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 Lend