower, as the case may be.
Section 3.11 Indemnification by Borrowers. All of the representations and
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warranties of Borrowers, as set forth in this Agreement shall survive the making
of this Agreement and the full repayment of the Loan; accordingly, in the event
of any claims against Lender, resulting in the breach of any of the foregoing
warranties and representations, each Borrower shall and hereby agrees to
indemnify Lender for any such claims notwithstanding the full repayment of the
Loan. Each and every requisition submitted by Borrower for funds under this
Agreement shall constitute a new and independent representation and warranty to
Lender with respect to all of the matters set forth in this Agreement, as of the
date of such requisition.
ARTICLE IV - AFFIRMATIVE COVENANTS
The Borrowers covenant and agree that from and after the Effective Date and
until payment in full of the principal of and interest on the Note, unless the
Lender shall otherwise consent in writing, each Borrower will:
Section 4.1 Loan Proceeds. Use the proceeds of the Loans only for the
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purposes set forth in Section 2.3 and furnish the Lender with all evidence that
it may reasonably require with respect to such use.
Section 4.2 Existence. Do or cause to be done all things necessary to
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preserve and keep in full force and affect its legal existence, rights,
franchises and privileges in the jurisdiction of its organization, and qualify
and remain qualified in each jurisdiction where qualification is necessary or
desirable in view of its business operations or the ownership of its properties.
Section 4.3 Maintenance of Business and Property. Continue to conduct and
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operate its business substantially as con-ducted and operated during the present
and preceding calendar year; at all times maintain, preserve and protect all
franchises and trade names and preserve all the remainder of its property used
or useful in the conduct of its business and keep the same in good repair,
working order and condition, and from time to time make, or cause to be made,
all needful and proper repairs, replacements, betterments and improvements
thereto so that the business carried on in connection therewith may be conducted
properly and advantageously at all times.
Section 4.4 SEC Filings. Make all filings as required by federal and state
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securities and other laws and regulations, or by any domestic securities
exchange or trading market, and provide copies thereof to the Lender promptly
after such filing or filings.
Section 4.5 Insurance. Insure and keep insured in good and financially
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sound and responsible insurance companies reasonably satisfactory to the Lender,
all insurable property owned by it which is of a character usually insured by
companies similarly situated and operating like properties, against loss or
damage from such hazards or risks, including fire, flood and windstorm as are
insured by companies similarly situated and operating like properties, insure
and keep insured employers' and public liability risks in responsible insurance
companies to the extent usually insured by companies similarly situated; and
maintain such other insurance as may be required by law or as may reasonably be
required in writing by the Lender.
Section 4.6 Payment of Indebtedness, Taxes, Etc.
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4.6.1 Pay all of its indebtedness and obligations promptly and in
accordance with normal terms; and
4.6.2 Pay and discharge or cause to be paid and discharged promptly
all taxes, assessments and governmental charges or levies imposed upon it
or upon its property or upon any part thereof, before the same shall become
in default, as well as all lawful claims for labor, materials and supplies
or otherwise which, if unpaid, might become a lien or charge upon such
properties or any part thereof; provided however, that the Borrower shall
not be required to pay and discharge or to cause to be paid and discharged
any tax, assessment, charge, levy or claim so long as the validity thereof
shall be contested in good faith by appropriate proceedings and the
Borrower shall have set aside on its books adequate reserves with respect
to any tax, assessment, charge, levy or claim, so contested.
Section 4.7 Compliance with Laws. Duly observe, conform and comply with all
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laws, decisions, judgments, rules, regulations and orders of all governmental
authorities relative to the conduct of its business, its properties, and assets,
except those being contested in good faith by appropriate proceedings diligently
pursued; and maintain and keep in full force and effect all licenses and permits
necessary to the proper conduct of its business.
Section 4.8 Notice of Default. Upon the occurrence of any Default or Event
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of Default, promptly furnish written notice thereof to the Lender.
Section 4.9 Inspection. At reasonable times and after reasonable prior
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written notice, each Borrower shall permit any representatives of Lender to
visit and inspect any of the properties of such Borrower, to examine and copy
all books of account, records, reports and other papers, and to discuss the
affairs, finances and accounts with Borrower's employees and independent
accountants at all such reasonable times and as often as may be reasonably
requested.
Section 4.10 Notice of Litigation and Other Proceedings. Give prompt notice
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in writing to the Lender of the commencement of (a) all material litigation
which, if adversely determined, might adversely affect the business or financial
condition of the Borrowers; (b) all other litigation involving a claim against
the Borrower for $25,000 or more in excess of applicable insurance coverage; and
(c) any citation, order, decree, ruling or decision issued by, or any denial of
any application or petition to, or any proceeding before any governmental
commission, bureau or other administrative agency public regulatory body against
or affecting the Borrower, or any property of the Borrower or any lapse,
suspension or other termination or modification of any certification, license,
consent or other authorization of any agency or public regulatory body, or any
refusal of any thereof to grant any application therefor, in connection with the
operation of any business conducted by any of the Borrowers.
ARTICLE V
The Borrowers covenant and agrees that from the Effective Date and until
payment in full of the principal of and interest on the Note, unless the Lender
shall otherwise consent in writing, neither of the Borrowers will:
Section 5.1 Limitation of Liens. Except as permitted by the Loan Documents,
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create, assure, incur or suffer to exist any Lien upon, or transfer or
assignment of, any of its property or revenues or assets now owned or hereafter
acquired to secure any Indebtedness of obligations, or enter into any
arrangement for the acquisition of any property subject to conditional sale
agreements or leases or other title retention agreements; excluding, however,
from the operation of this covenant: (i) deposits or pledges to secure payment
of worker's compensation, unemployment insurance, old age pensions or other
social security; (ii) deposits or pledges to secure performance of bids,
tenders, contracts (other than contracts for the payment of money) or leases,
public or statutory obligations, surety or appeal bonds or other deposits or
pledges for purposes of like general nature in the ordinary course of business;
(iii) Liens for property taxes not delinquent and Liens for taxes which in good
faith are being contested or litigated; (iv) mechanics', carriers', workmen's,
repairmen's or other like liens arising in the ordinary course of business
securing obligations which are not overdue for a period of 60 days or more or
which are in good faith being contested or litigated; (v) Liens securing the
unpaid purchase price of equipment purchased by the Borrower in the ordinary
course of its business and Liens existing upon assets acquired by the Borrower;
and (vi) any existing Liens reflected in the financial statements referred to in
Section 3.3 hereof.
Section 5.2 Limitation on Indebtedness. Incur, create, assume or permit to
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exist any Indebtedness, except
5.2.1 The Note and any other Indebtedness of the Borrower to the
Lender;
5.2.2 Indebtedness which is subordinated to the prior payment in full
of the principal of, and interest on, the Note(s) on terms and conditions
approved in writing by the Lender;
5.2.3 Indebtedness representing the unpaid purchase price of equipment
purchased by the Borrower in the ordinary course of its business and
Indebtedness existing upon assets acquired by the Borrower; and
5.2.4 Existing Indebtedness reflected in the audited financial
statements referred to in Section 3.3 hereof.
Section 5.3 Mergers, Consolidations and Acquisition of Assets. Wind up,
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liquidate, dissolve, merge or consolidate with any corporation or entity, or
acquire all or substantially all of the assets of any corporation except that
(i) the Borrower may merge or consolidate with any Subsidiary provided that the
Borrower is the surviving corporation.
Section 5.4 Sale, Lease, Etc. Sell, lease, assign, transfer or otherwise
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dispose of any of its assets or revenues (other than obsolete or worn-out
personal property or personal property or real estate not used or useful in its
business) whether now owned or hereafter acquired, other than in the ordinary
course of business.
Section 5.5 Management and Ownership. Permit any material change in its
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ownership or management.
Section 5.6 General.
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(i) engage, directly or through other Persons, in any business
other than the business now carried on;
(ii) change its certificate of incorporation, bylaws or other
charter documents, except as contemplated hereby;
(iii) declare or pay dividends or make any other distribution or
redeem any of its equity securities; or
(iv) enter into or modify a material related-party transaction.
ARTICLE VI - CONDITIONS TO LENDER'S OBLIGATIONS TO MAKE THE LOAN
The conditions listed below are precedent to any obligations of the Lender
and shall be complied with in form and substance satisfactory to Lender and its
counsel prior to the Lender's obligation to advance any portion of the Loan:
Section 6.1 Each Advance. The obligation of the Lender to make each advance
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pursuant to Article 2 herein is subject to no adverse change in the condition,
financial or otherwise of any of the Borrowers and no default or the occurrence
of any event which with notice or passage of time would become a default under
this Agreement or any of the Loan Documents, and is subject to the following
conditions precedent, each of which shall have been met or performed by the
Borrowing Date:
6.1.1 Consultant Approval. The Consultant shall have approved the
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advance;
6.1.2 No Default. (i) No Default or Event of Default shall have
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occurred and be continuing or will occur upon the making of the Loan on
such Borrowing Date, and all representations and warranties made by the
Borrowers herein or otherwise in writing in connection herewith shall be
true and correct in all material respects with the same effect as though
the representations and warranties had been made on and as of such
Borrowing Date, and (ii) a certificate to this effect shall have been
issued to the Lender on such Borrowing Date by ALHI's Chief Financial
Officer; and
6.1.3 Use of Proceeds. The Loan proceeds shall have theretofore been
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applied in accordance with the Use of Proceeds as set forth in Section 2.3
hereof.
Section 6.2 Loan Documents. The appropriate parties shall have executed and
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delivered to Lender the Mortgage and the Guaranty.
Section 6.3 Note. The Note shall have been duly executed and delivered to
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the Lender.
Section 6.4 Supporting Documents. The Borrowers shall have executed and
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delivered, or caused to be executed and delivered, to the Lender each of the
certificates and the other Loan Documents and all additional opinions, documents
and certificates that the Lender or its counsel may require, and all such
opinions, certificates and documents specified in this Article 6 shall be
reasonably satisfactory in form and substance to the Lender and its counsel;
Section 6.5 Expenses. Borrowers shall have paid all of Lender's reasonable
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fees and expenses incurred in connection with this Agreement, not to exceed
$50,000. In addition, Borrowers shall have paid all applicable documentary stamp
taxes, intangible taxes and other closing costs.
ARTICLE VII- EVENTS OF DEFAULT
Section 7.1 Events of Default. If any one of the following "EVENTS OF
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DEFAULT" shall occur and shall not have been remedied:
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7.1.1 Any representation or warranty made or deemed made by any
Borrower herein or in any of the other Loan Documents, or in any
certificate or report furnished by such Borrower at any time to the Lender,
shall prove to have been incorrect, incomplete or misleading in any
material respect on or as of the date made or deemed made; or
7.1.2 Any Borrower shall fail to pay, when due, any principal of or
interest on the Note, or to pay when due any other sum payable under this
Agreement and the same is not paid within 10 days after written notice from
Lender; or
7.1.3 Any default by any Borrower under any Indebtedness or other
obligation to the Lender or any of its Affiliates which is not cured within
any grace periods provided thereunder.
7.1.4 Any Borrower shall default in any material respect in the
performance of any agreement, covenant or obligation contained herein or in
any of the other Loan Documents if the default continues for a period of 30
days after notice of default to the Borrower by the Lender; or
7.1.5 Final judgment for the payment of money in an amount in excess
of $50,000 shall be rendered against any Borrower and the same shall remain
undischarged for a period of 30 days, during which period execution shall
not effectively be stayed, provided such Borrower , as applicable, will
have the right to contest in good faith by appropriate proceedings and
provided such Borrower shall have set aside on its books adequate reserves
for payment of such money; or
7.1.6 Any Borrowers default in the performance of its obligations with
respect to any Indebtedness in excess of $50,000 or as lessor or lessee
under any lease of all or any material portion of its property, after the
expiration of any applicable cure periods; or
7.1.7 Any Borrower shall cease to exist or to be qualified to do or
transact business in the State in which the Property are located, or shall
be dissolved or terminated or shall be a party to a merger or
consolidation, or shall sell all or substantially all of its assets; or
7.1.8 If, without the prior written consent of Lender, which consent
shall be in Lender's sole and absolute discretion any equity interest in
RCAC is are issued, sold, transferred, conveyed, assigned, mortgaged,
pledged, or otherwise disposed of, whether voluntarily or by operation of
law, and whether with or without consideration, or any agreement for any of
the foregoing is entered into; or
7.1.9 Any Borrower shall (i) voluntarily terminate operations or apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of such Borrower, as the case
may be, or of all or of a substantial part of the assets of such Borrower,
as the case may be, (ii) admit in writing its inability, or be generally
unable, to pay its debts as the debts become due, (iii) make a general
assignment for the benefit of its creditors, (iv) commence a voluntary case
under the United States Bankruptcy Code (as now or hereafter in effect),
(v) file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, (vi) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involun-tary case under the Bankruptcy Code, or (vii) take any corporate
action for the purpose of effecting any of the foregoing; or
7.1.10 Any Borrower shall fail to furnish to the Lender notice of
default in accordance with Section 4.8 hereof, within 10 days after any
such notice of default becomes known to the President or Chief Financial
Officer of such Borrower, whether or not notification to such Borrower is
furnished by the Lender; or
7.1.11 Borrowers shall be in default of this Agreement if all filings
required by law or regulation to be made with the Commission as set forth
in Section 3.4 herein, are not made on or before the Effective Date.
Section 7.2 THEREUPON, in the case of any such event, the Lender may, by
written notice to the Borrowers, at its option: (A) immediately terminate the
commitment of the Lender to advance additional funds hereunder, and/or (B)
immediately declare the principal of, and interest accrued on, the Note
immediately due and payable without presentment, demand, protest or notice,
whereupon the same shall become immediately due and payable.
ARTICLE VIII - MISCELLANEOUS
Section 8.1 No Waiver, Remedies Cumulative. No failure on the part of the
------------------------------
Lender to exercise and no delay in exercising any right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and are not exclusive
of any remedies provided by law.
Section 8.2 Survival of Representations. All representations and warranties
---------------------------
made herein shall survive the making of the loans hereunder and the delivery of
the Note, and shall continue in full force and effect so long as the Note is
outstand-ing and unpaid and the commitment to make the Loan has not been
terminated.
Section 8.3 Notices. Any notice or other communication hereunder to any
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party hereto shall be by hand delivery, facsimile, recognized overnight courier
or registered or certified mail, return receipt requested, and shall be deemed
to have been given or made when delivered to the party at its address or fax
number specified next to its signature hereto (or at any other address that the
party may hereafter specify to the other parties in writing).
Section 8.4 Construction. This Agreement and the Note shall be deemed a
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contract made under the law of the State of Florida and shall be governed by and
construed in accordance with the law of said state and any suit, action or
proceeding arising out of or relating to this Agreement may be commenced and
maintained in any court of competent subject matter jurisdiction in Miami-Dade
County, Florida, and any objection to such jurisdiction and venue is hereby
expressly waived.
Section 8.5 Successors and Assigns. This Agreement shall be binding upon
-----------------------
and shall inure to the benefit of each Borrower and the Lender, and their
respective successors and assigns, provided, that no Borrower may assign any of
its rights hereunder without the prior written consent of the Lender, which may
be arbitrarily withheld, and any such assignment will be void.
Section 8.6 Limit on Interest. Anything herein or in the Note to the
-------------------
contrary notwithstand-ing, the obligations of the Borrowers under this Agreement
and the Note to the Lender shall be subject to the limitation that payments of
interest to the Lender shall not be required to the extent that receipt of any
such payment by the Lender would be contrary to provisions of law applicable to
the Lender (if any) which limit the maximum rate of interest which may be
charged or collected by the Lender; provided however, that nothing herein shall
be construed to limit the Lender to presently existing maximum rates of
interest, if any increased interest rate is hereafter permitted by reason of
applicable federal or state legislation.
Section 8.7 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to an original and all of
which when taken together shall constitute but one and the same instrument.
Section 8.8 Headings. The headings are for convenience only and are not to
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affect the construction of or to be taken into account in interpreting the
substance of this Agreement.
Section 8.9 Severability. In the event that any one or more of the
------------
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
Section 8.10 Entire Agreement. This Agreement is intended by the parties as
----------------
a final expression of their agreement with respect to the subject matter hereof
and is intended as a complete and exclusive statement of the terms and
conditions thereof, and this Agreement supersedes and replaces all prior
negotiations and agreements between the parties hereto, or any of them, whether
oral or written. Each of the parties hereto acknowledges that no other party,
agent or attorney of any other party, has made any promise, representation or
warranty whatsoever, expressed or implied, not contained herein concerning the
subject matter hereof to induce the other party to execute this Agreement or any
of the other documents referred to herein, and each party hereto acknowledges
that it has not executed this Agreement or such other documents in reliance upon
any such promise, representa-tion or warranty not contained herein.
Section 8.11 Integration. This Agreement, together with the other documents
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and instruments executed herewith and contemplated by this Agreement, comprises
the complete and integrated agreement of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. The Borrower further releases and discharges Lender
from and against any and all liability with respect to all prior agreements and
preliminary commitments. The Loan Documents were drafted with the joint
participation of Borrower and Lender, and their respective counsel, and shall be
construed neither against nor in favor of any of them, but rather in accordance
with the fair meaning thereof.
Section 8.12 Course of Dealing; Amendment; Supplemental Agreements. No
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course of dealing between the Lender and Borrower shall be effective to amend,
modify or change any provision of this Agreement. This Agreement or any document
executed in connection herewith, may not be amended, modified, or changed in any
respect except by agreement in writing signed by the Lender and the Borrower.
Section 8.13 Indemnification. Each of the Borrowers hereby agree to hold
---------------
the Lender and its officers, directors, employees and agents harmless from and
against all claims, damages, liabilities and expenses, including reasonable
attorney fees and disbursements of counsel, which may be incurred by or asserted
against any of them in connection with or arising out of any investigation,
litigation, or proceeding relating to the Loan, except that the Borrowers shall
not be required to indemnify the Lender to the extent that such claims, damages,
liabilities or expenses arise from the negligence or willful misconduct of
Lender.
Section 8.14 WAIVER OF JURY TRIAL. BORROWERS AND LENDER KNOWINGLY,
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VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGA-TION BASED HEREON OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY DOCUMENT EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OR EITHER PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT TO THE LENDER ENTERING INTO THIS AGREEMENT AND MAKING ANY LOAN,
ADVANCE OR OTHER EXTENSION OF CREDIT TO THE BORROWERS.
(Signatures on next page)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
effective on the date first written above.
"BORROWERS"
AMERICAN LEISURE HOLDINGS, INC.
By:/s/ Xxxxxxx X. Xxxxxx
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Its: CEO
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Address:
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XXXXX CREEK ACQUISITION COMPANY, LLC
By:/s/ Xxxxxxx X. Xxxxxx
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Its: Manager
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Address:
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"LENDER"
STANFORD INTERNATIONAL BANK LIMITED
By:
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Its:
-------------------------
Address:
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