Exhibit 10.1
Legal Description
TARRAGON SOUTH
Development Corp.
200 East Las Olas Blvd., Suite 1660
Fort Lauderdale, Florida 33301
954,712.2755 o Fax: 954.712.1255
August 29, 2005
AGU Entertainment Corp.
3200 West Oakland Park Boulevard
Lauderdale Lakes, Florida 33311
Attention: Mr. David Levy
Re: Agreement for Purchase and Sale, dated as of August 29, 2005,
between AGU Entertainment Corp., a Delaware corporation, as seller
("Seller"), and Tarragon South Development Corp., a Nevada
corporation, as buyer ("Buyer")
Dear Ladies and Gentlemen:
Reference is made to the captioned agreement (the "Agreement"). Pursuant
to the Agreement, Seller agrees to sell to Buyer and Buyer agrees to buy from
Seller certain property located in Lauderdale Lakes, Broward County, Florida,
located at 3200 West Oakland Park Boulevard, Lauderdale Lakes, Florida, and as
more particularly described therein (the "Property"). Any capitalized term set
forth in the Agreement and not otherwise defined in this Side Letter Agreement
Regarding Buyer Financing (this "Letter Agreement") shall have meaning ascribed
to such term in the Agreement.
Notwithstanding anything contained in the Agreement to the contrary, Buyer
agrees to the following:
1. Buyer agrees to make a loan (the "Buyer Loan") to Seller in the
aggregate principal amount of $2,500,000.00 (the "Aggregate Loan
Amount"), to be advanced to Buyer as follows: (a) one tranche in the
aggregate amount of $750,000 to be released from escrow upon
satisfaction of the conditions applicable thereto (the "First
Tranche"), (b) a second tranche in the aggregate amount of no more
than $750,000.00 to be advanced, subject to the terms of the Buyer
Loan Documents (as defined herein), no later than October 1, 2005,
and (c) a third tranche in the aggregate amount of no more than
$1,000,000.00 to be advanced, subject to the tents of the Buyer Loan
Documents, no later than November 1, 2005. Notwithstanding anything
contained in this Section 1 to the contrary, such advances of the
Aggregate Loan Amount shall be advanced if and only if each of the
conditions to advances set forth in Section 4 of this letter are
satisfied to Buyer's reasonable satisfaction in all respects. Buyer
agrees that the form of the loan documents evidencing the Buyer Loan
(collectively, the "Buyer Loan Documents") shall be substantially in
the form of the Senior Loan Documents (as defined herein), subject
to reasonable changes as may be necessary to accurately document the
Buyer Loan as Buyer shall deem necessary.
2. The Aggregate Loan Amount shall accrue interest on the basis of a
360 day year at an interest rate per annum equal to six and one-half
percent (6.5%). Interest shall be due and payable monthly, provided,
however, in the event that no Event of Default (as shall be defined
in the Buyer Loan Documents) shall exist, interest shall be deferred
and paid upon the maturity of the Loan. The Loan shall mature no
later than a date that is the earlier to occur of (x) the date of
the Closing and (y) December 23, 2005.
3. The Loan shall be seem-ed by a mortgage encumbering the Property and
any other tangible and intangible property owned by Seller. Buyer
understands, acknowledges and agrees that such mortgage and any
other liens shall be in third position and agrees to enter into
reasonable and customary intercreditor agreements with respect to
the two mortgages that hold mortgages senior to Buyer's mortgage.
Such senior mortgages and any and all other documents executed in
connection therewith are referred to herein as the "Senior Loan
Documents".
4. The conditions to the advancing of the Aggregate Loan Amount shall
be as follows: (a) payment by Seller of all costs associated with
the Buyer Loan (which costs may be payable from proceeds of the
Aggregate Loan Amount to the extent then available to be advanced),
including, without limitation, payment of recording charges,
documentary stamp taxes, intangible taxes, title insurance, survey
costs and any and all other costs and expenses associated with the
Buyer Loan, (b) absences of defaults, (c) Buyer's receipt of title
insurance insuring the lien of Buyer's mortgage subject only to
those exceptions as are acceptable to Buyer, (d) receipt of an ALTA
survey of the Property certified to, among others, Buyer, (e)
receipt of insurance for the Property (casualty, liability and any
other as may be reasonably required) naming Buyer as an additional
insured and in amounts and from companies as are reasonably
acceptable to Buyer, (0 receipt of documentation evidencing the
authority of Seller to execute the Buyer Loan Documents and enter
into the Buyer Loan transaction, including, an opinion of counsel as
to the same and as to the enforceability of the Buyer Loan
Documents, and (g) any other condition as may be reasonable and
customary.
In the event that you are in agreement with the foregoing terms, please
acknowledge the same in the space where set forth below so that the parties
hereto can commence the efforts necessary to timely arrange for the advance of
the First Tranche.
Very truly yours,
TARRAGON SOUTH DEVELOPMENT CORP., a Nevada Corporation
By: /s/ Marcy H. Kammerman
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Name: Marcy H. Kammerman
Title: EVP
ACKNOWLEDGED AND AGREED:
AGU ENTERTAINMENT CORP., a Delaware corporation
By: /s/ David C. Levy
-----------------------------
Name: David C. Levy
Title: President