Credit Agreement
$6,000,000 Credit Facility
by and among
SUNSTONE GOLF RESORT, INC., A FLORIDA CORPORATION
AMERICAN LEISURE MARKETING & TECHNOLOGY, INC., A FLORIDA CORPORATION
ADVANTAGE PROFESSIONAL MANAGEMENT GROUP INC., A FLORIDA CORPORATION
CARIBBEAN LEISURE MARKETING LIMITED, AN ANTIGUAN LIMITED COMPANY
LEISURE XXXXX XXXXXXXXXXXXX, LTD., A UNITED KINGDOM COMPANY
AMERICAN LEISURE HOLDINGS, INC., A NEVADA CORPORATION
collectively, "Borrowers"
and
XXXXXXX XXXXXX, AN INDIVIDUAL
"Guarantor"
and
STANFORD VENTURE CAPITAL HOLDINGS, INC.
"Lender"
Dated as of DECEMBER 18, 2003
CREDIT AGREEMENT
THIS CREDIT AGREEMENT(the "AGREEMENT"), dated as of December 18, 2003,
(the "EFFECTIVE DATE"), is made by and among SUNSTONE GOLF RESORT, INC., a
Florida CORPORATION ("SGR"), AMERICAN LEISURE MARKETING & TECHNOLOGY, INC., a
Florida corporation ("ALHT"), ADVANTAGE PROFESSIONAL MANAGEMENT GROUP INC., a
Florida corporation ("APMG"), AND CARIBBEAN LEISURE MARKETING LIMITED, an
Antiguan limited company ("CLM"), LEISURE XXXXX XXXXXXXXXXXXX, LTD., a United
Kingdom company ("LSI") and AMERICAN LEISURE HOLDINGS, INC., a Nevada
corporation ( "ALHI" together with SGR, ALHT, APMG, CLM and LSI collectively
referred to herein as the "BORROWERS" and individually as a "BORROWER"), XXXXXXX
XXXXXX, an individual (the "GUARANTOR") and STANFORD VENTURE CAPITAL HOLDINGS,
INC. (the "LENDER").
W I T N E S S E T H
WHEREAS, the Borrowers desire to obtain a commitment from the Lender to
make credit 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
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 "$0.001 Warrants" shall mean those certain warrants to
purchase up to an aggregate of 600,000 shares of ALHI's common stock,
$0.001 par value per share at an exercise price of $0.001 per share being
issued to Lender in accordance with the terms hereof and of the Warrant
Purchase Agreement.
1.1.2 "$2.96 Warrants" shall mean those certain warrants to purchase
up to an aggregate of 1,350,000 shares of ALHI's common stock, $0.001 par
value per share at an exercise price of $2.96 per share being issued to
Lender in accordance with the terms hereof and of the Warrant Purchase
Agreement.
1.1.3 "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 a Borrower, or five
percent (5%) or more of the equity interest of which is held beneficially
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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.
1.1.4 "Agreement" means this Credit Agreement, as the same may from
time to time be amended.
1.1.5 "Allonge" shall mean the allonge of the Arvimex Note to
Lender, in the form supplied by Lender, dated of even date herewith.
1.1.6 "Arvimex Mortgage" that certain Mortgage Deed executed by SGR,
in favor of Arvimex, Inc., a Panamanian corporation ("Arvimex"), dated
February 3, 2000 and recorded in Official Records Book 4399, Page 746 of
the Public Records of Polk County, Florida, as amended by that certain
Note and Mortgage Modification Agreement dated March 31, 2003 and recorded
in Official Records Book 5311, Page 221 of the Public Records of Polk
County, Florida, which secures the Arvimex Note, which mortgage encumbers
the real property described on Exhibit B, attached hereto.
1.1.7 "Arvimex Note" shall mean that certain Promissory Note in the
original principal amount of Two Million Five Hundred Fifteen Thousand
Dollars ($2,515,000.00) executed by SGR in favor of Arvimex, dated January
31, 2000, as amended by that certain Note and Mortgage Modification
Agreement dated March 31, 2003.
1.1.8 "Assignment" shall mean the assignment of the Arvimex Mortgage
by Arvimex in favor of Lender in the form supplied by Lender, dated of
even date herewith.
1.1.9 "Availability" shall mean, as of December 18, 2003, the sum of
$3,550,000 for the uses described on Schedule 3.11 hereto, on and after
January 1, 2004, up to an additional $366,000 to be paid directly to the
payables of the Antigua Call Center, as well as for the payment of wages
in connection with the Antigua Call Center, from and after the New
Mortgage Closing Date up to an additional sum equal to the excess of $6
million over the amounts previously advanced.
1.1.10 "Borrowers" has the meaning assigned to that term in the
introduction to this Agreement.
1.1.11 "Borrowing" shall mean the drawing down by a Borrower of a
loan or loans from the Lender on any given Borrowing Date.
1.1.12 "Borrowing Date" shall mean the date as of which a Borrowing
is consummated.
1.1.13 "Business Day" shall mean a day on which commercial banks are
open for business in the state of Florida.
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1.1.14 "Bridge Loan" shall mean those certain loans and advances
made by the Lender to ALHI in the aggregate principal amount of
$2,976,456.67 and evidenced in part by those certain promissory notes
executed by ALHI and made payable to Lender in the aggregate principal
amount of $1,065,000 and maturing on March 31, 2004.
1.1.15 "Code" shall mean the Internal Revenue Code of 1986 as
amended from time to time, and the regulations and published
interpretations thereof.
1.1.16 "Commencement Date" shall mean the date of execution by the
Borrowers of this Agreement.
1.1.17 "Commission" shall mean the Securities and Exchange
Commission.
1.1.18 "Conversion Notice" shall have the meaning ascribed to such
term as in Section 2.8.1 of this Agreement.
1.1.19 "Credit Loan" shall mean the aggregate principal amount
advanced by the Lender as a Loan to the Borrowers under Article 2 hereof,
or, where the context requires, the amount thereof then outstanding.
1.1.20 "Default" means any event which, with the lapse of time, the
giving of notice, or both, would become an Event of Default.
1.1.21 "Default Rate" shall mean fifteen percent (15%) per annum.
1.1.22 "Director" shall mean any member of the Board of Directors of
ALHI.
1.1.23 "Entity Authorizations" shall mean
(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.
(iii) If any Borrower is a general partnership, a certified
copy of the partnership agreement with all modifications and
amendments thereto in recordable form, or a Memorandum of the
partnership agreement, in recordable form, together with
certifications from the Partnership: (a) identifying the full names
of all partners, (b) confirming the fact that the partnership is in
full force and effect, (c) addressing the authority of the
partner(s) to execute the Loan Documents, and (d) acknowledging that
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the within transaction is in the usual course of the business of the
partnership. If any Borrower is a limited partnership, a certified
copy of the certificate of limited partnership (as filed with the
Secretary of State of the state of its formation), a certificate of
good standing (from the state of its formation and from the State of
Florida) and a certified copy of the partnership agreement, with all
modifications and amendments thereto.
(iv) If any Borrower is a trust, a certified copy of the trust
agreement with all modifications and amendments thereto, together
with a certificate (certifying the authenticity of such trust
agreement) and resolutions as may be required to establish the power
and authority of the Trustee to execute, deliver and perform its
obligations under the Loan Documents. In addition to the foregoing,
Borrower must deliver or cause to be delivered such other documents
as may be reasonably required by Lender or Lender's counsel.
(v) Borrowers must deliver or cause to be delivered such other
documents as may be reasonably required by Lender or Lender's
counsel.
1.1.24 "Event of Default" has the meaning assigned to that term in
Section 7.1 hereof.
1.1.25 "Exchange Act" shall mean the Securities and Exchange Act of
1934, as amended.
1.1.26 "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 here-after in existence.
1.1.27 "Guaranty" shall mean the Guaranty dated of even date
herewith executed by the Guarantor in favor of the Lender.
1.1.28 "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
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contributions of other participants in the partnership or joint venture,
shall be included).
1.1.29 "Individual Guarantor" shall mean Xxxxxxx Xxxxxx, an
individual.
1.1.30 "Inside Director" shall mean any Director who is not an
Outside Director.
1.1.31 "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.
1.1.32 "Investments" shall mean, with respect to any Person, all
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.
1.1.33 "Lender" has the meaning assigned to that term in the
introduction to this Agreement.
1.1.34 "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.
1.1.35 "Loan" shall mean the aggregate principal amount advanced by
the Lender as a loan or loans to the Borrowers under Article 2 and Article
6 hereof, or, where the context so requires, subject to Availability.
1.1.36 "Loan Documents" shall mean those documents executed or
submitted in connection with the Loan, including, without limitation, (i)
the Note, (ii) this Credit Agreement, (iii) the Guaranty, (iv) the Stock
Pledge Agreement, (v) the Mortgage, (vi) the Security Agreements, (vii)
the Warrant Purchase Agreement, (viii) the Real Property Agreements; and
(xi) all other documents and instruments executed by any Borrower and
Guarantors in connection with the Loan and/or as may be required by Lender
or Lender's counsel, including those referred to in section 6.7 hereof.
1.1.37 "Loan Funding Period" shall mean the period between the
Effective Date and the Maturity Date.
1.1.38 "Maturity Date" shall mean December 31, 2008.
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1.1.39 "Maximum Loan Commitment" means the obligation of the Lender,
subject to the Availability, to make the Credit Loan pursuant to Section
2.1 hereof in the aggregate principal amount of up to SIX MILLION DOLLARS
($6,000,000.00).
1.1.40 "Mortgages" shall mean, in the case of SGR, the Mortgage
Modification and Restatement Agreement of even date herewith (the
"Mortgage Modification Agreement"), and in the case of APMG, the Mortgage
and Security Agreement of even date herewith ("the Hotel Mortgage"), to
Lender which collectively secures the Loan and evidences a valid second
mortgage lien on the Property, and all fixtures and personal property
located on or used in connection with the Property, if any.
1.1.41 "Note" shall mean the Convertible Promissory Note described
in Section 2.5 hereof, in the principal amount of SIX MILLION DOLLARS
($6,000,000.00) dated the initial Borrowing Date and payable to the order
of the Lender, substantially in the form of Exhibit "A" 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.
1.1.42 "New Mortgage Closing Date" shall have the meaning set forth
in Section 6.11 herein.
1.1.43 "Obligations" shall mean the Maximum Loan Commitment and any
and all liabilities, obligations, covenants, duties and debts, owing by
the Borrower to the Lender, arising under this Agreement, 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 contractual agreement between the Lender and the
Borrowers.
1.1.44 "Outside Director" shall mean a Director who meets those the
requirements set forth for a "Non-Employee Director" under Rule 16b-3(3)
of the Securities Exchange Act of 1934.
1.1.45 "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.
1.1.46 "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.
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1.1.47 "Pledge Agreement" shall mean that certain Pledge Agreement
of even date herewith executed by ALHI and LSI pledging (i) all of the
issued and outstanding capital stock of ALMT; (ii) all of the issued and
outstanding capital stock of CLM.
1.1.48 "Property" shall mean the parcels of real property owned by
SGR and APMG and described in Exhibits B and C respectively, attached
hereto, together with any improvements located thereon, if any.
1.1.49 "Put Notice" shall have the meaning ascribed to such term as
in Section 2.5.2 of this Agreement.
1.1.50 "Securities Act" shall mean the Securities Act of 1933, as
amended and the rules promulgated thereunder.
1.1.51 "Real Property Agreements" shall mean the Mortgages, and the
Assignment, together with all other documents and instruments executed by
any Borrower, Guarantor, or third party, in connection with same, or as
may be required by Lender or Lender's counsel.
1.1.52 "Security Agreement" shall mean that certain Security
Agreement of even date herewith executed by ALMT and CLM granting a
security interest in all of the assets of ALMT and CLM, respectively.
1.1.53 "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 fifty percent (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.
1.1.54 "Warrants" shall mean the $0.001 Warrants and the $2.96
Warrants to purchase an aggregate of 1,950,000 shares of common stock
$0.001 par value per share of ALHI being issued to Lender in accordance
with the terms hereof and of the Warrant Purchase Agreement.
1.1.55 "Warrant Purchase Agreement" shall mean that certain Warrant
Purchase Agreement of even date herewith executed by Lender and ALHI
pursuant to which Lender purchased, and ALHI issued and sold, warrants to
purchase an aggregate of 1,950,000 of ALHI's common stock $0.001 par value
per share, at an exercise price of $0.001 per share for warrants to
purchase 600,000 shares of the ALHI common stock and an exercise price of
$2.96 per share for warrants to purchase 1,350,000 shares of the ALHI
common stock as set forth in Schedule A to Warrant Purchase Agreement.
1.1.56 "Wholly-Owned Subsidiary" shall mean any Subsidiary, one
hundred percent (100%) of the outstanding capital stock of all classes of
which is owned by the Borrowers and/or one or more Wholly-Owned
Subsidiaries.
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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 4.9 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 - CREDIT LOAN
Section 2.1 Commitment. The Lender agrees, on the terms, conditions
and limitations of this Agreement, to make Credit Loans in United States
Dollars to the Borrowers, from time to time, during the Loan Funding
Period, in an aggregate amount not to exceed at any one time outstanding
the Maximum Loan Commitment, subject to compliance with the Availability.
The Credit Loan shall bear interest as set out in the Note.
Section 2.2 Borrowings and Prepayments. Each Borrowing hereunder
shall be made only if there is no then existing Event of Default
hereunder. Borrowers shall have the right at any time, and from time to
time, to prepay the outstanding principal amount in whole or in part
without premium or penalty, provided that interest on the amount prepaid,
accrued through the date of prepayment date, shall be paid on such date of
prepayment.
Section 2.3 Notice. The Borrowers shall give written notice, signed
by the Borrowers (or telephone notice, promptly confirmed in writing) to
the Lender at least two (2) business days prior to the proposed Borrowing
Date specifying (i) the Borrowing Date (which shall be a business day),
and (ii) the amount of the proposed Borrowing.
Section 2.4 Manner of Borrowing. Each Borrowing under this Article 2
shall be made at the office of Lender, at its address as set forth
opposite its signature at the end of this Agreement, by wire transfer to
the Borrower's account; provided however, that the requested Borrowing
shall in no event exceed the amount of Availability on such date.
Section 2.5 Warrants.
2.5.1 With each Borrowing, in accordance with the Warrant Xxxxxxxx
Xxxxxxxxx, XXXX shall issue to Lender the Warrants, pro rata, in
accordance with Schedule 2.5.1 attached hereto.
2.5.2 Subject to Section 6.10 hereof, at anytime during the month of
December 2008, upon five days written notice to ALHI (the "PUT NOTICE"),
the holders of the $0.001 Warrants, shall have the right, but not the
obligation, in its sole discretion, to put to ALHI, and ALHI shall, within
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five days of its receipt of the Put Notice, purchase any of the $0.001
Warrants or any shares issued upon the exercise thereof, that has not
theretofore been sold by a holder of the Warrant at a purchase price of
$2.25 per share of Common Stock or $2.25 for each share for which such
Warrant is exercisable, whichever is applicable, payable in cash.
Section 2.6 Note.
2.6.1 The Loan made by the Lender under this Article 2 shall be
evidenced by, and repaid with interest in accordance with, a single
Promissory Note of the Borrowers in substantially the form of EXHIBIT "A"
attached hereto and made a part hereof, with appropriate insertions, in
the amount of the Maximum Loan Commitment, dated even date herewith and
payable to the order of the Lender on the date or dates specified thereon,
such Note to represent the obligation of the Borrowers to the Lender to
repay the Credit Loan of the Borrowers. The Note provides that on the
Maturity Date, the Commitment to make further Loans to the Borrower shall
cease and that, on such date, the entire amount of principal outstanding
thereunder and accrued interest shall be paid in full.
2.6.2 Although the stated amount of the Note shall be equal to the
Maximum Loan Commitment, the Note shall be enforceable, with respect to
the Borrowers' obligation to pay the principal amount thereof, only to the
extent of the unpaid principal amount of the Loan at the time evidenced
thereby together with unpaid accrued interest thereon. Interest on the
Note shall be payable on, and only for the period during which, the
principal amount of the Loan evidenced thereby is outstanding.
Section 2.7 Principal and Interest.
2.7.1 Borrowers shall repay the outstanding principal balance of the
Loan on the Maturity Date.
2.7.2 Borrower shall pay the Lender interest quarterly on the unpaid
principal balance of the Loan, in arrears, at a per annum rate equal to
six percent (6%). Interest charges shall be computed on the basis of a
year of 360 days and actual days elapsed, and will be payable to the
Lender on each applicable Loan Payment Date.
2.7.3 Effective as of the first Borrowing, Borrower shall borrow and
shall pay to Lender an amount of $224,241.67, which shall be held by
Lender in reserve and shall be paid by Lender to service the 2003 and 2004
interest accruals on the Availability Amount on the date hereof, and on
the New Mortgage Closing Date the Borrower shall borrow and increase the
reserve as necessary to fund 2004 interest accrual on the total amount
outstanding.
2.7.4 If any Event of Default occurs, then, while any such Event of
Default is continuing, the Loan will bear interest at the Default Rate.
2.7.5 The Borrowers' obligation to repay the Loan and to pay
interest on the Loan shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be terminated for
any reason whatsoever.
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Section 2.8 Conversion Rights. At any time prior to the Maturity
Date, the Note and all sums, at any given time, due hereunder, shall, at
the sole election of Lender and upon 5 days written notice to Borrowers
and ALHI, be convertible in whole or in part, from time to time, into that
number of shares of ALHI common stock calculated by dividing the amount
due by $15.00.
2.8.1 Any conversion shall be exercised by written notice to ALHI at
their principal place of business (the "CONVERSION NOTICE").
2.8.2 Within five (5) days of its receipt of the Conversion Notice,
ALHI shall issue and deliver to the address of the holder of the Note as
set forth herein (as such address may be modified from time to time in the
records of ALHI), or to the holder's nominees, a certificate or
certificates, substantially in the form as shown in Exhibit A attached
hereto, for the number of shares of Common Stock to which such holder
shall be entitled; provided, that ALHI shall not be obligated to issue to
any Lender certificates evidencing the shares of Common Stock issuable
upon such conversion unless either the Note is delivered to ALHI for
cancellation and reissuance in the proper amount or an affidavit of loss
of the Note has been executed by the holder. In the event that the Note is
converted in full, the Lender will execute satisfaction of mortgages and
security interests in customary form supplied by the Borrowers at no
expense to the Lender.
2.8.3 If ALHI shall declare and pay to the holders of the shares of
Common Stock a dividend in shares of Common Stock, the Conversion Price in
effect immediately prior to the date fixed for the determination of
shareholders entitled to such dividends shall be proportionately decreased
(adjusted to the nearest 1/100th of a share of Common Stock), such
adjustment to become effective immediately after the date fixed for such
determination.
2.8.4 If ALHI shall subdivide the outstanding shares of Common Stock
into a greater number of shares of Common Stock or combine the outstanding
shares of Common Stock into a smaller number of shares of Common Stock,
the Conversion Price in effect immediately prior to such subdivision or
combination, as the case may be, shall be proportionately increased or
decreased (adjusted to the nearest 1/100th of a share of Common Stock), as
the case may require, such increase or decrease, as the case may be, to
become effective when such subdivision or combination becomes effective.
2.8.5 In the case of any reclassification or change of outstanding
shares of Common Stock issuable upon the conversion of the Note, or in the
case of any consolidation or merger of ALHI with or into another
corporation, or in the case of any sale or conveyance to another
corporation of all or substantially all of the property of ALHI, the
holder of the Note shall have the right thereafter, so long as such
holder's conversion right hereunder shall exist, to convert the Note in
whole or in part, into the same kind and amount of shares of stock and
other securities and property receivable upon such reclassification,
change, consolidation, merger, sale or conveyance by a holder of the
number of shares of Common Stock of ALHI into which the Note might have
been converted immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance.
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2.8.6 In case securities or property other than shares of Common
Stock shall be issuable or deliverable upon the conversion as aforesaid,
then all references in this Section shall be deemed to apply, so far as
appropriate and as nearly as may be, to such other securities or property.
The subdivision or combination of shares of Common Stock at any time
outstanding into a greater or lesser number of shares of Common Stock
(whether with or without par value) shall not be deemed to be a
reclassification of the Common Stock of ALHI for the purposes of this
subsection.
2.8.7 ALHI shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, such number of its shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of the Note, the sufficiency of which shall be determined by
using the Conversion Price.
Section 2.9 Payments and Prepayments.
2.9.1 Repayment of the Loans. The Borrowers shall repay the
outstanding principal balance of Loans, plus all accrued but unpaid
interest thereon, as provided herein.
2.9.2 Place and Form of Payments. All payments of principal,
interest, fees, premiums and other sums payable hereunder to Lender shall
be made without condition or reservation of right and (except for proceeds
of Collateral received directly by the Lender) in same day funds and
delivered to the Lender not later than 3:00 P.M. (Eastern Standard Time)
on the date due to such account of Lender as the Lender may designate.
Funds received by the Lender after that time shall be deemed to have been
paid on the next succeeding Business Day. If any payment of principal,
interest, fees, premiums or other sums payable hereunder becomes due and
payable on a day other than a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day and interest thereon
shall be payable at the applicable Interest Rate during such extension.
2.9.3 Credit for Payments. All payments received by the Lender as
proceeds of Collateral will be the sole property of the Lender up to the
amount due and owing and until all of the Obligations have been satisfied
in full. Any surplus shall immediately be paid to the Borrower.
2.9.4 Application of Payments. All payments not relating to specific
principal or interest payable with respect to the Loans, or not
constituting payment of specific fees, and all proceeds of Collateral
received by the Lender from or as to the Borrower, shall be applied,
subject to the provisions of this Agreement, first, to pay any fees,
expense reimbursements or indemnities then due to the Lender from the
Borrower; second, to pay interest due in respect of the Loans; third to
pay or prepay principal of the Loans; and fourth to the payment of any
other Obligation due to the Lender by the Borrower. The Lender shall have
the right, upon an Event of Default, to apply payments received in
connection with this Agreement or the other Loan Documents as provided
above in such order as it deems appropriate.
2.9.5 Principal Prepayment. The Borrower shall have the right, at
any time and from time to time, on thirty days' prior written notice to
the Lender, to Prepay the Loan in whole or in part, without penalty or
11
premium. The Borrowers shall pay accrued interest then outstanding on the
Loan through the date of Prepayment.
Section 2.10 Collateral. The Payment of all Obligations due under
this Agreement is secured by the Mortgages, the Guaranty, the Stock Pledge
Agreement, and, subject to Section 6.10 hereof, the Security Agreement.
Section 2.11 Fees and Expenses. The Borrowers shall bear its own
costs, including attorney's fees, incurred in the negotiation of this
Agreement and consummation of the transactions contemplated herein and the
corporate proceedings of the Borrowers in contemplation hereof and
thereof. At the date of issuance of the Note by the Borrowers to the
Lender, the Borrowers shall reimburse the Lender for all of the Lender's
reasonable out-of-pocket expenses incurred in connection with the
negotiation or performance of this Agreement, in addition to an
origination fee equal to $122,260 which fee shall be paid to Lender and
reasonable fees and disbursements of counsel to the Lender. On each
subsequent draw hereunder, Borrower shall pay Lender a fee equal to 4% of
any such draw as an origination fee.
Section 2.12 Assignment; Participation. Lender may assign to one or
more Persons or sell participations to one or more such Persons, all or a
portion of its rights and obligations hereunder and under the Note and, in
connection with any such assignment or sale of a participation, may assign
its rights and obligations under this Agreement and the other Loan
Documents. Lender shall have no obligation to give notice to the Borrowers
of any such assignment or sale of a participation. Lender may, in
connection with any assignment or proposed assignment or sale or proposed
sale of a participation, disclose to the assignee or proposed assignee or
participant or proposed participant any information relating to the
Borrowers furnished to the Lender by or on behalf of the Borrowers.
Section 2.13 Notices. The Borrowers agree, at its expense, to
execute all such notices and other instruments and make all such filings
and recordings as the Lender shall request in order to assure that the
Lender at all times holds duly executed, delivered, filed and recorded
assignments and security interests of first priority against other
creditors, bona fide purchasers without notice, a trustee in bankruptcy
and other possible adverse claimants.
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 shall survive
the execution and delivery of this Agreement and the Note, the Guaranty,
and the other Loan Documents:
Section 3.1 Corporate Existence and Power. The Borrowers are each
duly incorporated, validly existing and in good standing under the laws of
their respective states of incorporation and each is duly qualified or
licensed to transact business in all places where such qualification or
license is necessary. Each Borrower has the corporate power to make and
perform this Agreement and the Note, and this Agreement does, and the Note
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. The Borrowers have the corporate power to
make and perform this Agreement the Loan Documents, and the Note, and this
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Agreement does, and the Loan Documents and Note 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 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. The making and performance by the Guarantor of this
Agreement, the Guaranty, and any additional documents pursuant hereto, has
been duly authorized by all necessary legal action of the Guarantor, 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 Guarantor, pursuant to any
instrument or agreement to which the Guarantor is a party or by which the
Guarantor or his properties may be bound or affected.
Section 3.3 Financial Condition. The financial statements of ALHI
set forth 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 with the SEC by the Company since January 1, 2000 (the "ALHI SEC
FILINGS"), contained any untrue statement of a material fact or to the
best of Borrower's and Guarantor'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 all prior to the
date of this Agreement corrected, updated or superseded by a document
subsequently filed with Commission. The Company has furnished or made
available to the Lender true and complete copies of all the documents it
has filed with the Commission since January 1, 2000, all in the forms so
filed.
On or before May 26, 2004, the Borrower's and Guarantor's shall
cause the Company to file, and the Company shall have filed, all filings
required by law or regulation and from and after May 26, 2004, the
Company's filings shall 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 will contain any untrue
statement of a material fact or will omit any material fact required to be
stated therein or necessary to make the statements made therein, in light
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of the circumstances in which they were made, not misleading. The failure
of the Company to make such filings with the Commission by May 26, 2004,
will result in a default under Section 7.1.13 hereof.
Section 3.5 Full Disclosure. The financial statements referred to in
Section 3.3 do not, nor does this Agreement, nor does the Preliminary
Official Statement of the Westridge Community Development District dated
November 2003, nor any written statement furnished by any Borrower to the
Lender in connection with the negotiation of this Agreement and Loans,
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 or Guarantor can now foresee, is reasonably likely to prove
to materially and adversely affect the business or financial condition of
any Borrower or Guarantor or the ability of any Borrower or Guarantor to
perform this Agreement, the Note or the Guaranty.
Section 3.6 Litigation. Except to the extent disclosed in the ALHI
SEC Filings, there are no suits, actions or proceedings pending, or to the
knowledge of the Borrower or Guarantor, 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 or
Guarantors which, if adversely determined, would have a material adverse
effect on the business or financial condition of any Borrower or
Guarantor.
Section 3.7 Payment of Taxes. As of the date of execution of this
Agreement, federal income tax returns of each Borrower and Guarantor have
been filed with Internal Revenue Service and no deficiencies have been
assessed. Each of the Borrower and Guarantor have 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 Borrower and Guarantor
have set up reserves which are reasonably believed by each Borrower and
Guarantor 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. Neither any
Borrower nor Guarantor 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 any Borrower nor Guarantor 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 or Guarantor 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 or Guarantor.
Section 3.9 Authorizations. All authorizations, consents, approvals
and licenses required under applicable law or regulation for the ownership
or operation of the property owned or operated by any Borrower or
Guarantor or for the conduct of business in which any Borrower or
Guarantor are engaged, have been duly issued and are in full force and
14
effect, and to the best of Borrower's or Guarantor's actual knowledge,
none of the Borrowers or the Guarantor 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 or Guarantor, which default would have a material adverse effect
on any of the Borrowers or Guarantor. 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, the Guaranty or any of the Loan Documents executed in connection
with the making of the Loan.
Section 3.10 Title to Property. Each Borrower and the Guarantor 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, the Guarantor 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 the Guarantor 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 or
the Guarantor, as the case may be.
Section 3.11 Use of Proceeds. The proceeds of the Loans shall be
used by the Borrowers exclusively as set forth on Schedule 3.11 hereto.
All of the representations and warranties of Borrower and the
Guarantors and, as the case may be, 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 each Guarantors 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 and the Guarantors covenant and agree that from and
after the Effective Date and until payment in full of the principal of and
interest on the Note and the termination in full of the Commitment, unless
the Lender shall otherwise consent in writing, the Borrowers and the
Guarantor, as the case may be, will:
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Section 4.1 Loan Proceeds. Use the proceeds of the Loans only for
the purposes set forth in Section 3.11 and furnish the Lender with all
evidence that it may reasonably require with respect to such use.
Section 4.2 Corporate Existence. Do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate
existence, rights, franchises and privileges in the jurisdiction of its
corporation, 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 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 Antigua Call Center. Commencing on the date hereof,
maintain an employee work force comprising of at least 96 persons paid at
current wage levels increased for inflation and seniority at the Antigua
Call Center. Borrower shall cause the Antigua Call Center to remain free
of debt and shall not encumber the assets of the Antigua Call Center or
the capital stock of the company that owns the Antigua Call Center.
Section 4.5 SEC Filings. Make all required filings in connection
with the Loan to the Borrowers as required by federal and state laws and
regulations, or by any domestic securities exchange or trading market, and
to provide copies thereof to the Lender promptly after such filing or
filings.
Section 4.6 Insurance. Insure and keep insured in good and
financially 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, 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; maintain such
other insurance as may be required by law or as may reasonably be required
in writing by the Lender.
Section 4.7 Payment of Indebtedness, Taxes, Etc.
4.7.1 Pay all of its indebtedness and obligations promptly and in
accordance with normal terms; and
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4.7.2 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
and Guarantors 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 4.8 Compliance with Laws. 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 4.9 Accounting Firm. By Xxxxx 0, 0000, XXXX shall hire and
retain a reputable and SEC qualified accounting firm, including any of the
so-called Big Four, Xxxxx Xxxxxxxx, BDO Xxxxxxx or any other regional firm
acceptable to Lender in its sole discretion, to serve as auditor of ALHI's
financial statements, which accounting firm shall be retained by ALHI in
sufficient time to promptly review the ALHI quarterly report due on May,
15 2004.
Section 4.10 Notice of Default. Upon the occurrence of any Default
or Event of Default, promptly furnish written notice thereof to the
Lender.
Section 4.11 Inspection. At reasonable times and after reasonable
prior written notice, Borrower and Guarantors shall permit any
representatives of Lender to visit and inspect any of the properties of
Borrower and Guarantor, 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 4.12 Notice of Litigation and Other Proceedings. Give prompt
notice 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 Borrower or Guarantors; (b) all
litigation or threatened litigation relating to the Property which could
result in a lien or charge against said property, (c) all other litigation
involving a claim against the Borrower or Guarantors for Twenty-five
Thousand Dollars ($25,000.00) or more in excess of applicable insurance
coverage; and (d) 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 Guarantor, or
any property of the Borrower or Guarantor, 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 or
the Guarantor.
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ARTICLE V - NEGATIVE COVENANTS
Each of the Borrowers and the Guarantor covenant and agree 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, none of the Borrowers and the Guarantor will, out of the ordinary
course of business violate any of the following covenants, provided that
in the course of any of the following each of the Borrowers consider to be
in the ordinary course of business each of the Borrowers shall provide
Lender ten business days prior written notice thereof and if Lender
disagrees then Lender will notify each of the Borrowers prior to the
conclusion of such ten business days or matter shall be deemed to be in
the ordinary course of business:
Section 5.1 Limitation of Liens. Except as permitted by the
Mortgages, 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
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 the Borrower or Guarantors in the ordinary course of its
business and Liens existing upon assets acquired by the Borrower or
Guarantors; and (vi) any existing Liens reflected in the financial
statements referred to in Section 4.9 hereof.
Section 5.2 Limitation on Indebtedness. Incur, create, assume or
permit to 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;
5.2.4 Indebtedness permitted by the terms of the Mortgages; and
5.2.5 Existing Indebtedness reflected in the audited financial
statements referred to in Section 3.3 hereof.
Section 5.3 Mergers, Consolidations and Acquisition of Assets.
Windup, liquidate, dissolve, merge or consolidate with any corporation, or
acquire all or substantially all of the assets of any corporation except
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that 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 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 ownership or management.
Section 5.6 General.
(i) engage, directly or through other Persons, in any business
other than the business now carried on;
(ii) sell a material portion of any of the assets of any of
the Borrowers out of the ordinary course of business or merge any of
the Borrowers into or with another unaffiliated company, except as
contemplated hereby;
(iii) change the certificate of incorporation, bylaws or other
charter documents of any of the Borrowers, except as contemplated
hereby;
(iv) change substantially or materially the nature of the
business of any of the Borrowers;
(v) declare or pay dividends or make any other distribution or
redeem equity securities of the Guarantors or any of the Borrowers;
or
(vi) enter into or modify a 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 Loan. The obligation of the Lender to make each
credit loan pursuant to Article 2 herein is subject to no adverse change
in the condition, financial or otherwise. Of any of the Borrowers or
Guarantor and no default or the occurrence of any event which with notice
or passage of time would become a default under this Agreement, 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 Notice of Borrowing. The Borrowers shall have delivered to the
Lender the notice of Borrowing provided for in Section 2.3 hereof;
19
6.1.2 No Default. (i) No Default or Event of Default shall have
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 each Borrower's Chief
Financial Officer;
6.1.3 Use of Proceeds. The Loan proceeds shall have theretofore been
applied in accordance with the Use of Proceeds as set forth in Section
3.11 herein.
Section 6.2 Additional Conditions to Credit Loan. The obligation of
the Lender to make the Credit Loan pursuant to Article 2 herein is subject
to the following additional conditions precedent, each of which shall have
been met or performed by the initial Borrowing Date:
6.2.1 Note. The Note, duly executed and completed in the form of
EXHIBIT "A" attached hereto and made a part hereof, shall have been
delivered to the Lender;
6.2.2 Supporting Documents. The Borrowers and the Guarantor shall
have executed and delivered, or caused to be executed and delivered, to
the Lender each of the certificates, the Guaranty the Assignment, the
Mortgages and the other Loan Documents and, where applicable, recorded in
the appropriate public offices; 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
satisfactory in form and substance to the Lender and its counsel;
6.2.3 Title Insurance. SGR and APMG shall deliver to Lender an
original policy of title insurance issued by a title company acceptable to
the Lender, in an amount equal to the principal amount of the Note, which
title insurance policy (i) shall insure Lender against loss or damage on
account of mechanics liens upon the Property, (ii) shall insure that the
Mortgage is a valid second lien on the Property, (iii) shall insure that
title to the land is good and marketable and free and clear of all liens,
encumbrances, easements, exceptions, reservations and restrictions, except
for liens, encumbrances, easements, exceptions, reservations and
restrictions stated thereon;
6.2.4 Phase I Environmental. An environmental assessment of the
Property performed at Borrower's expense by a licensed engineer or other
environmental consultant satisfactory to Lender stating that:
a. the Property are not located within any area designated as
a hazardous substance site by any of the Governmental Authorities;
and
b. no hazardous or toxic wastes or other materials or
substances regulated, controlled, or prohibited by any federal,
state, or local environmental laws, including but not limited to
asbestos, are located on the Property; and
20
c. the Property have not been cited or investigated in the
past for any violation of any such laws, regulations, or ordinances.
If the environmental assessment shall reveal any condition
unacceptable to Lender, the same shall constitute an Event of
Default hereunder and in addition to all remedies available to
Lender, Lender shall be relieved of any obligation to fund any sums
hereunder. If the environmental assessment recommends, or if Lender
so requests, in its sole and absolute discretion, a Phase II audit,
additional testing or remedial action, Borrower, at its sole cost
and expense shall promptly conduct such additional audits and
testing and/or complete such remedial action. Lender may require the
Borrower to provide evidence that all necessary actions have been
taken to remove any hazardous substance contamination and/or to
restore the site to a condition acceptable to Lender and all
Governmental Authorities.
6.2.5 Appraisal. An Appraisal of the Property by an appraiser
satisfactory to Lender indicating the final value of any improvements
thereon, in an amount satisfactory to Lender.
6.2.6 Survey. SGR and APMG shall deliver to Lender a current sketch
of survey of the Property prepared by a surveyor reasonably acceptable to
Lender showing the following:
(a) the location of the perimeter of the Property by courses
and distances and perimeter footings in place, and by reference
Township, Range and Section;
(b) the location of and the identification by reference to
recording data of all easements, rights-of-way, conditions and
restrictions on or appurtenant to the Property;
(c) the location of all building setback lines;
(d) the lines of the streets abutting the Property and the
width thereof;
(e) all encroachments, and the extent thereof in feet and
inches upon the Property;
(f) the improvements located upon the Property and the
relation of same by distances to the perimeter of the Property, the
building setback lines and the street lines; and
(g) if the Property are described as being on a filed map, a
legend relating the Plat of survey to such map.
Section 6.3 Mortgagor's Affidavit. Except as set forth in the title
commitments, Affidavits of SGR and APMG shall be executed and delivered to
Lender certifying that no liens exist on the Property other than for taxes
not yet due and payable and other matters of record that do not materially
21
adversely affect Borrowers' use and enjoyment of the Property, and that no
other parties are entitled to possession of the Property.
Section 6.4 Hazard Insurance. SGR and APMG shall each deliver to
Lender the original policy of hazard insurance, in completed value form
with extended coverage in the amount of the full insurable value of the
improvements to the Property, or a certificate evidencing same together
with a true and correct copy of the original of the policy(s), issued by a
company satisfactory to the Lender, duly endorsed to show the interest of
Lender under a New York standard non-contributing mortgagee clause or
reasonable equivalent and providing that such policy will not be canceled
or modified without thirty (30) days prior written notice to Lender and
that all insurance proceeds will be paid directly to Lender; provided,
that such payment shall be subject to the terms and provisions of the
Mortgage. Each of the Borrowers and Guarantor agree that Lender shall have
the right to take any action necessary to continue said insurance in full
force and effect including, but not limited to, paying premiums; any funds
advanced to continue said policies in full force and effect shall be
considered as advances hereunder and shall bear interest from the date of
disbursement at the same rate as the Note and payment of said funds and
interest shall be secured by the Mortgage;
Section 6.5 Flood Insurance. SGR and APMG shall deliver to Lender
evidence satisfactory to Lender either that the Property are not within a
hazardous flood area as designated by the Department of Housing and Urban
Development and any other governmental authority, or, if the Property are
within such a hazardous area, that the Property are covered by flood
insurance supplied by the Federal Insurance Administration to the maximum
amount required by all applicable regulations, all as provided in the
Flood Disaster Protection Act of 1973, as amended, together with
appropriate endorsements thereto providing for Lender's interests in the
same manner as the Hazard Insurance, including without limitation that
such insurance will not be canceled without ten (10) days prior written
notice to Lender. Borrowers agree that Lender shall have the right to take
any action necessary to continue said insurance in full force and effect
shall be considered as advances hereunder and shall bear interest from the
date of disbursement at the same rate as other advances and payment of
said funds and interest shall be secured by the Mortgage.
Section 6.6 Expenses. Borrowers shall have paid all those reasonable
fees and charges due and payable or ordered paid by Lender.
Section 6.7 Substitution of Collateral. In the event Borrower elects
to substitute any of the Collateral under this Agreement, such
substitution shall be strictly in accordance with the applicable terms of
the Mortgages and shall be the sole responsibility of the Borrower.
Section 6.8 Other Documents. Borrowers shall deliver to Lender such
other documents and information as Lender may reasonably require.
Section 6.9 Corporate Governance. The ALHI Board of Directors shall
be comprised of three Inside Directors and four Outside Directors. Lender
shall have the right, in its sole discretion, to appoint one Outside
Director.
Section 6.10 SEC Investigation. Notwithstanding anything to the
contrary herein contained, upon ALHI's receipt of written notification
from the Commission advising ALHI that the Commission has concluded its
22
investigation as contemplated in those certain letters from the Commission
to ALHI dated September 30, 2003 and October 17, 2003 respectively,
without any orders, settlements or other action before the Commission
adverse to the Borrower or any of its officers and directors as of the
date hereof ("the SEC Letter"), to the extent they have not yet been
exercised, those certain obligations of ALHI contained in Section 2.5.2
shall terminate and the Lender at the sole expense of the borrowers shall
execute a release and satisfaction of ALMT from the Security Agreement.
Section 6.11 New Mortgage Closing Date. The "New Mortgage Closing
Date" shall mean the date on which:
(a) SGR has executed and delivered a new mortgage to Lender as set
forth in Section 3.16 of Exhibit B to the Mortgage
Modification Agreement;
(b) Title Insurance. SGR shall deliver to Lender an original
policy of title insurance issued by a title company acceptable
to the Lender, in an amount equal to the $7.3 million dollars
less the appraised value of APMG, but in no event less than
$4.8 million dollars, which title insurance policy (i) shall
insure Lender against loss or damage on account of mechanics
liens upon the parcels of real property owned by SGR set forth
in Exhibit B-1 (the "SGR Property"), (ii) shall insure that
the Mortgage is a valid second lien on the SGR Property, (iii)
shall insure that title to the land is good and marketable and
free and clear of all liens, encumbrances, easements,
exceptions, reservations and restrictions, except for liens,
encumbrances, easements, exceptions, reservations and
restrictions stated thereon;
(c) Phase I Environmental. An environmental assessment, and
updates to the assessment of the SGR Property performed at
Borrower's expense by a licensed engineer or other
environmental consultant satisfactory to Lender stating that:
i. the SGR Property are not located within any area
designated as a hazardous substance site by any of the
Governmental Authorities; and
ii. no hazardous or toxic wastes or other materials or
substances regulated, controlled, or prohibited by any
federal, state, or local environmental laws, including but not
limited to asbestos, are located on the SGR Property; and
iii. the SGR Property has not been cited or investigated
in the past for any violation of any such laws, regulations,
or ordinances.
If the environmental assessment shall reveal any
condition unacceptable to Lender, the same shall constitute an
Event of Default hereunder and in addition to all remedies
available to Lender, Lender shall be relieved of any
obligation to fund any sums hereunder. If the environmental
assessment recommends, or if Lender so requests, in its sole
23
and absolute discretion, a Phase II audit, additional testing
or remedial action, Borrower, at its sole cost and expense
shall promptly conduct such additional audits and testing
and/or complete such remedial action. Lender may require the
Borrower to provide evidence that all necessary actions have
been taken to remove any hazardous substance contamination
and/or to restore the site to a condition acceptable to Lender
and all Governmental Authorities.
(d) Appraisal. An Appraisal of SGR by an appraiser satisfactory to
Lender. The appraised value of the SGR Property, together with
the appraised value of any other real property then mortgaged
to Lender as security for the Note, shall be equal to or
greater than $6,000,000 or $7,300,000, as the case may be in
the event the SEC Letter has not been received.
(e) Survey. SGR shall deliver to Lender a current sketch of survey
of the SGR Property prepared by a surveyor reasonably
acceptable to Lender showing the following:
(i) the location of the perimeter of the SGR Property by
courses and distances and perimeter footings in place, and by
reference Township, Range and Section;
(ii) the location of and the identification by reference
to recording data of all easements, rights-of-way, conditions
and restrictions on or appurtenant to the SGR Property;
(iii) the location of all building setback lines;
(iv) the lines of the streets abutting the SGR Property
and the width thereof;
(v) all encroachments, and the extent thereof in feet
and inches upon the SGR Property;
(vi) the improvements located upon the SGR Property and
the relation of same by distances to the perimeter of the SGR
Property, the building setback lines and the street lines; and
(vii) if the SGR Property is described as being on a
filed map, a legend relating the Plat of survey to such map.
(f) Mortgagor's Affidavit. Except as set forth in the title
commitments, Affidavits of SGR shall be executed and delivered
to Lender certifying that no liens exist on the SGR Property
other o than for taxes not yet due and payable and other
matters of record that do not materially adversely affect
Borrowers' use and enjoyment of the SGR Property, and that no
other parties are entitled to possession of the SGR Property.
24
(g) Hazard Insurance. SGR shall each deliver to Lender the
original policy of hazard insurance, in completed value form
with extended coverage in the amount of the full insurable
value of the improvements to the SGR Property, or a
certificate evidencing same together with a true and correct
copy of the original of the policy(s), issued by a company
satisfactory to the Lender, duly endorsed to show the interest
of Lender under a New York standard non-contributing mortgagee
clause or reasonable equivalent and providing that such policy
will not be canceled or modified without thirty (30) days
prior written notice to Lender and that all insurance proceeds
will be paid directly to Lender; provided, that such payment
shall be subject to the terms and provisions of the Mortgage.
Each of the Borrowers and Guarantor agree that Lender shall
have the right to take any action necessary to continue said
insurance in full force and effect including, but not limited
to, paying premiums; any funds advanced to continue said
policies in full force and effect shall be considered as
advances hereunder and shall bear interest from the date of
disbursement at the same rate as the Note and payment of said
funds and interest shall be secured by the Mortgage. The SGR
Property is unimproved, accordingly Lender acknowledges that
at present it is not requiring hazard insurance as otherwise
required herein;
(h) Flood Insurance. SGR shall deliver to Lender evidence
satisfactory to Lender either that the SGR Property are not
within a hazardous flood area as designated by the Department
of Housing and Urban Development and any other governmental
authority, or, if the SGR Property are within such a hazardous
area, that the SGR Property are covered by flood insurance
supplied by the Federal Insurance Administration to the
maximum amount required by all applicable regulations, all as
provided in the Flood Disaster Protection Act of 1973, as
amended, together with appropriate endorsements thereto
providing for Lender's interests in the same manner as the
Hazard Insurance, including without limitation that such
insurance will not be canceled without ten (10) days prior
written notice to Lender. Borrowers agree that Lender shall
have the right to take any action necessary to continue said
insurance in full force and effect shall be considered as
advances hereunder and shall bear interest from the date of
disbursement at the same rate as other advances and payment of
said funds and interest shall be secured by the Mortgage. The
SGR Property is unimproved, accordingly Lender acknowledges
that at present it is not requiring flood insurance as
otherwise required herein;
(i) Legal Opinion. Borrower shall deliver a legal opinion executed
by counsel to Borrower, dated as of the execution hereof, the
form of which is attached hereto as Exhibit D.
Upon the satisfaction of each of the items set forth above, the Guarantor shall
be immediately and fully released by Lender from any and all obligations set
forth herein. Lender hereby acknowledges that SGR may provide updates to the
items referenced in (c), (d), (e), and (f) above.
25
Section 6.12 Future Draws. After the New Mortgage Closing Date, the
Borrower shall be entitled to draw upon the remaining Availability Amount
of $2,114,000, which amount shall be used solely for i) interest reserve
payments; and ii) payments for the marketing SGR, and other SGR related
costs such as architectural, engineering, and marketing, which are
associated with the Tierra del Sol project; (iii) fees that are due to
Borrower's counsel for work on the New Mortgage Closing Date; (iv) fees to
Lender; and (v) fees due Xxxxxx Xxxxxx which fees shall not to exceed
$100,000; provided however, Borrower must establish to the Lender's sole
satisfaction, that such draws on the remaining Availability Amount are
being used solely for such purposes.
Section 6.13 Approval of Corporate Officers. Xxxxxxx Xxxxxx shall be
appointed as CEO of ALHI. Lender's Outside Director and ALHI shall make
its best efforts to hire and retain two individuals with industry
appropriate qualifications and character, which individuals shall be
mutually acceptable to both Lender and ALHI, to serve as ALHI's Chief
Financial Officer and Chief Operating Officer by March 31, 2004.
Immediately upon the retention of such individuals, ALHI shall cause
Xxxxxxx Xxxxxx to resign from his current positions as ALHI's Chief
Financial Officer and Chief Operating Officer, respectively.
ARTICLE VII - EVENTS OF DEFAULT
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 any
Borrower herein or in any of the other Loan Documents, or by Guarantor in
the Guaranty or in any certificate or report furnished by such Borrower or
Guarantor 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 ten (10) days after written
notice from Lender; or
7.1.3 Any default in the payment or performance of any obligation of
Guarantors arising under the Guaranty or pursuant to any other Loan
Document, and the same is not cured within thirty (30) days' written
notice from Lender; or
7.1.4 Any Borrower or any of the Guarantors shall default in the
performance of any agreement, covenant or obligation contained herein or
in any of the other Loan Documents not provided for elsewhere in this
Article 7, if the default continues for a period of thirty (30) days after
notice of default to the Borrower and Guarantor, if applicable, by the
Lender; or
26
7.1.5 There shall occur any default in the due observance or
performance of any covenant, condition or agreement on the part of any of
the Borrowers or Guarantor to be observed or performed pursuant to the
terms of Articles 4 or 5 hereof and the same is not cured within thirty
(30) days after written notice from Lender; or
7.1.6 At any time on or after the date hereof, less than 96 persons
shall be employed by the Antigua Call Center, and CLM shall not have sold
all of the assets of the Antigua Call Center now or hereafter existing, to
Lender free and clear of all Liens for an amount not greater than $1,000
and paid all normal recurring expenses and payrolls through thirty days
following such sale; or
7.1.7 Final judgment for the payment of money in an amount in excess
of Fifty Thousand Dollars ($50,000.00) shall be rendered against any
Borrower or the Guarantor and the same shall remain undischarged for a
period of thirty (30) days, during which period execution shall not
effectively be stayed, provided such Borrower or Guarantor, 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
7.1.8 Any Borrower's or Guarantor's default in the performance of
its obligations as lessor or as lessee under any lease of all or any
portion of its property, after the provision of written notice and the
expiration of cure periods provided in such documents; or
7.1.9 Any Borrower or the Guarantor shall die or 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
7.1.10 If, without the prior written consent of Lender, which
consent shall be in Lender's sole and absolute discretion any shares of
stock of Borrower or any shares of stock of the Borrower held by the
Guarantor 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
7.1.11 Any Borrower or the Guarantor 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 any of the
Borrowers or Guarantor, as the case may be, or of all or of a substantial
part of the assets of such Borrower or Guarantor, 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 involuntary
27
case under the Bankruptcy Code, or (vii) take any corporate action for the
purpose of effecting any of the foregoing; or
7.1.12 Any Borrower shall fail to furnish to the Lender notice of
default in accordance with Section 4.7 hereof, within ten (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;
7.1.13 Borrowers shall be in default of this Agreement 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 May 26, 2004.
THEREUPON, in the case of any such event other than an event described in
Subsections 7.1.5 and 7.1.6 of this Section 7.1, the Lender may, by written
notice to the Borrowers, at its option: (A) immediately terminate the Commitment
of the Lender hereunder, and/or (B) immediately declare the principal of, and
interest accrued on, the Note(s) immediately due and payable without
presentment, demand, protest or notice, whereupon the same shall become
immediately due and payable; and, in the case of any event described in
Subsection 7.1.5 of this Section 7.1, the Commitment of the Lender hereunder
shall automatically terminate, without any action on the part of the Lender, and
the principal of, and interest accrued on, the Note(s) shall become immediately
due and payable, both as to principal and interest, without presentment, demand,
protest, or notice of any kind, all of which are hereby expressly waived,
anything contained herein or in the Note(s) to the contrary notwithstanding,
and, in the case of any event described in Subsection 7.1.6. of this Section
7.1, the Borrower shall forfeit and transfer to Lender all of the assets of the
Antigua Call Center and all of the stock of any Subsidiary owning and/or
controlling the Antigua Call Center shall be forfeited and transferred and
assigned to Lender or its designee and Lender shall reduce the principal balance
outstanding by an amount equal to $1,000.
It is understood and agreed that the Lender shall not be obligated to
pursue or exhaust any or all remedy or remedies against the Borrower prior to
making demand upon, and proceeding against, Guarantor, however Lender
acknowledges that no Event of Default shall be applicable to the Guarantor after
the Guarantee is terminated in accordance with the terms set forth herein.
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 Release and Waiver of Claims. Borrower and its
affiliates hereby acknowledge that Borrower acquired assets for use in the
Antigua Call Center, incurred expenses, and made expenditures in
connection therewith, and made the independent judgment to fund operations
in Antigua Call Center, and in so doing has not in any way relied upon any
representations, advice, or counsel of the Lender, and was not induced by
the Lender to incur such expenses and make such expenditures. The Borrower
28
and hereby releases and covenants not to xxx the Lender for any losses it
has, or may in the future, incur in Antigua, and furthermore hereby waives
any and all claims which may be asserted for the actual and consequential
damages incurred by the Borrower (including, without limitation, amounts
required to be paid under this Agreement by the Borrower to Lender),
including claims to seek recourse against the Lender in the event the
Lender fails to advance any remaining Availability Amount. Borrower agrees
that neither Lender nor its agents shall be liable for any monetary
damages (except to the extent that Borrower can prove Lender's bad faith
or willful misconduct), and in the event of bad faith or willful
misconduct, Borrower's sole remedies shall be limited to commencing an
action seeking injunctive relief or declaratory judgment. The parties
hereto agree that any action or proceeding to determine whether Lender has
acted in bad faith or with willful misconduct shall be determined by an
action seeking declaratory judgment. Lender agrees that, in such event, it
shall cooperate in expediting any action seeking injunctive relief or
declaratory judgment. Borrower hereby expressly waives and releases, to
the fullest extent permitted by law, the pleading of any statute of
limitations as a defense to payment of any amounts due under this
Agreement or the performance of its other obligations set forth in the
Loan Documents. Borrower hereby waives the right to assert a counterclaim,
other than a compulsory counterclaim, in any action or proceeding brought
against it by Lender or its agents.
Section 8.3 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 has not been
terminated.
Section 8.4 Notices. Any notice or other communication hereunder to
any party hereto shall be by telegram, facsimile transmission with next
day delivery of original, telex or registered or certified mail and shall
be deemed to have been given or made when telegraphed, faxed as provided
herein, telexed or deposited in mails, postage prepaid, addressed to the
party at its address specified next to its signature hereto (or at any
other address that the party may hereafter specify to the other parties in
writing).
Section 8.5 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 8.6 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 8.7 Limit on Interest. Anything herein or in the Note to the
contrary notwithstanding, 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;
29
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 8.8 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 8.9 Headings. 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 8.10 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 8.11 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 8.12 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. The Borrower
and Guarantors 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 8.13 Course of Dealing; Amendment; Supplemental Agreements.
No 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 8.14 Indemnification. Each of the Borrowers and the
Guarantor hereby agree to hold the Lender and its officers, directors,
employees and agents harmless from and against all claims, damages,
30
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
and the Guarantor 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 8.15 WAIVER OF JURY TRIAL. BORROWERS, GUARANTOR 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 THE LENDER ENTERING INTO
THIS AGREEMENT AND MAKING ANY LOAN, ADVANCE OR OTHER EXTENSION OF CREDIT
TO THE BORROWERS.
*SIGNATURES ON FOLLOWING PAGE(S)*
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
effective on the date first written above.
"BORROWER"
SUNSTONE GOLF RESORT, INC.
a Florida corporation
------------------------------------
(Signature of Witness) By:
-----------------------------------
Its:
------------------------------------ ----------------------------------
(Printed Name of Witness) Address:
------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
AMERICAN LEISURE MARKETING &
TECHNOLOGY, INC.
a Florida corporation
------------------------------------
(Signature of Witness) By:
-----------------------------------
Its:
------------------------------------ ----------------------------------
(Printed Name of Witness) Address:
------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
ADVANTAGE PROFESSIONAL
MANAGEMENT GROUP INC., a Florida
corporation
------------------------------------
(Signature of Witness) By:
-----------------------------------
Its:
------------------------------------ ----------------------------------
(Printed Name of Witness) Address:
------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
32
Signed, sealed and delivered CARIBBEAN LEISURE MARKETING
in the presence of: LIMITED, a Antiguan
limited company
------------------------------------
(Signature of Witness) By:
-----------------------------------
Its:
------------------------------------ ----------------------------------
(Printed Name of Witness) Address:
------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
Signed, sealed and delivered LEISURE XXXXX XXXXXXXXXXXXX,
LTD., A United Kingdom company
------------------------------------
(Signature of Witness) By:
-----------------------------------
Its:
------------------------------------ ----------------------------------
(Printed Name of Witness) Address:
------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
Signed,sealed and delivered AMERICAN LEISURE HOLDINGS, INC.
in the presence of: a Nevada corporation
------------------------------------
(Signature of Witness) By:
-----------------------------------
Its:
------------------------------------ ----------------------------------
(Printed Name of Witness) Address:
------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
"GUARANTOR"
--------------------------------
(Signature of Witness) XXXXXXX XXXXXX
-------------------------------- By:
(Printed Name of Witness) -----------------------------------
Address: Its:
----------------------------------
Address:
------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
33
EXHIBIT A
NOTE
34
EXHIBIT B
35
EXHIBIT B-1
SGR PROPERTY
36
EXHIBIT C
37
EXHIBIT D
LEGAL OPINION
38
SCHEDULE 3.11
USE OF PROCEEDS
--------------------------------------------------------------------------------
MINIMUM AMOUNT USE OF PROCEEDS
--------------------------------------------------------------------------------
$2,976,456.67 Refinancing
--------------------------------------------------------------------------------
$224,241.67 Interest Reserve
--------------------------------------------------------------------------------
$19,633.30 Bridge Loan Interest
--------------------------------------------------------------------------------
$121,630 Origination Fees
--------------------------------------------------------------------------------
$208,038.36 Closing Costs and ALH Working Capital,
if any
--------------------------------------------------------------------------------
$3,550,000 TOTAL
--------------------------------------------------------------------------------
39
