Document:

Loan and Security Agreement

Exhibit
    10.10

    LOAN
      AND SECURITY AGREEMENT

     

    Between

     

    COSTA
      BLANCA I REAL ESTATE, LLC, a Florida limited liability company, as
      Borrower,

     

    AND

     

     

    KENNEDY
      FUNDING, INC.

    as
      Agent for the

    lenders
      named herein

     

    Date:
      as
      of June 26, 2007

     

    

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    TABLE
      OF CONTENTS

     

    Page

     

    
      	
              1.

            	
              Definitions

            	1 

    

    
      	
              2.

            	
              The
                Loan.

            	3 

    

    
      	
              3.

            	
              The
                Note

            	8 

    

    
      	
              4.

            	
              Grant
                of Security Interest.

            	9 

    

    
      	
              5.

            	
              Conditions
                Precedent to Lender’s Obligations

            	 10

    

    
      	
              6.

            	
              Representations
                and Warranties of Borrower

            	 13

    

    
      	
              7.

            	
              Survival
                of Representations and Warranties

            	 17

    

    
      	
              8.

            	
              Affirmative
                Covenants

            	 18

    

    
      	
              9.

            	
              Negative
                Covenants of Borrower

            	 21

    

    
      	
              10.

            	
              Events
                of Default

            	 23

    

    
      	
              11.

            	
              Remedies.

            	 26

    

    
      	
              12.

            	
              Payment
                of Expenses.

            	 27

    

    
      	
              13.

            	
              Lender’s
                Right to Assign

            	
              25

            

    

    
      	
              14.

            	
              Default
                Interest Rate

            	 28

    

    
      	
              15.

            	
              Usury
                Savings

            	 28

    

    
      	
              16.

            	
              Notices

            	
              27

            

    

    
      	
              17.

            	
              No
                Waiver

            	 29

    

    
      	
              18.

            	
              Failure
                to Exercise Rights

            	 30

    

    
      	
              19.

            	
              Prohibition
                Against Exercise of Rights Applicable Only to Individual
                Lenders

            	 30

    

    
      	
              20.

            	
              Miscellaneous.

            	 30

    

    
      	
              21.

            	
              Successors
                and Assigns.

            	 32

    

    
      	
              22.

            	
              Waiver
                of Jury Trial

            	 33

    

    
      	
              23.

            	
              Releases
                of Collateral.

            	 33

    

     

    Schedules

     

    
      	
              Schedule
                A

            	
              -
                Description of the Collateral

            
	
              Schedule
                B

            	
              -
                Principal Loan Documents

            
	
              Schedule
                C

            	
              -
                Criteria for Funding of Holdback

            
	
              Schedule
                D

            	
              -
                Lenders

            
	
              Exhibit
                A

            	
              -
                Form of Advertisement

            

    

    

    

    

    
      
        
           

        

        
        

      

      
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    LOAN
      AND SECURITY AGREEMENT

     

    THIS
      LOAN AND SECURITY AGREEMENT (“Agreement”),
      dated as
      of June 26, 2007, between
      COSTA BLANCA I REAL ESTATE, LLC,
      a
      Florida limited liability company, having an address at 2460 Sand Lake Road,
      Orlando, Florida 32809 (“Borrower”), and KENNEDY
      FUNDING, INC.
      (“Agent”), a New Jersey corporation having an address at Two University Plaza,
      Suite 402, Hackensack, New Jersey 07601, as agent for the lenders identified
      on
Schedule
      D
      attached
      hereto and incorporated herein by reference, in each case having an address
      care
      of Kennedy Funding, Inc., Two University Plaza, Suite 402, Hackensack, New
      Jersey 07601 (the aforesaid Agent and lenders are hereinafter collectively
      referred to as “Lender”).

     

    W
      I T N E S S E T H

     

    WHEREAS,
      Borrower has requested that Lender make a loan to Borrower in the amount of
      FOUR
      MILLION FOUR HUNDRED FIFTY THOUSAND ($4,450,000) DOLLARS
      (the
“Loan”), subject to and upon the terms and conditions hereinafter contained,
      which Loan shall be evidenced by a Promissory Note as of even date herewith
      from
      Borrower to Lender (the “Note”);

     

    WHEREAS,
      the
      Loan is to be secured by certain instruments, agreements and documents,
      including, but not limited to, those items identified in the Principal Loan
      Documents as set forth on Schedule
      B
      hereto
      and made a part hereof, and payment and performance of the Loan is to be
      guaranteed pursuant to that certain guaranty of even date herewith from
      Guarantor (as hereinafter defined) to Lender (“Guaranty”);

     

    WHEREAS,
      capitalized terms not otherwise defined herein shall have those meanings
      assigned to them in the Loan Documents (as hereinafter defined);
      and

     

    WHEREAS,
      Lender
      has agreed to make the Loan to Borrower on the terms and conditions hereinafter
      set forth.

     

    NOW,
      THEREFORE,
      in
      consideration of the foregoing and of the covenants and conditions hereinafter
      set forth, Borrower and Lender hereby agree as follows:

     

    1. Definitions.
      As used
      herein:

     

    (a) “Account”
      or “Accounts Receivable” means,
      in
      addition to the definition of account as contained in the Uniform Commercial
      Code, the right of Borrower to receive payment for goods sold or leased or
      for
      services rendered which are not evidenced by an instrument or chattel paper,
      whether or not it has been earned by performance.

     

    
      
         

         

        
        

      

      
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    (b) “Account
      Debtor” means,
      in
      addition to the definition of account debtor as contained in the Uniform
      Commercial Code, the person or persons obligated to Borrower on an Account,
      or
      who is represented by Borrower to be so obligated.

     

    (c) “Affiliate”
      of any Person (as hereinafter defined) shall mean any other Person which,
      directly or indirectly, controls or is controlled by, or is under common control
      with such Person. For the purposes of this definition, “controls” (including,
      with correlative meanings, the terms “controlled by” and “under common control
      with”), as used with respect to any Person, shall mean the possession, directly
      or indirectly, of the power to direct or cause the direction of the management
      and policies of such Person, whether through the ownership of voting securities
      or by contract or otherwise.

     

    (d) “Business
      Day” shall mean any day upon which banks located in the State of New Jersey
      generally are open to conduct regular banking business.

     

    (e) “Closing
      Date” shall mean the date on which this Agreement is executed by the parties
      hereto and the conditions set forth in Paragraph 5 are fulfilled to the
      satisfaction of Lender.

     

    (f) the
      “Collateral” shall mean the Real Property Collateral, the Collateral described
      in Paragraph 4 hereof, any other collateral described in any Loan Document
      and
      any other property of Borrower and/or Guarantor now or hereafter subject to
      a
      security agreement, mortgage, pledge, assignment or other document granting
      Lender a security interest therein and/or securing the Loan.

     

    (g) the
      “Default Rate” shall have the meaning ascribed thereto in the Note.

     

    (h) “Dollar”
      or “$” or “dollar” or any other terms of similar import shall mean United States
      Dollars, it being understood and agreed that all advances of the Loan shall
      be
      made in U.S. Dollars and repaid or reimbursed in U.S. Dollars without reduction
      for currency exchange fluctuation.

     

    (i) “Environmental
      Laws” shall mean a collective reference when and as applicable to (i) the
      Comprehensive Environmental Response, Compensation & Liability Act, as
      amended, 42 U.S.C. Section 9601 et seq.,
      (ii)
      the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901
      et seq.,
      and
      (iii) any and all other federal, state and local statutes, laws, rules,
      ordinances, regulations and executive orders pertaining to environmental matters
      applicable to the Borrower’s business and/or properties, as the same may be
      amended or supplemented from time to time.

     

     

    
      
         

         

        
        

      

      
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      (j) “Governmental
        Authority” or “Governmental Authorities” shall mean any federal, state, county
        or municipal governmental agency, board, commission,officer,
        official or entity exercising executive, legislative, judicial, regulatory
        or
        administrative functions of or pertaining to government and having jurisdiction
        over Borrower, the Guarantor (as hereinafter defined) or the
        Collateral.

    

     

    (k) the
      “Guarantor” shall collectively mean, jointly and severally, American Leisure
      Holdings, Inc., TDS Amenities, Inc. and Malcolm Wright.

     

    (l) the
      “Indemnified Party” and “Indemnified Parties” shall mean Agent and Lender as
      well as their directors, officers, trustees, partners, employees, agents,
      attorneys and shareholders.

     

    (m) the
“Loan
      Documents” shall mean this Agreement, the Note, the Mortgage (as hereinafter
      defined), the Guaranty and any other documents or agreements given to Lender
      by
      Borrower or the Guarantor in connection with the Loan whether or not
      specifically set forth herein.

     

    (n) “Mortgage”
      shall mean that certain Mortgage and Security Agreement, given by Borrower
      (as
      such term is defined therein), as mortgagor, in favor of Lender, as mortgagee,
      in connection with the Mortgaged Property, which Mortgage is given as security
      for the due payment of Borrower’s obligations under the Note.

     

    (o) “Person”
      or “Persons” shall mean any one or more individuals, partnerships, corporations
      (including a business trust), joint stock companies, limited liability company,
      trusts, unincorporated associations, joint ventures or other entities, or a
      foreign state or political subdivision thereof or any agency of such state
      of
      subdivision.

     

    (p) “Personalty”
      shall mean all Accounts, Accounts Receivable, Equipment, Inventory, Goods (as
      such terms are defined in the Uniform Commercial Code) and other personal
      property of the Borrower, as more particularly described herein.

     

    (q) “Real
      Property Collateral” or “Mortgaged Property” shall mean that certain real
      property owned or leased by Borrower, situated in Polk County, Florida as more
      particularly described in Schedule
      A attached
      hereto and made a part hereof.

     

    (r) “Uniform
      Commercial Code” shall mean the Uniform Commercial Code, as enacted in the State
      of Florida and amended from time to time.

     

    2. The
      Loan.

     

    (a) Provided
      that no default shall have occurred and be continuing hereunder, Lender agrees,
      subject to the terms and conditions hereinafter set forth, to advance from
      time
      to time (each, an “Advance”) to Borrower up to Four Million Four Hundred Fifty
      Thousand ($4,450,000) Dollars.

     

    
      
         

         

        
        

      

      
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    (b) Subject
      to a final closing statement prepared by Lender’s counsel and executed by
      Borrower (the “Closing Statement”), the proceeds of the initial Advance in the
      amount of Three Million Nine Hundred Fifty Thousand ($3,950,000) Dollars (the
      “Initial Advance”) shall be disbursed as follows and used only for the following
      purposes and as set forth on the Closing Statement:

     

    (1) The
      sum
      of Four Hundred Sixty Four Thousand and 00/100 ($464,000) Dollars shall be
      disbursed on behalf of Borrower on the Closing Date and simultaneously paid
      to
      Lender as a fully earned, non-refundable fee (the “Fee”) in consideration of
      Lender’s commitment to make the Loan on the terms and conditions stated herein.
      In no event shall the Fee be applied or credited in reduction of any principal,
      interest or other sum payable hereunder; and

     

    (2) The
      sum
      of Four Hundred Thousand Five Hundred and 00/100 ($400,500) Dollars shall be
      disbursed by Lender on behalf of Borrower on the Closing Date and simultaneously
      paid to Lender (the “Prepaid Interest”) which shall be credited against interest
      payments due under the terms of the Note, as such interest payments become
      due;
      and 

     

    (3) The
      sum
      of Forty Four Thousand Five Hundred and 00/100 ($44,500) Dollars shall be
      disbursed by Lender on behalf of Borrower on the Closing Date and simultaneously
      paid to Whitestone Realty Capital, LLC (the “Broker”) as full satisfaction of
      the Broker’s commission resulting from the consummation of this
      Loan;

     

    (4) The
      sum
      of Thirty Two Thousand Five Hundred and 00/100 ($32,500) Dollars shall be
      disbursed by Lender on behalf of Borrower on the Closing Date and simultaneously
      paid to Cole, Schotz, Meisel, Forman & Leonard, P.A., in payment of its
      legal fees; 

     

    (c) The
      foregoing disbursements may be made, notwithstanding contrary directions from
      Borrower , and for such purpose Borrower agrees that:

     

    A. The
      foregoing constitutes an irrevocable direction or authorization to so disburse
      the funds (said authorization being coupled with an interest) and no further
      direction or authorization from Borrower shall be necessary to warrant any
      such
      disbursements; and

     

    B. All
      such
      disbursements shall satisfy the obligations of Lender to advance funds to
      Borrower notwithstanding any other agreement or document to the contrary and
      shall be secured by the Mortgage as fully as if made by Borrower, regardless
      of
      the disposition by the party to whom such disbursements are so
      made.

     

     

     

    
      
         

         

        
        

      

      
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    (d) Prepaid
      Interest.
      So long
      as no Event of Default and no event which with the passage of time and/or the
      giving of notice would constitute a default hereunder or
      under
      any other Loan Documents shall have occurred, Lender shall credit Borrower
      from
      Prepaid Interest to the extent of amounts not so credited for payments of
      interest under the Note, it being understood, however, that the Prepaid Interest
      does not in any way limit Borrower’s obligations to make payments of interest
      under the Note after the Prepaid Interest has been exhausted Any amounts not
      so
      credited from Prepaid Interest on the Maturity Date shall be credited to the
      payment of the Loan, and any remaining Prepaid Interest after payment in full
      of
      the Loan shall be disbursed to Borrower. Upon an Event of Default, the Lender
      may credit to the extent of amounts not so credited from the Prepaid Interest
      any amounts then due hereunder and under the Loan Documents.

     

    (e) Holdback.
      A
      portion of the Loan, in the amount of up to Five Hundred Thousand and 00/100
      ($500,000) Dollars (the “Holdback”) shall be held by Lender, to be disbursed
      after the date hereof from time to time in accordance with the terms hereof,
      to
      reimburse Borrower for construction costs incurred by Borrower in connection
      with the construction of the swimming pool on certain real property owned by
      TDS
      Amenities, Inc. (the “Project”), as such real property is more specifically
      described in the Costa II Loan Documents (as hereinafter defined) (the “TDS
      Parcel”), or as reduced as set forth herein. Each Advance of the Holdback shall
      accrue interest as of the date when disbursed by Lender. Notwithstanding
      anything to the contrary contained herein, Lender’s obligation to make any
      Advance of the Holdback shall be subject to the determination by Lender, in
      its
      reasonable discretion, that all of the following conditions are satisfied at
      the
      time of the disbursement, each in form, manner and substance satisfactory to
      Lender and its counsel, and after giving effect thereto: (A) no Event of Default
      and no event which with the passage of time and/or the giving of notice would
      constitute a default hereunder or under any other Loan Documents shall have
      occurred, (B) each representation and warranty set forth in Section 6 herein
      shall continue to be materially true and correct as if then made, (C) Borrower’s
      continuing satisfaction of all of the above conditions and each of the following
      conditions, all in form, manner and substance satisfactory to Lender and its
      counsel, and (D) if at any time in Lender’s reasonable discretion the
      loan-to-value ratio based on the “as improved” disposition value of the Real
      Property Collateral (“Improved Value”) shall not exceed sixty percent (60%),
      determined as set forth in Subsection (j) of this Section 2: 

     

    (1) The
      conditions for release set forth on Schedule
      C
      attached
      hereto and made a part hereof;

     

    (2) Borrower
      has obtained from all appropriate Governmental Authorities the appropriate
      permits and approvals for the work for which the Advance is requested and Lender
      has been furnished with a filed copy thereof;

     

    (3) All
      material, equipment and fixtures incorporated in the work at the Property shall
      have been purchased so that the absolute ownership thereof shall have vested
      in
      Borrower immediately upon installation thereof on the Mortgaged Property
      and Borrower shall have produced and furnished, if required by Lender, the
      contracts, bills of sale or other agreements under which title thereto has
      vested;

     

    
      
         

         

        
        

      

      
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    (4) Borrower
      has obtained all applicable authorizations, consents, licenses, approvals,
      and
      permits of Governmental Authorities for the work for which disbursements are
      requested; and

     

    (5) Each
      Advance shall be used by Borrower solely to pay or as reimbursement for the
      obligations for which such disbursement is sought, and for the purposes set
      forth in the sources and uses set forth on Schedule
      C
      hereof,
      as applicable.

     

    (f) Lender
      shall not be required to make any Advance of the Holdback if at the time of
      the
      requested Advance: (i) the Mortgaged Property or any portion thereof has been
      damaged or destroyed by fire or any other casualty and the Borrower is unwilling
      or unable to repair same using funds other than the proceeds of the Loan or
      insurance proceeds; (ii) any legal action is pending which may have a material
      adverse effect upon the ability of Borrower to complete the improvements to
      the
      Property or the ability of Borrower to repay the principal and interest on
      the
      Loan as it becomes due, or (iii) Lender shall have determined that the
      undisbursed balance of the loan plus any funds of Borrower is insufficient
      to
      fund completion of the project and Borrower is unable or unwilling to produce
      funds to cover the deficiency.

     

    (g) Lender
      shall be entitled to reimbursement from the Holdback for all costs and expenses
      incurred by Lender in connection with each Advance of the Holdback, including,
      without limitation, on-site engineer or architect inspections to verify work
“in
      place” and the value thereof, which shall be limited to one (1) inspection per
      draw by Borrower and conducted by Lender or a local consultant retained by
      Lender at Lender’s discretion, the cost of which shall not exceed Two Thousand
      Dollars ($2,000) per inspection.

     

    (h) Upon
      an
      Event of Default, Lender may, in its sole discretion, apply all or any portion
      of the Holdback to any outstanding payment, sum or obligation of Borrower under
      the Loan Documents.

     

    (i) Lender
      shall notify Borrower of Lender’s determination of the Improved Value (“Lender’s
      Determination Notice”) as determined by Volpe Real Estate Advisors, Inc. (“Volpe
      Value”). If Borrower disagrees with Lender’s determination of the Improved
      Value, Borrower shall notify Lender (“Borrower’s Notice of Disagreement”) within
      twenty (20) calendar days of Borrower’s receipt of Lender’s Determination
      Notice, specifying therein Borrower’s determination of the Improved Value as
      determined by Integra Realty Resources (“IRR Value”). If the IRR Value is within
      ten (10%) percent of the Volpe Value, then the Improved Value shall be the
      average of the IRR Value and the Volpe Value. If the IRR Value is not within
      ten
      (10%) percent
      of the Volpe Value, then the Improved Value shall be determined as follows:
      Volpe Real Estate Advisors, Inc. and Integra Realty Resources shall appoint
      a
      third appraiser for the purpose of determining the Improved Value (“Third Party
      Value”). The Lender and Borrower each agree that the average of the two closest
      appraisals of the “as improved” disposition value of the Real Property
      Collateral as determined by the Volpe Value, the IRR Value and the Third Party
      Value shall be the Improved Value. Borrower shall be responsible for and shall
      pay all fees associated incurred by Lender in connection with this Section
      2(i).

    
      
         

         

        
        

      

      
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    (j) Costa
      II Cash Collateral.

     

    (1) Notwithstanding
      anything contained herein to the contrary, the Costa II Borrowers (as
      hereinafter defined) may deposit with Lender, in cash, an amount equal to the
      greater of (i) the amount of the Holdback (as such term is defined in the Costa
      II Loan Agreement), and (ii) the amount necessary to complete the Project,
      as
      determined by Lender in its reasonable discretion (the “Cash Collateral”).

     

    (2) In
      the
      event the Costa II Borrowers deposit the Cash Collateral with Lender, regardless
      of whether the Costa II Note (as hereinafter defined) is prepaid in whole,
      and
      no Event of Default hereunder or under any other Loan Documents or any of the
      Costa II Loan Documents shall have occurred beyond any applicable grace periods,
      Lender shall, at the sole cost and expense of the Costa II Borrowers, release
      its lien on the TDS Parcel; provided,
      however,
      that in
      addition to the Cash Collateral, the Borrowers shall provide to Lender, (a)
      written evidence, satisfactory to Lender in its reasonable discretion, that
      the
      completion of the Project, the resort water complex (including a wave pool,
      flowrider surfing pool, water slides, spas and a four-story children’s water
      park) and the 16,000 square foot pool-side sports bar (collectively,
“Amenities”), each of which shall be located on or adjacent to the Mortgaged
      Property, shall be partially financed in an amount of no less than $5,800,000
      (i.e. $2,900,000 plus the Cash Collateral) by an institutional lender, (b)
      documentation evidencing that the swimming pool on the TDS Parcel will be
      constructed, to Lender’s reasonable satisfaction, in accordance with the plans
      and specifications provided to Lender by Borrower and the contract submitted
      to
      Lender from Weller Pools, (c) written evidence that the owners of all or any
      portion of the remainder of the Mortgaged Property shall have access to, and
      the
      ability to use, the swimming pool constructed on the TDS Parcel and the other
      Amenities pursuant to easements established by the Borrower and reasonably
      acceptable to Lender, (d) written evidence that Lender shall have continued
      access into and across the TDS Parcel pursuant to easements established by
      the
      Borrower and reasonably acceptable to Lender to complete the Project, if
      necessary, (e) such other documents as may be required by Lender in its
      reasonable discretion, and (f) written evidence that the construction contract
      submitted to Lender from Weller Pools to complete the Project is still in full
      force and effect.

     

    (3) The
      Cash
      Collateral shall be held by Lender as additional security for (1) the repayment
      of the Loan and the Costa II Loan, (2) the repayment of all obligations owed
      to
      Lender pursuant to the Loan Documents and the Costa II Loan Documents (as
      hereinafter defined), and (3) the completion of the Project, and shall be
      disbursed to Borrower or the Costa II Borrowers, as applicable, pursuant to
      the
      terms and conditions of Section 29 and Section 2(e) of the Costa II Loan
      Agreement and Section 2(e) and this Section 2(j) of this Agreement, as
      applicable. 

    
      
         

         

        
        

      

      
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    (4) Notwithstanding
      anything contained herein or in any of the other Loan Documents to the contrary,
      the Borrower acknowledges and agrees that in the event the Cash Collateral
      is
      deposited with Lender, Lender shall not be required to make any further Advances
      of the Holdback to Borrower. However, notwithstanding the foregoing, upon
      written request from Borrower, Lender may make such further Advances of the
      Holdback to Borrower in Lender’s sole and absolute discretion.

     

    (5) Notwithstanding
      the foregoing, upon an Event of Default, Lender may, in its sole discretion,
      apply all or any portion of the Cash Collateral to any outstanding payment,
      sum
      or obligation of Borrower under the Loan Documents or the Costa II Loan
      Documents, including without limitation, the completion of the Project.

     

    (k) Notwithstanding
      the foregoing or anything contained herein to the contrary, provided that no
      Event of Default and no event which with the passage of time and/or the giving
      of notice would constitute a default hereunder or under any other Loan Documents
      or any of the Costa II Loan Documents (as hereinafter defined) shall have
      occurred, (i) in the event Borrower and/or the Costa II Borrowers repay an
      amount equal to at least $16,000,000 (but less than $18,000,000) of the
      aggregate outstanding principal balance of the Costa II Loan and this Loan
      prior
      to the six (6) month anniversary of the date hereof, Borrower shall receive
      a
      credit at the time this Loan is repaid in full in the amount of $150,000, or
      (ii) in the event Borrower and the Costa II Borrowers repays an amount equal
      to
      at least $18,000,000 of the aggregate outstanding principal balance of the
      Costa
      II Loan and this Loan prior to the six (6) month anniversary of the date hereof,
      Borrower shall receive a credit at the time this Loan is repaid in full in
      the
      amount of $200,000. 

     

    3. The
      Note.
      The
      obligation of the Borrower to repay all monies advanced by Lender to Borrower
      in
      connection with the Loan shall be evidenced by this Agreement and the Note.
      The
      Loan shall bear interest at the rate(s) set forth in the Note and shall be
      payable as provided in the Note with final payment due on the Maturity Date
      (as
      defined in the Note). All of Borrower’s obligations hereunder and under the Note
      are secured by the Mortgage and the other Loan Documents. Should the principal
      of or interest on the Loan become due and payable on a day other than a Business
      Day, the maturity thereof shall be extended to the next succeeding Business
      Day
      and, in the case of principal, interest shall be payable thereon at the rate
      per
      annum specified in the Note during such extension.

     

    
      
         

         

        
        

      

      
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    4. Grant
      of Security Interest.

     

    (a) Borrower
      hereby assigns and pledges to Lender, and hereby grants to Lender a security
      interest in all property of the following types, wherever located and whether
      now owned or hereafter owned or acquired by Borrower, whether or not affixed
      to
      the Mortgaged Property, in all proceeds (including, without limitation, amounts
      payable under any policies of insurance with respect thereto), and Products
      (as
      such term is defined in the Uniform Commercial Code) thereof in any form, in
      all
      parts, accessories, attachments, special tools, additions, replacements,
      substitutions and accessions thereto or therefor, and in all increases or
      profits received therefrom:

     

    (1) all
      Accounts, to the extent that the same relate to the Mortgaged Property and/or
      the operations at the Mortgaged Property;

     

    (2) all
      Equipment (as such term is defined in the Uniform Commercial Code), and in
      all
      of Borrower’s machinery and equipment of every kind, nature and description, as
      well as trucks and vehicles of every kind and description, including, but not
      limited to, trailers, cranes and hoisting equipment, whether presently owned
      by
      Borrower or hereafter acquired, and wherever located to the extent that the
      same
      relate to the Mortgaged Property and/or the operations at the Mortgaged
      Property;

     

    (3) all
      Inventory (as such term is defined in the Uniform Commercial Code);

     

    (4) all
      General Intangibles (as such term is defined in the Uniform Commercial Code),
      to
      the extent that the same relate to the Mortgaged Property and/or the operations
      at the Mortgaged Property;

     

    (5) all
      deposit accounts of Borrower with Lender, now or hereafter existing, and all
      money, instruments, escrows, securities, documents, chattel paper, credits,
      claims, performance bonds, payment bonds, all other forms of surety to the
      extent that the same relate to the Mortgaged Property and/or the operations
      at
      the Mortgaged Property, and other property of Borrower now or hereafter in
      the
      possession or custody of Lender or any of its agents;

     

    (6) all
      Chattel Paper (as such term is defined in the Uniform Commercial Code), to
      the
      extent that the same relate to the Mortgaged Property and/or the operations
      at
      the Mortgaged Property, including, but not limited to, all such Chattel Paper
      now or hereafter left in the possession of Lender for any purpose;

     

     

     

    
      
         

         

        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (7) all
      Instruments (as such term is defined in the Uniform Commercial Code), including
      any negotiable instruments or a securities, or any other writing which evidences
      a right to the payment of money and is of the type which is, in the ordinary
      course of business, transferred by delivery with any necessary endorsement
      or
      assignment whether presently owned by Borrower or hereafter acquired, to the
      extent that the same relate to the Mortgaged Property and/or the operations
      at
      the Mortgaged Property, including, but not limited to, all such Instruments
      now
      or hereafter left in the possession of Lender for any purpose;

     

    (8) all
      Documents (as such term is defined in the Uniform Commercial Code);

     

    (9) all
      Goods
      (as such term is defined in the Uniform Commercial Code), to the extent that
      the
      same relate to the Mortgaged Property and/or the operations at the Mortgaged
      Property whether presently owned by Borrower or hereafter acquired;

     

    (10) any
      and
      all deposits (whether held in escrow or not) given to the Borrower in connection
      with those certain Purchase Agreements for townhouses and condominiums on the
      Mortgaged Property; and

     

    (11) all
      books
      and records, including, without limitation, customer lists, credit files,
      computer programs, print-outs and other computer materials and records of
      Borrower pertaining to all of the Collateral.

     

    (b) Borrower
      will perform any and all steps requested by Lender to create and maintain in
      Lender’s favor a first and valid lien on and security interest in the Collateral
      or pledges of Collateral, including, without limitation, the execution,
      delivery, filing and recording of financing statements and continuation
      statements, supplemental security agreements, notes, filings with federal
      government offices and any other documents necessary, in the opinion of Lender,
      to protect its interest in the Collateral which liens shall be exclusive except
      for those liens expressly permitted elsewhere herein. Lender and its designated
      officer are hereby appointed Borrower’s attorney-in-fact to do all acts and
      things which Lender may deem necessary to perfect and continue perfected the
      security interests and Liens provided for in this Agreement, including, but
      not
      limited to, executing financing statements on behalf of Borrower.

     

    5. Conditions
      Precedent to Lender’s Obligations.
      Lender
      shall not be obligated to make the Loan hereunder unless Lender shall have
      received the following, all in form and substance satisfactory to the Lender
      in
      all respects:

     

    (a) the
      Note,
      duly executed by Borrower;

     

    (b) the
      Mortgage, duly executed by Borrower;

     

    (c) this
      Agreement, duly executed by each Borrower;

     

    (d) the
      Guaranty, duly executed by each Guarantor;

    
      
         

         

        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    (e) the
      Assignment of Leases and Rents, duly executed by each Borrower;

     

    (f) the
      Assignment of Licenses, Contracts, Plans, etc., duly executed by each
      Borrower;

     

    (g) the
      Environmental Indemnity Agreement, duly executed by Borrower and
      Guarantor;

     

    (h) the
      Document Re-Execution Agreement, duly executed by Borrower and
      Guarantor;

     

    (i) the
      Closing Statement, duly executed by each Borrower;

     

    (j) certificates
      of insurers, or other evidence satisfactory to Lender, indicating that Borrower
      and Guarantor have obtained the policies of insurance as are required under
      the
      terms of the Mortgage;

     

    (k) a
      paid
      title insurance policy (without survey exception) in the full amount of the
      Loan
      issued by a title insurance company acceptable to Lender and insuring the
      Mortgage as a valid first lien on the Mortgaged Property, with such endorsements
      as Lender shall require and subject to the Permitted Exceptions identified
      in
      the Mortgage;

     

    (l) UCC-1
      financing statements required to evidence or perfect Lender’s security interest
      in the personal property now or hereafter owned by the Borrower and located
      on
      or used in connection with the Mortgaged Property and UCC-1 financing statements
      required to perfect Lender’s security interest in the Collateral;

     

    (m) an
      appraisal of the Mortgaged Property;

     

    (n) financial
      statements and tax returns for each Borrower, and each Guarantor;

     

    (o) evidence
      of a search of the public records which discloses no conditional sales
      contracts, chattel mortgages, leases of personalty, financing statements or
      title retention agreements filed or recorded against any Borrower or the
      Mortgaged Property;

     

    (p) a
      survey
      of the Mortgaged Property prepared in accordance with the “Minimum Standard
      Detail Requirements for ALTA and ACSM Land Title Surveys” jointly established by
      ALTA and ACSM in 2005, as updated, and certified to Lender by a registered
      land
      surveyor acceptable to the Lender (“Survey”);

     

    
      
         

         

        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    (q) copies
      of
      all permits or approvals required by Governmental Authorities to such date
      with
      respect to Borrower or the Mortgaged Property, to the extent the same are
      necessary and appropriate to operate and develop the Mortgaged
      Property.

     

    (r) an
      environmental audit of the Mortgaged Property (Phase I and, if necessary Phase
      II);

     

    (s) the
      operating agreement of Borrower certified by the Manager of each
      Borrower;

     

    (t) an
      incumbency certificate of Borrower which shall certify the names and titles
      of
      the members of the limited liability company authorized to sign, in the name
      and
      on behalf of Borrower this Agreement and each other Loan Document to be
      delivered pursuant to this Agreement by Borrower, together with the true
      signatures of such officers, upon which certificate the Lender may conclusively
      rely;

     

    (u) consents
      of the limited liability company authorizing the transactions to be entered
      into
      by Borrower in connection with this Agreement;

     

    (v) evidence
      that the Mortgaged Property is not located in a federal or state flood hazard
      area;

     

    (w) certification
      regarding debts and liens, executed by the owner of the Mortgaged
      Property;

     

    (x) payment
      of the Short Interest, the Fee (as such terms are defined herein and in the
      Note) and other fees and expenses required to be paid to or on behalf of Lender
      in connection with the Loan;

     

    (y) opinions
      of legal counsel to the Borrower with respect to such matters as the Lender
      may
      reasonably request including, but not limited to, opinions from Borrower’s local
      Florida counsel and Borrower’s New Jersey counsel;

     

    (z) an
      opinion of legal counsel to the Guarantor with respect to such matters as the
      Lender may reasonably request including, but not limited to, opinions from
      Guarantor’s local Florida counsel and Guarantor’s New Jersey counsel;
      and

     

    (aa) evidence
      of the appointment of a New Jersey agent to accept service of process on behalf
      of Borrower and Guarantor, pursuant to the requirements of the Loan
      Documents;

     

    (bb) evidence
      demonstrating current full compliance with all applicable zoning, health,
      environmental and safety laws, ordinances and regulations (including, without
      limitation, approval of local, private or public sewage or water
      utility);

     

    
      
         

         

        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    (cc) certification
      from Borrower that Borrower is not a party to any existing or pending or
      threatened litigation, except as previously disclosed to Lender;
      and

     

    (dd) evidence
      demonstrating receipt of all appropriate approvals meeting all applicable
      requirements of all Governmental Authorities having jurisdiction including,
      but
      not limited to, subdivision and site plan approvals, potable water supply,
      sewage discharge and sewage connection, use of septic tanks or
      alternatives.

     

    (ee) satisfactory
      evidence that all roads and utilities necessary for the full utilization of
      the
      Collateral for its intended purposes have been completed or the presently
      installed and proposed roads and utilities will be sufficient for the full
      utilization of Collateral for its intended purposes.

     

    (ff) such
      other agreements, certificates or other documents as Lender or Title Insurance
      Company may reasonably request;

     

    6. Representations
      and Warranties of Borrower.
      To
      induce Lender to make the Loan pursuant to this Loan Agreement, each Borrower,
      jointly and severally, hereby represents and warrants to Lender as
      follows:

     

    (a) By
      its
      acceptance of Lender’s funds and execution of the Loan Documents, Borrower
      acknowledges, agrees and confirms that it has no defense, offset or counterclaim
      for any occurrence in relation to this Loan and Borrower acknowledges that
      Lender has complied with all of its obligations under the Loan Documents as
      of
      the date hereof.

     

    (b) Borrower
      is a limited liability company, duly organized under the laws of the State
      of
      Florida and has all requisite power and authority and legal right to own its
      property, to carry on its business as it is now being conducted, to enter into
      this Agreement and the other Loan Documents entered into by it and to perform
      all of its obligations hereunder and thereunder.

     

    (c) The
      execution and delivery by Borrower of the Loan Documents, and the performance
      of
      its obligations thereunder, have been duly authorized by all necessary action,
      corporate or otherwise, and do not and will not: (i) require any further action,
      consent or approval on the part of the members of any Borrower; (ii) violate
      any
      provision of law, rule, regulation, order, writ, judgment, injunction, decree,
      determination or award presently in effect having applicability to any Borrower,
      or the members of such Borrower; or (iii) result in any breach of or constitute
      a default under any indenture or loan or credit agreement or any other
      agreement, lease or instrument to which any Borrower is a party or by which
      any
      Borrower or its properties may be bound or affected, and Borrower is not in
      default under any such law, rule, regulation, order, writ, judgment, injunction,
      decree, determination or award or any such indenture, agreement, lease or
      instrument.

     

    
      
         

        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    (d) The
      Loan
      Documents have been duly executed and delivered by Borrower and are legal,
      valid
      and binding obligations of such Borrower, enforceable against such Borrower
      in
      accordance with their respective terms.

     

    (e) Except
      as
      previously disclosed to Lender, there is no material action, suit, proceeding,
      inquiry or investigation, at law or in equity, or before any court, governmental
      instrumentality, public board or arbitrator pending or threatened against or
      affecting any Borrower or any of its properties or rights, wherein an
      unfavorable decision, ruling or finding would (i) to the extent not covered
      by
      insurance as to which the insurer has not disclaimed coverage, result in any
      material adverse change in the financial condition, business, properties or
      operations of Borrower; (ii) materially or adversely effect the transactions
      evidenced by the Loan Documents; (iii) materially impair the right of either
      to
      carry on its business substantially as now conducted; or (iv) adversely effect
      the validity or enforceability of the Loan Documents.

     

    (f) To
      the
      best of each Borrower’s knowledge, Borrower is in compliance with all laws
      applicable to such Borrower or its properties or assets.

     

    (g) Borrower
      is a pre-existing limited liability company and is actively engaged in the
      operation of its business and has not been created as a vehicle to obtain the
      Loan. The proceeds of the Loan will be used by the Borrower for the purposes
      set
      forth in Paragraph 6(o) in connection with the operation of the Borrower’s
      business, and the proceeds of the Loan will not be paid over or diverted by
      Borrower to any member, manager, officer, director, trustee, shareholder of
      Borrower, any Guarantor or any other person.

     

    (h) The
      following entity constitutes the sole member of Costa Blanca I Real Estate,
      LLC
      and its respective membership interest in Costa Blanca I Real Estate, LLC is
      set
      forth opposite its name:

     

    Tierra
      Del Sol Resort (Phase 1), Ltd. 100%

     

    (i) There
      has
      been no material adverse change in the condition, financial or otherwise, of
      any
      Borrower or any Guarantor since the date of its financial statements furnished
      to Lender.

     

    (j) Each
      Borrower’s properties and assets reflected on its financial statements referred
      to above, and all such properties and assets are free and clear of all
      mortgages, pledges, liens, charges or other encumbrances, except as reflected
      on
      such financial statements which have been previously provided to
      Agent.

     

     

     

    
      
         

        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    (k) Borrower
      and each Guarantor have each filed all federal, state and other income or
      franchise tax returns which are required to be filed and have paid all
taxes
      due
      or which may become due pursuant to such returns or pursuant to any assessment
      received by it.

     

    (l) All
      timely authorizations, permits, approvals and consents of Governmental
      Authorities which may be required in connection with the valid execution and
      delivery of this Agreement and the other Loan Documents and the carrying out
      or
      performance of any of the activities or transactions required or contemplated
      hereunder or thereunder have been applied for or obtained (and remain in full
      force and effect).

     

    (m) All
      financial statements, information and other financial data furnished by any
      Borrower and any Guarantor to Lender in connection with the Agreement (i) were
      true, correct and complete in all material respects, as of the date of said
      financial statements, information and other data, (ii) such financial statements
      present fairly the financial condition of such Borrower and such Guarantor
      at
      the respective dates thereof and the results of operations and changes in
      financial position for the periods to which they apply, and (iii) there have
      been no material adverse changes in the financial condition of Borrower or
      any
      Guarantor since the delivery by Borrower or the Guarantor, as the case may
      be,
      to Lender of the most recent financial statements.

     

    (n) Each
      Borrower’s assets, at a fair valuation, exceed such Borrower’s liabilities
      (including, without limitation, contingent liabilities). Every Borrower is
      paying its debts as they become due and Borrower anticipates the continuing
      ability to pay its debts as they become due. Borrower has capital and assets
      sufficient to carry on its business.

     

    (o) Proceeds
      from the Loan shall be used only as set forth in this Agreement, the Closing
      Statement, and for other proper limited liability company purposes. No part
      of
      the proceeds of the Loan shall be used, directly or indirectly, for the purpose
      of purchasing or carrying any margin stock within the meaning of Regulation
      U of
      the Board of Governors of the Federal Reserve System, or for the purpose of
      purchasing or carrying or trading in any stock under such circumstances as
      to
      involve Borrower in a violation of Regulation U of the Board of Governors of
      the
      Federal Reserve System. In particular, without limitation of the foregoing,
      no
      part of the proceeds from the Loan are intended to be used to acquire any
      publicly-held stock of any kind. As used in this subparagraph (r), the terms
      “margin stock” and “purpose of purchasing or carrying” shall have the meanings
      assigned to them in the aforesaid Regulation U, and the term “publicly-held,” in
      respect to securities, shall have the meaning assigned to it in Section 220.7(a)
      of Regulation T of the Board of Governors of the Federal Reserve
      System.

     

    
      
         

         

        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

     

    
      (p) No
        Borrower is not in violation of or in default under (nor on the Closing Date
        is
        there any waiver in effect which, if not in effect, would result in a violation
        or default under) any provision of such Borrower’s operating
        agreement, or under any provision of any agreement, indenture, evidence of
        indebtedness, loan or financing
        agreement, certificate, lease or other instrument to which it is a party,
        or by
        which it is bound, or of any law, governmental order, rule or regulation,
        in any
        such case under this subparagraph (s) so as to affect adversely in any material
        manner its business, assets or financial conditions.

    

     

    (q) All
      statements, representations and warranties made by any Borrower or any other
      person in this Agreement, any other Loan Document and any other agreement,
      document, certificate or instrument previously furnished or to be furnished
      by
      said person to Lender under this Agreement or in connection with the Loan:
      (i)
      are and shall be true, correct and complete in all material respects at the
      time
      they were made and, in the case of those made prior to the Closing Date, on
      and
      as of the Closing Date, (ii) do not and shall not contain any untrue statement
      of a material fact at the time made, and (iii) do not and shall not omit to
      state a material fact at the time made necessary in order to make the
      information contained herein or therein not misleading or incomplete. Borrower
      understands that all such statements, representations and warranties shall
      be
      deemed to have been relied upon by Lender as a material inducement to provide
      the Loan.

     

    (r) No
      person
      is entitled to receive from Borrower any brokerage commission, finder’s fee or
      similar fee or payment in connection with the consummation of the transactions
      contemplated by this Agreement except Whitestone Realty Capital. No brokerage
      or
      other fee, commission or compensation is to be paid by Lender by reason of
      any
      act, alleged act or omission of Borrower with respect to the transaction
      contemplated hereby.

     

    (s) Except
      as
      set forth in that certain Phase I report dated November 26, 2006 and prepared
      by
      Universal Engineering Sciences, Inc., Borrower has no knowledge of any of the
      following:

     

    (i) The
      release or threatened release of any hazardous substance, pollutant or
      contaminant as each such term is presently defined in any applicable
      Environmental Laws resulting from any activity by or on behalf of Borrower
      or
      any predecessor in interest to the Mortgaged Property, including, without
      limitation, the generation, handling, storage, treatment, transportation or
      disposal of any hazardous substance, pollutant or contaminant at any of the
      past
      or present business locations and facilities of Borrower; or

     

    (ii) Any
      past
      or future action taken or to be taken by any federal, state, county or municipal
      Governmental Authority or by any other person under any applicable Environmental
      Laws concerning the release of any hazardous substance, pollutant or contaminant
      into the soil, air, surface or subsurface water or the environment in general
      from any of the past or present business locations and facilities of Borrower;
      or

     

    
      
         

         

        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    (iii) Any
      claims or actions brought or which are threatened to be brought by any Person
      against Borrower for damages occurring at or outside of any of the past or
      present business locations and facilities of Borrower resulting from the alleged
      release or threatened release of any hazardous substance, pollutant or
      contaminant by Borrower or any predecessor in interest, including, without
      limitation, claims for health effects to Persons, property damage and/or damage
      to natural resources.

     

    (t) (A) Borrower’s
      address set forth above is the location of Borrower’s chief executive office,
      and is the only location where Borrower keeps its records concerning its
      Accounts, and its inventory and equipment. (B) Within four (4) months of the
      date of this Agreement, none of Borrower’s assets have been moved from any
      jurisdiction or other locations than the present location of assets set forth
      above except for inventory or equipment purchased or sold by Borrower in the
      ordinary course of business from persons or entities customarily selling such
      inventory or equipment. (C) As of the date hereof, no inventory is now stored
      with a bailee, warehouseman or similar party. (D) As of the date hereof,
      Borrower does not hold any goods belonging to third parties or in which other
      parties have an interest, including any goods sold on a bill and hold basis.
      (E)
      Borrower does not presently purchase or otherwise hold goods on a consignment
      basis. (F) None of Borrower’s inventory is of a nature that contains any labels,
      trademarks, trade names, or other identifying characteristics which are the
      properties of third parties, and the use of which by Borrower is in violation
      of
      the rights of such third parties or under license, royalty or similar agreements
      with any third parties. (G) No persons hold any goods of Borrower. (H) Borrower
      has not purchased any inventory or equipment except in the ordinary course
      of
      business for value and from persons customarily in the business of selling
      such
      inventory or equipment. (I) Borrower does not hold any instrument or chattel
      paper connected with any Account. (J) Borrower does not own any trademarks,
      trade names, patents or copyrights. (K) No surety bonds have been issued on
      behalf of Borrower with respect to any contracts or purchase orders out of
      which
      Accounts Receivable have arisen or are expected to arise.

     

    (u) Borrower
      is the owner and the operator of the Mortgaged Property.

     

    (v) Borrower
      has all approvals necessary so that the final development permit that Polk
      County, Florida has issued in connection with the Mortgaged Property is
      valid.

     

    7. Survival
      of Representations and Warranties.
      The
      foregoing representations and warranties shall survive the execution of this
      Loan Agreement and the closing of the Loan.

     

    
      
         

         

        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    8. Affirmative
      Covenants.
      To
      induce Lender to make the Loan pursuant to this Agreement, each Borrower,
      jointly and severally, hereby covenants and agrees that so long as the Loan
      shall remain outstanding hereunder, Borrower shall comply with the following
      covenants:

     

    (a) Borrower
      shall keep and maintain complete and accurate books, accounts and records.
      Borrower shall permit access thereto and examination thereof by Lender and
      any
      authorized representatives of Lender, at all reasonable times and places during
      normal business hours (including the right to make copies thereof at the cost
      and expense of Borrower).

     

    (b) Borrower
      shall comply in all material respects with all applicable federal, state, county
      and municipal laws, rules, regulations and orders of any Governmental Authority
      having jurisdiction over Borrower, subject to the limitations expressly set
      forth in the Mortgage, except to the extent contested in good faith and by
      proper proceedings or where the failure to so comply would not have a material
      adverse effect on Borrower, including, without limitation, all Environmental
      Laws and health and safety laws.

     

    (c) Borrower
      shall promptly notify Lender of the occurrence of any Event of Default or an
      event which, with the giving of notice or passage of time or both, would
      constitute an Event of Default and of the occurrence of any event or the
      commencement of any action, suit or proceeding which, if adversely determined,
      would adversely affect the condition, financial or otherwise, of Borrower or
      Guarantor.

     

     

     

    
      
         

         

        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    (d) Borrower
      shall indemnify, protect, defend and save harmless the Indemnified Parties
      from
      and against (i) any and all losses, damages, expenses or liabilities of any
      kind
      or nature and from any suits, claims, or demands, by third parties including
      reasonable counsel fees incurred in investigating or defending such claim,
      suffered by any of them and caused by, relating to, arising out of, resulting
      from, or in any way connected with the Loan and the transactions contemplated
      herein, and (ii) any and all losses, damages, expenses or liabilities sustained
      by Lender in connection with any environmental sampling or cleanup relating
      to
      any properties or assets owned or otherwise used by Borrower in the operation
      of
      its business, or mandated by any Environmental Law; provided, however, Borrower
      shall not be obligated to indemnify, protect, defend and save harmless an
      Indemnified Party, if the loss, damage, expense or liability was caused by
      or
      resulted from the gross negligence or willful misconduct of that Indemnified
      Party. In case any action shall be brought against an Indemnified Party based
      upon any of the above and in respect to which indemnity may be sought against
      Borrower, the Indemnified Party against whom such action was brought, shall
      promptly notify Borrower in writing, and Borrower shall assume the defense
      thereof, including the employment of counsel selected by Borrower and reasonably
      satisfactory to the Indemnified Party, the payment of all costs and expenses
      and
      the right to negotiate and consent to settlement. Upon reasonable determination
      made by the Indemnified Party, the
      Indemnified Party shall have the right to employ separate counsel in any such
      action and to participate in the defense thereof at the Indemnified Party’s cost
      and expense. Borrower shall not be liable for any settlement of any such action
      effected without its consent, but if settled with Borrower’s consent, or if
      there be a final judgment for the claimant in any such action, Borrower agrees
      to indemnify and save harmless said Indemnified Party against whom such action
      was brought from and against any loss or liability by reason of such settlement
      or judgment. The provisions of this subparagraph (d) shall survive the
      termination of this Agreement and the final repayment of the Loan.

     

    (e) If
      Lender
      shall so require, Borrower agrees to establish and maintain at a banking
      institution of Lender’s choice a lockbox, in accordance with Lender’s standard
      lockbox agreement in effect from time to time, and to direct all Account Debtors
      to make remittances on all Accounts to said lockbox. Any and all remittances
      received in said lockbox may be applied to the Obligations of Borrower to Lender
      in accordance with Paragraph (g) hereof.

     

    (f) If,
      notwithstanding the notices to Account Debtors to remit payments on Accounts
      to
      the lockbox referred to above, Borrower receives any payments on Accounts or
      other Collateral, Borrower agrees to receive any and all payments and
      remittances on Accounts and Inventory and other Collateral, including cash,
      checks, drafts, notes, acceptances or other forms of payment in trust for Lender
      and to deliver such payments in the identical form in which they were received,
      together with collection reports in form satisfactory to Lender.

     

    (g) All
      proceeds of any Account(s) and inventory and other Collateral which are
      delivered to or otherwise received by Lender for application to the Loan
      provided for herein shall be deemed received as of the date of actual receipt
      by
      Lender, and shall be applied by Lender on account of the Obligations upon
      Lender’s receipt of same; provided, however, that no checks, drafts, or other
      Instruments received by Lender shall constitute payment to Lender unless and
      until such item of payment has actually been collected by Lender. For the sole
      purpose of calculation of interest due to Lender from Borrower, all such
      proceeds and other payments on account of the Loan provided for in this
      Agreement, irrespective of the type or form of payment thereof shall not be
      considered applied on account of the Obligations until actual clearance of
      such
      funds.

     

    (h) Borrower
      shall maintain all of its property in good working condition, ordinary wear
      and
      tear excepted (including obsolete and abandoned property).

     

    (i) Borrower
      shall, within ten (10) days of the end of each month, deliver to Lender an
      aging
      of its Accounts and report of its inventory, and an aging of its accounts
      payable in such form as may be reasonably acceptable to Lender, and within
      thirty (30) days of the end of each month, a duly completed accounts receivable
      reconciliation report in such form as may be reasonably acceptable to
      Lender.

     

    
      
         

         

        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    (j) Borrower
      will continue to hold all necessary licenses and permits for the operations
      of
      their business, including but not limited to contract vendor registrations
      and
      account numbers.

     

    (k) Lender
      (by any of its officers, employees and agents) shall have the right, at any
      time
      or times during Borrower’s usual business hours (provided reasonable prior
      notice is given except if an Event of Default has occurred and is continuing),
      to inspect the Collateral, all records related thereto (and to make extracts
      from such records) and the premises upon which any of the Collateral is located,
      to discuss Borrower’s affairs and finances with any person and to verify the
      amount, quality, quantity, value and condition of, or any other matter relating
      to, the Collateral.

     

    (l) (A) Lender
      shall have the right at any time and from time to time, without notice, to
      notify Account Debtors to make payments to Lender, to endorse all items of
      payment which may come into its hands payable to Borrower, to take control
      of
      any cash or non-cash proceeds of Accounts and of any returned or repossessed
      goods; to compromise, extend or renew any Account or deal with it as it may
      deem
      advisable, and to make exchanges, substitutions or surrenders of Collateral,
      to
      notify the postal authorities, after an Event of Default, to deliver all mail,
      correspondence or parcels addressed to Borrower to Lender at such address as
      Lender may choose. (B) Borrower herewith appoints Lender or its designee as
      Attorney-in-Fact to endorse Borrower’s name on any checks, notes, acceptances,
      drafts or any other instrument or document requiring said endorsement and to
      sign Borrower’s name on any invoice or bills of lading relating to any Account,
      or drafts against its customers, or schedules or confirmatory assignment on
      Accounts, or notices of assignment, financing statements under the Uniform
      Commercial Code, and other public records, and in verification of Accounts
      and
      in notices to Account Debtors. (C) Lender shall have no obligation to preserve
      any rights against any Person obligated on any Account, chattel paper,
      instrument or other item of Collateral. Lender shall not be permitted to
      exercise the rights granted to it under the foregoing clauses (A) and (B) prior
      to an Event of Default.

     

    (m) Borrower
      will furnish Lender with at least ten (10) days’ prior written notice of any
      change in location of or addition to its chief executive office, the office
      where it keeps its records concerning its Accounts, its location of Inventory,
      Equipment and other assets, and other business locations.

     

    (n) Pay
      and
      discharge, and require its subsidiaries to pay and discharge, when due, all
      taxes, assessments or other governmental charges imposed on them or any of
      their
      respective properties, unless the same are currently being contested in good
      faith by appropriate proceedings and adequate reserves are maintained
      therefor.

     

    (o) Operate
      its properties, and cause those of its subsidiaries to be operated in compliance
      with all applicable orders, rules and regulations promulgated by the
      jurisdictions and agencies thereof where such properties are located and duly
      file or cause to be filed such reports and/or information returns as may be
      required or appropriate under applicable orders, regulations or
      law.

    
      
         

         

        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    (p) Permit
      the Lender’s representatives and/or agents full and complete access to any or
      all of the Borrower’s and its subsidiaries’ properties and financial records, to
      make extracts from and/or audit such records and to examine and discuss the
      Borrower’s properties, business, finances and affairs with the Borrower’s
      officers and outside accountants.

     

    (q) Obtain
      lien releases and lien waivers, in a statutory standard form, as and when
      Borrower pays contractors, materialmen, laborers providing labor, equipment,
      or
      materials to the Mortgaged Property and submit copies of the same to
      Lender.

     

    (r) Within
      fifteen (15) calendar days of the date hereof, Borrower shall provide Lender
      with an update of that certain Phase I report dated November 26, 2006 and
      prepared by Universal Engineering Sciences, Inc. and a corresponding reliance
      letter and professional liability insurance certificate (with limits of not
      less
      than $2,000,000) from Universal Engineering Sciences, Inc., each of which shall
      be in form and with substance satisfactory to Lender in its reasonable
      discretion. 

     

    (s) Within
      thirty (30) calendar days of the date hereof, Borrower shall provide Lender
      with
      full searches, in form and with content satisfactory to Lender in its reasonable
      discretion, on American Leisure Holdings, Inc. (including, without limitation,
      lien and judgment searches, tax and assessment searches, litigation, bankruptcy
      and UCC searches, municipal searches) performed in the State of Nevada and
      in
      each County and State where American Leisure Holdings, Inc. does business.
      Such
      searches shall be performed by a nationally recognized search company
      satisfactory to Lender in its reasonable discretion.

     

    9. Negative
      Covenants of Borrower.
      To
      induce Lender to make the Loan pursuant to this Agreement, each Borrower,
      jointly and severally, hereby covenants and agrees that so long as the Loan
      shall remain outstanding, Borrower shall not:

     

    (a) Except
      for Permitted Encumbrances as set forth in the Mortgage, at any time: (i)
      create, incur, assume or suffer to exist any mortgage, deed of trust, pledge,
      security interest, encumbrance, lien or charge of any nature upon or with
      respect to Borrower’s assets and properties or (ii) sign or file under the
      Uniform Commercial Code of any jurisdiction a financing statement which names
      Borrower as a debtor or (iii) sign any security agreement authorizing any
      secured party thereunder to file such financing statement. Borrower further
      covenants and agrees not to grant any similar negative pledge to any other
      lender.

     

    
      
         

         

        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    
      (b) Except
        as
        to the sale or disposition of assets which are obsolete or worn out and are
        no
        longer used or useful in the conduct of its business, convey, sell, lease,
        assign, transfer, hypothecate or otherwise dispose of any of its now or
        hereafter acquired property, business or assets.

    

     

    (c) Create,
      incur, suffer to exist, assume, guaranty, endorse, become a surety, or otherwise
      become liable for the debt or other obligations of any other Person whether
      directly or indirectly, or make or incur any advance, purchase commitment,
      other
      obligation or loan for the direct or indirect purpose of paying or discharging
      any such obligations.

     

    (d) Make
      any
      advance, loan, extension of credit or capital contribution to, or purchase
      any
      stock, bonds, notes, debentures or other securities of or any assets
      constituting a business unit of, or make any other investment income, any
      Person.

     

    (e) Enter
      into any merger or consolidation or liquidate or wind-up or dissolve itself
      (or
      suffer any liquidation or dissolution) or convey, sell, lease, assign, transfer
      or otherwise dispose (directly or indirectly) of all or substantially all of
      its
      property, business or assets or make any material change in its present method
      of conducting business or permit any corporate guarantor to do any of the
      foregoing.

     

    (f) Materially
      change, amend, alter or modify the bylaws/operating agreement or other governing
      documents of Borrower or permit any corporate guarantor to do any of the
      foregoing.

     

    (g) Enter
      into or permit any Guarantor to enter into any transaction, including, without
      limitation, the purchase, sale or exchange of property or the rendering of
      any
      service, with any officer, director, shareholder or partner of Borrower or
      any
      Guarantor or Affiliate of any of the foregoing.

     

    (h) Declare
      or pay any dividends on, distributions on or make any payment on account of,
      or
      set apart assets or a sinking fund for the purchase, redemption, defeasance,
      retirement or other acquisition of, any interest, shares or any class of stock
      or any warrant or option to purchase any such stock whether now or hereafter
      outstanding or make any other distribution in respect thereof, directly or
      indirectly whether in cash or property or obligations.

     

    (i) Create,
      incur, suffer to exist any indebtedness, except (i) indebtedness in respect
      of
      the Loan; (ii) indebtedness, if any, outstanding as of the date of this
      Agreement and shown on the financial statements previously delivered to Lender;
      and (iii) for new advances to the Borrower in connection with a loan in the
      combined amount of up to Twenty Five Million ($25,000,000) Dollars to Standford
      International Bank and Resorts Funding Group, LLC both of whom are current
      stockholders and investors of the Borrower; provided, however, that any such
      loan to Standford International Bank and Resorts Funding Group, LLC shall be
      subordinate to the Loan.

     

    
      
         

         

        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    (j) Transfer,
      sell, lease or otherwise convey (directly or indirectly) any interest or shares
      of capital stock or membership or ownership interest in any guarantor; provided,
      however, that upon reasonable notice to Lender, American Leisure Holdings,
      Inc.
      shall be permitted to transfer shares of capital stock to a public company
      to be
      listed on the Alternative Investment Market in London, England.

     

    (k) Purchase
      any Inventory or Equipment except in the ordinary course of business from
      persons customarily in the business of selling such Inventory or
      Equipment.

     

    (l) Without
      prior written consent of Lender, remove the Collateral from its present
      location, except for the removal of Inventory upon its sale.

     

    (m) Sell
      or
      transfer any Inventory to any Affiliate or subsidiary of Borrower except on
      arms
      length terms in the ordinary course of business.

     

    (n) Sell,
      lease or transfer any of its equipment (except for abandoned or obsolete
      equipment) or other assets without the prior written consent of Lender except
      for sales of inventory in the ordinary course of business to good faith
      purchasers for value.

     

    (o) Allow
      its
      existence of as a corporation/limited liability company to be other than in
      good
      standing and will not, without the prior written consent of Lender, dissolve
      or
      liquidate, or merge or consolidate with or acquire or affiliate with any other
      business entity or form any subsidiary.

     

    (p) Change
      its name without furnishing to Lender at least ten (10) days’ prior written
      notice thereof.

     

    (q) Utilize
      any trade name, and will not in the future utilize any trade name without
      furnishing to Lender at least ten (10) days prior written notice
      thereof.

     

    (r) Change
      the nature of its business.

     

    (s) Sell,
      assign, transfer or dispose of any of its accounts or notes receivable, with
      or
      without recourse, except to the Lender.

     

    (t) Except
      after notice to Lender and with Lender’s prior written consent, partition or
      subdivide the Mortgaged Property.

     

    10. Events
      of Default.
      The
      occurrence of any of the following shall constitute an Event of Default
      hereunder:

     

    (a) failure
      of any Borrower to make any payment of any installment of principal or interest
      when due under the Note;

     

    
      
         

         

        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    (b) failure
      of any Borrower to pay any other sum when due hereunder or under the Note or
      any
      other Loan Document;

     

    (c) any
      representation or warranty of any Borrower or any Guarantor made herein or
      in
      any other Loan Document or in any other writing given to Lender in connection
      with the Loan shall have been incorrect in any material respect as of the time
      when the same shall have been made or is nor accurate when a further
      disbursement is to be made to Borrower;

     

    (d) the
      occurrence of an Event of Default under the Mortgage or any other Loan Document,
      subject to any applicable notice and/or cure periods;

     

    (e) the
      sale,
      conveyance, assignment, transfer or other disposition or divestiture of
      Borrower’s title to any of the Collateral, or the mortgage or other conveyance
      of a security interest in, or other encumbrance on any of the Collateral or
      any
      interest therein, whether voluntary or involuntary, except as provided herein
      or
      in any of the Loan Documents;

     

    (f) any
      merger, consolidation, liquidation or dissolution, or the sale or transfer
      of
      all or substantially all of the assets, of any Borrower;

     

    (g) except
      as
      may be permitted herein or in any of the Loan Documents, the transfer (directly
      or indirectly) of any of the stock or other ownership interest of any Borrower
      or Guarantor;

     

    (h) any
      default in the performance or observance of any term, covenant or agreement
      to
      be performed by any Borrower or any Guarantor in this Loan Agreement or in
      any
      Loan Document;

     

    (i) the
      use
      of proceeds of the Loan for any purpose other than the purpose described in
      Paragraph 6(o);

     

    (j) any
      Loan
      Documents for any reason shall cease to be in full force and effect, the liens
      on the Collateral purported to be created thereby shall cease to be or are
      not
      valid and perfected liens having priority over all other liens except any
      encumbrances specifically permitted under such Loan Documents, or any Guarantor
      shall assert that it has no liability under the Guaranty to which it is a
      party;

     

    (k) one
      or
      more judgments or decrees shall be entered against any Borrower in excess of
      $25,000 or any Guarantor (not paid or fully covered by insurance) and all such
      judgments or decrees shall not have been vacated or discharged, stayed or bonded
      pending appeal within ninety (90) days from the entry thereof;

     

    (l) if
      any
      Borrower or any Guarantor becomes insolvent;

     

    
      
         

         

        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    (m) if
      any
      Borrower or any Guarantor generally does not pay its debts as they become
      due;

     

    (n) if
      any
      Borrower or any Guarantor makes an assignment for the benefit of
      creditors;

     

    (o) if
      any
      Borrower or any Guarantor calls or causes to be called a meeting of creditors
      for the composition of debts;

     

    (p) if
      there
      shall be filed by or with the consent or authorization of any Borrower or any
      Guarantor a petition in bankruptcy for liquidation or for reorganization, or
      a
      custodian, receiver or agent is appointed or authorized to take charge of its
      properties, or any Borrower or any Guarantor authorizes any such
      action;

     

    (q) if
      there
      shall be filed against any Borrower or any Guarantor a petition in bankruptcy,
      for liquidation, or for reorganization, or a custodian, receiver, or agent
      is
      appointed or authorized to take charge of its properties and any Borrower or
      any
      Guarantor, as the case may be, has not consented to or authorized such action
      and such action is not dismissed within sixty (60) days; 

     

    (r) if
      any
      license, permit, registration, vendor account or other approval required for
      the
      normal operation of any Borrower’s business or any of the Collateral shall be
      suspended or shall cease to be in full force and effect; and

     

    (s) an
      Event
      of Default (beyond any applicable grace periods) under that certain Loan and
      Security Agreement dated as of April 20, 2007, between Costa
      Blanca II Real Estate, LLC, a Florida limited liability company, Costa Blanca
      III Real Estate, LLC, a Florida limited liability company, TDS Town Homes (Phase
      1), LLC, a Florida limited liability company, TDS Town Homes (Phase 2), LLC,
      a
      Florida limited liability company and Lender, as Agent, as amended by that
      certain First Amended to Loan and Security Agreement and Other Loan Documents
      of
      even date herewith, and/or any other document or agreement given or delivered
      to
      Lender in connection therewith, including without limitation that certain
      Amended and Restated Promissory Note in the original principal amount of Twenty
      Four Million Nine Hundred Thousand ($24,900,000) Dollars dated as of the date
      hereof.

     

    Notwithstanding
      anything contained herein to the contrary, (i) Borrower shall have a ten (10)
      calendar day grace period with respect to any payments referenced in subsection
      (b) of this Section 10, and (ii) Borrower shall be provided with written notice
      from Lender and a thirty (30) calendar day grace period to diligently cure
      same
      with respect to the occurrence of any event described in subsections (c), (h),
      (l), (m), (o) and (r) of Section 10; provided, however, that the giving of
      such
      notice and/or grace period shall not have a material adverse effect on the
      Lender, the Collateral, the Mortgaged Property and/or Lender’s lien on the
      Mortgaged Property, as determined by Lender in its reasonable discretion.

    
      
         

         

        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

     

    11. Remedies.

     

    (a) Upon
      the
      occurrence of an Event of Default (subject to any applicable cure periods)
      and
      at any time thereafter during the continuance of such Event of Default, in
      addition to any remedies available to Lender under applicable law, Lender may
      take one or more of the following remedial steps in any order of
      priority:

     

    (i) Declare
      immediately due and payable the outstanding principal balance of the Note,
      together with all accrued and unpaid interest, fees and other sums or expenses
      payable thereunder and hereunder and accordingly accelerate payment thereof
      without presentment, demand, notice of intention to accelerate, notice of
      acceleration or notice of any other kind, all of which are expressly
      waived;

     

    (ii) Take
      any
      action at law or in equity against any Borrower or any Guarantor pursuant to
      the
      Guaranty (a) to collect the payments then due and thereafter to become due
      under
      the Loan Documents, or (b) to enforce performance and observance of any
      obligation, agreement or covenant of Borrower or such other parties under the
      Loan Documents;

     

    (iii) Exercise
      any and all rights and remedies provided for in the other Loan Documents as
      they
      relate to any Borrower or any Guarantor pursuant to the Guaranty.

     

    (iv) Proceed
      with or without judicial process to take possession of all or any part of the
      Collateral provided for herein not already in the possession of Lender and
      Borrower agrees that upon receipt of notice of Lender’s intention to take
      possession of all or any part of said Collateral, Borrower will do everything
      reasonably necessary to assemble the Collateral and make same available to
      Lender at a place to be designated by Lender. Borrower hereby waives any and
      all
      rights it may have, by statute, constitution or otherwise to notice from Lender,
      for Lender to obtain possession, by Court proceedings or otherwise, of the
      Collateral provided for in this or in any other agreement with
      Lender;

     

    
      
         

         

        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    
      (v) So
        long
        as Lender acts in a commercially reasonable manner, assign, transfer and
        deliver
        at any time or from time to time the whole or any portion of the Collateral
        or
        any rights or interest therein in accordance with the Uniform Commercial
        Code,
        and without limiting the scope of Lender’s rights thereunder, Lender may sell
        the Collateral at public or private sale, or in any other manner, at such
        price
        or prices as Lender may deem best, and either for cash or credit, or for
        future
        delivery, at the option of Lender, in bulk or in parcels and with or without
        having the Collateral at the sale or other disposition. Lender shall have
        the
        right to be the purchaser at any public sale.
        Lender shall have the right to conduct such sales on Borrower’s premises or
        elsewhere and shall have the right to use Borrower’s premises without charge for
        such sales for such time or times as Lender may see fit. Lender is hereby
        granted license or other right to use, without charge, Borrower’s labels,
        patents, copyrights, rights of use of any name, trade secrets, trade names,
        trademarks and advertising matter, or any property of a similar nature, as
        it
        pertains to the collateral, in advertising for sale and selling any collateral
        and Borrower’s rights under all licenses and franchise agreements shall inure to
        Lender’s benefit. Borrower agrees that a reasonable means of disposition of
        Accounts shall be for Lender to hold and liquidate any and all Accounts.
        In the
        event of a sale of the Collateral, or any other disposition thereof, Lender
        shall apply all proceeds first to all costs and expenses of disposition,
        including reasonable attorneys’ fees, and then to the Obligations of Borrower to
        Lender;

    

     

    (vi) Elect
      to
      retain the Collateral or any part thereof in satisfaction of all Obligations
      due
      from Borrower to Lender upon notice of such proposed election to Borrower and
      any other party as may be required by the Uniform Commercial Code;
      and

     

    (vii) Lender
      shall have the right immediately, and without notice or other action to set-off
      against any of any Borrower’s Obligations to Lender any sum owed by Lender in
      any capacity to any Borrower whether due or not, and Lender shall be deemed
      to
      have exercised such right of set-off and to have made a charge against any
      such
      sum immediately upon the occurrence of a Default, even though the actual book
      entries may be made at some time subsequent thereto.

     

    (b) No
      remedy
      conferred in this Agreement or the other Loan Documents is intended to be
      exclusive of any other remedy, and each and every such remedy shall be
      cumulative and shall be in addition to every other remedy conferred herein
      or
      now or hereafter existing at law or equity or by statute or
      otherwise.

     

    12. Payment
      of Expenses.

     

    (a) Borrower
      agrees that it shall pay, within ten (10) days after demand, all out-of-pocket
      expenses incurred by Lender in connection with this transaction including,
      without limitation, fees and expenses for any title searches required hereunder,
      recording and filing fees, and reasonable attorneys’ fees incurred by Lender in
      connection with the Loan (including any amendments and waivers), the preparation
      of the Loan Documents, the administration of the Loan, inspection of the
      Mortgaged Property during the course of the Project and the enforcement Lender’s
      rights and remedies under the Loan Documents.

     

     

     

    
      
         

         

        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

     

    (b) If
      Borrower should fail to perform or observe, or to cause to be performed or
      observed, any covenant or obligation under this Agreement or any of the other
      Loan Documents, then the Lender, may (but shall be under no obligation to)
      take
      such steps as are necessary to remedy any such nonperformance or nonobservance
      and provide
      for payment thereof, if any (which shall include, without limitation, steps
      necessary to cure any defaults of Borrower under any lease).

     

    (c) All
      amounts expended or advanced by the Lender pursuant to this Paragraph 12 shall
      become part of the outstanding principal balance of the Loan and the Note,
      shall
      be secured by, among other things, the Mortgage, shall become due and payable
      by
      the Borrower upon demand by Lender, and shall bear interest at the Default
      Rate
      (such interest to be calculated from the date of such advance by Lender to
      the
      date of repayment thereof by Borrower).

     

    13. Lender’s
      Right to Assign.
      Lender
      shall have the right to sell, assign, participate, transfer or dispose of all
      or
      any part of its interest in the Loan without the consent or approval of Borrower
      or Guarantor.

     

    14. Default
      Interest Rate.
      All sums
      advanced and all expenses incurred by Lender pursuant to any provision of this
      Agreement or of the other Loan Documents which are not paid when due shall
      bear
      interest at the Default Rate set forth in the Note from the date such sum was
      due until such sum is paid in full and shall be secured by the
      Mortgage.

     

    15. Usury
      Savings.
      Notwithstanding anything to the contrary contained herein, under no
      circumstances shall the aggregate amount paid or agreed to be paid hereunder
      or
      under the Note exceed the highest lawful rate permitted under applicable usury
      law (the “Maximum Rate”) and the payment obligations of Borrower under this
      Agreement and the Note are hereby limited accordingly. If under any
      circumstances, whether by reason of advancement or acceleration of the maturity
      of the unpaid principal balance hereof or otherwise, the aggregate amounts
      paid
      hereunder or under the Note shall include amounts which by law are deemed
      interest and which would exceed the Maximum Rate, Borrower stipulates that
      payment and collection of such excess amounts shall have been and will be deemed
      to have been the result of a mistake on the part of both Borrower and Lender
      or
      the holder of the Note, and the party receiving such excess payments shall
      promptly credit such excess (only to the extent such payments are in excess
      of
      the Maximum Rate) against the unpaid principal balance hereof and any portion
      of
      such excess payments not capable of being so credited shall be refunded to
      Borrower.

     

    16. Notices.
      All
      notices, consents, approvals and requests required or permitted hereunder or
      under any other Loan Document shall be given in writing and shall be effective
      for all purposes if hand delivered or sent by (a) certified or registered United
      States mail, postage prepaid, return receipt requested or (b) expedited prepaid
      delivery service, either commercial or United States Postal Service, with proof
      of attempted delivery, and by telecopier (with answer back acknowledged),
      addressed as follows (or at such other address and a person as shall be
      designated from time to time by any party hereto, as the case may be, in a
      written notice to the other parties hereto in the manner provided for in this
      Section):

     

    
      
         

         

        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    If
      to
      Lender:    

                                                      
      Kennedy
      Funding, Inc.

    Two
      University Plaza, Suite 402

    Hackensack,
      New Jersey 07601

    Attention:
      Jeffrey Wolfer

    Facsimile
      No. (201) 342-8373

    

    With
      a
      copy to: 

     

    Cole,
      Schotz, Meisel, Forman & Leonard P.A.

    25
      Main
      Street

    Hackensack,
      New Jersey 07602-0800

    Attention:
      Michael R. Leighton, Esq.

    Facsimile
      No.: (201) 489-1536

    

     

    If
      to
      Borrower: 

     

    Costa
      Blanca I Real Estate, LLC     

    2460
      Sand
      Lake Road     

    Orlando,
      Florida 32809

     

    With
      a
      copy to: 

     

    Jason
      G.
      Williams, Esq. 

    American
      Leisure Holdings, Inc. 

    2460
      Sand
      Lake Road 

    Orlando,
      Florida 32809

    Facsimile
      No.:  (407) 251-8455

    

    With
      a
      copy to: 

     

    Philip
      L.
      Logas, Esq.

    Philip
      L.
      Logas, P.A.

    55
      E.
      Pine Street

    Orlando,
      Florida 32801

    Facsimile
      No.: (407) 849-1570

    

    A
      notice
      shall be deemed to have been given: in the case of hand delivery, at the time
      of
      delivery; in the case of registered or certified mail, when delivered or the
      first attempted delivery on a business day; or in the case of expedited prepaid
      delivery and telecopy, upon the first attempted delivery on a business
      day.

     

    17. No
      Waiver.
      No
      course of dealing between Borrower and Lender or any failure or delay on the
      part of Lender in exercising any rights or remedies hereunder shall operate
      as a
      waiver of any rights or remedies of Lender and no single or partial exercise
      of
      any rights or remedies hereunder shall operate as a waiver or preclude the
      exercise of any other rights or remedies hereunder. In the event any agreement
      contained in this Agreement or the other Loan Documents should be breached
      and
      thereafter waived by Lender, such waiver shall be limited to the particular
      breach so waived and shall not be deemed to waive any other breach hereunder
      or
      thereunder.

     

    
      
         

         

        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    18. Failure
      to Exercise Rights.
      Nothing
      herein contained shall impose upon Lender any obligation to enforce any terms,
      covenants or conditions contained in this Agreement and the other Loan
      Documents. Failure of Lender, in any one or more instances, to insist upon
      strict performance of any terms, covenants or conditions of this Agreement
      and
      the other Loan Documents, shall not be considered or taken as a waiver or
      relinquishment by Lender of its right to insist upon and to enforce in the
      future, by injunction or other appropriate legal or equitable remedy, strict
      compliance with all the terms, covenants and conditions of this Agreement and
      the other Loan Documents. The consent of Lender to any act or omission by
      Borrower shall not be construed to be a consent to any other or subsequent
      act
      or omission or a waiver of the requirement for Lender’s consent to be obtained
      in any future or other instance.

     

    19. Prohibition
      Against Exercise of Rights Applicable Only to Individual
      Lenders.
      Borrower
      is hereby prohibited from exercising against Lender or Agent any right or remedy
      which it might otherwise be entitled to exercise against any one or more (but
      less than all) of the individual parties constituting Lender, including, without
      limitation, any right of set-off or any defense.

     

    20. Miscellaneous.

     

    (a) Choice
      of Law.
      THE
      LOAN WAS NEGOTIATED IN THE STATE OF NEW JERSEY, THIS AGREEMENT WAS NEGOTIATED
      IN
      THE STATE OF NEW JERSEY, WAS EXECUTED AND DELIVERED BY BORROWER AND ACCEPTED
      BY
      LENDER IN THE STATE OF NEW JERSEY, AND THE PROCEEDS OF THE NOTE WERE DISBURSED
      FROM THE STATE OF NEW JERSEY, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL
      RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY,
      AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE
      FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. THIS AGREEMENT
      AND
      THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
      ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW JERSEY APPLICABLE TO CONTRACTS
      MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES
      OF
      AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
      PRIORITY, ENFORCEMENT AND FORECLOSURE OF THE LIENS AND SECURITY INTERESTS
      CREATED IN THE REAL PROPERTY COLLATERAL UNDER THE LOAN DOCUMENTS SHALL BE
      GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE JURISDICTION IN WHICH
      THE
      REAL PROPERTY COLLATERAL IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST
      EXTENT PERMITTED BY THE LAW OF SUCH JURISDICTION, THE LAW OF THE STATE OF NEW
      JERSEY SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS,
      AND
      THE DEBT OR OBLIGATIONS ARISING HEREUNDER.

    
      
         

         

        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

     

     

    (b) Jurisdiction. AT
      LENDER’S ELECTION, TO BE ENTERED IN ITS SOLE DISCRETION, ANY LEGAL SUIT, ACTION
      OR PROCEEDING AGAINST BORROWER OR LENDER ARISING OUT OF OR RELATING TO THIS
      NOTE
      OR THE OTHER LOAN DOCUMENTS SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT
      IN
      NEW JERSEY, AND BORROWER WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
      HAVE
      TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND HEREBY
      IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION
      OR
      PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT THE
      CORPORATION TRUST COMPANY, LOCATED AT 820 BEAR TAVERN ROAD, WEST TRENTON, NEW
      JERSEY 08628,
      AS ITS AUTHORIZED AGENT TO RECEIVE AND FORWARD ON ITS BEHALF SERVICE OF ANY
      AND
      ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY
      FEDERAL OR STATE COURT IN NEW JERSEY, AND AGREES THAT SERVICE OF PROCESS UPON
      SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR
      DELIVERED TO BORROWER IN THE MANNER PROVIDED IN THE MORTGAGE, SHALL BE DEEMED
      IN
      EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
      ACTION OR PROCEEDING IN THE STATE OF NEW JERSEY. BORROWER (1) SHALL GIVE PROMPT
      NOTICE TO THE LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,
      (2) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED
      AGENT WITH AN OFFICE IN NEW JERSEY (WHICH OFFICE SHALL BE DESIGNATED AS THE
      ADDRESS FOR SERVICE OF PROCESS), AND (3) SHALL PROMPTLY DESIGNATE SUCH A
      SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW JERSEY OR
      IS
      DISSOLVED WITHOUT LEAVING A SUCCESSOR.

     

    (c) Borrower
      and/or Guarantor (as applicable) agrees if Borrower and/or Guarantor is required
      to make any deduction or withholding of foreign taxes (or taxes imposed because
      Borrower and/or Guarantor is a foreign person or entity) from any payment due
      to
      Lender herein, then the amount payable to Lender upon which such deduction
      or
      withholding is based, shall be increased to the extent necessary to ensure
      that,
      after all deductions or withholdings, Lender is paid a net amount equal to
      the
      amount Lender would have been paid in the absence of such deduction or
      withholding. At Lender's request, Borrower and/or Guarantor shall provide Lender
      with documentation adequate to demonstrate payment of such deduction or
      withholding by Borrower and/or Guarantor under this provision.

    
      
         

         

        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

     

    (d) The
      parties hereto agree that, notwithstanding anything contained herein to the
      contrary, there shall be required the consent of the Agent, Borrower and Lenders
      holding Fifty Percent (50%) of the outstanding balance or commitment to lend
      under the Loan to do any of the following:

     

    (1) Amend
      of
      modify the terms of the Note, this Agreement, the Mortgage and the other Loan
      Documents or execute any waiver of any material event of default under this
      Agreement or the other Loan Documents.

     

    (2) Consent
      to or permit any substitution, withdrawal or release of any collateral, any
      Guarantor or any other security securing the payment of the Loan except in
      accordance with the terms of the Note, this Agreement and the Loan
      Documents.

     

    (e) Any
      condition of this Agreement or any other Loan Document which requires the
      submission of evidence of the existence or non-existence of a specified fact
      or
      facts implies as a condition the existence or non-existence, as the case may
      be,
      of such fact or facts, and Lender shall, at all times, be free independently
      to
      establish to its reasonable satisfaction and in its absolute discretion such
      existence or non-existence.

     

    (f) Borrower
      and each Guarantor, as the case may be, shall execute and deliver, or cause
      to
      be executed and delivered to Lender, all other instruments, certificates and
      agreements as Lender or Lender’s counsel may reasonably require, including, but
      not limited to, estoppel certificates stating that the Loan is in full force
      and
      effect and that there are no defenses or offsets thereto, to effect, confirm
      or
      assure the rights, remedies and liens intended to be granted or conveyed to
      Lender under this Agreement or any other Loan Document.

     

    (g) A
      determination that any portion of this Agreement or any of the Loan Documents
      is
      unenforceable or invalid shall not affect the enforceability or validity of
      any
      other provision, and any determination that the application of any provisions
      of
      this Agreement or any Loan Document to any person or circumstance is illegal
      or
      unenforceable shall not affect the enforceability or validity of such provisions
      it may apply to other persons or circumstances.

     

    (h) Without
      the consent of, or notice to Borrower, Lender may add one or more additional
      co-agents to this Loan.

     

    
      
         

         

        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    21. Successors
      and Assigns.

     

    (a) Borrower
      may not assign its rights under this Agreement without the prior written consent
      of Lender. Any such attempted assignment in violation of this Agreement shall
      be
      void and of no effect.

     

    (b) All
      covenants and agreements in this Agreement shall bind and inure to the benefit
      of the respective permitted successors and assigns of the parties hereto and
      any
      holder or holders of the Note or any portion thereof.

     

    22. Waiver
      of Jury Trial.
      BORROWER AND LENDER AGREE THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM
      OR
      COUNTERCLAIM, BROUGHT BY BORROWER OR LENDER ON OR WITH RESPECT TO THIS AGREEMENT
      OR ANY OTHER LOAN DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO
      OR
      THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY. BORROWER AND LENDER
      EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL
      BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER, BORROWER WAIVES ANY
      RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING,
      ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN,
      OR
      IN ADDITION TO, ACTUAL DAMAGES. BORROWER ACKNOWLEDGES AND AGREES THAT THIS
      SECTION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT LENDER
      WOULD NOT EXTEND CREDIT TO BORROWER (AS APPLICABLE) IF THE WAIVERS SET FORTH
      IN
      THIS SECTION WERE NOT A PART OF THIS AGREEMENT.

     

    23. Releases
      of Collateral.

     

    (a) The
      Lender may release, regardless of consideration, the obligation of any Person
      or
      Persons liable for payment of any of the Obligations secured hereby, or may
      release any part of the Mortgaged Property or any other collateral now or
      hereafter given to secure the payment of the Obligations or any part thereof,
      without impairing, reducing or affecting the obligations of the Borrower or
      Guarantors under the Loan Documents.

     

     

     

    
      
         

         

        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

     

    (b) Within
      thirty (30) days of Borrower’s request, provided: (i) Borrower is not in default
      hereunder or under any other Loan Document(s); and (ii) no event has occurred
      which with the passage of time and/or the giving of notice would constitute
      a
      default hereunder or under any other Loan Document(s), Lender shall release
      portions of the Mortgaged Property from the lien created by the Mortgage
      (“Released Property”) subject to: (i) Borrower’s payment to Lender of the
      Release Price (as hereinafter defined) for the Released Property, (ii) in
      Lender’s reasonable discretion, the loan-to-value
      ratio based on the “as improved” disposition value of the Mortgaged Property
      shall not be less than sixty percent (60%) as determined in accordance with
      Section 2(i) of this Agreement, (iii) Borrower’s compliance with the terms and
      conditions set forth in Subsection 2.20(d)(ii), (iv), (v), (vi), (ix) and (x)
      of
      the Mortgage, and (iv) with respect to the release of each townhouse or
      condominium unit to be released from the Mortgaged Property (each a “Sale
      Unit”), (1) evidence that such Sale Unit shall be transferred or sold to an
      Affiliate Purchaser (as defined below) in connection with Borrower obtaining
      construction financing, (2) an assignment of the proceeds of the sale of such
      Sale Unit (in an amount not less than (a) $55,000 for each Sale Unit if such
      Sale Unit is transferred to an Affiliate in connection with Borrower obtaining
      construction financing, or (b) the Release Price described below if such Sale
      Unit is not transferred to an Affiliate Purchaser in connection with Borrower
      obtaining construction financing) after the payment of the first mortgage on
      such Sale Unit, and (3) a pledge of the ownership interest in the Affiliate
      Purchaser, subject to any assignment to the first mortgagee, each in form and
      with substance satisfactory to Lender in its reasonable discretion. The Release
      Price for the Released Property shall be $55,000 for each Sale Unit; when such
      Sale Unit is transferred to an Affiliate of Borrower (“Affiliate Purchaser”) in
      connection with Borrower obtaining construction financing. In the event a Sale
      Unit is not transferred to an Affiliate Purchaser in connection with Borrower
      obtaining construction financing, the Release Price for such Sale Unit shall
      be
equal
      to
      the greater of: (i) eighty (80%) percent of the net sale price of the Sale
      Unit (subject to reasonable and customary closing adjustments and sales
      commissions (to be approved by Lender in Lender’s commercially reasonable
      discretion)); (ii) seventy-five (75%) percent of the gross sale price of the
      Sale Unit or (iii) the minimum release amount agreed to by Lender prior to
      closing. 

     

    24. Publicity.

     

    (a) With
      the
      prior written consent of Borrower, which consent shall not be unreasonably
      withheld, conditioned or delayed, Lender shall have the right to issue news
      releases, and publicize and/or advertise the fact that it has provided financing
      with respect to the project and/or the Mortgaged Property and in connection
      therewith Lender shall have the right to photograph and use pictures of the
      Mortgaged Property in any such advertisements, brochures, print, media and
      other
      copy. Notwithstanding the foregoing, Borrower shall use reasonable efforts
      to
      obtain the consent of its United Kingdom counsel (the “Legal Consent”) to the
      Lender’s publication of the form of advertisement previously approved by
      Borrower and attached hereto as Exhibit A (“Advertisement”) no later than July
      6, 2007. The Advertisement shall describe a $29,350,000 loan transaction with
      Lender. In the event Borrower cannot obtain the Legal Consent by July 6, 2007,
      the Borrower shall continue to work diligently to obtain such Legal Consent
      and
      Lender shall have the right, without the prior written consent of Borrower,
      to
      publish the Advertisement upon the earlier of (i) the expiration of the “quiet
      period” in connection with the public offering of an affiliate of Borrower, (ii)
      the termination or discontinuance of such public offering, and (iii) the date
      upon which Borrower obtains the Legal Consent. 

     

    
      
         

         

        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

     

     

    (b) With
      the
      prior written consent of Borrower, which consent shall not be unreasonably
      withheld, conditioned or delayed, Borrower, at Lender’s cost and expense, shall
      erect a suitable sign or signs at the Mortgaged Property in a location which
      is
      clearly visible to the public and otherwise reasonably acceptable to Lender.
      The
      Sign shall be prepared by Lender and may contain, among other things, that
      financing for the Mortgaged Property is being provided by Lender and otherwise
      publicize Lender’s role in the financing. Lender shall coordinate the placement
      and maintenance of such signs on the Mortgaged Property with
      Borrower.

     

    25. Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      effective only upon delivery and thereafter shall be deemed an original, and
      all
      of which shall be taken to be one and the same instrument, for the same effect
      as if all parties hereto had signed the same signature page. Any signature
      page
      of this Agreement may be detached from any counterpart of this Agreement without
      impairing the legal effect of any signatures thereon and may be attached to
      another counterpart of this Agreement identical in form hereto but having
      attached to it one or more additional signature pages.

     

    26. Joint
      and Several Liability.
      Notwithstanding anything contained herein to the contrary, Borrower shall be
      jointly and severally liable for a breach of any and all covenants,
      representations, warranties, terms, obligations and liabilities under this
      Agreement.

     

    27. Conflict.
      In the
      event of any conflict between the terms set forth in this Agreement and the
      terms set forth in Article 7 of that certain Guaranty of even date herewith
      executed by Malcolm J. Wright, American Leisure Holdings, Inc. and TDS
      Amenities, Inc. in favor of Lender (hereinafter referred to as the “Guaranty”)
      the terms set forth in the Guaranty shall supersede and prevail over any
      conflicting terms set forth in this Agreement; provided, however, that nothing
      contained in the Guaranty shall expand any notice or grace period set forth
      in
      this Agreement. 

     

     

    
      
         

         

        
        

      

      
        -37-

        
          

        

      

      
        
        

      

    

    
       

      28. Cross
        Collateralization.
        Borrower
        understands and agrees that the Loan is and will be cross-collateralized
        with
        that certain loan dated
        as
        of April 20, 2007 in
        the
        amount of Twenty
        Four Million Nine Hundred Thousand ($24,900,000) Dollars by and between Costa
        Blanca II Real Estate, LLC, a Florida limited liability company, Costa Blanca
        III Real Estate, LLC, a Florida limited liability company, TDS Town Homes
        (Phase
        1), LLC, a Florida limited liability company, TDS Town Homes (Phase 2), LLC,
        a
        Florida limited liability company (the “Costa
        II Borrowers”)
        and
        Lender, as Agent (the “Costa
        II Loan”).
        It is
        understood and agreed that a default (beyond any applicable grace periods)
        under
        the terms and conditions of (i) that certain Loan and Security Agreement
        dated
        as of April 20, 2007, between Costa
        Blanca II Real Estate, LLC, Costa Blanca III Real
        Estate, LLC, TDS Town Homes (Phase 1), LLC, TDS Town Homes (Phase 2), LLC
        and
        Lender, as Agent, as amended by that certain First Amendment to Loan and
        Security Agreement and Other Loan Documents of even date herewith (“Costa
        II Loan Agreement”),
        and/or (ii) any other document or agreement given or delivered to Lender
        in
        connection therewith, including without limitation that certain (a) Amended
        and
        Restated Promissory Note in the original principal amount of Twenty Four
        Million
        Nine Hundred Thousand ($24,900,000) Dollars of even date herewith (“Costa
        II Note”),
        and
        (b) and that certain Mortgage and Security Agreement filed in the County
        of
        Polk, State of Florida, as amended by that certain First Amendment to Mortgage
        and Security Agreement of even date herewith, which was given as security
        for
        the repayment of said Promissory Note (the “Costa
        II Loan Documents”)
        will
        also constitute a default (beyond any applicable grace periods) under the
        terms
        and conditions of this Loan and will entitle Lender to all rights and remedies
        available to Lender under the Costa II Loan Documents. It is further understood
        and agreed that in the event Borrower defaults upon the terms and conditions
        of
        the Loan or any of the Loan Documents executed or delivered in connection
        with
        the Loan, Lender shall have the right to declare the Costa II Loan in default
        and accelerate same and avail itself of any rights and remedies thereunder.
        Borrower shall execute any and all documents necessary to effectuate such
        cross-collateralization.

    

     

    

     

    [Remainder
      of this page intentionally left blank.]

     

    

     

    

     

    
      
        
           

           

        

        
        

      

      
        -38-

        
          

        

      

      
        
        

        
          

        

      

    

    IN
      WITNESS WHEREOF,
      the
      undersigned have executed this Loan and Security Agreement as of the day and
      year first set forth above.

     

    
      	
              WITNESS:

               

               

               

               

               

              _________________________________

              Print
                Name:

            	
              LENDER:

               

              KENNEDY
                FUNDING, INC.,
                as Agent

               

               

               

              By:_________________________________

              Name:

              Title:

               

            
	
              WITNESS:

               

               

               

               

               

               

               

               

               

               

               

              Name:/s/
                Jason
                Williams                         
                

              Jason
                Williams

            	
              BORROWER:

               

              COSTA
                BLANCA I REAL ESTATE, LLC,
                a
                Florida limited liability company

               

              By:
                Tierra del Sol Resort (Phase 1), Ltd., a Florida limited partnership,
                its
                manager

               

              By:
                TDS Management, LLC, a Florida limited liability company, its general
                partner

               

               

               

               

               

              By:/s/
                Malcolm J.
                Wright                   
                

              Name:
                Malcolm J. Wright

              Title:
                Manager

               

            

    

    
      
         

         

        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

    STATE
      OF
      NEW JERSEY )

     
)
      ss.:

    COUNTY
      OF
      BERGEN     )

     

    I
      certify
      that on __________ _____, 2007, __________ personally came before me and this
      person acknowledged under oath, to my satisfaction, that he:

     

    (a) executed
      the attached Loan and Security Agreement; and

     

    (b) was
      authorized to and did execute the attached Loan and Security Agreement on behalf
      of and as _______________ of Kennedy Funding, Inc., the entity named in this
      instrument, by virtue of authority granted by its bylaws and board of
      directors.

     

     

    _____________________________________

    NOTARY
      PUBLIC

    

    

    STATE
      OF
      FLORIDA     )

       
       ) ss.:

    
      
        COUNTY
          OF ORANGE )

         

      

    

     

    I
      certify
      that on June 20th, 2007, Malcolm J. Wright came before me in person and
      stated to my satisfaction that he/she:

     

    (a) made
      the
      attached instrument; and

     

    (b) was
      authorized to and did execute this instrument on behalf of and as Manager of
      TDS
      MANAGEMENT, LLC, a Florida limited liability company, the General Partner of
      TIERRA DEL SOL RESORT (PHASE 1), LTD., a Florida limited partnership, the
      Manager of COSTA BLANCA I REAL ESTATE, LLC, a Florida limited liability company
      (the “Company”), the entity named in this instrument, as the free act and deed
      of the Company, by virtue of the authority granted by its operating agreement
      and its members.

     

     

                                                                                                                                                        /s/
      J.K. Hudson

    NOTARY
      PUBLIC

    #DD459074

    

    

    

    

    

    

    
      
        
           

           

        

        
        

      

      
        -40-

        
          

        

      

      
        
        

        
          

        

      

    

    SCHEDULE
      A

     

    DESCRIPTION
      OF THE COLLATERAL

     

    

    
      
        
                

           

        

        
        

      

      
          
          A-1

        
          

        

      

      
        
        

        
          

        

      

    

    SCHEDULE
      B

     

    PRINCIPAL
      LOAN DOCUMENTS

     

    1. Loan
      Commitment dated June 5, 2007, as amended;

     

    2. Loan
      and
      Security Agreement dated as of the date hereof;

     

    3. Promissory
      Note dated as of the date hereof;

     

    4. Mortgage
      and Security Agreement dated as of the date hereof;

     

    5. Document
      Re-Execution Agreement dated as of the date hereof;

     

    6. Environmental
      Indemnity Agreement dated as of the date hereof;

     

    7. Assignment
      of Leases and Rents dated as of the date hereof;

     

    8. Assignment
      of Licenses, Contracts, Plans, Specifications, Surveys, Drawings and Reports
      dated as of the date hereof;

     

    9. Guaranty
      dated as of the date hereof;

     

    10. Loan
      Closing Statement dated as of the date hereof;

     

    11. UCC-1
      Financing Statements.

     

    
      
        
           

           

        

        
        

      

      
        B
          -1

        
          

        

      

      
        
        

        
          

        

      

    

    SCHEDULE
      C

     

    CRITERIA
      FOR FUNDING OF HOLDBACK

     

    This
      Schedule
      C
      to the
      Loan and Security Agreement (the “Agreement”) dated June 26, 2007 between COSTA
      BLANCA I REAL ESTATE, LLC, a Florida limited liability company, having an
      address at 2460 Sand Lake Road, Orlando, Florida 32809, (“Borrower”) and KENNEDY
      FUNDING, INC. (“Agent”), as agent for the lenders identified therein (Agent and
      such lenders are hereinafter collectively referred to as “Lender”) is hereby
      incorporated as a part of the Agreement with the same effect as if set forth
      in
      the body thereof. Capitalized terms not otherwise defined in this Schedule
      C
      shall have those meanings assigned to them in the Agreement. 

     

    In
      addition to any other terms, conditions and requirements under the Agreement
      with respect to the Holdback or any advance (each, an “Advance”) of the
      Holdback, Lender’s obligation to make any Advance shall be subject to the
      determination by Lender, in its reasonable discretion, that all of the following
      conditions are satisfied at the time of the disbursement, each in form, manner
      and substance satisfactory to Lender and its counsel:

     

    
      	
              1.

            	
              Sources
                and Uses.
                Each Advance shall be used for construction by Borrower of improvements
                with respect to the Project and for such purposes set forth in Paragraph
                2
                of the Agreement. Advances shall only be made by Lender upon satisfactory
                review and confirmation by Agent that the construction of the Project
                is
                proceeding and is being constructed according to the terms and conditions
                of any construction contracts or agreements to be executed by Borrower
                for
                the construction on the Project, each of which are subject to the
                approval
                of Agent, including without limitation, that certain Weller Pool
                contract.

            

    

     

    
      	
              2.

            	
              Borrower’s
                Draw Requests.
                Borrower may request an advance of the Holdback by delivering to
                Agent a
                draw request in substantially the form attached to this Schedule
                C (“Draw
                Request”) or as otherwise approved by Agent in its sole discretion. Draw
                Requests shall not be submitted more frequently than once in any
                one
                calendar month. Each Draw Request shall contain the sources and uses
                for
                such requested advance, reference the complete budget, the amounts
                of any
                previous draws, the percentage of work then complete, the amount
                requested
                for the then current draw request, and the balance remaining, all
                on a
                line by line basis. 

            

    

     

    
      	
              3.

            	
              Plans
                and Specifications and Contracts.
                Each Advance shall only be used to pay expenses incurred in connection
                with the Project in accordance with the plans and specifications
                approved
                by Lender (as amended from time to time with Lender’s approval, the “Plans
                and Specifications”). Borrower shall submit to Agent copies of all
                contracts with respect to the Project entered into with third party
                contractors for materials provided or work performed on the Project
                (“Third Party Contractors”) and other hard construction costs related to
                the Project in accordance with the Plans and Specifications. Each
                contract
                shall be in form and substance and containing terms reasonably acceptable
                to Agent prior to Borrower submitting a Draw Request for monies due
                under
                such contracts.

            

    

     

    
      
         

         

        
        

      

      
        C-
          1

        
          

        

      

      
        
        

      

    

     

     

    
      	
              4.

            	
              Lien
                Waivers and Verification of Payment.
                It
                shall be Borrower’s responsibility to obtain lien releases, in standard
                statutory form, as and when Borrower pays Third-Party Contractors
                and any
                other contractors, materialmen and laborers providing labor, equipment,
                or
                materials to the job. If required by Agent as a condition to any
                Draw
                Request, Borrower shall provide reasonable written verification (such
                as
                copies of cleared or pending checks) that funds previously drawn
                have been
                used for the purpose intended, and that Borrower has obtained lien
                releases from contractors.

            

    

     

    
      	
              5.

            	
              Loan
                Title Policy and Verification of Title.
                As a condition to the funding of any Draw Request, Borrower shall
                deliver
                or cause to be delivered to Agent an endorsement to the title policy
                issued to Lender with respect to the Loan and the Mortgage covering
                the
                date of disbursement and showing the Mortgage as a first, prior and
                paramount lien on the Mortgage Property subject only to the Permitted
                Encumbrances (as defined in the Mortgage), confirming that nothing
                has
                intervened to affect the validity or priority of the Mortgage, and
                such
                other instruments, documents and information as Agent or the title
                company
                insurer may reasonably request.

            

    

     

    
      	
              6.

            	
              Lender
                to Timely Process Borrower’s Draw Request.
                Lender shall authorize its disbursement to Borrower, by wire transfer,
                within fifteen (15) days of receipt of Borrower’s Draw Request provided
                that: (a) the Draw Request is in the proper form and accompanied
                by a copy
                of bona fide invoices from Third Party Contractors evidencing a request
                for payment for materials provided or work performed in connection
                with
                the Project, (b) Borrower has satisfied the conditions set forth
                in the
                Agreement with respect to the Holdback and this Schedule C and (c)
                Borrower provides Lender with evidence acceptable to Lender that
                the
                balance of the Holdback will be sufficient to pay all remaining costs
                in
                connection with the Project.

            

    

     

    
      	
              7.

            	
              Liens
                and Encumbrances.
                Lender shall not be required to make an Advance if at the time of
                such
                requested Advance there is any lien or encumbrance upon the Mortgaged
                Property (other than the Permitted Encumbrances), or while there
                is any
                change, question or claim of any kind whatsoever, whether of record
                or
                not, which, in the reasonable opinion of the Agent and its counsel,
                may
                constitute a cloud on the title to the Mortgaged Property, as applicable,
                render the title of the Mortgaged Property unmarketable, or otherwise
                invalidate or have priority over the Mortgage or other instruments
                securing the Loan, or any portion thereof, or in any way may render
                Lender’s position insecure. Further, Lender shall not be required to make
                an Advance if at the time of such requested Advance there shall have
                been
                a “discharge” of any “hazardous substances” or “hazardous wastes”, as
                those terms are defined by any applicable federal, state, or local
                environmental laws.

            

    

     

    
      
         

         

        
        

      

      
        C-2

        
          

        

      

      
        
        

      

    

     

     

    
      	
              8.

            	
              Special
                Representations, Warrants and Covenants.
                Borrower represents, warrants and covenants to Agent and Lender that
                the
                Project will continue with reasonable diligence. Borrower represents,
                warrants and covenants to Agent and Lender that Lender and its agents,
                at
                all times prior to payment and satisfaction of the Loan, including
                on the
                occasion of each Advance, shall have the right of entry and free
                access to
                the Project and the right to inspect all of the work performed or
                furnished in and about the Project and to inspect subcontracts and
                records
                of Borrower. Borrower agrees to pay for all reasonable costs of such
                inspections to be performed by Agent and Lender or their
                agents.

            

    

     

    
      	
              9.

            	
              No
                Default.
                Lender shall have no obligation to make an Advance if at the time
                of the
                Draw Request or and after giving effect thereto there exists an Event
                of
                Default or other event which with the passage of time and/or the
                giving of
                notice would constitute a default under the Agreement or under any
                other
                Loan Documents.

            

    

     

    
      
         

         

        
        

      

      
        C-3

        
          

        

      

      
        
        

      

    

    

    DRAW
      REQUEST FORM

    

    LENDER:
      KENNEDY FUNDING, INC. 

    BORROWER:
      COSTA BLANCA I REAL ESTATE, LLC

    

    RE:
      LOAN
      AND SECURITY AGREEMENT between Lender and Borrower dated June 26, 2007 (“Loan
      Agreement”) 

    

    Date:
      ___________                    
      Draw
      Request No._________

    

    Amount
      of
      Draw Request: $ _____________________ 

    

    Attached
      to this Draw Request is a sources and uses for the funds in connection with
      this
      Draw Request which identifies (a) the use of funds requested to be advanced;
      (b)
      the amounts of any previous advances of the Holdback (as defined in the Loan
      Agreement); and (c) the work performed and costs incurred to date in connection
      with the Project (as defined in the Loan Agreement).

    

    The
      Borrower certifies that attached herewith is a true, correct and complete copy
      of the invoices with respect to amounts requested under this Draw Request.
      The
      Borrower also certifies that (i) no Event of Default (as defined in the Loan
      Agreement), nor any event, circumstance or condition which with notice or the
      passage of time or both would be an Event of Default, has occurred and is
      continuing, (ii) Borrower knows of no fact or circumstance which will or could
      prejudice the construction or operation of the Project or repayment of the
      Loan;
      (iii) Borrower has received no affidavits or other notices in connection with
      the creation of a mechanic’s lien by any contractor, subcontractor or
      materialman; (iv) the budget for the Project has not been modified or amended
      in
      any material respect since the time it was previously approved by Lender; (v)
      the statements made in this Draw Request and any documents submitted herewith
      are true, correct and complete, and (vi) this Draw Request has been duly
      authorized by Borrower.

    

    CERTIFIED
      AS TRUE AND CORRECT:

    

    COSTA
      BLANCA I REAL ESTATE, LLC  TDS
      AMENITIES, INC.

    

       

      

        

          
            	
                    By:
                      ________________________________

                  	
                    By:
                      ________________________________

                  
	
                    Name:
                      

                  	
                    Name:
                      

                  
	
                    Title:

                  	
                    Title:

                  
	 	 
	 	
                    AMERICAN
                      LEISURE HOLDINGS, INC.

                  
	
                    _________________________________

                  	 
	
                    Malcolm
                      J. Wright, individually

                  	
                    By:_____________________________

                  
	 	
                    Name:

                  
	 	
                    Title:

                  

          

        

      

       

       

       

       

       

       

    

    

     

    
      
        
          
 

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    SOURCES
      AND USES

     

    To
      be
      attached to Each Draw Request

     

    

     

    

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    SCHEDULE
      D

     

    LENDERS

     

     

     

     

     

     

     

     

     

     

     

     

     

    

     

    
      
        
           

           

        

        
        

      

      
        D-1

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      A

     

    Form
      of
      AdvertisementPromissory Note

    Exhibit
      10.11

    

    PROMISSORY
      NOTE

     

    
      	
              $4,450,000

               

            	
              June
                26, 2007

               

            

    

    FOR
      VALUE
      RECEIVED, the undersigned, COSTA
      BLANCA I REAL ESTATE, LLC,
      a
      Florida limited liability company, having an address at 2460 Sand Lake Road,
      Orlando, Florida 32809, (the “Borrower”),
      promises to pay to the order of KENNEDY
      FUNDING, INC.
      (“Agent”),
      with
      an office at Two University Plaza, Suite 402, Hackensack, New Jersey 07601,
      as
      agent for the lenders identified on Schedule
      A
      annexed
      hereto (Agent and the lenders identified on Schedule A are hereinafter
      collectively referred to as “Lender”),
      the
      principal sum of FOUR
      MILLION FOUR HUNDRED FIFTY THOUSAND ($4,450,000) DOLLARS,
      or so
      much thereof as may be advanced by Lender to Borrower from time to time (the
      “Principal
      Amount”),
      together with interest on the unpaid Principal Amount thereof computed from
      the
      date advanced (the “Commencement
      Date”),
      at
      the rates provided herein until June 25, 2010 or such earlier date on which
      the
      Principal Amount becomes due and payable as provided herein (the “Maturity
      Date”);
      provided, however, that from and after (i) the Maturity Date, whether upon
      stated maturity, acceleration or otherwise, or (ii) the date on which the
      interest rate hereunder is increased to the Default Rate (as hereinafter
      defined) as provided herein, such additional interest shall be computed at
      the
      Default Rate.

     

    As
      used
      herein, the term “Default
      Rate”
shall
      mean a rate of interest of twenty-four percent (24.0%) per annum, but in no
      event shall the Default Rate be in excess of the Maximum Rate (as hereinafter
      defined).

     

    If
      any
      payment of interest is not paid within five (5) days from the due date for
      such
      payment, a late charge equal to the lesser of ten percent (10%) of such overdue
      payment or the maximum amount permitted by applicable law shall automatically
      become due to the holder of this promissory note (the “Note”),
      subject, however, to the limitation that late charges may be assessed only
      once
      on each overdue payment. Said late charges do not constitute interest and shall
      constitute compensation to the holder of this Note for collection and co-lender
      administration costs incurred hereunder. In addition, if any payment of
      principal or interest is not paid when due, the holder of this Note shall have
      the right, upon notice to Borrower, to increase the rate of interest per annum
      on all amounts outstanding to the Default Rate and, upon said notice, such
      rate
      increase shall be effective retroactively as of the date from which the interest
      component of such overdue payment began to accrue and shall remain in force
      and
      effect for so long as such default shall continue. This paragraph shall not
      be
      construed as an agreement or privilege to extend the due date of any payment,
      nor as a waiver of any other right or remedy accruing to the holder of this
      Note
      by reason of any default.

     

    

    
      
        
          

           

          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

     

    
       

      Principal
        and interest hereunder shall be payable as follows:

    (a) From
      the
      Commencement Date, interest on the Principal Amount outstanding hereof shall
      accrue at the rate of Twelve (12.0%) percent per annum, for the period beginning
      on and including the Commencement Date to the last day of the month in which
      the
      Commencement Date occurs (“Short
      Interest”),
      and
      shall be payable on August 1, 2007.

     

    (b) Interest
      only at the rate per annum equal to the greater of (i) Twelve (12%) percent
      and
      (ii) the Prime Rate (as defined below) as adjusted from time to time, plus
      Three
      and Three Quarters (3 3/4%) Percent on the Principal Amount outstanding hereof
      shall accrue from July 1, 2007 through June 30, 2008 and be paid monthly, in
      arrears, in an amount, as determined by Lender, equal to one-twelfth (1/12th)
      of
      the annual interest payments for such period commencing August 1, 2007 and
      continuing on the first day of each month thereafter through and including
      July
      1, 2008.

     

    (c) Interest
      only at the rate per annum equal to the greater of (i) Sixteen (16%) percent
      and
      (ii) the Prime Rate (as defined below) as adjusted from time to time, plus
      Seven
      and Three Quarters (7 3/4%) Percent on the Principal Amount outstanding hereof
      shall accrue from July 1, 2008 through June 30, 2009 and be paid monthly, in
      arrears, in an amount, as determined by Lender, equal to one-twelfth (1/12th)
      of
      the annual interest payments for such period commencing August 1, 2008 and
      continuing on the first day of each month thereafter through and including
      July
      1, 2009.

     

    (d) Interest
      only at the rate per annum equal to the greater of (i) Eighteen (18.0%) percent
      and (ii) the Prime Rate, as adjusted from time to time, plus Nine and Three
      Quarters (9 3/4%) Percent, on the Principal Amount outstanding hereof shall
      accrue from July 1, 2009 through the Maturity Date and be paid monthly in
      arrears, in an amount, as determined by Lender, equal to one-twelfth (1/12th)
      of
      the annual interest payment for each twelve (12) month period commencing on
      August 1, 2009 and continuing on the first day of each month thereafter until
      the Maturity Date.

     

    (e) All
      principal, interest and other sums due hereunder shall be due and payable in
      full on the Maturity Date.

     

    As
      used
      herein, the term “Prime Rate” shall mean the rate of interest published in The
      Wall Street Journal from time to time as the "Prime Rate." If more than one
      "Prime Rate" is published in The Wall Street Journal for a day, the average
      of
      such "Prime Rates" shall be used, and such average shall be rounded up to the
      nearest one-eighth of one percent (0.125%). If The Wall Street Journal ceases
      to
      publish the "Prime Rate," the Agent shall select an equivalent publication
      that
      publishes such "Prime Rate," and if such "Prime Rates" are no longer generally
      published or are limited, regulated or administered by a governmental or
      quasigovernmental body, then Agent shall select a comparable interest rate
      index. If interest on this Note is calculated at the Prime Rate as provided
      herein, then the interest rate will change on July 1, 2007 and on the first
      day
      of each month thereafter following any change in the Prime Rate.

     

    

    
      
        
          

           

          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    (f) Prepaid
      Interest (as defined in the Loan and Security Agreement of even date herewith,
      hereinafter, the “Loan
      Agreement”),
      if
      any, shall be utilized in accordance with the terms of the Loan
      Agreement.

     

    Each
      payment hereunder shall be credited first to Lender’s collection expenses, next
      to late charges, next to unpaid interest, and the balance, if any, to the
      reduction of the Principal Amount. The interest on this Note shall be calculated
      on the basis of a 30-day month and a 360-day year.

     

    This
      Note
      may be prepaid in whole or in part at any time, without penalty or premium,
      it
      being understood and agreed that, except as expressly provided herein or in
      the
      Loan Agreement, Borrower shall not be entitled, by virtue of any prepayment
      or
      otherwise, to a refund of the Fee (as defined in the Loan Agreement), interest,
      any other fees, points, charges and the like paid by Borrower to Lender in
      connection with the loan hereunder (the “Loan”)
      and
      for fees and expenses incurred by Lender in making the Loan, all of which
      payments shall be retained by Lender from and after the date each such payment
      is made hereunder.

     

    Borrower
      and each surety, endorser and guarantor hereof hereby waive all demands for
      payment, presentations for payment, notices of intention to accelerate maturity,
      notices of acceleration of maturity, demand for payment, protest, notice of
      protest and notice of dishonor, to the extent permitted by law. Borrower further
      waives trial by jury. No extension of time for payment of this Note or any
      installment hereof, no alteration, amendment or waiver of any provision of
      this
      Note and no release or substitution of any collateral securing Borrower’s
      obligations hereunder shall release, modify, amend, waive, extend, change,
      discharge, terminate or affect the liability of Borrower under this
      Note.

     

    Any
      forbearance by the holder of this Note in exercising any right or remedy
      hereunder or under any other agreement or instrument in connection with the
      Loan
      or otherwise afforded by applicable law, shall not be a waiver or preclude
      the
      exercise of any right or remedy by the holder of this Note. The acceptance
      by
      the holder of this Note of payment of any sum payable hereunder after the due
      date of such payment shall not be a waiver of the right of the holder of this
      Note to require prompt payment when due of all other sums payable hereunder
      or
      to declare a default for failure to make prompt payment.

     

    If
      this
      Note is placed in the hands of an attorney for collection, Borrower shall pay
      all costs incurred and reasonable attorneys’ fees for legal services in the
      collection effort, whether or not suit be brought.

     

     

    

    
      
        
          

           

          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    
      At
        the
        election of the holder of this Note, all payments due hereunder may be
        accelerated, and this Note shall become immediately due and payable without
        notice or demand, upon the occurrence of any of the following events (each
        an
“Event
        of Default”):
        (1)
        Borrower fails to pay on or before the date due, any amount of principal
        and/or
        interest payable hereunder; (2) Borrower fails to perform or observe any
        other
        term or provision of this Note with respect to payment; provided,
        however,
        that
        Borrower shall be provided with a ten (10) calendar day period to cure same;
        (3)
        Borrower fails to perform or observe any other term or provision of this
        Note;
provided,
        however,
        that
        Borrower shall be provided with written notice from Lender of any non-monetary
        default under this Note and a thirty (30) calendar day period to cure same;
        or
        (4) there exists a default under the Mortgage (as hereinafter defined), a
        default under any Guaranty (as hereinafter defined) or a default under or
        misrepresentation contained in any other agreement, document or certificate
        of
        Borrower or any Guarantor (as hereinafter defined) in connection with the
        Loan,
        which default is not cured within any grace period expressly provided therefor
        in such document. In addition to the rights and remedies provided herein,
        the
        holder of this Note may exercise any other right or remedy in any other
        document, instrument or agreement evidencing, securing or otherwise relating
        to
        the indebtedness evidenced hereby in accordance with the terms thereof, or
        under
        applicable law, all of which rights and remedies shall be
        cumulative.

    

     

    If
      this
      Note is transferred in any manner, the right, option or other provisions herein
      shall apply with equal effect in favor of any subsequent holder
      hereof.

     

    Notwithstanding
      anything to the contrary contained herein, under no circumstances shall the
      aggregate amount paid or agreed to be paid hereunder exceed the highest lawful
      rate permitted under applicable usury law (the “Maximum
      Rate”)
      and
      the payment obligations of Borrower under this Note are hereby limited
      accordingly. If under any circumstances, whether by reason of advancement or
      acceleration of the maturity of the unpaid principal balance hereof or
      otherwise, the aggregate amounts paid on this Note shall include amounts which
      by law are deemed interest and which would exceed the Maximum Rate, Borrower
      stipulates that payment and collection of such excess amounts shall have been
      and will be deemed to have been the result of a mistake on the part of both
      Borrower and the holder of this Note, and the party receiving such excess
      payments shall promptly credit such excess (to the extent only of such payments
      in excess of the Maximum Rate) against the unpaid principal balance hereof
      and
      any portion of such excess payments not capable of being so credited shall
      be
      refunded to Borrower.

     

     

     

    

    
      
        
          

           

          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

     

    This Note
      is
      secured by, among other things, that certain Mortgage and Security Agreement
      (the “Mortgage”),
      an
      assignment of leases and rents (“Assignment”),
      an
      assignment of licenses, contracts, plans, specifications, surveys, drawings
      and
      reports (the “Assignment
      of Licenses”),
      all
      of the foregoing being of even date herewith and a first lien on the certain
      real estate collateral (the “Collateral”)
      identified in the Mortgage, and is entitled to the benefits and security
      thereof. Reference is made to the Mortgage, Assignment and Assignment of
      Licenses for descriptions of the respective rights and obligations of the
      Borrower and Lender thereunder. This Note is guaranteed by the separate guaranty
      of even date herewith (the “Guaranty”)
      of
      American Leisure Holdings, Inc.,
      TDS
      Amenities, Inc. and Malcolm Wright (collectively, the “Guarantor”)
      and
      reference is made to the Guaranty for the respective rights of the parties
      thereunder. Borrower hereby agrees to indemnify, defend and hold harmless Lender
      from and against any and all claims, loss, cost, damage or expense (including,
      without limitation, reasonable attorneys’ fees) which may be incurred by Lender
      in connection with or as a result of any default (following notice and the
      opportunity to cure provided for in such document), other than consequential
      and
      incidental damages, by Borrower or Guarantor under the Mortgage, Assignment,
      or
      Assignment of Licenses, or by the Guarantor (following notice and the
      opportunity to cure provided for in such document) under the Guaranty, or a
      default (following notice and the opportunity to cure provided for in such
      document) under or misrepresentation contained in any other agreement, document
      or certificate of Borrower or any Guarantor executed or delivered in connection
      with the Loan (collectively, the “Loan
      Documents”).

     

    By
      its
      acceptance of Lender’s funds and execution of this Note, Borrower acknowledges,
      agrees and confirms that it has no defense, offset or counterclaim for any
      occurrence in relation to this Loan and Borrower acknowledges that Lender has
      complied with all of its obligations under the Loan Documents as of the date
      hereof.

     

    All
      payments of principal and interest hereunder are payable in lawful money of
      the
      United States of America and shall be made by wire transfer to the account
      of
      Agent or KF Holdings SPV, LLC, as instructed, at Valley National Bank, pursuant
      to wiring instructions to be provided to Borrower at Closing or to such other
      accounts as may be instructed by Agent.

     

    Borrower
      is hereby prohibited from exercising against Lender (as a group) or Agent,
      any
      right or remedy which it might otherwise be entitled to exercise against any
      one
      or more (but less than all) of the parties constituting Lender, including,
      without limitation, any right of setoff or any defense. Any other claim that
      Borrower may have, arising from or related to the transaction evidenced by
      this
      Note and the other Loan Documents shall be asserted only against the Agent
      and
      not against any of the individual parties constituting Lender.

     

    This
      Note
      shall be binding on the parties hereto and their respective heirs, legal
      representatives, executors, successors and assigns.

     

    This
      Note
      shall be construed without any regard to any presumption or rule requiring
      construction against the party causing such instrument or any portion thereof
      to
      be drafted.

     

    This
      Note
      shall be governed by the laws of the State of New Jersey without regard to
      choice of law consideration. Borrower hereby irrevocably consents to the
      jurisdiction of the courts of the State of New Jersey and of any federal court
      located in such State in connection with any action or proceeding arising out
      of
      or relating to this Note or the other
      Loan Documents. Borrower and Guarantor hereby designate The Corporation Trust
      Company, located at 820 Bear Tavern Road, West Trenton, New Jersey 08628, as
      their duly appointed agent to accept service of process within the State of
      New
      Jersey on their behalf.

     

    

    
      
        
          

           

          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

    

     

    This
      Note
      may not be changed or terminated orally.

     

    A
      determination that any portion of this Note is unenforceable or invalid shall
      not affect the enforceability or validity of any other provision, and any
      determination that the application of any provision of this Note to any person
      or circumstance is illegal or unenforceable shall not affect the enforceability
      or validity of such provision to the extent legally permissible and otherwise
      as
      it may apply to other persons or circumstances.

     

    Borrower
      understands and agrees that the Loan is and will be cross-collateralized with
      that certain loan dated
      as
      of April 20, 2007 in
      the
      amount of Twenty
      Four Million Nine Hundred Thousand ($24,900,000) Dollars by and between Costa
      Blanca II Real Estate, LLC, Costa Blanca III Real Estate, LLC, TDS Town Homes
      (Phase 1), LLC, TDS Town Homes (Phase 2), LLC and Lender, as Agent (the
“Costa
      II Loan”).
      It is
      understood and agreed that a default (beyond any applicable grace periods)
      under
      the terms and conditions of (i) that certain Loan and Security Agreement dated
      as of April 20, 2007, between Costa
      Blanca II Real Estate, LLC, Costa Blanca III Real Estate, LLC, TDS Town Homes
      (Phase 1), LLC, TDS Town Homes (Phase 2), LLC and Lender, as Agent, as amended
      by that certain First Amendment to Loan and Security Agreement and Other Loan
      Documents of even date herewith, and/or (ii) any other document or agreement
      given or delivered to Lender in connection therewith, including without
      limitation that certain (a) Amended and Restated Promissory Note in the original
      principal amount of Twenty Four Million Nine Hundred Thousand ($24,900,000)
      Dollars of even date herewith, and (b) and that certain Mortgage and Security
      Agreement, as amended by that certain First Amendment to Mortgage and Security
      Agreement of even date herewith, filed in the County of Polk, State of Florida
      which was given as security for the repayment of said Promissory Note (the
      “Costa
      II Loan Documents”)
      will
      also constitute a default under the terms and conditions of the Loan and will
      entitle Lender to all rights and remedies available to Lender under the Costa
      II
      Loan Documents. It is further understood and agreed that in the event Borrower
      defaults (beyond any applicable grace periods) upon the terms and conditions
      of
      the Loan or any of the Loan Documents executed or delivered in connection with
      the Loan, Lender shall have the right to declare the Costa II Loan in default
      and accelerate same and avail itself of any rights and remedies thereunder.
      Borrower shall execute any and all documents necessary to effectuate such
      cross-collateralization.

     

    

    
      
        
          

           

          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    
      JURY
        TRIAL WAIVER. BORROWER AGREES THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER
        CLAIM
        OR COUNTERCLAIM, BROUGHT BY BORROWER OR THE HOLDER OF THIS NOTE ON OR WITH
        RESPECT TO THIS NOTE OR ANY OTHER LOAN DOCUMENT OR THE DEALINGS
        OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A COURT
        AND NOT BY A JURY. BORROWER AND LENDER EACH HEREBY KNOWINGLY, VOLUNTARILY
        AND
        INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION
        OR
        PROCEEDING. BORROWER ACKNOWLEDGES AND AGREES THAT AS OF THE DATE HEREOF THERE
        ARE NO DEFENSES OR OFFSETS TO ANY AMOUNTS DUE IN CONNECTION WITH THE LOAN.
        FURTHER, BORROWER WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY
        SUCH
        SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL
        OR
        OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER
        ACKNOWLEDGES AND AGREES THAT THIS PARAGRAPH IS A SPECIFIC AND MATERIAL ASPECT
        OF
        THIS NOTE AND THAT LENDER WOULD NOT EXTEND CREDIT TO BORROWER IF THE WAIVERS
        SET
        FORTH IN THIS PARAGRAPH WERE NOT A PART OF THIS NOTE.

       

       

       

    

     

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      of this page intentionally left blank.]

     

    

    
      
        
          

           

          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS WHEREOF, the undersigned has executed this Note on the date set forth
      above.

     

    
      	
              WITNESS:

               

               

               

               

               

               

               

               

               

              /s/
                Jason Williams

              Name:
                Jason Williams

            	
              BORROWER:

               

              COSTA
                BLANCA I REAL ESTATE, LLC,
                a
                Florida limited liability company

               

              By:
                Tierra del Sol Resort (Phase 1), Ltd., a Florida limited partnership,
                its
                manager

               

              By:
                TDS Management, LLC, a Florida limited liability company, its general
                partner

               

               

               

              By:
                /s/ Malcolm J. Wright

              Name:
                Malcolm J. Wright

              Title:
                Manager

               

            

    

    

     

    
      	
              STATE
                OF FLORIDA

            	
              )

            
	
            	
              )
                ss.:

            
	
              COUNTY
                OF ORANGE

            	
              )

            

    

     

    I
      certify
      that on June 20th, 2007, Malcolm J. Wright came before me in person and
      stated to my satisfaction that he/she:

     

    (a)
       made
      the
      attached instrument; and

     

    (b)
       was
      authorized to and did execute this instrument on behalf of and as Manager of
      TDS
      MANAGEMENT, LLC, a Florida limited liability company, the General Partner of
      TIERRA DEL SOL RESORT (PHASE 1), LTD., a Florida limited partnership, the
      Manager of COSTA BLANCA I REAL ESTATE, LLC, a Florida limited liability company
      (the “Company”), the entity named in this instrument, as the free act and deed
      of the Company, by virtue of the authority granted by its operating agreement
      and its members.

     

     

    /s/
      J.K. Hudson

    NOTARY
      PUBLIC

    #DD459074

    

    

    

    
      
        
          
            

             

          

          
          

        

        
          8

          
            

          

        

        
          
          

          
          

        

      

    

    

    SCHEDULE
      A

     

    LENDERS

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        A-1

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