Exhibit
10.17
PERFORMANCE AND COMPLETION GUARANTY
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PROJECT COMMONLY KNOWN AS
"TIERRA DEL SOL PHASE I"
THIS
PERFORMANCE
AND COMPLETION
GUARANTY ("Guaranty") made as of December
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29, 2005, by MALCOLM J. AMERICAN
LEISURE HOLDINGS, INC., a Nevada corporation,
and TDS DEVELOPMENT, LLC, a Florida limited liability
company (collectively,
"Guarantor"), to and for the benefit of KEYBANK NATIONAL
ASSOCIATION, a national
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banking association, its successors and assigns ("Lender").
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R E C I T A L S
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A.
On or about the date hereof, TIERRA DEL
SOL RESORT (PHASE 1), LTD., a
Florida limited
partnership,
TDS TOWN HOMES (PHASE
1), LLC, a Florida limited
liability company,
COSTA BLANCA I REAL ESTATE, LLC, a Florida limited liability
company, TDS
AMENITIES,
INC., a Florida corporation (jointly and
severally
"Borrower"), and
Lender entered into that certain Loan Agreement ("Loan
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----
Agreement") whereby
Lender agreed to make a secured revolving loan (the "Loan")
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available to
Borrower in the maximum principal amount of FORTY MILLION
AND
NO/100 DOLLARS
($40,000,000.00), to finance the development and construction
of
a luxury townhome/condominium project to be known as "Tierra del Sol" (the
"Project").
Capitalized terms used
and not otherwise defined herein shall have
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the meanings given to them in the Loan Agreement.
B.
In connection with the Loan, Borrower has executed
and delivered the
Note in favor of Lender of even date herewith in the maximum
principal amount of
the Loan, payment of which is secured by (i) a Mortgage made
by Borrower in
favor of Lender on the Project, and (ii) the other Loan
Documents.
C.
Guarantor will derive material financial benefit from the Loan
evidenced
and secured by the Note, the Mortgage and the other Loan
Documents.
D.
Lender has relied on the statements and
agreements contained herein in
agreeing to
make the Loan. The execution and delivery of this Guaranty
by
Guarantor is a condition precedent to the making of the Loan by
Lender.
AGREEMENTS
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NOW,
THEREFORE, intending
to be legally bound, Guarantor, in consideration
of the matters described in the foregoing Recitals, which Recitals are
incorporated herein
and made a part hereof, and for other good
and valuable
consideration the
receipt and sufficiency of which are acknowledged,
hereby
covenant and
agree for the benefit of Lender and its
successors, endorsees,
transferees, participants and assigns as follows:
1.
Guarantor, absolutely, unconditionally, and irrevocably
guarantees:
(a) the full, complete and punctual observance, performance and
satisfaction of all of the obligations, duties, covenants and
agreements of
Borrower under the Loan Agreement and the other Loan Documents with
respect
to
the Construction and completion of the Project free of
any claim for
mechanics',
materialmen's or
any other liens, and
in accordance with (1)
all
Laws, (2) the Plans and Specifications and (3)
the time periods and
other requirements
set forth in the Loan Documents, including,
without
limitation, the following:
<PAGE>
(i) To perform, complete and pay for (or
cause to be performed,
completed and paid
for) the Construction and to pay all costs of said
Construction (including any and all cost overruns) and all other
costs
associated with the
Project (including, without limitation, the costs
of any architects' and engineers' fees), if Borrower
shall fail to
perform, complete or pay for such work, including any sums expended
in
excess of the amount of indebtedness incurred by
Borrower under the
Loan Agreement
or with respect to the Loan, whether or not the
Construction is actually completed;
(ii) If Lender exercises its right under
Section 20.1(a) of the
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Loan Agreement
to take possession of the Project and complete
the
Construction, to
reimburse Lender for all costs and expenses incurred
by Lender in excess of the applicable Budget
Line Items therefor (if
any) in so taking possession of the Project and completing the
Construction pursuant to the Plans and Specifications;
(iii) If any mechanics' or materialmen's
liens should be filed,
or should attach, with respect to the Project by reason of the
Construction, to
immediately,
or within the time
period required by
the Loan Documents (if
any), cause the removal of such liens, or post
security against
the consequences of their possible
foreclosure and
procure an
endorsement(s) to the title policy insuring Lender against
the consequences of the foreclosure or enforcement of such
lien(s);
(iv) If any chattel
mortgages, conditional vendor's liens or any
liens, encumbrances or
security interests whatsoever should be filed,
or should attach, with respect to the personal property,
fixtures,
attachments and
equipment delivered upon the Project and owned by
Borrower, attached
to the Project or used in connection with the
construction of the
Improvements, to immediately cause the removal of
such lien(s)
, or within the time period required by the Loan
Documents (if any),
cause the removal of such liens, or post security
against the
consequences of their possible foreclosure and procure an
endorsement(s) to
the title policy insuring Lender against the
consequences of the foreclosure or enforcement of such lien(s);
and
(v) To pay the premiums for all policies of insurance required
to
be furnished
by Borrower pursuant to the Loan Agreement
during the
Construction if such premiums are not paid by Borrower;
(b) Borrower's
obligation
to keep the Loan In Balance (as more
particularly defined and described in Article 11 of the Loan
Agreement) and
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the
full and prompt payment of all Deficiency Deposits;
(c) the full and prompt payment of any Enforcement Costs (as
hereinafter defined in Section 7 hereof).
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All
obligations described
in subsections (a) and (b) of this Section 1 are
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referred to herein as the "Obligations."
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2.
In the event of any default by Borrower in performance of the
Obligations and the expiration of any applicable cure or grace
period, Guarantor
agrees, on demand by
Lender or any holder of the Note (which demand may be made
concurrently with
notice to Borrower that Borrower is in default of its
<PAGE>
obligations), to
perform all the Obligations. After and Event
of Default and
expiration of
applicable
cure period, Lender shall have the right, at its
option, either
before, during or after commencing foreclosure or sale
proceedings, as the
case may be, and before, during or after pursuing any other
right or remedy against Borrower or Guarantor, to perform
any and all of the
Obligations by
or through any agent, contractor or subcontractor of its
selection, all
as Lender in its sole discretion deems proper,
and Guarantor
shall indemnify
and hold Lender free
and harmless from and against any and all
loss, damage, cost,
expense, injury, or liability Lender may suffer or incur in
connection with
the exercise of its rights under this Guaranty or the
performance of
the Obligations. Furthermore, Lender shall not have any
obligation to
protect or insure any collateral for the
Loan, nor shall Lender
have any obligation to perfect its security
interest in any collateral for the
Loan.
During the
course of any construction undertaken by
Lender or any other
party on behalf of Lender in accordance with the terms of this Guaranty,
Guarantor shall
pay on demand any amounts due to
contractors, Subcontractors,
and material
suppliers and for permits and licenses
necessary or desirable in
connection therewith. Guarantor's obligations in connection with
such work shall
not be affected by any errors or omissions of the General
Contractor, Architect,
Lender's Consultant
or any Subcontractor or agent or employee of any of
the
foregoing in
the design, supervision, and performance of the work; it
being
understood that such risk is assumed by Guarantor. Neither the
completion of the
Construction nor
failure of said party to complete the Construction
shall
relieve Guarantor of
any liabilities hereunder; rather, such liability shall be
continuing and may be
enforced by Lender to the end that the Construction shall
be timely completed, lien-free, without loss, cost, expense, injury
or liability
of any kind to Lender.
All
of the remedies set forth herein and/or provided for in any of the
Loan
Documents or
at law or equity shall be available
to Lender, and the choice by
Lender of one such
alternative over another shall not be subject to question or
challenge by
Guarantor or any other person, nor shall any such choice be
asserted as
a defense, setoff, or failure to mitigate
damages in any action,
proceeding, or
counteraction
by Lender to recover
or seeking any other remedy
under this
Guaranty, nor shall such choice preclude Lender
from subsequently
electing to
exercise a different remedy. The parties have agreed to the
alternative remedies
hereinabove specified
in part because they recognize that
the choice
of remedies in the
event of a failure hereunder will necessarily be
and should
properly be a matter of good faith business judgment,
which the
passage of time and
events may or may not prove to have been the best choice to
maximize recovery by
Lender at the lowest cost to Borrower and/or Guarantor. It
is the intention of the parties that such
good faith choice by Lender be given
conclusive effect regardless of such subsequent developments.
3.
Guarantor does hereby (a) waive notice of acceptance of this
Guaranty by
Lender and
any and all notices
and demands of every kind which may be required
to be given by Lender pursuant to any statute, rule or law, (b)
agree to refrain
from asserting, until after repayment in full of the Loan, any
defense, right of
set-off or other claim
which Guarantor may have against Borrower, (c) waive any
defense, right
of set-off or other claim which
Guarantor or Borrower may have
against Lender,
the holder of the
Note, (d) waive any and all rights Guarantor
may have under any anti-deficiency statute or other
similar protections, (e)
waive presentment
for payment, demand for payment, notice of nonpayment
or
dishonor, protest and notice of protest, diligence in collection
and any and all
formalities which
otherwise might be
legally required to charge Guarantor with
liability, and (f)
waive any failure by Lender to inform Guarantor of any facts
Lender may
now or hereafter know
about Borrower, the Project, the Loan, or the
transactions
contemplated by the Loan Agreement, it being understood and
agreed
that Lender has no duty so to inform and that Guarantor is fully
responsible for
being and remaining informed by Borrower of all circumstances
bearing on the
risk of nonperformance of the Obligations. Credit may be
granted or continued
from time to time by
Lender to Borrower without notice to or authorization from
Guarantor, regardless
of the financial or other condition of
Borrower at the
time of any such grant
or continuation. Lender shall not have any obligation to
<PAGE>
disclose or discuss
with Guarantor its assessment of the financial condition of
Borrower. Guarantor
acknowledges that no representations of any kind whatsoever
have been made by
Lender. No modification or waiver of any of the provisions of
this Guaranty
shall be binding upon Lender except as
expressly set forth in a
writing duly signed and delivered by Lender.
4.
Guarantor further agrees that Guarantor's
liability as guarantor shall
not be impaired or affected by any renewals or extensions which may
be made from
time to time, with or
without the knowledge or consent of Guarantor of the time
for payment
of interest or principal under the Note or by
any forbearance or
d
