EXHIBIT 10.5
LOAN AGREEMENT
THIS LOAN AGREEMENT dated as of JULY 13, 1998, by and among GOLDEN BEAR
GOLF, INC., a Florida Corporation ("Borrower") and XXXX X. XXXXXXXX (the
"Lender"), provides:
ARTICLE I
RECITALS AND PURPOSE OF LOAN
Subject to the terms and conditions hereinafter set forth, the Lender
agrees to lend to Borrower and Borrower agrees to borrow from the Lender, an
amount not exceeding U.S. $2,400,000.00, the proceeds of which shall be used as
set forth herein.
ARTICLE II
DEFINITIONS
The terms defined in this Article II shall for all purposes of this
Agreement have the meanings herein specified unless the context expressly or by
necessary implication otherwise requires:
"Agreement" shall mean this Loan Agreement and all written amendments
thereto.
"Borrower" shall mean Golden Bear Golf, Inc., a Florida corporation.
"Business Day" shall mean any day other than Saturday, Sunday or other
day on which commercial banks in the state of Florida are authorized or required
to close under applicable laws.
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"Closing Date" shall mean JULY 13, 1998.
"Event of Default" shall mean an event specified in /section/11.1
hereof.
"Loan" shall mean the Loan to Borrower hereunder.
"Loan Documents" shall mean collectively this Agreement, the Note, and
such additional agreements, consents, environmental indemnification agreement,
documents and instruments as may be executed pursuant to this Agreement or in
connection herewith.
"Maximum Loan Outstanding" shall mean $2,400,000.00.
"Note" shall mean the Note of Borrower evidencing the Loan.
"Person" shall mean a corporation, association, partnership,
organization, business, division, individual or government or political
subdivision thereof or any governmental agency.
"Project" shall mean the residential real estate project described on
Exhibit "A" hereto.
ARTICLE III
THE LOAN
3.1 AMOUNT. The Lender agrees, on the terms and subject to the
conditions of this Agreement, to make the Loan to Borrower in
the aggregate principal amount not to exceed U.S. $2,400,000.00.
3.2 ADVANCE PROCEDURE. Lender shall fund the entire Loan Proceeds to
Great Expectations, LLC in accordance with an Agreement dating
JULY 13, 1998.
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3.3 NOTE. The Loan shall be evidenced by the Note, dated as of the
Closing Date in the face principal amount of U.S. $2,400.000.00
payable to the order of the Lender.
3.4 PROCEEDS. The proceeds of the Loan shall be utilized solely in
connection with the Project.
3.5 PREPAYMENT. Prepayment shall be remitted at any time without
penalty.
ARTICLE IV
THIS SECTION INTENTINALLY DELETED.
ARTICLE V
THIS SECTION INTENTINALLY DELETED
ARTICLE VI
PROFIT PARTICIPATION
6.1 DESCRIPTION. Lender is receiving a profit participation in a
certain residential real estate project described in the
Agreement. As long as there is no event of default by Borrower
hereunder, the first $2,400,000.00 of any distributions to
Lender shall be applied to the principal of the Loan. If the
Loan has been satisfied, the distributions (up to a total of
$2,400,000) shall be paid to Borrower.
ARTICLE VII
CONDITIONS OF LENDING
The obligation of the Lender to make the Loan hereunder is subject to
the accuracy of the representations and warranties contained in Article VIII,
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to the performance by the Borrower of its obligations to be performed hereunder
and to the satisfaction of the following further conditions:
7.1 LOAN ADVANCE.
(a) The representations and warranties set forth in Article
VIII shall be true and correct in all material respects
on and as of the date of the Loan advance with the same
effect as though such representations and warranties had
been made on and as of such date.
(b) Borrower shall be in compliance with all the terms and
provisions set forth herein on its part to be observed
or performed, no Event of Default nor any event which
upon notice or lapse of time or both would constitute
such an Event of Default, shall have occurred and be
continuing.
7.2 CLOSING CONDITIONS. The following conditions shall be satisfied
prior to funding of the Loan, as applicable:
(a) At Closing, the Borrower shall have delivered to the
Lender a duplicate original of this Agreement executed
by Borrower.
(b) At Closing, the Borrower shall have delivered to the
Lender the Note, executed by Borrower.
(c) At closing and thereafter as determined by Lender, the
Borrower shall have executed and delivered to the Lender
such other Loan Documents (if any) as may be appropriate
under the terms of this Agreement, all in form and
substance acceptable to Lender, including, but not
limited to, the Environmental Indemnification Agreement
executed by Borrower.
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(d) At Closing, the Borrower, shall have delivered to the
Lender copies of corporate resolutions adopted by the
Board of Directors of the Borrower, and certified by its
secretary, duly authorizing the execution, delivery and
performance of this Agreement, the Note and the other
Loan Documents and all transactions and documents
contemplated hereby and thereby.
(e) As determined by Lender, the Borrower shall have
delivered to the Lender true copies of all third party
consents and required governmental approvals, if any,
necessary to the execution, delivery and performance of
this Agreement, the Note, and the other Loan Documents
and the transactions contemplated hereby or thereby.
(f) No event shall have occurred and be continuing which
constitutes an Event of Default, or which would
constitute an Event of Default but for a requirement
that notice be given or that a period time elapse, or
both.
All legal matters incident to the Loan, and all advances thereof, and
all documents and instruments to be delivered hereunder or pursuant hereto or
thereto, shall in all events be satisfactory in form and substance to counsel
for the Lender.
ARTICLE VIII
GENERAL REPRESENTATIONS AND WARRANTIES
Borrower represents and warrant to the Lender, as of the date of this
Agreement (unless otherwise specified) and as of the date of each advance of the
Loan that:
8.1 INCORPORATION, QUALIFICATION, PROPERTIES. Borrower is a Florida
corporation duly organized, existing and in good standing under
the laws of the jurisdiction of its incorporation, (ii) entitled
to own its respective properties and carry on its business as
now conducted and presently contemplated, and (iii) qualified to
do business in each jurisdiction in which it does business.
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8.2 CORPORATE AUTHORITY. Borrower has the necessary corporate power
to enter into, and has taken all necessary corporate action to
authorize, the execution, delivery and performance of, this
Agreement, and all transactions and Loan Documents contemplated
hereby and thereby.
8.3 BINDING EFFECT AND ENFORCEABILITY. This Agreement constitutes,
and all other Loan Documents, when issued and delivered pursuant
hereto for value received, will constitute, legal, valid and
binding obligations of the Borrower, enforceable against
Borrower in accordance with the terms thereof.
8.4 NO CORPORATE OR CONTRACT VIOLATION. There is no provision of law
or in the charter or by-laws of Borrower and, no provision of
any existing mortgage, contract, lease, indenture or agreement
binding on it or any of its properties which would be
contravened by the making and delivery of this Agreement, or any
of the other Loan Documents, or by the performance or observance
of any of the terms hereof or thereof.
8.5 APPROVALS. The execution, delivery and performance of this
Agreement, and the transactions contemplated hereby, do not
require any approval or consent of, or filing or registration
with, any governmental or any other agency or authority, or
stockholders, or of any other party, or, if any such approval is
require, the same has been obtained.
8.6 TRUE STATEMENTS. Neither this Agreement or any written statement
or certificate furnished by the borrower to the Lender in
connection with the Loan, contains any untrue statement of
material fact or omit disclosure of a material fact necessary to
make the statement contained therein or herein not misleading.
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8.7 TAX RETURNS. The Borrower has filed on a timely basis all
required federal tax returns and all state and other tax returns
and all assessments and other governmental charges (other than
those presently payable without penalty or interest and those
being contested in good faith by appropriate proceedings) due
from the Borrower has been paid.
8.8 USE OF PROCEEDS. No part of the proceeds of any Loan hereunder
will be used, directly or indirectly, for the purpose of
purchasing, carrying or trading in any margin security within
the meaning of applicable regulations of the Board of Governors
of the Federal Reserve System, or for the purpose of purchasing
or carrying or trading in any securities under such
circumstances as to involve a violation of such regulations
including, without limitation, Regulations G,T, U and X of such
Board, or for any purpose other than as set forth in Article I
hereof. If requested by the Lender, the Borrower will furnish to
the Lender a statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in Regulation U.
The foregoing warranties and representations shall be deemed to be
continuing and shall survive the execution and delivery of this Agreement.
ARTICLE IX
AFFIRMATIVE COVENANTS
Until payment in full of the Loan and the Note, unless the Lender shall
otherwise consent in writing, the Borrower agrees that it will:
9.1 TAXES. Duly pay and discharge all taxes, assessments and
governmental charges upon it or against its properties prior to
the date on which penalties attach thereto.
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9.2 CORPORATE FRANCHISES. Duly observe and conform to all valid
requirements of any governmental authority relative to the
conduct of its businesses and to its properties and assets and
maintain and keep in force all leases, franchises, licenses and
permits necessary to the lawful and proper conduct of its
businesses.
9.3 INSURANCE. Keep its properties and assets in good repair,
maintain insurance on its property in such amounts and against
such risks as is reasonably required.
9.4 FINANCIAL INFORMATION. Promptly upon their becoming available,
Borrower will deliver to Lender copies of all financial
information relating to Borrower as may be reasonable required
by Lender.
9.5 ACCESS TO PREMISES AND RECORDS. Maintain financial records in
accordance with generally accepted accounting principles, and
permit representatives of the Lender to have access to such
financial records and the premises of the Borrower at reasonable
times and to make such excerpts from such records as such
representatives deem necessary, which excerpts shall remain
confidential.
9.6 LITIGATION AND OTHER NOTICES. Give the Lender prompt written
notice of the following:
(a) Any Event of Default and any event which with notice or
lapse of time or both would constitute an Event of
Default;
(b) All events of default or any event that would become an
event of default upon notice or lapse of time or both
under any of the terms or provisions of any note, or of
any other evidence of indebtedness;
(c) The occurrence of any claim, demand, action, suit, or
proceeding against the Borrower whether or not such
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claim is considered by the Borrower to be covered by
insurance; including any lien claims in connection with
the construction described herein; and
(d) Levy of an attachment, execution or other process
against any of the property or assets, real or personal,
of the Borrower.
9.7 MAINTENANCE OF PROPERTY. Maintain all of its properties and
assets in good condition, repair and working order.
9.8 COMPLIANCE WITH LAWS. Comply in all material respects with all
laws and governmental regulations of the United States of
America and all political subdivisions thereof applicable to it
and its business, including, without limitation, air and water
pollution, safety, health and discrimination.
9.9 FINANCIAL INFORMATION. Borrower shall provide its in-house
financial reports requested by Lender, including income and
expense reports, as well as copies of any federal and state tax
filing.
9.10 PROJECT. Provide such information with respect to the Project as
is requested by Lender from time to time.
ARTICLE X
NEGATIVE COVENANTS
The Borrower agrees that until payment in full of the Loan and the Note,
without the prior written consent of the Lender, the Borrower shall not:
10.1 AGREEMENTS. Enter into any agreement containing any provision
that would be violated or breached by the performance of the
Borrower' obligations under this Agreement, the Note, or any
instrument or document to be delivered hereunder or in
connection herewith.
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ARTICLE XI
EVENTS OF DEFAULT
11.1 EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an Event of Default hereunder and under the
Loan Documents:
(a) The Borrower shall fail to make any payment of principal
or interest with respect to the Note on the due date
thereof, whether at maturity, by notice of intention to
prepay or otherwise;
(b) The Borrower shall breach or fail to perform any term,
covenant, warranty or agreement contained or referred to
herein or in any of the Loan Documents;
(c) The Borrower shall breach any other term, covenant,
warranty or agreement herein or in any other Loan
Document;
(d) Any material representation or warranty of the Borrower
herein, or of the Borrower in any Loan Document or in
any certificate delivered hereunder or thereunder shall
prove to have been untrue at the time it was made in any
material respect;
(e) Borrower shall (i) voluntarily commence any proceeding
or file any petition seeking relief under Title ll of
the United States Code or any other federal, state or
foreign bankruptcy, insolvency or similar law, (ii)
consent to the institution of, or fail to controvert in
a timely and appropriate manner, any such proceeding or
the filing of any such petition, (iii) apply for or
consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for Borrower
or for a substantial part of its property, (iv) file and
answer admitting the material allegations of a petition
filed against it in any such proceeding, (v)
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make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or
fail generally to pay its debts as they become due, or
(vii) take corporate action for the purpose of effecting
any of the foregoing;
(f) An involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of
competent jurisdiction seeking (i) relief in respect of
Borrower, or of a substantial part of its property,
under Title 11 of the united States Code or any other
federal, state or foreign bankruptcy, insolvency or
similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for
Borrower, or for a substantial part of its property or
(iii) the winding-up or liquidation of Borrower; and
such proceeding or petition shall continue undismissed
for sixty (60) days or an order or decree approving or
ordering any of the foregoing shall continue unstayed
and in effect for 30 days; or
(g) Borrower shall suffer any final judgment to be entered
against it or them which is not provided for in full
within sixty (60) days by insurance, bond, payment or
otherwise to Lender's satisfaction, or any writ of
attachment or execution or any similar process to be
issued or levied against a substantial part of its or
their property, which is not provided for prior to
attaching; or
(h) Any event of default by Borrower in connection with any
other Loan or obligation of Borrower.
11.2 REMEDIES. Upon the occurrence of any such Event of Default under
item 11.1 (a) above, there shall be a "Grace Period" of ten (10)
days after any such payment is due. Upon the occurrence of any
such Event of Default under items 11.1 (b) through (e) there
shall be a Grace Period of
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fifteen (15) days from notice of any such default; provided that
if any such Event of Default cannot practically be cured within
such fifteen (15) day period, the time to cure such breach shall
be extended as long as the defaulting party is proceeding to
effect a cure as expeditiously as practicable, but in no event
shall the Grace Period exceed forty-five (45) calendar days from
such notice.
Upon the occurrence of an Event of Default, and the expiration of the
Grace Period as set forth herein, the full amount of the disbursed and unpaid
principal of and accrued interest on the Notes and all other obligations
hereunder shall become automatically due and payable, in full, immediately
without additional demand or notice and, at the election of lender, Borrower
shall be deemed to be in default under the Purchase Agreement and all Loan
Documents.
11.3 CROSS-DEFAULT. An Event of Default hereunder shall constitute an
event of default under the documents evidencing and/or securing
the Loan.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 NOTICES. All written notices hereunder to either party hereto
shall be sent by telefax or by commercial delivery service
(including Federal Express and similar carriers) or by certified
or registered mail, postage prepaid, or delivered in person
addressed to the party for whom intended at the address
specified on the signature pages hereto. Any party shall have
the right to change its address for notice by giving notice
hereunder, including the right to specify a person to whose
attention notices shall be directed, and shall also have the
right by giving notice hereunder to require that copies of any
notice be given to additional persons or addresses.
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12.2 TERM OF AGREEMENT. This Agreement shall continue in force and
effect so long as any Loan, the Note or any obligation of the
Borrower for any interest or other expense hereunder or
thereunder or under any other Loan Document shall be
outstanding.
12.3 NO WAIVER. No failure or delay by the Lender in exercising any
right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies
herein provided are cumulative and not exclusive of any rights
or remedies otherwise provided by law.
12.4 SEAL, JURISDICTION. This Agreement and the Note shall be deemed
to be contracts made under seal and shall be construed in
accordance with and governed by the laws of the State of
Florida.
12.5 EXPENSE, TAXES. (a) The Borrower agrees to pay on demand all
intangible taxes payable by Lender in connection with the Note,
documentary stamps, taxes, fees, filing fees, recording fees,
and out-of-pocket expenses of the Lender, including, without
limitation the reasonable fees and expenses of the Lender's
counsel, in connection with the preparation and negotiation of
this Agreement, the Loan, the Note and the other Loan Documents
and the enforcement or defense of any thereof including
enforcement or defense arising in bankruptcy proceedings.
(b) If the Lender shall retain or engage at any time an
attorney or attorney's to collect or enforce or protect
its interest with respect to this Agreement, the Loan,
the Note or the other Loan Documents, the Borrower shall
pay all of the costs and expenses of such collection,
enforcement or protection, including
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reasonable fees of attorney's, and the Lender may take
judgment for all such amounts.
12.6 CHANGE, WAIVERS, ETC. Neither this Agreement, the Notes or the
other Loan Documents nor any provision hereof or thereof, may be
changed, waived, discharged or terminated orally, but only by a
statement in writing signed by the Lender.
12.7 SINGULAR AND PLURAL. Terms in the singular number shall include
the plural and those in the plural shall include the singular.
12.8 USE OF DEFINED TERMS. All terms defined in this Agreement shall
have the defined meanings when used in the Notes, and the other
Loan Documents and in certificates, reports or other documents
made or delivered pursuant hereto or thereto, unless the context
shall otherwise require.
12.9 BINDING EFFECT OF AGREEMENT. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Lender and
their respective successors and assigns, provided that the
borrower may not assign or transfer their rights or obligations
hereunder without the prior written consent of the Lender, any
such assignment being void.
12.10 HEADINGS. Headings or captions have been inserted for
convenience only and shall not be construed as limiting or
affecting in any way the provisions of this Agreement.
12.11 ACCOUNTING TERMS. Except as otherwise specifically provided, all
accounting terms used herein shall have the meanings customarily
given thereto in accordance with generally accepted accounting
principles ("GAAP").
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12.12 COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto
and thereto were upon the same instrument.
12.13 ESTOPPEL CERTIFICATES. Borrower, within ten (10) days after
request by Lender, will furnish Lender with a statement, duly
acknowledged and certified, setting forth the amount of the Loan
and the offsets or defenses thereto, if any.
12.14 FURTHER ASSURANCES. Borrower agrees to do or cause to be done
all such further reasonable acts and things, and to execute and
deliver or cause to be executed and delivered all such
additional conveyances, assignments, agreements and instruments
as Lender may at any time reasonably request in connection with
the administration or enforcement of this Agreement and the
other Loan Documents or in order better to assure, perfect and
confirm unto Lender its rights, powers and remedies under this
Agreement and under the other Loan Documents. Nothing contained
in this paragraph shall be construed as obligating Borrower to
provide or to cause to be provided any collateral or security
for the Loan other than as expressly contemplated by the
provisions of this Agreement.
12.15 INDEMNIFICATION OF LENDER. Borrower shall indemnify Lender, its
directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and reasonable
expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not Lender is a
party thereto) which any of them may pay or incur arising out of
or relating to this Agreement, the other Loan Documents, the
transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Loan
hereunder. The obligations of the borrower under this paragraph
shall survive the termination of this Agreement.
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12.16 FACSIMILE. The parties agree that this agreement may be
transmitted between them by facsimile machine. The parties
intend that faxed signatures constitute original signatures and
that a faxed agreement containing the signatures (original or
faxed) of all parties is binding on the parties.
12.17 PUBLIC DISCLOSURE. Neither party shall make any public release
of information regarding the maters contemplated herein except
as otherwise required by law or as otherwise agreed to by the
parties.
12.18 ATTORNEYS' FEES AND COSTS. If any legal action or other
proceeding is brought for the enforcement of this Agreement, or
because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of
this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorneys' fees and
other costs incurred in that action or proceeding, including
those related to appeals, in addition to any other relief to
which it or they may be entitled.
12.19 WAIVER OF TRAIL BY JURY. Borrower and Lender hereto hereby
knowingly, voluntarily and intentionally waive the right either
may have to a trial by jury in respect to any action,
proceeding, litigation or counterclaim based hereon, or arising
out of, under or in connection with the Agreement, or any course
of conduct, course of dealing, actions or statements (whether
verbal or written) of either party in connection herewith.
12.20 GOVERNING LAW, VENUE AND JURISDICTION. This Agreement and all
transactions contemplated by this Agreement shall be governed by
and construed and enforced in accordance with the internal laws
of the State of Florida without regard to principles of
conflicts of laws. The parties acknowledge that a substantial
portion of
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negotiations and anticipated performance of this Agreement
occurred or shall occur in Palm Beach County, Florida, and that,
therefore, each of the parties irrevocably and unconditionally
(a) agrees that any suit, action or other legal proceeding
arising out of or relating to this Agreement shall be brought in
the courts of record of the Xxxxx xx Xxxxxxx xx Xxxx Xxxxx
Xxxxxx; (b) consents to the jurisdiction of each such court in
any such suit, action or proceedings; and (c) waives any
objection which it may have to the laying of venue of any such
suit, action or proceeding in any of such court.
12.21 SUBORDINATION AGREEMENTS. Lender agrees to enter into such
reasonable Subordination Agreements as may be required from time
to time by institutional lenders providing financing to
Borrower.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the day and year
first above written.
BORROWER:
GOLDEN BEAR GOLF, INC.
BY:
--------------------------------------
Name:
Title:
LENDER:
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Xxxx X. Xxxxxxxx
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