Exhibit 2.5
PROMISSORY NOTE
$_____________(1) November 3, 2005
FOR VALUE RECEIVED, the undersigned, Azur International, Inc., a Nevada
corporation (the "Company"), The Grand Shell Landing, Inc., a Mississippi
corporation and a wholly-owned Subsidiary of the Company, whose address is 3499
Shell Landing Blvd., Gautier, Mississippi 39553 ("Grand Shell"), Azur Shell
Landing Development II, LLC, a Mississippi limited liability company whose
address is 3499 Shell Landing Blvd., Gautier, Mississippi 39553 ("Azur-Shell")
and Azur Shell Landing Resort, Inc., a Mississippi corporation, whose address is
3499 Shell Landing Blvd., Gautier, Mississippi 39553 ("ASLR" and collectively
with Azur-Shell, Grand Shell and the Company, the "Makers" and individually, a
"Maker") jointly and severally, by this promissory note (hereinafter called
"this Note"), promise unconditionally to pay to the order of ______________, a
_______________ with a principal place of business at __________________________
(hereinafter called the "Lender"), on or, as required hereunder, before October
___, 2008 (the "Maturity Date") the principal sum of _____________________
($____________), or so much thereof as may remain unpaid hereunder, and to pay
interest on the principal sum remaining unpaid hereunder from time to time from
the date hereof until said principal sum shall have been paid in full.
Definitions
"Business Day" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday in the United States or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.
"Agent" shall mean the designated agent under the Loan Documents.
"Crawford" shall mean Crawford Family Limited Partnership.
"Custodial Account" shall mean the Custodial Account at The First, a
National Banking Association ("Custodian") maintained for the benefit of the
Lender pursuant to the terms of the Custodial and Security Agreement, dated
October __, 2005, by and among the Makers, the Lender, the Custodian, the other
lenders signatory to the Loan Documents and the agent to the lenders thereto.
"Deed of Trust" shall have the meaning set forth in Section f.
"Event of Default" shall have the meaning set forth in the Deed of Trust.
_______________________
(1) Subscription Amount of Lender.
"Fundamental Transaction" shall mean (a) any Maker effects any merger or
consolidation of such Maker with or into another Person, (b) the Maker effects
any sale of all or substantially all of its assets in one or a series of related
transactions, (c) any tender offer or exchange offer (whether by the Maker or
another Person) is completed pursuant to which holders of equity of the Maker
are permitted to tender or exchange their shares for other securities, cash or
property, or (d) the Maker effects any reclassification of the equity of the
Maker or any compulsory share exchange pursuant to which the equity of the Maker
is effectively converted into or exchanged for other securities, cash or
property.
"Interest Adjustment Date" shall have the meaning set forth in Section b.
"Loan Documents" shall have the meaning set forth in Section f.
"Lot" shall mean a tract of property encumbered by the Deed of Trust which
comprises no more than 1.5 acres in size.
"Naranjo" shall mean the Naranjo Family Limited Partnership.
"Olympic" shall mean Olympic Coast Investments Inc.
"Permitted Dividends" shall mean, (i) prior to the date that the principal
amount of this Note is less than $_______(2) (a) upon the sale of any Lot(s) by
Azur-Shell, (1) payments of up to 5% of the gross proceeds of such sale to
Crawford and (2) payments of up to 5% of gross proceeds of such sale to Naranjo,
(b) payments to other Makers provided such payments are used for working capital
purposes only of such Maker and (c) payments to Crawford of up to 25% of the net
profits solely from the sale of the Block Sale Property and (ii) after the date
that the principal amount of this Note is less than $_________(3), (a) payments
to other Makers provided such payments are used for working capital purposes
only and (b) all payments to Carl Crawford. Notwithstanding anything herein to
the contrary, no payments shall be a Permitted Dividend if, at such time, Lender
has not received all payments due and payable under this Note from the sale of
any Lots or Block Sale Property, as applicable, subject to such Permitted
Dividend or otherwise. Upon the sale of any Lots or Block Sale Property,
Permitted Dividends shall be subordinate in right of payment to any payments
then due and payable to Lender.
"Permitted Indebtedness" shall mean (a) the existing indebtedness on
Azur-Shell of up to $7.1 million held by Olympic, (b) the existing indebtedness
on Grand Shell of up to $6.5 million held by Textron and (c) indebtedness under
the Promissory Note, dated October 24, in the principal amount of $1,460,000
from ASLR to Crawford, including accrued interest thereon.
"Permitted Liens" liens incurred in connection with Permitted Indebtedness
in clauses (a) and (b) thereunder.
"Person" means a corporation, an association, a partnership, organization,
a business, an individual, a government or political subdivision thereof or a
governmental agency.
"Textron" shall mean Textron Financial Corporation.
_____________
(2) The product of 0.5 and the original principal amount of this Note.
(3) The product of 0.5 and the original principal amount of this Note.
Payments of Interest
Commencing on November 1, 2005 and continuing on the first day of each
succeeding calendar month until the principal amount outstanding on this Note is
equal to or less than _________(4) (such date, the "Interest Adjustment Date"),
the Makers, jointly and severally, shall pay to the Lender monthly installments
of interest in the amount of _____________(5) Dollars ($__________). For
purposes of clarification, the monthly payment prior to the Interest Adjustment
Date shall be a fixed amount of $______ and not based on the then principal
amount outstanding of this Note. On the Interest Adjustment Date and continuing
through the Maturity Date, interest shall accrue on the outstanding principal
balance hereunder at a rate of fourteen percent (14%) per annum, on the basis of
a 360-day year, and be payable on the first day of each succeeding calendar
month until the principal amount outstanding on this Note is no longer
outstanding. All overdue accrued and unpaid interest to be paid hereunder shall
entail a late fee at the rate of 22% per annum (or such lower maximum amount of
interest permitted to be charged under applicable law) which will accrue daily,
from the date such interest is due hereunder through and including the date of
payment.
Payments of Principal
(i) Amortization. Commencing on April 1, 2006 and continuing on the
first day of each succeeding calendar month until the Maturity Date, the
Makers, jointly and severally, shall make equal installments of principal
equal to __________(6) Dollars ($_________).
(ii) Block Sales. The Makers intend to sell three tracts of the
Property in approximately the following acreages: (i) 65.9 acres, (ii) 60
acres, and (iii) 14 acres located in Guatier, Mississippi and owned of
record by Azur-Shell and encumbered by the Deed of Trust (collectively,
the "Block Sale Property"). Upon the conditions set forth herein and upon
the closing of the first sale of all or part of the Block Sale Property,
the Makers, jointly and severally, shall prepay $__________(7) of the
principal indebtedness due hereunder from the proceeds of such sale (the
"Block Sale Prepayment"). Concurrently with the full prepayment to the
Lender from the proceeds of the sale of the Block Sale Property, the
Lender shall instruct the Agent to release its portion of the lien under
the Deed of Trust to the entire Block Sale Property. The Lender shall
apply the Block Sale Prepayment first to any accrued, but unpaid interest,
and next to reduce the principal amount hereunder. The reduction in the
Makers' obligations to make principal payments hereunder as a result of
such prepayment shall be in inverse order of maturity
Lot Sales. Upon the sale of each Lot, the Makers, severally and
jointly, shall prepay to the Lender an amount equal to _________(8)
Dollars ($_______) per Lot. Concurrently with the full prepayment to the
Lender from the proceeds of the sale of the Lot, the Lender shall instruct
the Agent to release its lien under the Deed of Trust to such Lot. The
Lender shall apply such payment from the sale of any Lot first to accrued,
but unpaid interest, and next to reduce the principal amount hereunder.
_________________
(4) The product of 0.5 and the original principal amount of this Note.
(5) The product of 0.0234 and the original principal amount of this Note.
(6) The product of 0.0334 and the original principal amount of this Note.
(7) The product of 0.25 and the original principal amount of this Note.
(8) Lender's pro-rata shares of $18,500 based on original principal amounts of
notes.
Sale of Florida Property. Upon the sale of certain real estate (the
"Florida Property") held by 48 Hendricks, LLC, a Florida limited liability
company and 63% owned subsidiary of the Company (such ownership, the
"Membership Interest"), the Makers, severally and jointly, shall cause 48
Hendricks, LLC to promptly distribute to its members the proceeds of such
sale and promptly with its receipt of such distribution the Company shall
prepay $__________(9) of the principal indebtedness due hereunder from the
proceeds of such sale (the "Florida Sale Prepayment"). Concurrently with
the full prepayment to the Lender from the proceeds of the sale of the
Florida Property, the Lender shall instruct the Agent under that certain
Second Membership Interest Security Agreement, dated October __, 2005, to
terminate its lien on the Membership Interest. The Lender shall apply the
Florida Sale Prepayment first to any accrued, but unpaid interest, and
next to reduce the principal amount hereunder in direct order of maturity,
that is, any reduction in principal shall on a dollar for dollar basis
reduce the Makers' obligations to make the next principal amortization
payment or payments under Section c.(i).
Optional Prepayment. Other than as set forth in this Section c, the
Makers may not prepay this Note all or in part unless, upon five Business
Days prior written notice by the Makers to the Lender, Makers prepay, on
such fifth Business Day, 130% of the entire principal amount then
outstanding of this note plus all accrued and unpaid interest ("Optional
Prepayment Amount"). Concurrently with the full payment of the Optional
Prepayment Amount to the Lender from the proceeds of the sale of the Block
Sale Property, the Lender shall instruct the Agent to release all of its
liens under the Deed of Trust.
No Adjustment. The payments to the Lender as set forth in this
Section c shall not reduce the amount of future scheduled payments of
principal and interest.
Late Fee. All overdue principal and interest to be paid hereunder
shall entail a late fee at the rate of 22% per annum (or such lower
maximum amount of interest permitted to be charged under applicable law)
which will accrue daily, from the date such interest is due hereunder
through and including the date of payment.
d. Mechanics of Payment
a) All payments of principal, interest and other amounts payable on
or in respect of this Note or the indebtedness evidenced hereby shall be
made to the Lender at its principal office in
____________________________________________________, in lawful money of
the United States of America, in funds immediately available to the Lender
as the Lender may from time to time direct. Payments of interest shall be
made by automatic deduction from the Custodial Account.
b) Unless and until an Event of Default shall have occurred and be
continuing under the Deed of Trust (in which event such payments shall be
applied by the Lender as the Lender in the Lender's sole discretion shall
determine), all payments received in respect of the indebtedness evidenced
by this Note shall be applied first to the payment of all amounts (except
principal and interest) at the time due and then to interest hereon
accrued to the date of payment, and finally to the unpaid principal
hereof.
_________________
(9) The product of 0.25 and the original principal amount of this Note.
c) If any payment on this Note becomes due and payable on a day
other than a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to any payment of
principal, interest thereon shall be payable at the then applicable rate
during such extension.
d) Should the indebtedness evidenced by this Note or any part
thereof be collected by action at law, or in bankruptcy, receivership or
other court proceedings, or should this Note be placed in the hands of
attorneys for collection after default, the Makers agree to pay, upon
demand by the Lender, in addition to principal and interest and other
sums, if any, due and payable hereon, court costs and reasonable
attorneys' fees and other reasonable collection charges, unless prohibited
by law.
e. Negative Covenants. So long as any portion of this Note is
outstanding, the Makers will not and will not permit any of their
respective subsidiaries to, directly or indirectly:
a) except for Permitted Indebtedness, enter into, create,
incur, assume, guarantee or suffer to exist any indebtedness for
borrowed money of any kind, including but not limited to, a
guarantee, on or with respect to any of the property or assets of
the Makers or their subsidiaries now owned or hereafter acquired or
any interest therein or any income or profits therefrom;
b) except for Permitted Liens, enter into, create, incur,
assume or suffer to exist any liens of any kind, on or with respect
to any of its property or assets of the Makers or their respective
subsidiaries now owned or hereafter acquired or any interest therein
or any income or profits therefrom;
c) amend its certificate of incorporation, bylaws or other
charter documents so as to adversely affect any rights of the
Lender;
d) repay, repurchase or offer to repay, repurchase or
otherwise acquire the equity of any Maker or its Subsidiaries;
e) other than payment made to Textron and Olympic in respect
the Permitted Indebtedness under clauses (a) and (b) thereunder,
prepay, repurchase, redeem or offer to repay, repurchase, redeem or
otherwise acquire any indebtedness of any Maker or its subsidiaries
until the principal amount outstanding on this Note is less than
$__________(10);
f) enter into any agreement with respect to any of the
foregoing; or
______________
(10) 50% of original principal amount of this Note.
g) other than Permitted Dividends, pay cash dividends on any
equity securities of the Makers.
f. Deed of Trust
This Note is secured, inter alia, by a Deed of Trust and Security
Agreement (the "Deed of Trust") of even date herewith granted to the Lender by
the Makers with respect to certain premises located in Jackson County,
Mississippi, and by certain other instruments executed by the Markers in favor
of the Lender which constitute additional security for this Note. Neither the
foregoing references to the Deed of Trust or the other security documents
(collectively, the "Loan Documents") nor any provision thereof shall affect or
impair the absolute and unconditional obligation of the Makers to pay the
principal of and interest on this Note as herein provided.
g. Event of Default
Upon the occurrence of an Event of Default, the Lender may declare the
entire unpaid principal balance hereof, together with interest and other
amounts, if any, accrued hereon, immediately due and payable (if not previously
due and payable) and may exercise each and every other remedy available to the
Lender hereunder, under the Deed of Trust or any of the other Loan Documents, or
otherwise available at law or in equity. The Lender's failure to exercise such
option shall not constitute a waiver of the right to exercise the same at any
other time. All overdue principal and interest to be paid hereunder shall entail
a late fee at the rate of 22% per annum (or such lower maximum amount of
interest permitted to be charged under applicable law) which will accrue daily,
from the date such interest is due hereunder through and including the date of
payment.
h. Waivers
All makers, sureties, guarantors and endorsers hereof, by executing or
endorsing this Note or by entering into or executing any agreement to pay any of
the indebtedness evidenced hereby, (i) consent and agree to be bound by the
provisions of this Note and promise, absolutely and unconditionally, to pay the
principal of and interest on this Note as herein provided, (ii) waive trial by
jury in any action on this Note or on any security for this Note, (iii) waive
(to the fullest extent allowed by law) all requirements of diligence in
collection, presentment, notice of non-payment, protest, notice of protest, suit
and all other conditions precedent in connection with the collection and
enforcement of this Note or any security for this Note or any guarantee of the
indebtedness evidenced hereby, (iv) waive any right to the benefit of, or to
direct the application of, any security for this Note until payment in full, (v)
waive the right to require the Lender to proceed against any other person or to
pursue any other remedy before proceeding against such makers, sureties,
guarantors or endorsers, or any of them, and, except as otherwise required by
law, waive the right to require the Lender to proceed against any collateral
secured by the Deed of Trust, or otherwise, before proceeding against such
makers, sureties, guarantors or endorsers, or any of them, and (vi) agree that
no renewal or extension of this Note (including a renewal or extension in which
this Note is surrendered), no change in the rate of interest payable hereon, no
release, surrender or substitution of security for, or guarantee of, this Note
or the indebtedness evidenced hereby, no modification or waiver of the terms of
any instrument securing this Note, no delay-in the enforcement of payment of
this Note or any security for, or guarantee of, this Note or the indebtedness
evidenced hereby, and no delay or omission in exercising any right or power
under this Note or any security for, or guarantee of, this Note or the
indebtedness evidenced hereby, shall affect the liability hereon of such makers,
sureties, guarantors or endorsers, or any of them.
None of the provisions hereof, and none of the Lender's rights or remedies
hereunder on account of any past or future defaults, shall be deemed to have
been waived by the Lender's acceptance of any past due amount or by any
indulgence granted by the Lender to any maker, surety, guarantor or endorser
hereof. This Note shall be the joint and several obligation of all such makers,
sureties, guarantors and endorsers, and shall be binding upon them and their
successors and assigns.
i. Savings Clause
All agreements between the Makers and the Lender contained herein are
hereby expressly limited so that in no contingency or event whatsoever, whether
by reason of acceleration of maturity of this Note, or otherwise, shall the
amount paid or agreed to be paid to the Lender for the use, forbearance or
detention of the principal amount evidenced by this Note and secured by the Deed
of Trust and the other Loan Documents exceed the maximum permissible under
applicable law the benefit of which may be asserted by the Makers as a defense,
and if, from any circumstance whatsoever, fulfillment of any provision of this
Note, the Deed of Trust or any of the other Loan Documents, at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, or if from any circumstances the Lender should
ever receive as interest under this Note, the Deed of Trust or any of the other
Loan Documents such an excessive amount, then, ipso facto, the amount which
would be excessive interest shall be applied to the reduction of the principal
balance as evidenced by this Note and secured by the Deed of Trust and the other
Loan Documents and not to the payment of interest. This provision shall control
every other provision of all agreements between the Makers and the Lender.
As used herein, the term the "Lender" shall mean, in addition to the
initial payee hereof, each person from time to time who is an endorsee of this
Note or the bearer, if this Note is at the time payable to bearer.
j. Lost or Mutilated Note
If this Note shall be mutilated, lost, stolen or destroyed, the Makers
shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Note, or in lieu of or in substitution for a lost,
stolen or destroyed Note, a new Note for the principal amount of this Note so
mutilated, lost, stolen or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such Note, and of the ownership hereof, and
indemnity, if requested, all reasonably satisfactory to the Makers.
k. Governing Law
All questions concerning the construction, validity, enforcement and
interpretation of this Note shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by any of this Note (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the "New York Courts"). Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of the New
York Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of this Note), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, or such New York Courts are improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Note and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Note or the transactions
contemplated hereby. If either party shall commence an action or proceeding to
enforce any provisions of this Note, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys' fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
l. Severability
If any provision of this Note is invalid, illegal or unenforceable, the
balance of this Note shall remain in effect, and if any provision is
inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances. If it shall be found that any
interest or other amount deemed interest due hereunder violates applicable laws
governing usury, the applicable rate of interest due hereunder shall
automatically be lowered to equal the maximum permitted rate of interest. The
Makers covenant (to the extent that it may lawfully do so) that it shall not at
any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Makers from paying all or any portion of the
principal of or interest on this Note as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this indenture, and the Makers (to the extent it may lawfully do
so) hereby expressly waive all benefits or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impeded
the execution of any power herein granted to the Lender, but will suffer and
permit the execution of every such as though no such law has been enacted.
m. Headings
The headings contained herein are for convenience only, do not constitute
a part of this Note and shall not be deemed to limit or affect any of the
provisions hereof.
n. Notices
Any and all notices or other communications or deliveries to be provided
by the Lender hereunder shall be in writing and delivered personally, by
facsimile, sent by a nationally recognized overnight courier service, addressed
to the Makers, at the addresses set forth above, facsimile number (954)
763-1516, Attn: Donald Winfrey or such other address or facsimile number as the
Makers may specify for such purposes by notice to the Lender delivered in
accordance with this Section. Any and all notices or other communications or
deliveries to be provided by the Makers hereunder shall be in writing and
delivered personally, by facsimile, sent by a nationally recognized overnight
courier service addressed to the Lender at the facsimile telephone number or
address of the Lender appearing on the books of the Makers, or if no such
facsimile telephone number or address appears, at the principal place of
business of the Lender. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section m prior to 5:30 p.m. (New
York City time), (ii) the date after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section m later than 5:30 p.m. (New York City time) on any
date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the
second Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given.
o. Assumption
Any successor to the Makers or surviving entity in a Fundamental
Transaction shall (i) assume in writing all of the obligations of such Makers
under this Note and the other Transaction Documents pursuant to written
agreements in form and substance satisfactory to the Lender (such approval not
to be unreasonably withheld or delayed) prior to such Fundamental Transaction
and (ii) if the successor is to the Company, except as otherwise provided for in
Section 4.9 of the Purchase Agreement, to issue to the Lender a new Note of such
successor entity evidenced by a written instrument substantially similar in form
and substance to this Note, including, without limitation, having a principal
amount and interest rate equal to the principal amounts and the interest rates
of the Notes held by the Lender and having similar ranking to the Note, and
satisfactory to the Lender (any such approval not to be unreasonably withheld or
delayed). The provisions of this Section shall apply similarly and equally to
successive Fundamental Transactions and shall be applied without regard to any
limitations of this Note.
WITNESS the execution hereof as of the day and date above first
written.
AZUR-SHELL LANDING DEVELOPMENT II, LLC
By: /s/ Carl Crawford
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Name: Carl Crawford
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Title: Manager
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By:
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Name:
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Title:
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THE GRAND SHELL LANDING, INC.
By: /s/ Carl Crawford
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Name: Carl Crawford
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Title: President
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AZUR INTERNATIONAL, INC.
By: /s/ Donald Winfrey
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Name: Donald Winfrey
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Title: President
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AZUR SHELL LANDING RESORT, INC.
By: /s/ Donald Winfrey
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Name: Donald Winfrey
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Title: Vice President
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