CREDIT AGREEMENT $10,000,000 Credit Facility by and among AMERICAN LEISURE HOLDINGS, INC., a Nevada corporation “Borrower” and RESORTS FUNDING GROUP, LLC, a Florida limited liability company “Lender” Dated as of April 23 , 2007 CREDIT AGREEMENT
Exhibit
10.93
$10,000,000
Credit Facility
by
and among
a
Nevada corporation
“Borrower”
and
RESORTS
FUNDING GROUP, LLC,
a
Florida limited liability company
“Lender”
Dated
as of April 23 , 2007
THIS
CREDIT AGREEMENT (this “Agreement”),
dated
as of April 23, 2007, is made by and between AMERICAN
LEISURE HOLDINGS, INC.,
a
Nevada corporation (“Borrower”)
and
RESORTS
FUNDING GROUP, LLC,
a
Delaware corporation (“Lender”).
WHEREAS,
Borrower and certain of its Affiliates (collectively, the “TDS
Group”)
are
constructing a residential development known as “Tierra del Sol Resort Phase II”
(the “Phase
II Project”)
on
certain real property owned in fee simple by Tierra del Sol Resort (Phase 2),
Ltd., a Florida limited partnership, Costa Xxxxxx XX Real Estate LLC, a Florida
limited liability company, Xxxxx Xxxxxx III Real Estate LLC, a Florida limited
liability company, TDS Town Homes (Phase 2), LLC, a Florida limited liability
company and TDS Clubhouse, Inc., a Florida corporation (collectively,
“Phase
II Property Owner”)
in
Polk County, Florida, as more particularly described on Exhibit A
attached
hereto (the “Phase
II Property”);
WHEREAS,
the
Phase II Project is part of a two-phase residential development project
currently under development by the TDS Group, known as “Tierra del Sol” (the
“Tierra
del Sol Project”);
WHEREAS,
KeyBank
National Association, a national banking association (“KeyBank”)
has
agreed to provide financing for the Phase II Project pursuant to certain
agreements dated as of December 29, 2005 between KeyBank and the TDS Group;
WHEREAS,
additional funding is necessary to complete the construction and development
of
the Phase II Project, and for other operating costs of Borrower;
WHEREAS,
Borrower has applied to Lender for a loan in the amount of up to TEN MILLION
AND
NO/100 DOLLARS ($10,000,000.00) to be used to finance certain construction
and
development costs of the Phase II Project, for operating costs and expenses
to
be incurred by Borrower and for certain other purposes approved by Lender (the
“Loan”),
and
Lender is willing to make the Loan to Borrower on the terms and subject to
the
conditions hereinafter set forth;
WHEREAS,
Phase
II Property Owner will benefit, directly and indirectly, from the making of
the
Loan by Lender to Borrower and the construction of the Phase II Project;
and
WHEREAS,
as
an
inducement to Lender to make the Loan to Borrower, Phase II Property Owner
has
agreed to grant to Lender, as security for the repayment of the Loan and other
Obligations, a second priority mortgage lien on the Phase II Property, as more
particularly described herein.
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
Section
1.1 Definitions.
In
addition to terms defined elsewhere in this 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 “Advances”
shall
mean advances of the Loan proceeds subject to the terms and conditions of this
Agreement.
1.1.2 “Affiliate”
shall
mean any Person (other than a Subsidiary) which directly or indirectly through
one or more intermediaries controls, or is controlled by or is under common
control, with such named Person, or 5% or more of the equity interest of which
is held beneficially or of record by such named Person or a Subsidiary of such
Person. 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.
1.1.3 “Agreement”
shall
mean this Credit Agreement, as the same may from time to time be
amended.
1.1.4 “Applicable
Rate”
shall
mean a rate per annum equal to ten percent (10%).
1.1.5 “Borrower”
shall
have the meaning assigned to that term in the introduction to this
Agreement.
1.1.6 “Business
Day”
shall
mean a day on which commercial banks are open for business in the state of
Florida.
1.1.7 “Closing
Date”
shall
mean the date of this Agreement.
1.1.8 “Code”
shall
mean the Internal Revenue Code of 1986 as amended from time to time, and the
regulations and published interpretations thereof.
1.1.9 “Commission”
shall
mean the Securities and Exchange Commission.
1.1.10 “Default”
shall
mean any event which, with the lapse of time, the giving of notice, or both,
would become an Event of Default.
1.1.11 “Default
Rate”
shall
mean a rate per annum equal to fifteen percent (15%).
1.1.12 “Event
of Default”
has
the
meaning assigned to that term in Section 7.1 hereof.
1.1.13 “Exchange
Act”
shall
mean the Securities and Exchange Act of 1934, as amended.
-2-
1.1.14 “First
Mortgage”
shall
mean the mortgage securing the Phase II Senior Loan recorded in O.R.
Book 6572, Page 642, of the Public Records of Polk County,
Florida.
1.1.15 “Governmental
Authority”
shall
mean any court, board, agency, commission, office or authority of any nature
whatsoever or any governmental xxxx (xxxxxxx, xxxxx, xxxxxx, xxxxxxxx,
xxxxxxxxx, xxxx or otherwise) whether now or hereafter in
existence.
1.1.16 “Indebtedness”
of
any
Person shall mean (i) all indebtedness or 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).
1.1.17 “Initial
Advance”
shall
have the meaning assigned to such term in Section 2.1 hereof.
1.1.18 “Inventory”
shall
mean any and all goods, supplies, wares, 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.
1.1.19 “Legal
Requirements”
shall
mean all federal, state, county, municipal and other governmental statutes,
laws, treaties, rules, orders, regulations, ordinances, judgments, decrees,
injunctions, permits or requirements of Governmental Authorities affecting
Borrower, Mortgaged Property Owner or the Mortgaged Property or any part thereof
or the construction, use, alteration or operation thereof, or any part thereof,
whether now or hereafter enacted and in force, and all permits, licenses and
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments, either of record
or
known to Borrower or Mortgaged Property Owner, at any time in force affecting
the Mortgaged Property or any part thereof.
-3-
1.1.20 “Lender”
has
the
meaning assigned to that term in the introduction to this
Agreement.
1.1.21 “Lien”
shall
mean a mortgage, pledge, lien, hypothecation, assignment, security interest
or
other charge or encumbrance or any segregation of assets or revenues or other
preferential 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.
1.1.22 “Loan”
has
the
meaning assigned to that term in the Recitals hereto.
1.1.23 “Loan
Documents”
shall
mean, collectively, the documents and instruments listed in Section 2.2 hereof,
the Security Documents and all the other documents and instruments entered
into
from time to time, evidencing or securing the Loan or any obligation of payment
thereof or performance of Borrower’s or obligations in connection with the
transaction contemplated hereunder, each as amended.
1.1.24 “Material
Adverse Change”
or
“material
adverse change”
shall
mean, that, in Lender’s reasonable discretion, the business prospects,
operations or financial condition of a person, entity or property has changed
in
a manner which could impair the value of Lender’s security for the Loan, prevent
timely repayment of the Loan or otherwise prevent the applicable Person from
timely performing any of its material obligations under the Loan
Documents.
1.1.25 “Maturity
Date”
shall
mean the date that is twelve (12) months after the Closing Date.
1.1.26 “Mortgaged
Property”
shall
mean the Phase II Property.
1.1.27 “Mortgaged
Property Owner”
shall
mean the Phase II Property Owner.
1.1.28 “Note”
shall
mean a promissory note, in the principal amount of $10,000,000.00, dated as
of
the date hereof and payable to the order of Lender evidencing the Loan, and
any
modifications, renewals, replacements or substitutions therefor made from time
to time hereafter, to the extent applicable.
1.1.29 “Obligations”
shall
mean the any and all liabilities, obligations, covenants, duties and debts,
owing by Borrower to 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
Borrower hereunder or under any other Loan Document, or any other contractual
agreement between Lender and Borrower.
1.1.30 “Organizational
Documents”
shall
mean, as to any Person, its certificate of formation and operating agreement,
its partnership agreement and certificate of limited partnership or doing
business certificate, as applicable, its articles or certificate of
incorporation and by laws, and/or the other organizational or governing
documents of such Person. Organizational Documents of a Person shall include,
to
the extent applicable,
incumbency certificates, resolutions, certificates of good standing and consents
of members, partners or shareholders, as applicable.
-4-
1.1.31 “Permitted
Exceptions”
shall
mean those matters listed on Exhibit
B
attached
hereto and incorporated herein by reference to which title to the Phase II
Property may be subject on the Closing Date, and thereafter such other title
exceptions as Lender may reasonably approve in writing.
1.1.32 “Permitted
Liens”
shall
mean a mortgage, pledge, lien security interest or other charge or encumbrance
or any segregation of assets or revenues or other preferential 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.
1.1.33 “Person”
shall
mean any natural person, corporation, 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.
1.1.34 “Phase
II Property Mortgage”
shall
have the meaning assigned to such term in Section 2.10 hereof.
1.1.35 Phase
II Senior Lender”
shall
mean KeyBank or such other lender from time to time which has made a loan to
Borrower, Phase II Property Owner, or any of their Affiliates to finance the
Phase II Project, which loan is secured by a first priority mortgage on the
Phase II Property.
1.1.36 “Phase
II Senior Lender Consent”
shall
have the meaning assigned to that term in Section 4.11 hereof.
1.1.37 “Phase
II Senior Loan”
shall
mean the loan from Phase II Senior Lender to Borrower, Phase II Property Owner,
or any of their Affiliates to finance the Phase II Project, which loan is
secured by a first priority mortgage on the Phase II Property.
1.1.38 “Securities
Act”
shall
mean the Securities Act of 1933, as amended and the rules promulgated
thereunder.
1.1.39 “Security
Documents”
shall
mean the Phase II Property Security Documents, as defined in Section 2.10
hereof.
1.1.40 “Subsidiary”
shall
mean any Person in which any Borrower or a 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
Borrower.
-5-
1.1.41 “Warrants”
shall
have the meaning assigned to that term in Section 2.11 hereof.
1.1.42 “Wholly-Owned
Subsidiary”
shall
mean any Subsidiary, 100% of the outstanding capital stock of all classes of
which is owned by Borrower and/or one or more Wholly-Owned
Subsidiaries.
Section
1.2 Accounting
Terms.
Accounting terms not specifically defined in 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,” 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
Section
2.1 Agreement
to Borrow and Lend; Lender’s Obligation to Disburse.
Subject
to the terms, provisions and conditions of this Agreement and the other Loan
Documents, and subject to the approval by Lender of any request by Borrower
for
funds hereunder in the sole and absolute discretion of Lender, for the purposes
and subject to all of the terms, provisions and conditions contained in this
Agreement, the Lender and Borrower agree as follows:
2.1.1 The
principal amount of the Loan shall not exceed, at any time, Ten Million and
No/100 Dollars ($10,000,000.00); provided, however, in no event shall the amount
of the Loan equal or exceed such amount which would cause the amount secured
by
the Phase II Property Mortgage, taken together with the amount secured by the
Phase II First Mortgage, and any mortgage granted in favor of Stanford with
respect to the Phase II Property, to exceed $45,000,000.00.
2.1.2 Lender
agrees, upon Borrower’s compliance with and satisfaction of all conditions
precedent set forth in Section 6.1 hereof, to advance Loan proceeds in an amount
not to exceed $2,905,000.00 (the “Initial
Advance”).
2.1.3 After
the
Initial Advance, Lender shall have no obligation to make any further Advances.
Without limiting the generality of the foregoing, Lender has advised Borrower
that it will not be inclined to make any further advances in any event unless:
(i) Borrower has complied with all conditions precedent to disbursement from
time to time including the requirements of Section 6.2 hereof; (ii) no Material
Adverse Change has occurred with respect to Borrower, Phase II Property Owner,
or the Phase II Project and
-6-
(iii)
no
Event of Default and no default exists hereunder or under any other Loan
Document.
IT
IS ACKNOWLEDGED THAT LENDER, FOLLOWING THE INITIAL ADVANCE, SHALL HAVE NO
OBLIGATION TO MAKE FURTHER ADVANCES UNLESS LENDER ELECTS TO DO SO IN ITS SOLE
DISCRETION.
2.1.4 To
the
extent that Lender may have acquiesced in noncompliance with any requirements
precedent to the Initial Advance or precedent to any subsequent Advance, such
acquiescence shall not constitute a waiver by Lender, and Lender may at any
time
after such acquiescence require Borrower to comply with all such
requirements.
Section
2.2 Loan
Documents.
Borrower
agrees that it will, on the date of this Agreement execute and deliver or cause
to be executed and delivered to Lender, in form and substance acceptable to
Lender, this Agreement, the Note, the initial Warrants, and such other
documents, instruments or certificates as Lender and its counsel may reasonably
require, including such documents as Lender in its sole discretion deems
necessary or appropriate to effectuate the terms and conditions of this
Agreement and the Loan Documents, and to comply with the laws of the
State.
Section
2.3 Term
of the Loan.
All
principal, interest and other sums due under the Loan Documents shall be due
and
payable in full on the Maturity Date.
Section
2.4 Prepayments.
Borrower shall have the right to make prepayments of the Loan, in whole or
in
part, without prepayment penalty, upon not less than ten (10) days’ prior
written notice to Lender. The payment of any larger or additional sums in
advance of the payments required herein or under the Note shall not relieve
Borrower of the payment of the regular installments or of any other sums due
as
herein provided.
Section
2.5 Late
Charge.
Any and
all amounts due hereunder or under the other Loan Documents which remain unpaid
more than fifteen (15) days after the date said amount was due and payable
shall
incur a fee (“Late
Charge”)
of
five percent (5%) per annum of said amount, which payment shall be in addition
to all of Lender’s other rights and remedies under the Loan Documents.
Section
2.6 Interest
Rate.
The
Loan will bear interest at a rate per annum equal to the Applicable Rate;
provided, however, that upon the occurrence of an Event of Default, the Loan
shall bear interest at the Default Rate. Borrower shall pay all accrued interest
upon the earlier to occur of: (i) repayment of the Loan in full and termination
of the Loan; or (ii) maturity. Interest on the Loan shall be calculated for
the
actual number of days elapsed on the basis of a 360-day year, including the
first date of the applicable period to, but not including, the date of
repayment.
Section
2.7 Use
of
Proceeds.
Borrower will use the net proceeds of the Loan first to pay all reasonable
costs
and expenses incurred in Lender in connection with the Loan, and then for (i)
construction costs relating to the Phase II Project that are not covered by
the
Phase II Senior Loan, including costs to complete the amenities and site work;
professional fees; acquisition costs with respect to furniture, fixtures and
equipment necessary to complete and/or operate the Phase II Project; costs
and
expenses associated with vacation club sales; and marketing expenses; (ii)
general and administrative expenses incurred by Borrower or the Phase II
Property Owner in connection with the Phase II Project; (iii) interest and
financing costs relating to the Phase II Senior Loan (including any fees, costs,
or expenses incurred in connection with any refinancing of same) and
(iv) or such other purposes as permitted in writing by the Lender; in each
case subject to Lender’s approval in its sole discretion.
-7-
Section
2.8 Draw
Request.
As a
condition to any Advance, Borrower shall provide a written request, signed
by
Borrower, to Lender at least two (2) business days prior to the date of the
proposed Advance, specifying the date of the proposed Advance and the amount
thereof, and the proposed use of the Loan proceeds, which shall be in accordance
with Section 2.7 hereof, together with such other items as Lender may
require.
Section
2.9 Exit
Fee.
Borrower shall pay to Lender an exit fee of $200,000.00 (the “Exit
Fee”)
upon
the earlier to occur of: (i) repayment of the Loan in full and termination
of
the Loan; or (ii) the Maturity Date.
Section
2.10 Phase
II Property Mortgage.
In
order to secure payment of the Note and other Obligations, Phase II Property
Owner shall execute and deliver to Lender a second priority mortgage on the
Phase II Property in a form acceptable to Lender (the “Phase
II Property Mortgage”),
together with an assignment of leases and rents, financing statements, an
environmental indemnity agreement, assignments of contracts, and similar
documents, all in form and substance satisfactory to Lender in its sole
discretion, including without limitation, all items required to create, perfect
and protect Lender’s liens on the collateral for the Loan as contemplated hereby
(collectively, the “Phase
II Property Security Documents”).
The
Phase II Property Security Documents shall include provisions that the Phase
II
Property may not be transferred or further encumbered without Lender’s prior
written consent. Lender acknowledges and agrees that a mortgage lien on the
Phase II Property may be granted by Phase II Property Owner to Stanford
International Bank, Ltd. (“Stanford”),
provided that Lender and Stanford enter into an intercreditor agreement or
similar agreement addressing the rights and obligations of Lender and Stanford
with respect to the Phase II Property and the repayment of the obligations
secured thereby, providing for the priority of the repayment of the Note and
the
other Obligations in favor of Lender (the “Intercreditor
Agreement”),
in
form and substance satisfactory to Lender in its sole and absolute discretion.
Section
2.11 Warrants.
In
order to induce Lender to make the Loan, Borrower hereby agrees to issue in
favor of Lender (or its assigns) warrants to purchase up to 350,000 shares
of
Borrower’s common stock at $1.02 per share, which shall provide for cashless
exercise (collectively, the “Warrants”).
The
Warrants shall be issued on a pro-rata basis (warrants for 35 shares per
$1,000.00) with the Advances of the Loan, at the time of each Advance.
Section
2.12 Reserved.
Section
2.13 Further
Inducements. Borrower
acknowledges and agrees that it is the intention of the parties that the Loan
shall be funded on a pro-rata basis with the advances made to Borrower by
Stanford; provided, however, that the foregoing shall in no event obligate,
nor
be deemed to obligate, Lender to advance any portion of the Loan proceeds
hereunder, it being expressly agreed that Lender, following the Initial Advance,
shall have no obligation to make further Advances unless Lender elects to do
so
in its sole discretion. It is anticipated that, to induce Stanford to make
the
loan advances to Borrower, Borrower or its Affiliates, or principals of Borrower
or its Affiliates, may offer stock options, warrants, pledges of ownership
interests in Borrower or its Affiliates, pledges of proceeds, security
interests, or other collateral or incentives in order to induce Stanford to
make
requested loan advances to Borrower (any of the foregoing, an “Incentive”).
In
the event that any of the loan advances made by Stanford bear interest at an
interest rate greater than the Applicable Rate set forth herein, such favorable
interest rate shall also be deemed an “Incentive.” Borrower agrees Lender shall
be entitled to, and shall be offered, any Incentive in the same form and to
the
same extent as Stanford.
-8-
ARTICLE
III
In
order
to induce Lender to enter into this Agreement and to make the Loan provided
for
herein, Borrower and Mortgaged Property Owner each make the following
representations and warranties to 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 Advance,
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.
Each of
Borrower and Mortgaged Property Owner is duly organized validly existing and
in
good standing under the laws of its state of organization and is duly qualified
or licensed to transact business in all places where such qualification or
license is necessary. Borrower and Mortgaged Property Owner have 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 will, constitute the legal, valid
and
binding obligations of Borrower and Mortgaged Property Owner enforceable in
accordance with their respective terms.
Section
3.2 Authority.
The
making and performance by Borrower and Mortgaged Property Owner of this
Agreement, the Note, the Loan Documents, and any additional documents pursuant
hereto to which such Person is a party, has been duly authorized by all
necessary legal action of such Person, 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 Borrower or
Mortgaged Property Owner, pursuant to any instrument or agreement to which
Borrower or Mortgaged Property Owner is a party or by which Borrower or
Mortgaged Property Owner or their respective properties may be bound or
affected. The making and performance by Phase II Property Owner of the
Phase II Mortgage and other Phase II Security Documents will not violate any
provision of law or regulation, or any writ, order or decree of any court,
governmental, regulatory authority or agency, and will not result in a breach
of, or constitute a default or require any consent under, any instrument or
agreement to which Phase II Property Owner is a party or by which Phase II
Property Owner or the Phase II Property may be bound or affected, other than
the
First Mortgage.
-9-
Section
3.3 Financial
Condition.
The
financial statements of Borrower set forth in the Borrower 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 Borrower as of that date. Other
than as disclosed by those financial statements, Borrower has no direct or
contingent obligations or liabilities which would be material to the financial
position of Borrower, nor any material unrealized or anticipated losses from
any
commitments of Borrower. Since the date of such financial statements, there
has
been no material adverse change in the business or financial condition of
Borrower.
Section
3.4 SEC
Filings.
As of
the date hereof, none of the filings made with the SEC by Borrower since July
1,
2002 (the “Borrower
SEC Filings”),
contained any untrue statement of a material fact or to the best of Borrower’s
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. Borrower has furnished or made available
to
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 correspondence
with the Commission in response to inquiries. Borrower has filed all filings
required by law or regulation and the Borrower 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 Section 3.3 hereof do not, nor does this
Agreement, nor any written statement furnished by any Borrower to 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 Borrower or Mortgaged Property Owner has not disclosed to Lender in
writing which materially and adversely affects nor, so far as Borrower or
Mortgaged Property Owner, as applicable, can now foresee, is reasonably likely
to prove to materially and adversely affect the business or financial condition
of Borrower or Mortgaged Property Owner or the ability of Borrower or Mortgaged
Property Owner to perform its obligations under this Agreement, the Note, or
any
other Loan Document to which such Person is a party. There is no fact which
Borrower has not disclosed to Lender in writing which materially and adversely
affects nor, so far as Borrower can now foresee, is reasonably likely to prove
to materially and adversely affect the ability of Phase II Property Owner to
execute and deliver, and to perform its obligations under, the Phase II Mortgage
or any other Phase II Security Documents.
Section
3.6 Litigation.
Except
to the extent disclosed in the Borrower SEC Filings, there are no suits, actions
or proceedings pending, or to the knowledge of Borrower, threatened before
any
court or by or before any governmental or regulatory authority, commission,
bureau or agency or public regulatory body against or affecting Borrower which,
if adversely determined, would have a material adverse effect on the business
or
financial condition of Borrower.
-10-
Section
3.7 Payment
of Taxes.
As of
the Closing Date, federal income tax returns of Borrower have been filed with
Internal Revenue Service and no deficiencies have been assessed. Borrower 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
Borrower, to the extent that the taxes have become due, except as otherwise
permitted by the provisions hereof. Borrower has set up reserves which are
reasonably believed by 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 Borrower SEC Filings, neither Borrower, nor Mortgaged
Property Owner 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). Neither Borrower nor Mortgaged Property
Owner 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 Borrower or Mortgaged
Property Owner or their 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 Borrower, Mortgaged Property Owner, or the Mortgaged
Property.
Section
3.9 Authorizations.
All
material authorizations, consents, approvals and licenses required under
applicable law or regulation for the ownership or operation of the property
owned or operated by Borrower or Mortgaged Property Owner or for the conduct
of
business in which Borrower or Mortgaged Property Owner is engaged, have been
duly issued and are in full force and effect, and to the best of such Person’s
actual knowledge, neither Borrower nor Mortgaged Property Owner is 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
Borrower or Mortgaged Property Owner, which default would have a material
adverse effect on Borrower or Mortgaged Property Owner, as applicable. 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 other Loan Documents executed in connection
with the making of the Loan or the transactions contemplated herein or in the
other Loan Documents. 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 the Phase
II
Mortgage or other Security Documents by Phase II Property Owner or the
transactions contemplated therein, other than the recording of the Phase II
Mortgage in the public records of Polk County, Florida.
Section
3.10 Title
to Property.
Phase
II Property Owner owns fee simple title to the Phase II Property free and
clear of all Liens except the Permitted Exceptions. Borrower and each of its
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 hereof
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
Borrower, and each of its Subsidiaries are free from any liens except as
disclosed on the financial statements provided to 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 its 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 Borrower or such Subsidiary, as the case
may
be.
-11-
Section
3.11 Authorized
Shares.
Borrower shall have available a sufficient number of authorized and unissued
shares of common stock as may be necessary to effect the exercise of
the Warrants. Borrower understands and acknowledges the potentially dilutive
effect to the common stock of the issuance of shares of common stock upon the
exercise of the Warrants. Borrower further acknowledges that its obligation
to
issue shares of common stock upon exercise of the Warrants is absolute and
unconditional regardless of the dilutive effect that such issuance may have
on
the ownership interests of other stockholders of Borrower. The common stock
issuable upon exercise of the Warrants when issued, shall be duly and validly
issued, fully paid and non-assessable and will not subject the holder thereof
to
personal liability by reason of being such a holder.
Section
3.12 Title.
Mortgaged Property Owner has good, marketable and insurable fee simple title
to
the real property comprising part of the Mortgaged Property and good title
to
the balance of the Mortgaged Property, free and clear of all Liens whatsoever
except the Permitted Exceptions. The Phase II Mortgage when properly recorded
in
the appropriate records and any Uniform Commercial Code financing statements
required to be filed in connection therewith, will create (i) a valid, perfected
lien on the Mortgaged Property, subject only to Permitted Exceptions and (ii)
perfected security interests in and to, and perfected collateral assignments
of,
all personalty (including the Leases) in which a security interest can be
perfected by the filing of Uniform Commercial Code financing statements, and
any
leases, all in accordance with the terms thereof, in each case subject only
to
any Permitted Exceptions. There are no mechanics’, materialmen’s or other
similar liens or claims which have been filed for work, labor or materials
affecting the Mortgaged Property which are or may be liens prior to, or equal
or
coordinate with, the lien of the Mortgage Property. None of the Permitted
Exceptions, individually or in the aggregate, materially interfere with the
benefits of the security intended to be provided by the Phase II Mortgage,
this
Agreement and the other Loan Documents, materially and adversely affect the
value of the Mortgaged Property, or impair the use or operations of the
Mortgaged Property.
Section
3.13 Compliance.
The
Mortgaged Property and the use thereof comply in all material respects with
all
applicable Legal Requirements, including, without limitation, building and
zoning ordinances and codes. Mortgaged Property Owner has not committed any
act
which may give any Governmental Authority the right to cause Mortgaged Property
Owner to forfeit the Mortgaged Property or any part thereof or any monies paid
in performance of Mortgaged Property Owner’s obligations under any of the Loan
Documents. Mortgaged Property Owner has no knowledge of any violations or
notices of violations of any Legal Requirements relating to Mortgaged Property
Owner and/or the Mortgaged Property.
-12-
Section
3.14 Condemnation.
No
condemnation or other similar proceeding has been commenced or, to the best
knowledge of Borrower or Mortgaged Property Owner, is contemplated with respect
to all or any portion of the Mortgaged Property or for the relocation of
roadways providing access to the Mortgaged Property.
Section
3.15 Physical
Condition.
Neither
the Mortgaged Property nor any portion thereof is now damaged or injured as
result of any fire, explosion, accident, flood or other casualty. There are
no
proceedings pending, or, to the best knowledge of Borrower or Mortgaged Property
Owner, threatened, to acquire by power of condemnation or eminent domain, the
Mortgaged Property, or any interest therein. Borrower has not received notice
from any insurance company or bonding company of any defects or inadequacies
in
the Mortgaged Property or any part thereof, which would adversely affect the
insurability of the same or cause the imposition of extraordinary premiums
or
charges thereon or of any termination or threatened termination of any policy
of
insurance or bond.
Section
3.16 Indemnification
by Borrower.
All of
the representations and warranties of Borrower and Mortgaged Property Owner
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, Borrower and Mortgaged Property Owner shall and hereby agrees
to indemnify Lender for any such claims notwithstanding the full repayment
of
the Loan.
Section
3.17 Survival
of Representations and Warranties. Each
of Borrower
and Mortgaged Property Owner agrees that all of the representations and
warranties set forth in this Article III and elsewhere in this Agreement are
true as of the date hereof, will be true at the time of the Initial Advance
and,
except for matters which have been disclosed by Borrower or Mortgaged Property
Owner and approved by Lender in writing, at all times thereafter. Each request
for an Advance under the Loan Documents shall constitute a reaffirmation of
such
representations and warranties, as deemed modified in accordance with the
disclosures made and approved as aforesaid, as of the date of such request.
It
shall be a condition precedent to the Initial Advance and each subsequent
Advance that each of said representations and warranties is true and correct
as
of the date of such requested Advance. Each Advance shall be deemed to be a
reaffirmation by Borrower and Mortgaged Property Owner that each of the
representations and warranties is true and correct as of the date of such
Advance. In addition, at Lender’s request, Borrower and Mortgaged Property Owner
shall reaffirm such representations and warranties in writing prior to each
disbursement hereunder.
ARTICLE
IV
Borrower
covenants and agrees that from and after the Closing Date and until payment
in
full of the principal of and interest on the Note and any other obligations,
unless Lender shall otherwise consent in writing:
-13-
Section
4.1 Loan
Proceeds.
Borrower will use the proceeds of the Loan only for the purposes set forth
in
Section 2.7 hereof and furnish Lender with all evidence that it may reasonably
require with respect to such use.
Section
4.2 Existence.
Borrower will do or cause to be done all things necessary to 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.
Borrower will continue to conduct and operate its business substantially as
conducted 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.
Borrower will make all filings as required by federal and state securities
and
other laws and regulations, or by any domestic securities exchange or trading
market, and provide copies thereof to Lender promptly after such filing or
filings.
Section
4.5 Insurance.
Borrower will insure and keep insured in good and financially sound and
responsible insurance companies reasonably satisfactory to 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 Lender.
Section
4.6 Payment
of Indebtedness, Taxes, Etc.
4.6.1 Borrower
will pay all of its indebtedness and obligations promptly and in accordance
with
normal terms; and
4.6.2 Borrower
will 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 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 Borrower shall have set aside on its books
adequate reserves with respect to any tax, assessment, charge, levy or claim,
so
contested.
-14-
Section
4.7 Compliance
with Laws.
Borrower will duly observe, conform and comply with all 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 of Default, Borrower will promptly
furnish written notice thereof to Lender.
Section
4.9 Inspection.
At
reasonable times and after reasonable prior written notice, Borrower shall
permit any representatives of Lender to visit and inspect any of the properties
of 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.
Borrower will give prompt notice in writing to Lender of the commencement of
(a)
all material litigation which, if adversely determined, might adversely affect
the business or financial condition of Borrower, Phase II Property Owner, or
the
Phase II Project; (b) all other litigation involving a claim against Borrower,
Phase II Property Owner, or the Phase II Project 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 Borrower, Phase II Property
Owner or the Phase II Project, or any property of 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 Borrower, the Phase II Property Owner
or
the construction, development and sale of the Phase II Project.
Section
4.11 Construction
Lender Consent.
Borrower will use, or cause Phase II Property Owner to use, its best efforts
to
obtain the consent of the Phase II Senior Lender to the granting of the Phase
II
Mortgage by Phase II Property Owner to Lender (the “Phase
II Senior Lender Consent”).
ARTICLE
V
Borrower
covenants and agrees that from the Closing Date and until payment in full of
the
principal of and interest on the Note and any other obligations, unless Lender
shall otherwise consent in writing:
Section
5.1 Limitation
of Liens.
Except
as permitted by the Loan Documents, Borrower will not 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
or 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 sixty (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 Borrower in the ordinary course of its business and
Liens
existing upon assets acquired by Borrower; and (vi) any existing Liens reflected
in the financial statements referred to in Section 3.3 hereof.
-15-
Section
5.2 Limitation
on Indebtedness.
Borrower will not incur, create, assume or permit to exist any Indebtedness,
except
5.2.1 The
Note
and any other Indebtedness of Borrower to Lender;
5.2.2 Indebtedness
which is subordinated to the prior payment in full of the principal of, and
interest on, the Note on terms and conditions approved in writing by
Lender;
5.2.3 Indebtedness
representing the unpaid purchase price of equipment purchased by Borrower in
the
ordinary course of its business and Indebtedness existing upon assets acquired
by Borrower;
5.2.4 Existing
Indebtedness reflected in the audited financial statements referred to in
Section 3.3 hereof; or
5.2.5 The
loan
advances to be made to Borrower by Stanford; provided, however, that the
indebtedness thereunder shall be paid on a pari-passu basis with the Note and
other Obligations.
Section
5.3 Mergers,
Consolidations and Acquisition of Assets.
Borrower will not wind up, liquidate, dissolve, merge or consolidate with any
corporation or entity, or acquire all or substantially all of the assets of
any
corporation except that Borrower may merge or consolidate with any Subsidiary
provided that Borrower is the surviving corporation.
Section
5.4 Sale,
Lease, Etc.
Borrower will not sell, lease, assign, transfer or otherwise 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.
Borrower will not permit any material change in its ownership or
management.
-16-
Section
5.6 General.
(i) Borrower
will not engage, directly or through other Persons, in any business other than
the business now carried on;
(ii) Borrower
will not change its certificate of incorporation, bylaws or other charter
documents except as contemplated hereby;
(iii) Borrower
will not declare or pay dividends or make any other distribution or redeem
any
of its equity securities; or enter into or modify a material related-party
transaction.
ARTICLE
VI
The
conditions listed below are precedent to any obligations of Lender and shall
be
complied with in form and substance satisfactory to Lender and its counsel
prior
to Lender’s obligation to advance any portion of the Loan.
Section
6.1 Conditions
to Opening of the Loan and to each Advance.
Lender’s obligation hereunder to make the Initial Advance, and to make any
subsequent Advance, is conditioned upon satisfaction, or Lender’s receipt, of
the following, each in form and substance satisfactory to Lender:
6.1.1 No
Default.
No
Default or Event of Default shall have occurred and be continuing or will occur
upon the making of the Advance, and all representations and warranties made
by
Borrower 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
Advance.
6.1.2 Loan
Documents.
The
appropriate parties shall have duly executed and delivered to Lender this
Agreement, the Note, the Warrants, and each of the certificates and the other
Loan Documents and all additional opinions, documents and certificates that
Lender or its counsel may require, and all such opinions, certificates and
documents shall be reasonably satisfactory in form and substance to Lender
and
its counsel.
6.1.3 Property.
Lender
shall be satisfied with the title to, value and condition of the Phase II
Property in its sole and absolute discretion.
6.1.4 Expenses.
Borrower shall have paid all of Lender’s reasonable fees and expenses incurred
in connection with this Agreement. In addition, Borrower shall have paid all
applicable documentary stamp taxes, intangible taxes, recording fees and other
closing costs.
-17-
6.1.5 Organizational
Documents.
Lender
shall have received Organizational Documents for each of Borrower and Phase
II
Property Owner.
6.1.6 Existing
Title Policy.
Lender
shall have received (i) a copy of the owner’s title insurance policy relative to
the Phase II Property, together with a copy of the deed which conveyed title
to
the Phase II Property to Phase II Property Owner and copies of all title
exceptions.
6.1.7 Senior
Loan Documents.
Lender
shall have received copies of the First Mortgage and all other documents
evidencing and/or securing the loan secured thereby with respect to the Phase
II
Property.
6.1.8 Financial
Statements.
Lender
shall have received current financial statements from Borrower.
6.1.9 No
Material Advance Change.
There
shall have been no Material Adverse Change in the financial condition of
Borrower, Phase II Property Owner or the Phase II Property; nor any material
adverse event or condition affecting Borrower, Phase II Property Owner or the
Phase II Property, or the validity, enforceability or priority of the Loan
and
lien instruments.
6.1.10 Warrants.
Borrower shall have issued and delivered to Lender (or its assigns) Warrants
to
purchase (101,675) shares of Borrower’s common stock. [Revise this number to
reflect warrants for the purchase of 35 shares per$1,000 loaned at the time
of
execution.]
6.1.11 Reserved.
6.1.12 Environmental
Audit.
Borrower will provide, or cause the Phase II Property Owner, as applicable,
to
provide to Lender all documents in the possession or subject to the control
of
Borrower or Phase II Property Owner relating to the condition of the Phase
II
Property, including without limitation:
(i) existing
environmental reports;
(ii) submissions
and correspondence provided by Phase II Property Owner or any owner or user
of
the Phase II Property, as applicable, to any governmental authority;
(iii) correspondence,
orders, approvals and disapprovals provided by any governmental authority to
Phase II Property Owner or any user, developer, manager or owner of the Phase
II
Property; and
(iv) all
sampling and test results and reports obtained from samples and tests taken
on,
under, from or around the Phase II Property by or on behalf of Phase II Property
Owner, any user or owner of the Phase II Property, as applicable, and third
party or any governmental authority.
-18-
Any
costs
incurred by Lender in connection with the review of the foregoing documents,
the
Audit, any sampling and test results and reports, or otherwise in connection
with the assessment of the environmental condition of the Phase II Property,
will be borne by Borrower and will be paid promptly upon demand, including
without limitation, attorneys’ fees and all other professional or expert
fees.
6.1.13 Survey.
Borrower shall, or shall cause Phase II Property Owner, as applicable, to
provide to Lender a copy of the existing survey with respect to the Phase II
Property.
6.1.14 No
Litigation.
Borrower shall have furnished to Lender evidence that no litigation or
proceedings shall be pending or threatened which could or might cause a Material
Adverse Change with respect to Borrower, Phase II Property Owner or the Phase
II
Property.
Section
6.2 Conditions
to Subsequent Advances.
In
addition to the conditions set forth in Section 2.1.3 and Section 6.1 hereof,
Lender’s obligations hereunder to make any subsequent Advances are conditioned
upon Lender’s receipt of the following, each in form and substance satisfactory
to Lender:
6.2.1 Use
of
Proceeds.
The
Loan proceeds shall have theretofore been applied in accordance with the Use
of
Proceeds as set forth in Section 2.7 hereof.
6.2.2 Phase
II Property Security Documents and Supporting Documents.
Phase II Property Owner shall have executed and delivered to Lender the
Phase II Property Mortgage and the other Phase II Property Security Documents,
and all additional opinions, documents and certificates that Lender or its
counsel may require, all reasonably satisfactory in form and substance to Lender
and its counsel.
6.2.3 Phase
II Property Documents.
Lender
shall have received the documents and items set forth on Exhibit
C
attached
hereto with respect to the Phase II Property.
6.2.4 Warrants.
Borrower shall have issued and delivered to Lender (or its assigns) Warrants
to
purchase shares of Borrower’s common stock proportionate to the amount of the
Advance.
6.2.5 Other
Documents.
Borrower shall provide such other documents as may be reasonably required by
Lender’s counsel, including documents which verify and confirm Borrower’s
representations, warranties and covenants to Lender.
-19-
ARTICLE
VII
Section
7.1 Events
of Default.
If any
one of the following “Events of Default” shall occur and shall not have been
remedied:
7.1.1 Any
representation or warranty made or deemed made by Borrower herein or in any
of
the other Loan Documents, or in any certificate or report furnished by Borrower
at any time to 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 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 the Note or this Agreement and the same
is
not paid within ten (10) days after written notice from Lender; or
7.1.3 Any
default by Borrower under any Indebtedness or other Obligation to Lender or
any
of its Affiliates which is not cured within any grace periods provided
thereunder; or
7.1.4 Any
default by Mortgaged Property Owner under the Security Documents which is not
cured; or
7.1.5 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 thirty (30) days after notice of default
to Borrower by Lender; or
7.1.6 Final
judgment for the payment of’ money in an amount in excess of $50,000.00 shall be
rendered against Borrower and the same shall remain undischarged for a period
of
thirty (30) days, during which period execution shall not effectively be stayed,
provided Borrower, as applicable, will have the right to contest in good faith
by appropriate proceedings and provided Borrower shall have set aside on its
books adequate reserves for payment of such money; or
7.1.7
Borrower’s default in the performance of its obligations with respect to any
Indebtedness in excess of $50,000 or as lessor or as lessee under any lease
of
all or any material portion of its property, after the expiration of any
applicable cure periods; or
7.1.8 Borrower
shall cease to exist or to be qualified to do or transact business in any State
in which its properties 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
7.1.9 If,
without the prior written consent of Lender, which consent shall be in Lender’s
sole and absolute discretion, any equity interest in Phase
II
Property Owner 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
7.1.10 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 Borrower, or of all or of a substantial part of the assets
of
Borrower, (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 involuntary case under the Bankruptcy Code,
or
(vii) take any corporate action for the purpose of effecting any of the
foregoing; or
-20-
7.1.11 Borrower
shall fail to furnish to Lender notice of default in accordance with Section
4.8
hereof, within ten (10) days after any such notice of default becomes known
to
the President or Chief Financial Officer of Borrower, whether or not
notification to Borrower is furnished by Lender; or
7.1.12 A
Material Adverse Change occurs with respect to Borrower, the Phase II Property
Owner or the Phase II Property; or
Section
7.2 In
the
case of any such Event of Default, Lender may, by written notice to Borrower,
at
its option:
7.2.1 withhold
further disbursement of the proceeds of the Loan and/or immediately terminate
Lender’s obligations to make further disbursements hereunder; and/or
7.2.2 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; and/or
7.2.3 exercise
or pursue any other remedy or cause of action permitted under this Agreement
or
any other Loan Documents, including the Mortgage, if applicable, or conferred
upon Lender by operation of Law.
ARTICLE
VIII
Section
8.1 No
Waiver, Remedies Cumulative.
No
failure on the part of 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 outstanding and unpaid and the commitment to
make
the Loan has not been terminated.
-21-
Section
8.3 Notices.
Any
notice or other communication hereunder to any party hereto shall be by hand
delivery, facsimile, recognized overnight courier or registered or
certifiedmail, return receipt requested, and shall be deemed to have been
given or made when delivered to the party at its address or fax number set
forth
below (or at any other address that the party may hereafter specify to the
other
parties in writing):
|
Borrower:
|
0000
Xxxx Xxxx Xxxx
Xxxxxxx,
Xxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxx
Telephone:
(000) 000-0000
Fax:
(000)
000-0000
|
|
Lender:
|
Resorts
Funding Group, LLC
0000
Xxxx Xxxx Xxxx
Xxxxxxx,
Xxxxxxx 00000
Attention: Xxxxxxx
X. Xxxxxx
Telephone:
(000)
000-0000
Fax:
(000)
000-0000
|
Section
8.4 Construction.
This
Agreement and the Note shall be deemed a 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 Borrower
and
Lender, and their respective successors and assigns, provided, that Borrower
may
not assign any of its rights hereunder without the prior written consent of
Lender, which may be arbitrarily withheld. Any assignment that does not comply
with the provisions of this Agreement shall, at the election of Lender in
Lender’s sole discretion, be void.
Section
8.6 Limit
on Interest.
Anything herein or in the Note to the contrary notwithstanding, the obligations
of Borrower under this Agreement and the Note to Lender shall be subject to
the
limitation that payments of interest to Lender shall not be required to the
extent that receipt of any such payment by Lender would be contrary to
provisions of law applicable to Lender (if any) which limit the maximum rate
of
interest which may be charged or collected by Lender; provided however, that
nothing herein shall be construed to limit 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.
-22-
Section
8.8 Pleadings.
The
headings are for convenience only and are not to 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,
representation or warranty not contained herein.
Section
8.11 Integration.
This
Agreement, together with the other documents 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.
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
course of dealing between 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 Lender and
Borrower.
Section
8.13 Indemnification.
Borrower hereby agrees to hold Lender and its officers, directors, employees
and
agents harmless from and against all claims, damages, liabilities and expenses,
including reasonable attorneys’ 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
Borrower shall not be required to indemnify Lender to the extent that such
claims, damages, liabilities or expenses arise from the gross negligence or
willful misconduct of Lender.
Section
8.14 Waiver
of Jury Trial.
BORROWER AND LENDER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT
EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION 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 LENDER ENTERING INTO THIS AGREEMENT AND
MAKING ANY LOAN, ADVANCE OR OTHER EXTENSION OF CREDIT TO BORROWER.
-23-
|
BORROWER:
|
||
|
AMERICAN
LEISURE HOLDINGS, INC.,
a
Nevada corporation
By:
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx
X. Xxxxxx, CEO
|
||
|
LENDER:
|
||
|
RESORTS
FUNDING GROUP, LLC,
a
Florida limited liability company
By:
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx
X. Xxxxxx, Manager
|
-24-
EXHIBIT
A
Legal
Description - Phase II Property
Tracts
TH-1 A, XX-0 X, XX-0 X, XX-0 X, XX-0 C1, TH-2 C2, XX-0 X, XX-0 X, XX-0 X, XX-0
H
and TH-2 K, TIERRA DEL SOL, according to the Plat thereof, as recorded in Plat
Book 144, Pages 31 through 38, inclusive, of the public records of Polk County,
Florida.
A-1
EXHIBIT
B
Permitted
Exceptions - Phase II Property
1. Notice
of
Establishment of the Westridge Community Development District as set forth
in
instrument recorded in Book 5524, Page 369 .
2. Declaration
of Consent to Jurisdiction of Community Development District and to Imposition
of Special Assessments as set forth in instrument recorded in Book 6572,
Page 385 .
4. Terms
and
conditions of Declaration of Easements as set forth in instrument recorded
in Book 6572, Page 586 as corrected in the Corrective Declaration of
Easements, dated December 21, 2005, and recorded July 5, 2006 in Book 6855,
Page
1241 .
5. Terms
and
conditions of Declaration of Easements as set forth in instrument recorded
in Book 6585, Page 863 .
6. Declaration
Of Covenants, Restrictions And Easements recorded in Official Records Book
7253,
at Page 1901.
7. Mortgage
and Security Agreement made by TDS Town Homes (Phase 1), LLC, a Florida limited
liability company, TDS Town Homes (Phase 2), LLC, a Florida limited liability
company, Costa Xxxxxx XX Real Estate, LLC, a Florida limited liability company,
Xxxxx Xxxxxx III Real Estate, LLC, a Florida limited liability company, and
TDS
Amenities, Inc., a Florida corporation, jointly and severally, as Mortgagor,
to
Xxxxxxx Funding, Inc., a New Jersey corporation, as Mortgagee, dated April
20,
2007 and recorded April 24, 2007 in Official Records Book 7259, Page
1.
8. Assignment
of Leases and Rents by TDS Town Homes (Phase 1), LLC, a Florida limited
liability company, TDS Town Homes (Phase 2), LLC, a Florida limited liability
company, Costa Xxxxxx XX Real Estate, LLC, a Florida limited liability company,
Xxxxx Xxxxxx III Real Estate, LLC, a Florida limited liability company, and
TDS
Amenities, Inc., a Florida corporation, jointly and severally, as Assignor,
to
Xxxxxxx Funding, Inc., a New Jersey corporation, as Assignee, dated April 20,
2007 and recorded April 24, 2007 in Official Records Book 7259, Page
98.
9. UCC-1
Financing Statement by TDS Town Homes (Phase 1), LLC, a Florida limited
liability company, TDS Town Homes (Phase 2), LLC, a Florida limited liability
company, Costa Xxxxxx XX Real Estate, LLC, a Florida limited liability company,
Xxxxx Xxxxxx III Real Estate, LLC, a Florida limited liability company, and
TDS
Amenities, Inc., a Florida corporation, jointly and severally, as Debtor, to
Xxxxxxx Funding, Inc., a New Jersey corporation, as Secured Party, recorded
April 24, 2007 in Official Records Book 7259, Page 130.
B-1
EXHIBIT
C
Mortgaged
Property Documents
A. Survey.
Borrower shall have furnished to Lender a survey of the Mortgaged Property
by a
surveyor registered and licensed by the State of Florida, showing a state of
facts acceptable to Lender’s counsel, certified to Mortgaged Property Owner,
Lender and the title insurance company that will be issuing the mortgagee title
insurance policy in Lender’s favor. The survey shall include a narrative legal
description of the boundaries of the Mortgaged Property Owner, by metes and
bounds, if applicable, shall locate easements, shall include dimensions of
all
improvements, shall certify in a narrative statement whether encroachments
exist
from or onto the Mortgaged Property, and if so, shall locate same, and shall
include the surveyor’s registration number, seal, and date of survey. The survey
shall satisfy minimum technical standards as required by Section 472.027,
Florida
Statutes.
B. Appraisal.
Borrower shall have furnished to Lender an appraisal of the Mortgaged Property
in form and content satisfactory to Lender, addressed to Borrower and Lender,
furnished at Borrower’s cost by an appraiser selected and engaged by
Lender.
C. Environmental
Audit.
Lender
shall have received evidence satisfactory to Lender that the Mortgaged Property,
its users and uses are in full compliance with all federal, state, county and
municipal environmental laws, ordinances, rules, regulations and requirements
(“Environmental
Law”)
and
that there are no liens or threatened liens against Mortgaged Property Owner,
the Mortgaged Property or its users pursuant to Environmental Law, including
without limitation the following:
(i) Borrower
will obtain and provide to Lender, at Borrower’s sole cost and expense, an
environmental audit as to the Mortgaged Property (the “Audit”)
from
an environmental consultant acceptable to Lender, together with a reliance
agreement executed by the consultant in a form acceptable to Lender. The Audit
will be performed in accordance with and address the issues set forth in the
ASTM E 1527 Standard Practice for Environmental Site Assessments and such other
environmental standards of the FDIC, FNMA, or other entity as Lender may
specify, which must be satisfactory to Lender, in its sole and absolute
discretion.
(ii) Borrower
will secure for Lender, its agents and employees, the unrestricted right,
without the obligation, to enter upon the Mortgaged Property for purposes of
environmental investigation, inspection and sampling, all at Borrower’s cost and
expense.
D. Insurance.
Borrower shall have furnished to Lender an original insurance policy or original
Accord evidence thereof, as to public liability insurance, coverage against
“All
Perils” and/or builders risk, flood hazard coverage, and such other types and
amounts of insurance with respect to the Mortgaged Property and the operation
thereof, in amounts, in form, and upon a company satisfactory to
Lender.
C-1