Document:

Exhibit
10.1

 

THIRD AMENDMENT TO MASTER LOAN AGREEMENT

 

This
THIRD AMENDMENT TO MASTER LOAN AGREEMENT (this “Amendment”)
is entered into as of September 10, 2010, by and between HOMELAND ENERGY
SOLUTIONS, LLC, an Iowa limited liability company (“Borrower”),
and HOME FEDERAL SAVINGS BANK, a federally chartered stock savings bank
organized under the laws of the United States (“Lender”).

 

RECITALS

 

A.
           Borrower and Lender have
entered into a Master Loan Agreement dated November 30, 2007, as amended by
that certain First Amendment dated August 29, 2008, and as further amended by
that certain Second Amendment dated September 28, 2009, and a First Supplement
dated November 30, 2007, a Second Supplement dated November 30, 2007, and a
Third Supplement dated November 30, 2007 (collectively, the “Loan Agreement”) under which Lender agreed to extend certain
financial accommodations to Borrower.

 

B.
           Borrower has requested that
amounts being held in the Debt Service Reserve Account be released for
prepayment of the Term Loan, and Lender has agreed to such release upon the
terms and conditions set forth herein.

 

NOW
THEREFORE, in consideration of the facts set forth in the foregoing Recitals,
which the parties agree are true and correct, and in consideration for entering
into this Amendment and the related documents to be executed concurrently
herewith or pursuant hereto, the parties agree as follows:

 

AMENDMENT

 

1.             Amendments to
Loan Agreement.  Section 5.01(t)
of the Loan Agreement is hereby amended and restated in its entirety, as
follows:

 

(t)            Debt
Service Reserve Account.  Upon demand by Lender, Borrower shall be
unconditionally obligated to replenish the Debt Service Reserve Account to an
amount equal to $10,000,000.00, without presentment, demand, protest, or other
formalities of any kind.  Amounts held in
the Debt Service Reserve Account shall be disbursed or applied to repayment of
the Loans in such order and manner as Lender may elect in its sole discretion.  So long as no Event of Default exists, Lender
will release the Debt Service Reserve Account and Borrower’s obligation to
replenish said account will terminate when Borrower achieves and maintains
Tangible Net Worth of greater than or equal to sixty-five percent (65%) and
compliance with all covenants in this Agreement and the Supplements.  Notwithstanding the foregoing, amounts held
in the Debt Service Reserve Account may be disbursed or applied to repayment of
the Loans prior to the time when Borrower has achieved and maintained Tangible
Net Worth of greater than or equal to sixty-five percent (65%) with the prior
written consent of Lender, in such order and manner as Lender may elect in its
sole discretion; provided that Borrower is in compliance with all covenants in
this Agreement and the Supplements.  In
the event Lender agrees to allow Borrower to disburse the amount held in the
Debt Reserve Account early, Lender shall not demand that Borrower replenish the
Debt Service Reserve Account until 

 

 

after
Borrower’s Tangible Net Worth is calculated at the next applicable measurement
date.  For purposes of this Section 5.01(t)
Borrower’s Tangible Net Worth shall be measured quarterly based on Borrower’s
quarterly financial statements provided pursuant to Section 5.01(c).

 

2.
            Effect on Loan Agreement.  Except as expressly amended by this
Amendment, all of the terms, conditions, covenants and agreements of the Loan
Agreement shall be unaffected by this Amendment and shall remain in full force
and effect.  Nothing contained in this
Amendment shall be deemed to constitute a waiver of any events of default or to
affect, modify, or impair any of the rights of Lender as provided in the Loan
Agreement.

 

3.             Conditions
Precedent to Effectiveness of this Amendment.  The obligations of the Lender hereunder are
subject to the conditions precedent that Lender shall have received the
following, in form and substance satisfactory to Lender:

 

a.             this Amendment
duly executed by Borrower and Lender;

 

b.             $10,000,000.00
from Borrower, by the method provided in Section 2.12 of the Loan Agreement, as
and for prepayment of all accrued and unpaid interest on the Term Loan as of
the date of this Amendment, with the balance of such amount applied to the
outstanding principal balance of the Term Loan. 
Upon receipt of such amount, Lender shall release $10,000,000.00 from
the Debt Service Reserve Account and apply such amount to the outstanding
principal balance of the Term Loan;

 

c.             all other
documents, instruments, or agreements required to be delivered to Agent under
the Credit Agreement and not previously delivered to Agent; and

 

d.             payment for all
cost and expenses (including attorney’s fees) of Lender associated with the
documentation, execution and delivery of this Amendment.

 

4.
            Representations and
Warranties of Borrower. 
Borrower hereby agrees, affirms, and acknowledges as follows:

 

a.             Section 5.01(t)
of the Loan Agreement, shall remain in full force and effect, as amended
hereby, and all amounts currently held in the Debt Service Reserve Account in
excess of the $10,000,000.00 being released pursuant to this Amendment, shall
remain in the Debt Service Reserve Account until released in accordance with
the terms of the Loan Agreement.

 

b.             The
representations and warranties contained in the Loan Agreement are true and
correct as of the date of this Amendment in all material respects, except as
otherwise previously disclosed in writing to Lender except to the extent they
relate solely to an earlier date.

 

c.             Borrower has
full power and authority to execute, deliver, and perform this Amendment and
all documents, instruments and agreements required or contemplated hereby, and
when executed and delivered to Lender will constitute the valid, binding and
legally enforceable obligations of Borrower in accordance with their respective
terms and conditions, except as enforceability may be limited by applicable
bankruptcy or insolvency laws.

 

5.
            Counterparts.  It is understood and agreed that this
Amendment may be executed in several counterparts, each of which shall be
deemed an original, and all of such counterparts, when taken together, shall
constitute one and the same agreement.

 

 

SIGNATURE PAGE TO

THIRD AMENDMENT TO MASTER LOAN AGREEMENT

BY AND BETWEEN

HOMELAND ENERGY SOLUTIONS, LLC

AND

HOME FEDERAL SAVINGS BANK

 

DATED: September 10, 2010

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the date first above written.

 

BORROWER:

 

HOMELAND
ENERGY SOLUTIONS, LLC,

an
Iowa limited liability company

 

 

	
  /s/
  Walter Wendland

  	
   

  
	
  By:
   Walter Wendland

  
	
  Its:
  President/CEO

  

 

LENDER:

 

HOME
FEDERAL SAVINGS BANK,

a
federally chartered stock savings bank

organized
under the laws of the United States

 

 

	
  /s/
  Eric Oftedahl

  	
   

  
	
  By:
   Eric Oftedahl

  
	
  Its:
  Vice PresidentExhibit
10.1

 

LOAN PURCHASE AGREEMENT

 

This
Loan Purchase Agreement (“Agreement”) is made as of September 25, 2010, by
and between SCB Building, LLC, a Florida limited liability company (“Seller”),
and Sentinel Capital Partners, LLC, a Florida limited liability company (“Buyer”).

 

WHEREAS,
Seller is the owner and holder of a mortgage described in Exhibit “A”,
securing a promissory note in the original amount of $10,950,000.00
(hereinafter referred to as the “Note”).

 

WHEREAS,
Seller is the owner of the Note and various documents relating to the Note,
including but not limited to, a mortgage, security agreements, and any UCC
filing/liens, renewal notes, future advance notes, commercial loan agreements,
assignment of rents, personal guaranties, surveys, lender’s title insurance
policy and endorsements, feasibility studies, environmental reports,
appraisals, and other documents related to the Note (hereinafter collectively
referred to as “Loan Documents”).  The
Note and all related Loan Documents shall be collectively referred to as the “Loan.”

 

WHEREAS,
the Seller intends to assign said Loan to Buyer, and Buyer intends to accept
such assignment, all upon the terms and provisions more specifically set forth
herein.

 

NOW,
THEREFORE, in consideration of the mutual covenants of the parties set forth
herein, and intending to be legally bound, the parties hereto agree as follows:

 

1.             Purchase and Sale of the Loan.

 

(a)                  Subject to the terms and conditions of this
Agreement, on the date of the closing of the transactions contemplated hereby
(the “Closing,” which shall occur on the “Closing Date”), Seller agrees to
sell, assign, convey or otherwise transfer and deliver to Buyer, and Buyer
agrees to purchase and to pay the Purchase Price (as defined herein) for, and
to accept and assume, all of Seller’s right, title and interest in and
obligations under the Loan as more specifically set forth in Exhibit “A,”
attached hereto and made a part hereof, specifically including the right, title
and interest in any Loan Documents, including but not limited to the mortgage,
note, security agreement, and any UCC filings/liens, renewal notes, future
advance notes, commercial loan agreements, assignment of rents, personal
guaranties, surveys, lender’s title insurance policies and endorsements
thereto, hazard insurance policies (or any other insurance policies that are
maintained from time to time on any loans), feasibility studies, environmental
reports, appraisals, and any other documents that traditionally accompany the
Loan.

 

2.             Purchase Price; Closing.

 

(a)                          Purchase Price.  Buyer will pay
to Seller at Closing an amount equal to One Million Five Hundred Thousand and
00/100ths U.S. Dollars 

 

1

 

($1,500,000.00) (the “Purchase Price”) for the
Loan.  The Purchase Price shall be paid
in cash, payable as follows:

 

(i)                                     $150,000.00 upon execution of this Agreement. Said
$150,000.00 shall be considered earnest money (“Earnest Money Deposit”), which
is refundable to Buyer through the end of the Due Diligence Period set forth
below. Upon expiration of the Due Diligence Period as set forth in Paragraph 3
below, the Earnest Money Deposit shall become non-refundable except in the
event the sale of the Loan does not close because of a default of Seller under
this Agreement or the failure of a required condition to Closing.

 

(ii)                                  Remaining balance to be paid in cash at Closing
sufficient, when combined with the Earnest Money Deposit, to total the Purchase
Price.

 

(b)                         The Closing.  The Closing (“Closing”)
shall take place at a mutually agreeable location in Orlando, Florida on or
before seven (7) days after the expiration of the Due Diligence Period (as
defined below), unless otherwise agreed by the parties (the “Closing Date”).

 

3.             Due Diligence; Non-Assumption of
Contracts or Liabilities. Buyer is not assuming, and shall have no
obligations with respect to any obligation or liabilities of Seller except
those relating to or arising from the Loan as set forth herein. The Buyer shall
be allowed seven (7) days of due diligence (“Due Diligence Period”)
beginning on the date on which Buyer receives the last of the due diligence
items identified on Exhibit “B” (but only to the extent such items are in
the actual possession of Seller), during which it shall complete a legal,
financial and business due diligence investigation with regard to the
Loan.  In addition to the items on Exhibit “B,”
Seller shall cooperate and make available to Buyer all financial and other
information and records in the actual possession of the Seller reasonably
necessary to assess the condition and the value of the Loan. The Earnest Money
Deposit shall be fully refundable to Buyer if written notice of termination is
received by Seller on or before 5:00 P.M. of the seventh (7th) day of the Due Diligence Period, by email or facsimile
transmission.  The Earnest Money Deposit
shall be held by Burt & Burt, P.L. of Orlando, c/o Richard A. Burt, II,
Esquire (407) 420-6828 (“Escrow Agent”).

 

4.             Seller’s Representations and
Warranties.  Seller hereby represents
and warrants to Buyer to the best of the knowledge of the Seller, as of the
date hereof and as of the Closing Date, as follows:

 

(a)                          Power and Authority.  Seller has full
right, power and authority to sell the Loan and to execute, deliver, and perform
Seller’s obligations under this Agreement.

 

2

 

(b)                         Execution and Enforceability.  This
Agreement and the other documents to be delivered by Seller in connection with
the Agreement have been duly and validly executed and delivered by Seller and
constitute the valid and binding agreement of Seller, enforceable against
Seller in accordance with their terms.

 

(c)                          Title.  Seller is
vested with a full and absolute title to said Loan, which is presently free and
clear of all encumbrances, liens, claim, right or demand and Seller is vested
with absolute authority to transfer title to the Loan.

 

(d)                         The initial principal face amount of the Note and
Mortgage has been advanced to or on behalf of the mortgagor (hereinafter
referred to as “Mortgagor”), and the Mortgagor received consideration for the
Note and Mortgage.

 

(e)                          Mortgagor is presently in default of both its
monetary and non-monetary obligations under the Loan.

 

(f)                            There are no undisclosed agreements between the
Mortgagor and the Seller concerning any facts or conditions, whether past,
present, or future, which might in any way affect the obligations of the
Mortgagor to make timely payments thereon.

 

(g)                         Seller represents that there are no claims or
defenses against Seller based on lender liability.

 

(h)                         At Closing, Seller will provide a certificate to
Buyer identifying the current unpaid principal balance on the Loan and the
current unpaid total balance (including any accrued interest, penalties and
other funds advanced) as of the Closing Date and shall represent and warrant
the accuracy of those figures.

 

(i)                             The Note, mortgage, UCC’s (if any), Intercreditor
Agreement, and borrower payment history provided by Seller are true, correct,
undisputed and reflect full, correct and accurate information as to the balance
and status thereof, that no credit heretofore has been given to the Mortgagor
which was gratuitous or was given for payment made by an employee or agent of
the Seller, or has arisen from a renewal granted for the purposes of concealing
a delinquency.

 

(j)                             That the Loan has not been pledged as security or
is otherwise encumbered in any way and there Seller has no actual knowledge of
any Judgments or pending actions against or relating to the Loan except as set
forth herein.

 

(k)                          Compliance with Laws.  The
execution, delivery and performance by Seller of this Agreement does not and
will not (i) violate any provision of any law, rule or regulation,
order, writ, judgment, injunction, statute, 

 

3

 

decree, determination or award applicable to Seller or
the Loan; (ii) require any consent, approval or notice under (except as
previously obtained or made) or result in a violation or breach of, or
constitute a default (or give rise to any right of termination, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, loan or credit agreement, license, permit, lease or
any other agreement or instrument or obligation to which Seller or the Loan is
bound; or (iii) result in, or require the creation or imposition of, any
Lien upon or with respect to the Loan.

 

(l)                             Taxes.  Seller has paid
all documentary or intangible taxes on the Loan.

 

(m)                       Financial Information.  Seller
represents that the financial information presented to Buyer with regard to the
Loan are true and correct in all material respects as of the date hereof and
shall be true and correct in all material respects as updated as of the Closing
Date.

 

(n)                         Absence of Undisclosed Liabilities.  Seller
represents that there are no liabilities of the Seller under the Loan that
would be the responsibility of the Buyer as a result of this transaction.

 

(o)                         Litigation, Etc.  Seller has
no actual knowledge of any suits or administrative proceedings involving the
Seller that would be the responsibility of the Buyer as a result of this
transaction.

 

(p)                         Accurate and
Complete Records.  Any documents provided by Seller to Buyer,
that were prepared by Seller, are accurate and complete in all respects and do
not contain or reflect any material discrepancies.  Seller has not provided any other documents
that contain material inaccuracies of which Seller has actual knowledge.

 

(q)                         No Misleading
Statements.  The representations and warranties of the
Seller contained in this Agreement do not and will not include any untrue
material statements of a fact.

 

(r)                            That Seller has and will continue to maintain the
Loan in accordance with all applicable rules and laws until such time as
they are transferred to Buyer under this Agreement.

 

(s)                          That Seller has not entered into any agreement
relating to or affecting the Loan except as previously disclosed to Buyer.

 

(t)                            All representations and warranties of the Seller
contained in this Agreement shall survive Closing.

 

(u)                         Except as set forth in this Section 4 above ,
this Agreement and the contemplated assignment of the Loan is made, and as part
of the Buyer’s consideration for this Agreement such assignment, is accepted by
Buyer 

 

4

 

on an “as is” basis, with all faults, without any
recourse to Seller, and without any express or implied warranties or
representations, whether oral or written, past, present or future, by Seller to
Buyer as to any matter whatsoever. 
Seller shall have no obligation to bring any action or proceeding or
otherwise to incur any expense whatsoever with respect to the Loan.  Except as set forth in Section 4, above,
Seller has not made and does not hereby make any express or implied
representations or warranties whatsoever with respect to the status of the
Loan, the validity of the Loan, the condition of the property encumbered by the
Loan or the financial condition of any parties obligated relative to the Loan,
including, without limitation, any representation or warranty regarding leases,
quality of construction, workmanship, merchantability, fitness for any
particular purpose or the environmental or structural status or condition of
the property encumbered by the Loan or the collectability of the Loan or the
ability of any party obligated to make payments or perform other obligations
pursuant to the Loan Documents to make such payments or perform such
obligations, and Buyer acknowledges that Buyer is entering into this Agreement
without relying upon any such statement or representation made by Seller, any
agent, employee, or officer of Seller, or by any other person.

 

5.             Buyer’s Representations and
Warranties.  Buyer hereby represents,
warrants and covenants to Seller on the date hereof and as of the Closing Date,
as follows:

 

(a)                          Power and Authority.  Buyer has full
power, authority, capacity and right to execute, deliver, and perform Buyer’s
obligations under this Agreement.

 

(b)                         Execution and Enforceability.  This Agreement
and the other documents to be delivered by Buyer in connection with this
Agreement have been duly and validly executed and delivered by Buyer and
constitute the valid and binding agreement of Buyer, enforceable against Buyer
in accordance with their terms.

 

(c)                          Buyer has the opportunity under this Agreement to
conduct such due diligence review and analysis of the Loan, the property
encumbered by the Loan and the parties obligated to pay the amounts due under
the Loan as the Buyer deems necessary, proper or appropriate in order to make a
complete, informed decision with respect to the purchase and acquisition of the
Loan.

 

(d)                         Buyer acknowledges that the Loan may have limited
or no liquidity and Buyer has the financial ability to own the Loan for an indefinite
period of time and to bear the economic risk of an outright purchase of the
Loan and a total loss of the Purchase Price for the Loan.

 

5

 

(e)                          Buyer covenants, agrees, warrants and represents
that, after the Closing Date, Buyer shall not institute any enforcement or
legal action or proceeding in the name of Seller, or imply that Seller still
owns the Loan or is in anyway involved in such enforcement or legal action.

 

(f)                            All representations and warranties of the Buyer
contained in this Agreement shall survive Closing.

 

6.             Further Obligations of Seller
and the Buyer.  On and after the date
hereof:

 

(a)                          Assignment of Loan.  Seller shall
execute an assignment of the Loan to Buyer (in a form substantially similar to Exhibit “D”)
on the Closing Date. In addition, Seller shall deliver to Buyer original loan
files, including all of the Seller’s Loan Documents.  Seller shall also execute an allonge to the
Note (and any renewal or modification notes) from the Loan in a form
substantially similar to Exhibit “C”. 
Seller shall also execute a ‘goodbye’ letter to the Borrower stating
that the loan was assigned, that payments should now be made to Buyer and
including Buyer’s contact information. 
Seller shall also execute (and/or instruct its counsel to execute) any
necessary documents to transfer any rights in any litigation and legal
documents connected with the Loan (whether filed or not) to Buyer including,
but not limited to, documents prepare by Barrett, Chapman and Ruda, PA..  Seller shall also cooperate, at Buyer’s
expense, as necessary to facilitate Buyer’s enforcement of loan in litigation
or otherwise including, but not limited to, executing an affidavit of
indebtedness for the Loan stating the mortgagor/debtor’s current status with
the particularity necessary to file a summary judgment in any litigation on any
of the Loan.  This obligation shall
survive closing and shall be a continuing obligation as necessary for Buyer to
enforce the Loan in a court of competent jurisdiction against the
borrower.  Seller shall provide any
necessary documents, affidavits or testimony as Buyer reasonably requires
post-closing to enforce any rights in the Loan, all at Buyer’s expense.  These obligations shall survive Closing under
this Agreement.

 

(b)                         Confidential Nature and Information.  Seller
and Buyer agree that they will treat in confidence the terms and conditions of
this Agreement and all documents, materials and other information which they
shall have obtained regarding the Purchase Price, the other party and its
officers, directors and shareholders during the course of the negotiations
leading to the consummation of the transactions contemplated hereby (whether
obtained before or after the date of this Agreement, and whether or not the
Closing is completed), the investigation provided for herein, and the
preparation of this Agreement and other related documents.  The obligation of each party to treat such
documents, materials and other information in confidence shall not apply to any
information which (i) such party can demonstrate was already lawfully in
its possession prior to the disclosure thereof by the other party, (ii) is
known to the public and 

 

6

 

did not become so known through any violation of a legal
obligation by such party, (iii) became known to the public through no
fault of such party, (iv) is later lawfully acquired by such party from
other sources or (v) is necessary for Seller to comply with any
governmental regulatory obligations. 
This obligation shall specifically survive Closing under this Agreement.

 

(c)                          Further Assurance and Assistance.  After the
date hereof and for a period of two years, each party (including its successors
and/or assigns) from time to time shall, without further consideration, execute
and deliver such further documents and instruments and take such other actions
as may be reasonably requested by any other party hereto in order to carry out
the assignment of the Loan.

 

7.             Conditions Precedent to Closing.

 

(a)                                  The obligations of Buyer to consummate the
transactions contemplated hereby are subject to the satisfaction of each of the
following conditions, unless waived by the Buyer in its sole discretion:

 

(i)                                     Representations, Warranties and Covenants.  All
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date, as if
such representations and warranties were made on and as of the Closing Date,
and Seller shall have performed all agreements and covenants required hereby to
be performed by Seller prior to or as of the Closing Date.

 

(ii)                                  Consents.  Seller shall
have delivered to Buyer sufficient documentation to demonstrate that all
necessary consents and authorizations required to sell the Loan have been
obtained in accordance with Seller’s operating agreement and/or bylaws.

 

(iii)                               Due Diligence.  Buyer and its
advisors shall complete a due diligence examination as deemed reasonably
necessary by Buyer and the results of that investigation will be reasonably
satisfactory to Buyer in its sole discretion.

 

(b)                                 The obligations of Seller to consummate the
transactions contemplated hereby are subject to the satisfaction of each of the
following conditions, unless waived by the Seller in its sole discretion:

 

(i)       All representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing Date, as if such representations and warranties were made on and as
of the Closing Date, and Buyer shall have 

 

7

 

performed all agreements and covenants required hereby
to be performed by Buyer prior to or as of the Closing Date.

 

(c)                                  The obligations of both Buyer and Seller to
consummate the transaction contemplated hereby are subject to the satisfaction
of following and the failure of this condition to be satisfied shall relieve
both parties of their obligations to close unless both waive this condition:

 

(i)       Ouress Investments, LLC (“Ouress”),
an affiliate of Seller, has previously made, executed and delivered the
following promissory notes (collectively, the “Additional
Notes”): (i) promissory note in the original principal amount
of $1,449,480.00 given by Ouress to Gary G. Tharp; (ii) promissory note in
the original principal amount of $1,250,520.00 given by Ouress to Claude Wolfe;
and (iii) promissory note in the original principal amount of $300,000.00
given by Ouress to Eric W. Ludwig.  As
part of the Purchase Price hereunder, the Buyer shall be obligated to (i) satisfy
all amounts due and owing pursuant to the Additional Notes; (ii) deliver
to Seller on the Closing Date the originals of each of the Additional Notes,
each of which shall be marked as “Paid In Full” by the holder thereof with the
signature of such holder attested to by a notary public; and (iii) deliver
original affidavits from the holders of each of the Additional Notes in the
form set forth on Exhibit “E”
annexed hereto Delivery by Buyer to Seller on the Closing Date each of the
Additional Notes, and the affidavits as specified above shall be a condition
precedent to consummating the transactions contemplated hereby.

 

(ii)    Notwithstanding the foregoing, Seller acknowledges that
there is a current liability from Ouress to the Additional Note holders of
approximately $80,000.00 resulting from funds held back at Seller’s original
closing of the sale of the property secured by the Loan.  Seller agrees that it shall be Seller’s
obligation to satisfy that obligation with the Additional Note holders prior to
or at Closing under this Agreement such that this obligation is not a basis for
the failure to satisfy the condition identified in subparagraph (i) above.  Seller acknowledges that this obligation
belongs to Seller and is not part of Buyer’s obligations under this Agreement.

 

In
the event that one or more of the foregoing conditions is not fulfilled, the
Buyer may, by notice to Seller on or prior to the Closing Date, elect not to
consummate the transactions contemplated hereby.

 

8

 

8.             Indemnification.

 

(a)                                  The Seller shall indemnify and save the Buyer and
its respective members, affiliates, successors and assigns and their respective
officers, directors, employees, attorneys, contractors, trustees, and agents,
(collectively “Buyer Indemnified Persons”) harmless from, against, for and in
respect of (and shall defend Buyer as necessary):

 

(i)                                     Any liabilities or obligations of the Seller
(whether absolute, accrued, contingent or otherwise and whether a contractual,
tax, tort, or any other type of liability, obligation or claim) not
specifically assumed by the Buyer pursuant to this Agreement;

 

(ii)                                  Any damages, losses, obligations, liabilities,
claims, actions or causes of action sustained or suffered by the Buyer
Indemnified Persons, or any of them, and arising from the material breach,
untruth or inaccuracy of any representation, warranty or any agreement of the
Seller contained in or made pursuant to this Agreement (including the Exhibits
attached hereto), or any conveyance instrument or in any certificate,
instrument or agreement delivered by any of such parties pursuant hereto or
thereto or in connection with the transaction contemplated hereby or thereby,
or any facts or circumstances constituting any such breach, untruth or
inaccuracy;

 

(iii)                               Any liabilities or obligations for or in respect
of claims for brokerage or finders’ fees arising out of this Agreement and the
transactions contemplated hereby by any person claiming to have been engaged by
the Seller.

 

(b)                                 The Buyer shall indemnify and save the Seller and
its respective members, affiliates, successors and assigns and their respective
officers, directors, employees, attorneys, contractors, trustees, and agents,
(collectively “Seller Indemnified Persons”) harmless from, against, for and in
respect of (and shall defend Seller as necessary):

 

(i)                                     Any liabilities or obligations of the Buyer
(whether absolute, accrued, contingent or otherwise and whether a contractual,
tax, tort, or any other type of liability, obligation or claim) specifically
assumed by the Buyer pursuant to this Agreement;

 

(ii)                                  Any damages, losses, obligations, liabilities,
claims, actions or causes of action sustained or suffered by the Seller
Indemnified Persons, or any of them, and arising from the material breach, of
any representation, warranty or any agreement of the Buyer contained in or made
pursuant to this Agreement, or any conveyance instrument or in any 

 

9

 

certificate, instrument or agreement delivered by any of
such parties pursuant hereto or thereto or in connection with the transaction
contemplated hereby or thereby, or any facts or circumstances constituting any
such breach, untruth or inaccuracy;

 

(iii)                               Any liabilities or obligations for or in respect
of claims for brokerage or finders’ fees arising out of this Agreement and the
transactions contemplated hereby by any person claiming to have been engaged by
the Buyer.

 

(iv)                              Notwithstanding the foregoing, Buyer’s
indemnification obligations shall not include any liabilities that relate to
any breach by Seller of its representations and warranties including, but not
limited to, any lender liability claims or claims related to Seller’s actions
as ‘seller’ of the real property to Borrower under their purchase and sale of
the real property in December 2005.

 

9.             Third-Party Claims.  The
obligations and liabilities of the Seller and Buyer hereunder with respect to
claims resulting from the assertion of liability by third parties shall be
subject to the following terms and conditions:

 

(a)                          The Indemnified Persons shall give prompt written
notice to the Seller of any assertion of liability by a third party which might
give rise to a claim by the Indemnified Persons against the Indemnifying
Persons based on the indemnity agreement contained herein, stating the nature
and basis of said assertion and the amount thereof, to the extent known.

 

(b)                         In the event any action, suit or proceeding is
brought against the Indemnified Persons, with respect to which the Indemnifying
Persons may have liability under the indemnity agreement contained herein, the
action, suit or proceeding shall be defended (including all proceedings on
appeal or for review which counsel for the Indemnified shall deem appropriate)
by the Indemnifying Persons with counsel approved by the Indemnified Persons
upon terms and conditions approved by the Indemnified Persons.  The Indemnified Persons shall be kept fully
informed of such action, suit or proceeding at all stages thereof.  The Indemnifying Persons shall make available
to the Indemnified Persons and their attorneys and accountants all books and
records of the Indemnifying Persons relating to such proceedings or litigation
and the parties hereto agree to render to each other such assistance as they
may reasonably require of each other in order to ensure the proper and adequate
defense of any such action, suit or proceeding.

 

10

 

(c)                          The Indemnifying Persons shall not make any
settlement of any claims without the written consent of the Indemnified
Persons, other than for settlements that call for the mere payment of money.

 

10.           Remedies Cumulative.  The
remedies provided for in Sections 8 and 9 shall be cumulative and shall not
preclude assertion by the Indemnified Persons of any other rights or the
seeking of any other remedies against the Indemnifying Persons.  These rights shall survive Closing under this
Agreement.

 

11.           Survival of Representations.  The representations and warranties made by
the parties in this Agreement shall survive after the Closing Date until the
expiration of all applicable statute of limitations.

 

12.           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

 

13.           Entire Agreement.  This Agreement, and the documents and
instruments referred to herein, represent the entire agreement between Buyer
and Seller and supersedes any prior understandings, and agreements, between
such parties, written or oral. This Agreement shall not be modified or affected
by an offer or proposal, oral or written, made by or for any party in connection
with the negotiation or entering of the Agreement, which is not contained in
this Agreement or any Exhibit hereto.

 

14.           Amendments and Supplements.  All amendments, modifications, and
supplements to this Agreement shall be made by an instrument or instruments in
writing signed by each party hereto, and no amendment, modification or
supplement to this Agreement shall be effective unless and until made by an
instrument or instruments in writing as provided herein.

 

15.           Notice.  Any notice, request, instruction,
correspondence or other document required to be given under this Agreement by
any party to another (collectively called “Notice”) shall be in writing and
delivered in person or by courier service requiring acknowledgment of delivery
or mailed by certified mail, postage prepaid and return receipt requested, or
by telecopier, as follows:

 

If to the Buyer, addressed to:

 

Sentinel Capital Partners, LLC

11 N. Summerlin Avenue

Suite 210

Orlando, Florida 32801

Ph: (407) 420-6828

Fax: (866) 240-7043

 

If to the Seller or to the Principal, addressed to:

 

11

 

SCB Building, LLC

1612 E. Cape Coral
Parkway

Cape Coral, Florida 33904

Ph: (239) 443-1627

Fax: (239) 540-6501

 

ATTN: Mr. James May, General Counsel and Chief
Admin. Officer

 

Notice given by personal delivery or courier
service shall be effective upon actual receipt. 
Notice given by mail shall be effective five days after deposit with the
United States Postal Service.  Notice
given by facsimile transmission shall be confirmed electronically and shall be
effective upon actual receipt if received during the recipient’s normal
business hours, or at the beginning of the recipient’s next business day after
receipt if received before the recipient’s normal business hours.  All Notices by facsimile transmission shall
be confirmed promptly after transmission in writing by regular mail or personal
delivery.  Any party may change any
address to which Notice is to be given to it by giving Notice as provided above
of such change of address.

 

16.           Captions and Other Headings.  The section, subsection, and other headings
contained in this Agreement are for convenience only and shall not affect the
interpretation or meaning of the Agreement.

 

17.           Partial Invalidity.  In case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement
shall be construed as if such invalid, illegal or unenforceable provision or
provisions had never been contained herein. 
This Agreement shall be governed in all respects by Florida law.

 

18.           Commissions.  Seller has retained Colliers Arnold as its
broker and has agreed to pay that entity a commission associated with this
transaction.  Buyer hereby warrants and
represents to Seller that Buyer has not retained any broker in connection with
this transaction.  Each party shall be
responsible for any commission or finder’s fee payable by reason of its actions
or commitments in connection with this transaction, and shall indemnify the
other party hereto with respect thereto, other than those identified herein.

 

19.           Fees.  Except as otherwise provided herein, each
party shall be responsible for its own costs and expenses in negotiating this
Agreement and consummating the transaction contemplated hereby. Specifically,
Buyer and Seller shall each bear their own expenses in connection with the
purchase and sale of the Loan.  Seller
shall bear the expense of recording the Assignment of Loan Documents in the
applicable county.

 

20.           Governing Law; Forum.  This Agreement shall be governed by the laws
of the State of Florida applicable to contracts made and to be wholly performed
in the State of Florida.  The parties
irrevocably consent to the jurisdiction of any state court in Orange County,
Florida or the federal court in the Middle District of Florida.

 

12

 

21.           Legal Fees.  If any party to this Agreement seeks to
enforce such party’s rights under this Agreement by legal proceedings, the
non-prevailing party shall pay all costs and expenses incurred by the
substantially prevailing party including, without limitation, all reasonable
attorneys’ fees.

 

22.           Exclusive Opportunity.  Seller shall not negotiate or enter into
discussions with any other party or offer the Loan or any interest therein for
sale or long term lease to any other party until the time provided for Closing
of this Agreement has expired.

 

23.           Default.

 

(a)                                  Seller Default. 
If this transaction is unable to close because of the non-fulfillment of
any of the conditions precedent to Seller’s obligations, or Seller otherwise
breaches its obligations or representations under this Agreement and Closing
does not occur, the Buyer shall be entitled to recovery its actual out of
pocket due diligence expenses from Seller including, but not limited to, legal
fees, and due diligence review time (whether internal or performed by third
parties) and shall receive a return of the Earnest Money Deposit.

 

(b)                                 Buyer Default: 
If this transaction is unable to close because of a Buyer breach of its
obligations under this Agreement, Seller shall retain the Earnest Money Deposit
as its sole and exclusive remedy for any such breach.

 

(c)                                  The remedies set forth in subsections (a) and
(b) above are the exclusive remedies of each parties solely in the event
that this transaction does not close.  If
this transaction does close, and it is subsequently discovered that either
party breaches any continuing obligations under this Agreement, both parties
shall have all remedies provided under the law.

 

(d)                                 EXCEPT FOR AMOUNTS PAYABLE IN CONNECTION WITH
CLAIMS SUBJECT TO THE INDEMNIFICATION PROVISIONS OF THIS AGREEMENT NEITHER
PARTY WILL, UNDER ANY CIRCUMSTANCES, BE LIABLE TO THE OTHER PARTY FOR ANY LOST
PROFITS OR ANY OTHER SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING
OUT OF OR RELATING TO THIS AGREEMENT EVEN IF THE PARTY HAS BEEN NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.

 

24.           Time of the Essence.  Time is of the essence for all deadlines in
this Agreement.

 

13

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written.

 

	
  BUYER:

  	
   

  	
  SELLER:

  
	
   

  	
   

  	
   

  
	
  Sentinel
  Capital Partners, LLC,

  	
   

  	
  SCB
  Building, LLC,

  
	
  a
  Florida limited liability company

  	
   

  	
  a
  Florida limited liability company

  
	
   

  	
   

  	
   

  
	
  /s/
  Steve Parmee

  	
   

  	
  /s/
  Steven C. Barre

  
	
   

  	
   

  	
   

  
	
  By:
   Steve Parmee

  	
  By:
  Steven C. Barre, attorney in fact for James May

  
	
  Its:   Managing Member

  	
  Its:
   Trustee of 1612 E. Cape Coral Parkway
  Land Trust, sole member of SCB Building, LLC

  

 

14

 

Exhibit “A”

“Loan”

 

The loan between SCB Building, LLC, as lender, and
250 North Orange Avenue, LLC as borrower, evidenced by the promissory note
dated November 1, 2005, as amended on January 4, 2006, between the
parties, the mortgage and security agreement dated November 2, 2005 and
recorded in the public records of Orange County, Florida at Book 08288, Page 3915,
between the parties, and securing the note against real property located at 250
N. Orange Avenue, Orlando, Florida 32801, the Intercreditor Agreement between
Seller and Old Southern Bank dated November 13, 2006 and all
documents  related to the loan.

 

 

Exhibit “B”

“Due Diligence Items”

 

With
respect to the Loan:

 

Any
Loan Documents

 

Any
financial or related data on the borrower

 

Borrower’s
bank reconciliations for the past six months.

 

Most
recent title policy (and copies of all title exceptions) and survey.

 

Copies
of all documentation evidencing or providing security for the loan.

 

With
respect to the collateral securing the Loan (the “Real Property”):

 

A
current rent roll and copies of all leases currently affecting the Real
Property

 

Copies
of all contracts and agreements, including all franchise agreements, purchasing
agreements, maintenance contracts, union contracts, other labor agreements and
insurance policies.

 

Copies
of all operating licenses.

 

Copies
of all common area agreements for the surrounding grounds and use agreements.

 

Copies
of all available engineering reports and reports on toxic materials to include
hazardous waste, asbestos and PCBs. 
Copies of all available ADA surveys and reports.

 

Copies
of all available reports related to the physical condition of the Real Property
including, but not limited to, the heating, ventilation and air conditioning;
plumbing; electrical; energy; life-safety and support systems; and elevator,
escalator and structural systems.

 

Evidence
of compliance with all applicable building codes, zoning and subdivision laws
and occupancy permits.

 

All
plans, specifications, permits and certificates of occupancy.

 

Listing
of all capital expenditures and improvements made to the Real Property during
the last five years including date of expenditures and cost.

 

All
books, files, financial statements, independent audits, group sales and
reservation reports and records relating to the operation of the Real Property
including, but not limited to:

 

Operating and capital budgets.

 

Monthly financial statements for 2008 thru 2010 with comparisons of
actual to budget to prior year results on a monthly and year-end basis.

 

Projected year-end operating results (shown monthly and year-end) for
the current calendar year.

 

 

Schedule
of any security deposits, advance deposits, prepaid rent, gift certificates,
tenant security deposits and unearned income as of the most recent month-end.

 

Copies
of the utility bills relating to the Real Property from January 2008
through present.

 

Copies
of the tax bills relating to the Real Property from January, 2008 through
present and a description of any property tax abatement proceedings in
progress.

 

Summary
of crime and accident reports for the most recent twelve-month period.

 

Correspondence
from any governmental authority regarding legal compliance.

 

Ground
Lease and cross easement agreements, if applicable.

 

 

EXHIBIT “C”

ALLONGE

 

Allonge
to promissory note dated
                        ,
as revised on
                          ,
from 250 North Orange Avenue, LLC, to SCB Building, LLC in the original
principal amount of
$                              :
Pay to the order of
                                ,
without recourse, representation or warranty.

 

	
   

  	
  SCB
  BUILDING, LLC,

  
	
   

  	
  a
  Florida limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Print
  name:

  
	
   

  	
  Title:

  

 

 

EXHIBIT “D”

ASSIGNMENT OF MORTGAGE AND OTHER
LOAN DOCUMENTS

 

KNOW ALL PERSONS BY THESE PRESENTS: 
That SCB Building, LLC, a Florida limited liability company, in
consideration of the sum of TEN AND NO/100 ($10.00)
DOLLARS, and other valuable consideration received from or on behalf
of Sentinel Capital Partners, LLC (“Assignee”), at or before the ensealing and
delivery of these presents, the receipt whereof is hereby acknowledged, does
hereby grant, bargain, sell, assign, transfer and set over unto Assignee all of
SCB Building, LLC’s right, title and interest in and to the mortgage dated
                  ,
made by                             
in favor of SCB Building, LLC and recorded in Official Records Book
      , Page         
of the Public Records of Orange County, Florida, as modified by the Notice of
Future Advance and Mortgage Modification Agreement recorded in Official Records
Book         , Page         
of the Public Records of         
County, Florida, and as modified by the Second Notice of Future Advance and
Mortgage Modification record in Official Records Book       ,
Page          of the Public
Records of            County,
Florida.  This assignment includes any
and all collateral assignments of rents, leases and profits, together with any
and all other loan documents, title policies and casualty insurance policies. (“Loan
Documents”)

 

TO HAVE AND TO HOLD the same unto Assignee and
its legal representatives, successors and assigns forever.

 

 

[Signatures to appear on following page]

 

 

IN WITNESS WHEREOF, party of the first part has
set its hand and seal this        day of
                ,
2010.

 

 

 

	
  Signed,
  sealed and delivered in our presence:

  	
   

  	
  SCB
  BUILDING, LLC, a Florida limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print
  name:

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Print
  name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
  Print
  name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  STATE
  OF FLORIDA   )

  	
   

  	
   

  
	
  : 

  	
     ss.

  	
   

  	
   

  
	
  COUNTY
  OF ORANGE   )

  	
   

  	
   

  
					

 

 

The
foregoing instrument was acknowledged before me this      
day of                   
, 2010, by
                                      ,
as                                     
of SCB Building, LLC, who is personally known to me or who has produced (type
of identification) as identification and who did not take an oath.

 

	
   

  	
   

  	
   

  
	
  Signature of person taking acknowledgment

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of acknowledger typed, printed or stamped

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Notary Public

  	
   

  	
   

  
	
  Title or rank

  	
   

  	
   

  

 

 

EXHIBIT “E”

FORM OF AFFIDAVIT BY HOLDERS OF
ADDITIONAL NOTES

 

[see attached]

 

 

AFFIDAVIT

 

STATE OF FLORIDA

COUNTY OF

 

Before me, the undersigned authority, personally
appeared
                                                                  ,
who, being first duly sworn, deposes and says that, to the best of Affiant’s
knowledge and belief:

 

1.             Affiant
is the owner and holder of that certain promissory note dated
                              
given to Affiant by Ouress Investments, LLC, a Florida limited liability
company in the original principal amount of $                                           
(the “Note”).

 

(a)

 

2.             Affiant
has sole and exclusive possession of the Note. 
Affiant has not alienated, pledged, hypothecated or collaterally
assigned the Note.

 

3.             There
are no matters pending against Affiant that could give rise to a lien that
would attach to the Note or cause a loss of title or impair the title to the
Note and Affiant has not and will not execute any instrument that would
adversely affect the title or interest of Affiant in and to the Note.

 

4.             The representations embraced herein are made to induce Sentinel Capital
Partners, LLC, a Florida limited liability company to purchase the Note and to
induce SCB Building, LLC, a Florida limited liability company to sell other
debt instruments to Sentinel Capital Partners, LLC in an integrated
transaction.

 

(SEAL)

 

Sworn to and subscribed before me this
         day of
                        ,
2010, by                                                   .

 

	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  My Commission Expires:

  	
   

  
				

 

Personally Known
             (OR)
Produced Identification

 

Type of identification produced

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