First Amendment to Forbearance Agreement with LaSalle

Exhibit
    10.1
    FIRST
      AMENDMENT
      TO
      FORBEARANCE AGREEMENT

     

    


    This
      First Amendment to Forbearance Agreement (this “Amendment”)
      is
      made as of this __ day of July, 2007, by and among LASALLE BANK NATIONAL
      ASSOCIATION, AS TRUSTEE OF MARATHON REAL ESTATE CDO 2006-1 GRANTOR TRUST,
      successor-in-interest to Marathon Structured Finance Fund, L.P., a Delaware
      limited partnership (the “Lender”).
      SOUTH
      BEACH RESORTS, LLC, a Florida limited liability company (the “Borrower”),
      FRED
      PAUZAR, an individual resident of the State of Florida (“Pauzar”),
      and
      MALCOLM WRIGHT, an individual resident of the State of Florida (“Wright”,
      and
      together with Pauzar, the “Principals”,
      and
      the Principals, together with Borrower, the “Borrowing
      Parties”).

    


    RECITALS

     

    A. Lender
      and Borrower are parties to that certain Loan Agreement dated as of June 30,
      2005 (the “Loan
      Agreement”),
      pursuant to which Lender agreed to make a loan to Borrower (the “Loan”)
      in the
      amount of up to Nine Million and NO/100 Dollars ($9,000,000.00).

    


    B. The
      Loan
      is evidenced by that certain Promissory Note dated June 30, 2005 (the
“Note”),
      and
      is secured by the lien of that certain Mortgage, Assignment of Rents and
      Security Agreement dated June 30, 2005 and recorded among the land records
      of
      Dade County, Florida on July 11, 2005 in Official Records Book 23557, Page
      3073
      (the “Mortgage”).

    


    C. Payment
      of certain obligations of Borrower pursuant to the Loan Documents is guaranteed
      by the Principals pursuant to the terms of, inter alia, that certain Guaranty
      (Exceptions to Nonrecourse Liability) dated as of June 30, 2005 (the
“Guaranty”).
      As
      used herein, the term “Loan
      Documents”)
      shall
      mean the Loan Agreement, the Note, the Mortgage, the Guaranty and any and all
      other documents evidencing, securing and/or governing the Loan whether now
      existing or hereafter executed and delivered.

    


    D. The
      Loan
      matured by its terms on January 11, 2007 and Borrower failed to repay the Loan
      in accordance with the terms of and as required by the Loan Documents (the
      “Existing
      Default”).

    


    E. Pursuant
      to the terms of that certain Forbearance Agreement among Lender and the
      Borrowing Parties dated as of February 2, 2007 (as amended and modified hereby,
      the “Forbearance
      Agreement”),
      Lender agreed, among other things, to forbear from exercising any right or
      remedy against the Borrowing Parties with respect to the Existing Default during
      the Initial Forbearance Period and the Extended Forbearance Period.

    


    F. Borrower
      has requested that Lender continue to waive the Existing Default, and Lender
      has
      conditionally agreed to waive such Existing Default, on the terms set forth
      below provided, however, that in the event that any Event of Default or Other
      Default occurs during the Forbearance Period or prior to the payment in full
      of
      the Obligations of the Borrower to Lender, such waiver shall be null and
      void.

    


    NOW,
      THEREFORE, in consideration of the mutual undertakings set forth below and
      other
      good and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, and intending to be legally bound hereby, the parties agree as
      follows:


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    AGREEMENT

    


    1. Incorporation
      of Recitals; Defined Terms.
      Borrower
      and Lender agree that the Recitals above are a part of this Amendment. Unless
      otherwise expressly defined in this Amendment, terms defined in the Forbearance
      Agreement or in the Loan Agreement shall have the same meaning under this
      Amendment.

    


    (a) As
      used
      herein, the term “Forbearance
      Period”
shall
      mean the Initial Forbearance Period, the Extended Forbearance Period, or the
      Second Extended Forbearance Period, as the case may be.

    


    2. Acknowledgements.
      Borrowing Parties hereby acknowledge, ratify, admit, stipulate and agree,
      without precondition or qualification, as follows:

    


    (a) Each
      of
      the Recitals contained above in this Amendment is true, correct and complete
      in
      all material respects.

    


    (b) Borrower
      and Principals (i) entered into the Loan Documents to which they are parties,
      and (ii) are entering into this Amendment of their own free will, without
      coercion or threat of any kind from Lender or from any other Person, fully
      understanding the terms hereof (including the waiver of certain material rights
      afforded by law), and are fully aware that they may have potentially
      advantageous alternatives to entering into this Amendment. Borrower and
      Principals acknowledge, stipulate and agree that any other alternative would
      present a material risk to their detriment. 

    


    (c) The
      Loan
      Documents constitute valid and binding obligations of Borrower and Principals,
      enforceable against each of them in accordance with their respective
      terms.

    


    (d) As
      of
      July 11, 2007, the Obligations shall consist of the following:

    


    
      	
              Principal

            	
              $6,248,900.00

            
	
              Interest
                Due

            	
              $64,441.78

            
	
              Tax
                Escrow

            	
              $6,940.00

            
	
              Insurance
                Escrow

            	
              $8,500.00

            


    

    


    In
      addition, Borrower is obligated to pay to and reimburse Lender for all amounts
      incurred in connection with the Obligations and/or the Existing Default,
      including, without limitation, costs and expenses of Lender’s legal counsel,
      which amounts constitute part of the aggregate Obligations.

    


    (e) Except
      as
      specifically provided in Section 6(b) and (c) below, Borrower’s obligation to
      repay the Obligations is unconditional and without defense, counterclaim,
      recoupment or offset. The Obligations are immediately due and payable in
      full.

    


    (f) (i)
      There
      exist one or more defaults under the terms of the Loan Documents, (ii) any
      and
      all notices required to be given by Lender have in fact been given and received,
      (iii) all applicable grace periods have expired without cure having been
      effected, and (iv)Borrowing Parties hereby waive all such notice provisions
      and
      grace periods in connection with the
      Existing
      Default.

    


    (g) Borrower
      has no defenses, rights of set-off or recoupment, causes of action or claims
      or
      counterclaims with respect to the Obligations and/or the liens and security
      interests granted to Lender
      pursuant to the terms of the Loan Documents, and all of such liens and security
      interests are enforceable by Lender.


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    


    (h) Borrowing
      Parties shall derive material benefit by virtue of the execution and delivery
      of
      this Agreement and the performance of the parties’ obligations
      hereunder.

    


    3. Reaffirmation
      of Obligations.
      Borrowing Parties reaffirm and ratify that Borrower is indebted and obligated,
      directly or indirectly, to Lender in an amount equal to the Obligations set
      forth in Section 2(d) above. Interest shall continue to accrue on and forms
      a
      part of the Obligations pursuant to the terms of the Loan Documents as set
      forth
      herein. Borrower reaffirms and ratifies that, pursuant to the terms of the
      Loan
      Documents, it is liable to pay or reimburse applicable costs, fees and
      reasonable attorneys’ fees and expenses related to the Obligations incurred by
      Lender, all of which form a part of the Obligations. Borrower hereby promises
      to
      pay to the order of Lender the Obligations, plus any and all accrued interest
      thereon and accrued costs, fees and reasonable attorneys’ fees and expenses in
      accordance with the Loan Documents as modified by the terms hereof.

    


    4. Bankruptcy
      Proceedings.
      All
      representations and warranties set forth in Section 4 of the Forbearance
      Agreement are true and correct on and as of the date hereof and all
      acknowledgements, covenants and agreements set forth in Section 4 of the
      Forbearance Agreement are each hereby ratified, remain in full force and effect
      and constitutes the valid and legally binding obligations of Borrower and/or
      Principals, as the case may be, enforceable in accordance
      therewith.

    


    5. Release;
      Lender’s Liability.
      (a)
      Borrower, Principals, their successors and assigns (including, without
      limitation, any estate, debtor, trustee, receiver or assignee for the benefit
      of
      creditors) to the fullest extent permitted by law (collectively, the
“Releasing
      Parties”),
      hereby release, remise, forever discharge and forgive Lender, its shareholders,
      directors, affiliates, officers, employees, servicers, agents, attorneys,
      representatives, predecessors, successors and assigns (collectively, the
“Released
      Parties”),
      of
      and from any and all claims, causes, causes of action, demands, counterclaims,
      cross claims, damages, complaints, suits, bonds, losses, liabilities,
      obligations, commitments, contribution, indemnity or otherwise, at law or equity
      or mixed, known, unknown, suspected, unsuspected, asserted, unasserted, which
      the Releasing Parties or any of them, now have, had or may in the future have
      against the Released Parties or any of them which arose prior to the execution
      and delivery of this Agreement and relate to the Loan Documents and/or the
      Obligations.

    


    (b) Lender
      shall not be liable for any claims, suits, actions, costs, damages, liabilities
      or expenses, or incidental, consequential, special or punitive damages
      (“Liabilities”)
      in
      connection with the subject matter of this Amendment other than Liabilities
      caused by the gross negligence or willful misconduct of Lender, and Borrower
      hereby agrees to indemnify and hold harmless Lender and its affiliates and
      the
      directors, officers, employees and agents of any of them, and the successors
      and
      assigns of Lender from and against any and all Liabilities arising from or
      in
      connection with any acts or omissions taken by Borrower in connection with
      this
      Amendment or the performance of Borrower’s duties under this Amendment, other
      than those Liabilities caused by the gross negligence or willful misconduct
      of
      Lender.

    


    6. Forbearance
      Period.
      (a)
      During the Second Extended Forbearance Period (as defined below), Lender agrees
      to forbear from exercising any right or remedy against Borrowing Parties with
      respect to the Existing Default, provided (i) there shall occur no Event of
      Default other than the Existing Default, and (ii) Borrower shall continue to
      make monthly Payments of accrued interest on the Payment Date as contemplated
      by
      Section 2.2.1 of the Loan Agreement. Nothing herein shall be construed as an
      agreement
      by Lender from asserting any affirmative defense, cross-claim, counterclaim
      or
      third-party claim in any action or proceeding that is now pending or may
      hereafter be commenced. Lender’s agreement to forbear from exercising any rights
      or remedies in accordance with this paragraph shall commence as of 5:00 PM
      Eastern time, July 11, 2007 and continue until 5:00 PM
      Eastern
      time, October 11, 2007, unless earlier terminated as a result of the occurrence
      of an Additional Default (as defined in
      the
      Forbearance Agreement) (the “Second
      Extended Forbearance Period”).
      Upon
      and after the expiration of the Second Extended Forbearance Period, Lender
      shall
      be free to exercise any right or remedy to which Lender heretofore or hereafter
      shall be entitled without regard to this paragraph. Nothing contained herein
      shall be deemed to limit Borrower’s obligations to make all payments due under
      the Loan Documents other than the repayment of the principal balance, all of
      which obligations shall remain in full force and effect.


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    


    (b) During
      the Second Extended Forbearance Period, so long as no Additional Default shall
      occur, Borrower shall not be obligated to pay the Late Charges accruing as
      contemplated by Section 8 of the Note. Provided that Borrower pays the
      Obligations in full prior to the expiration of the Second Extended Forbearance
      Period, Lender shall waive such Late Charges in their entirety.

    


    (c) During
      the Second Extended Forbearance Period, so long as no Additional Default shall
      occur, although shall accrue at the Default Rate as contemplated by Section
      7.2
      of the Note, Borrower shall continue to pay interest at the Interest Rate,
      and
      the difference between interest accruing at the Interest Rate and the Default
      Rate (the “Interest
      Differential”)
      shall
      be deferred. Provided that Borrower pays the Obligations in full prior to the
      expiration of the Second Extended Forbearance Period, Lender shall waive the
      Interest Differential in its entirety.

    


    7. Costs
      and Expenses.
      Borrower
      shall be liable to and shall pay to Lender all of the following:

    


    (a) Interest.
      Upon execution and delivery hereof, Borrower shall pay all accrued interest
      due
      under the Loan Documents to Lender including the installment due July 11,
      2007.

    


    (b) Legal
      Fees. Borrower shall pay all of Lender’s
      reasonable
      attorneys’ fees and expenses incurred in connection with the preparation and
      negotiation of this Amendment and the enforcement of Lender’s rights and
      remedies hereunder or under the Loan Documents, as the case may be.

    


    (c) Lender’s
      Costs and Expenses. Borrower shall pay all costs and expenses incurred by or
      on
      behalf of Lender relating the Loan, Borrower’s default, and the execution and
      delivery of this Amendment.

    


    (d) In
      addition to the foregoing, upon execution and delivery hereof, Borrower shall
      pay to Lender a fee in the amount of Fifty Thousand and No/100 Dollars
      ($50,000.00) as consideration for Lender’s agreement to forbear from exercising
      its rights and remedies with respect to the Existing Default as provided
      hereunder.

    


    8. Good
      Faith.
      Borrowing Parties acknowledge and warrant that Lender has acted in good faith
      and has conducted itself in a commercially reasonable manner in its
      relationships with Borrowing Parties in connection with this Amendment and
      generally in connection with the Loan Agreement and the Obligations, Borrowing
      Parties hereby waiving and releasing any claims to the
      contrary.


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    9. Value.
      As a
      consequence of Lender’s covenants, releases, waivers, settlement, and
      forbearance hereunder, Borrowing Parties have received reasonably equivalent
      value, as construed under Section 548 of the Bankruptcy Code, and fair
      consideration, as construed under applicable local and state laws, for their
      obligations as set forth in this Amendment.

    


    10. Representations
      and Warranties.
      Borrower
      and each Principal represents and warrants to Lender for itself as
      follows:

    


    (a) Borrower
      is a limited liability company duly formed, validly existing and in good
      standing under the laws of the state in which it was formed.

    


    (b) Borrower
      has the power and authority to execute and deliver this Amendment and to perform
      its obligations hereunder, and has taken all necessary and appropriate limited
      liability action to authorize the execution, delivery and performance of this
      Amendment.

    


    (c) The
      Forbearance Agreement, as amended by this Amendment, and each of the other
      Loan
      Documents are each hereby ratified, each remain in full force and effect, and
      each constitutes the valid and legally binding obligation of Borrower and/or
      Principals, as the case may be, enforceable in accordance with its
      terms.

    


    (d) All
      of
      Borrower’s and Principals’ representations and warranties contained in the
      Forbearance Agreement, Loan Agreement and the other Loan Documents are true
      and
      correct on and as of the date of Borrower’s and Principals’ execution of this
      Amendment.

    


    (e) After
      giving effect to this Amendment, no Event of Default and no event which, with
      notice, lapse of time or both would constitute an Event of Default, has occurred
      and is continuing under the Forbearance Agreement, the Loan Agreement or the
      other Loan Documents.

    


    11. Remedies.
      Upon the
      occurrence of an Additional Default, Lender shall be entitled immediately to
      terminate this Amendment and the Forbearance Agreement without notice to the
      Borrowing Parties, whereupon Lender shall be entitled to pursue all of its
      rights and remedies under the Loan Documents, at law or in equity.

    


    12. Notices.
      Any
      notice or other communication required or permitted to be given shall be given
      in accordance with Section 14 of the Forbearance Agreement.

    


    13. CONSENT
      TO JURISDICTION.
      BORROWER
      PARTIES HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED
      WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND IRREVOCABLY AGREES THAT,
      SUBJECT TO LENDER’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
      RELATING TO THIS AMENDMENT OR THE FORBEARANCE AGREEMENT OR THE LOAN DOCUMENTS
      SHALL BE LITIGATED IN SUCH COURTS. BORROWER PARTIES EXPRESSLY SUBMIT AND CONSENT
      TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM
      NON
      CONVENIENS. BORROWER PARTIES HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL
      PROCESS AND AGREE THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON BORROWER
      PARTIES BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED
      TO
      BORROWER PARTIES, AT THE ADDRESS SET FORTH IN THE FORBEARANCE AGREEMENT AND
      SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN
      POSTED.


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    


    14. WAIVER
      OF JURY TRIAL.
      BORROWING PARTIES WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT
      THEY
      MAY HAVE TO A TRIAL BY JURY OF ANY CLAIM, COUNTERCLAIM, ACTION OR OTHER
      PROCEEDING ARISING UNDER OR RELATING TO THIS AMENDMENT, THE FORBEARANCE
      AGREEMENT, THE LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
      THEREBY.

    


    15. Applicable
      Law.
      This
      Amendment shall be governed by and interpreted in accordance with the laws
      of
      the State of New York applicable to contracts made and performed in New York
      (without regard to principles of conflict of laws that would defer to the
      substantive laws of another jurisdiction).

    


    16. Severability.
      The
      invalidity, illegality or unenforceability or any provision of this Amendment
      shall not affect or impair the validity, legality or enforceability of the
      remainder of this Amendment, and to this end, the provisions of this Amendment
      are declared to be severable.

    


    17. Amendment
      is a Loan Document; Entire Agreement.
      This
      Amendment shall constitute a Loan Document. This Amendment and the Loan
      Documents are complete, integrated documents, set forth all of the terms,
      conditions and agreements between the parties hereto and supersede any and
      all
      prior and contemporaneous terms, conditions, and agreements between the parties
      hereto. There are no other agreements, promises, representations or warranties
      made or given in connection with any of the foregoing or concerning the subject
      matter hereof that are not contained herein or in the Loan
      Documents.

    


    18. Counterparts.
      This
      Amendment may be executed in any number of duplicate originals or counterparts,
      each of such duplicate originals or counterparts shall be deemed to be an
      original and taken together shall constitute but one and the same instrument.
      The parties agree that their respective signatures may be delivered by fax.
      Any
      party who chooses to deliver its signature by fax agrees to provide a
      counterpart of this Amendment with its inked signature promptly to each other
      party.

    


    19. Survival.
      Any and
      all representations, warranties, covenants, promises and understandings of
      any
      kind or nature whatsoever contained herein or in the Loan Documents shall
      survive the execution and delivery hereof until the Obligations are indefeasibly
      repaid in full to Lender.

    


    20. Binding
      Effect.
      This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective representatives, successors and assigns.

    


    


    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    



    IN
      WITNESS WHEREOF, the parties hereto have executed this Amendment under seal
      as
      of the date and year first written above.

    


    
      	
              WITNESS:

               

               

               

               

               

               

               

               

              _________________________________

              Name:

            	
              BORROWER:

               

              SOUTH
                BEACH RESORTS, LLC,

              a
                Florida limited liability company

               

              By: SBR
                Holding Company, LLC,

              a
                Florida limited liability company

               

              By: American
                Leisure Holdings, Inc.

              a
                Nevada corporation

               

              By:_/s/
                Malcolm Wright

              Malcolm
                J. Wright

              Chief
                Executive Officer

            
	 	 
	 	 
	 	 
	
               

               

               

              _________________________________

              Name:

            	
              PRINCIPALS:

               

               

              /s/
                Fredric
                Pauzar                                                                     
                

              Fred
                Pauzar, individually

            
	
               

               

               

              _________________________________

              Name:

            	
               

               

               

              /s/
                Malcolm
                Wright                                                                  
                

              Malcolm
                Wright, individually

            
	 	 
	 	 
	 	 
	
               

               

               

               

               

               

              _________________________________

              Name:

            	
              LENDER:

               

              LASALLE
                BANK, NATIONAL ASSOCIATION, as Trustee of Marathon Real Estate CDO
                2006-1
                Grantor Trust

               

               

              By:    /s/
                Jay
                Miller                                                                      
                

              Name:
                Jay Miller

              Title:
                Assistant Vice President

            


    

    
 

     

     

    
      
        
        

      

      
        7