EXHIBIT 2.4
LOAN AGREEMENT
LOAN
AGREEMENT (this "Agreement") entered as of November 3, 2005,
THE
GRAND SHELL LANDING, INC., AZUR SHELL
LANDING DEVELOPMENT II, LLC, AZUR SHELL
LANDING RESORT, INC., and AZUR
INTERNATIONAL, INC. (collectively, `Borrowers"),
OMICRON MASTER TRUST, and the additional
parties, identified on the signature
pages of this Agreement ("Lenders").
RECITALS
A. On even
date herewith, the Lenders have loaned to the Borrowers Six
Million and No/100 Dollars
($6,000,000.00);
B. As
partial consideration for such loan, Azur International, Inc.
("Azur") entered into a Securities Purchase
Agreement with the Lenders pursuant
to which Azur agreed to issue certain
securities to the Lenders;
C. The
Lenders have requested and the Borrowers have agreed to deliver
certain security for their payment of the
Loan, including deed of trust liens on
the real property of Azur Shell Landing
Development II, LLC and The Grand Shell
Landing, Inc. and security interests in the
personal property of the Borrowers;
D. This
Agreement sets forth the obligations and rights of the parties
relating to that real estate and personal
property and further conditions
related to the loan.
NOW,
THEREFORE, for consideration paid, the parties agree that:
1. DEFINITIONS.
Each
reference in this Agreement to the following terms shall be deemed
to
have the following meanings:
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Agent:
Omicron Master Trust in its capacity as a Lender and on behalf
of
the other Lender.
Azur: Azur
International, Inc.
Azur
Shell: Azur Shell Landing Development II, LLC, a Mississippi
limited
liability company.
Azur Shell
Property: The Real Estate, and all associated rights owned by
Azur Shell located in Gautier,
Mississippi.
Collateral: The assets that secure the obligations of the
Borrowers.
Deed of
Trust: The Deed of Trust and Security Agreement executed by the
Borrowers in favor of Ann F. Corso, Trustee
for the benefit of the Agent.
Environmental Laws: Any and all federal, state, and municipal
laws,
whether now in force, or as amended or
enacted in the future, pertaining to
health or the environment.
Grand
Shell: The Grand Shell Landing, Inc.
Grand
Shell Property: The Real Estate, and all the associated rights,
owned by Grand Shell located in Gautier,
Mississippi.
Hazardous
Materials: Any substance defined as a "hazardous substance,"
"hazardous material," or "hazardous waste"
in the Environmental Laws, and any
other substance or compound prohibited or
regulated under the Environmental
Laws.
Improvements: Any additions to a development of any of the Real
Estate for
which any Borrower has applied for or
received approvals from governmental
entities or that Borrowers have represented
to Lenders as projected development
of the Real Estate, including without
limitation construction of roads,
utilities, and dwellings.
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Incipient Default: Any
event which with notice or lapse of time, or both,
would become an event of default.
Lenders:
The parties as defined in the first paragraph of this
Agreement.
Loan: The
advance of funds by the Lenders to the Borrowers and the
repayment obligation of the Borrowers, as
described in the Notes.
Loan
Documents: All of the documents executed by Borrowers in
connection
with the Loan.
Notes: The
promissory notes executed by the Borrowers in favor of the
Lenders in the aggregate amount of
$6,000,000.00.
Real
Estate: All land and buildings, and all appurtenant rights, owned
by
both Grand Shell and Azur Shell, unless
expressly excluded from this Agreement.
Resort:
Azur Shell Landing Resort, Inc.
Securities Purchase Agreement: The
agreement for the sale of certain
debentures of Azur to Lenders, of
approximately this date, as amended from time
to time.
Securities
Purchase Documents: All of the documents required to be
executed and delivered to Lenders by the
Securities Purchase Agreement.
2. THE LOAN.
The
Lenders will advance funds to borrowers (subject to the
conditions
described below), in the aggregate
principal amount of Six Million Dollars
($6,000,000.00), as evidenced by the Notes
and in accordance with the Securities
Purchase Agreement, which incorporates the
provisions of this agreement by
reference.
<PAGE>
3. SECURITY FOR LOAN.
In
addition to any documents described in the Securities Purchase
Agreement, the Loan and the payment and
performance of the Borrowers'
obligations under the Notes and Azur's
obligations under the Securities Purchase
Agreement, and all other sums due Lenders
under the terms of any of the Loan
Documents or this Agreement, are secured by
a Deed of Trust.
4. CONDITIONS PRECEDENT
TO THE MAKING OF THE LOAN.
4.1
General Conditions. The obligation of the Lenders to make the
Loan,
and to make any disbursements of the Loan,
is subject to satisfaction of all
conditions in the Securities Purchase
Agreement and the Notes and to each of the
following conditions:
4.1.1 There have been no Events of Default or Incipient Default
under this Agreement, the Securities
Purchase Agreement or the Notes.
4.1.2 None of the Borrowers have experienced any material
adverse
change in its financial condition or in its
ability to perform its obligations
under this Agreement, the Notes, the
Securities Purchase Agreement, or the Loan
Documents.
4.1.3 Borrowers have executed and delivered to Lenders all of
the
Loan Documents.
4.2 Real
Estate. The Agent has received the Deed of Trust.
4.2.1 Taxes. Evidence of payment of property taxes on the Real
Estate.
4.2.2 Insurance. Evidence of insurance for such insurance as
Lenders
may require, as further described in
section 7.1.
4.2.3 Title Insurance. Lenders' title insurance policy on the
Azur
Shell Property and the Grand Shell Property
in a form and with endorsements
approved by Lenders without any exceptions
not approved by the Lenders'
attorneys, insuring the Lenders in the
amount of $6,000,000.00.
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4.2.4 Mechanic's Liens. Mechanic's lien waivers or the
subordination
of such liens to the lien of the Lenders
submitted by all parties who have the
right to claim such a lien on the Real
Estate, or the applicable Borrowers'
affidavit that no labor has been performed
or materials furnished and no
contracts to perform labor or furnish
materials have been entered into in
connection with the Real Estate, except as
disclosed in writing to and approved
by Lenders, in a form acceptable to
Lenders.
4.2.5 Survey. Current surveys of the Real Estate, in a form
satisfactory to Lenders, and such
certifications from the surveyor as Lenders
may require to delete the "Surveyor's
exception" from the title insurance
policies on the Real Estate.
4.3 Entity
Existence and Authorizations. The Lenders have received the
following evidence of Borrowers'
authorization and existence:
4.3.1 For Grand Shell:
4.3.1.1 Certificate of Existence;
4.3.1.2 Certificates of Incumbency;
4.3.1.3 Certified copies of the Articles of Incorporation and
Bylaws; and
4.3.1.4
Resolution authorizing the execution and performance
of the Loan Documents.
4.3.2 For Azur Shell:
4.3.2.1 Certificate of Formation;
4.3.2.2 Certified Copy of Limited Liability Company Operating
Agreement, with all amendments;
<PAGE>
4.3.2.3 Resolutions adopted by the managers authorizing the
execution and performance of the Loan
Documents.
4.3.3 For Resort
4.3.3.1 Certificate of Existence;
4.3.3.2 Certificates of Incumbency;
4.3.3.3 Certified copies of the Articles of Incorporation and
Bylaws; and
4.3.3.4 Resolution authorizing the execution and performance
of the Loan Documents.
4.3.4 For
Azur
4.3.4.1 Certificate of Existence;
4.3.4.2 Certificates of Incumbency;
4.3.4.3 Certified copies of the Articles of Incorporation and
Bylaws; and
4.3.4.4 Resolution authorizing the execution and performance
of the Loan Documents.
4.4
Opinion of Borrowers' Counsel. An opinion of Borrowers' counsel
in
form and substance acceptable to the
Lenders.
4.5 Other.
Such other documents and schedules relating to the Real Estate,
and the Borrowers as the Lenders may
request.
5. REPRESENTATIONS AND
WARRANTIES.
In order
to induce the Lenders to make the Loan, the Borrowers makes the
following representations, warranties and
promises:
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5.1
Financial Condition. Subject to any limitations stated therein,
all
financial data and all other documents
which have been or will be furnished to
the Lenders to induce it to enter into this
Agreement do, or will, fairly
represent the financial condition of the
Borrowers and are, or will be,
accurate, true and complete in all material
respects.
5.2
Financial Statements. The financial statements have been and will
be
prepared in accordance with generally
accepted accounting principles,
consistently applied and fairly and
completely set forth the financial position
of Borrowers, as applicable, as of their
date. Except as previously disclosed in
writing to the Lenders, since the date of
the financial statements, there has
been no significant assignment of assets or
material adverse change or
threatened change in the financial
condition, operation or business prospects of
the Borrowers.
5.3 Entity
Status.
5.3.1 Grand Shell. Grand Shell is a Mississippi corporation,
duly
organized and existing under the laws of
Mississippi, has complied with all laws
and regulations and has obtained all
permits and approvals from all federal,
state and municipal authorities necessary
to conduct its current business.
5.3.2 Azur Shell. Azur Shell is a limited liability company
duly
organized and existing under the laws of
the Mississippi, has complied with all
laws and regulations and has obtained all
permits and approvals from all
federal, state and municipal authorities
necessary to conduct its current
business.
5.3.3 Resort. Resort is a Mississippi corporation, duly
organized
and existing under the laws of Mississippi,
has complied with all laws and
regulations and has obtained all permits
and approvals from all federal, state
and municipal authorities necessary to
conduct its current business.
<PAGE>
5.3.4 Azur. Azur is a Nevada corporation, duly organized and
existing under the laws of Nevada, has
complied with all laws and regulations
and has obtained all permits and approvals
from all federal, state and municipal
authorities necessary to conduct its
current business.
5.4
Pending Litigation. There is not now pending or threatened against
any
Borrower any litigation or any proceedings
before any court or administrative
agency, the outcome of which might
adversely affect the financial condition of
the Borrowers or the Collateral or their
ability to perform their obligations
under this Agreement or the Note.
5.5
Approvals. No approval of any person, corporation, or other entity
is
a prerequisite to the execution and
delivery of any of the Loan Documents
submitted to the Lenders in connection with
the Loan, or to ensure their
validity or enforceability.
5.6 Due
Execution. The execution, delivery and performance of the Loan
Documents are within the power of
Borrowers, have been duly authorized, are not
in contravention of law or any agreement or
undertaking to which any Borrower is
a party or by which it is bound, and when
executed will constitute the valid and
binding obligations of the Borrowers, and
will be enforceable according to their
terms.
5.7 Title.
Grand Shell and Azur Shell holds good and marketable title to
the Real Estate owned by it, free and clear
of all mortgages, liens, and
encumbrances, except for the liens of
Textron Financial Corporation and Olympic
Coast Investments, Inc. and those matters
shown in the commitments for title
insurance insuring the Property and
acceptable to the Lenders.
5.8
Compliance With Laws. The Real Estate is and will be in
compliance
with all federal, state, and local laws,
including, without limitation, all
zoning and land-use restrictions and all
laws relating to use, storage, and
disposal of Hazardous Materials.
<PAGE>
5.9 Trade
Names. Grand Shell and Azur Shell have not used any trade names
or other entities in connection with its
ownership of its Real Estate within the
past five years, except Shell Landing
Development and Shell Landing.
6. USE OF FUNDS.
The
proceeds of the Loan shall be used by the Borrowers as set forth
in
the Securities Purchase Agreement.
7. COVENANTS OF
BORROWERS.
7.1
Insurance.
7.1.1 Grand Shell and Azur Shell shall maintain insurance in
full
force and effect and will deposit
certificates with the Lenders for the
following:
7.1.1.1 Commercial general liability insurance, including
limited contractual liability and coverage
limits of not less than One Million
Dollars ($1,000,000.00) per occurrence and
Two Million Dollars ($2,000,000.00)
in the aggregate;
7.1.1.2 Fire and broad form coverage insurance;
7.1.1.3 Business interruption insurance;
7.1.1.4 All insurance required by any documents or agreements
related to the operation or development of
any of the Real Estate, and by any
other Loan Documents.
All required insurance policies shall be issued by companies
satisfactory to Lenders; b
