FORBEARANCE AGREEMENT
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THIS FORBEARANCE AGREEMENT (this "Agreement") is made and entered into as
of the ____ day December, 2001, by and between Universal Beverages Holdings
Corporation, a Florida corporation ("UBHC") and Universal Realty Investors, LLC,
a Florida limited liability company ("Universal Investors").
Background
A. UBHC is the owner of certain real property and improvements located at
0000 X. Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxx 00000 (the "Real Property"). The Real
Property previously served as security for a note ("Note") and mortgage in favor
of Great Lakes Bank ("Great Lakes"). Upon a default by UBHC under the Note,
Great Lakes initiated foreclosure proceedings in that certain action styled
Great Lakes Bank, N.A. v. Universal Beverages Holdings Corporation, et al., Case
No. 2001-CA-2266, in the Circuit Court of the Fifth Judicial Circuit, in and for
Lake County, Florida. Those proceedings resulted in a Final Judgment entered
October 11, 2001 (the "Final Judgment").
B. Universal Investors has entered into an agreement with Great Lakes to
obtain an assignment of the Final Judgment (the "Assignment"), subject to UBHC
and Universal Investors entering into this Agreement.
C. UBHC desires to enter into this Agreement in order to avoid a
foreclosure sale and provide it sufficient time to identify new financing to
satisfy the Final Judgment.
D. Universal Investors is willing to forbear from scheduling a foreclosure
sale and otherwise executing on the Final Judgment, in exchange for the
consideration provided herein and subject to the terms and conditions of this
Agreement.
Accordingly, to induce Universal Investors to forbear from scheduling a
foreclosure sale and otherwise executing on the Final Judgment, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree to the terms of this Agreement.
1. Representations and Warranties of UBHC. UBHC represents and warrants to
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Universal Investors as follows:
(a) Due Organization.UBHC is a corporation duly organized under the
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laws of the State of Florida.
(b) Authority. Xxxxxxxx X. Xxxxx is the duly elected President of UBHC
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and has the authority to execute and deliver this Agreement.
(c) Priority of Final Judgment. The Final Judgment is the senior lien
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against the Real Property. UBHC acknowledges that Universal Investors has not
undertaken a title search and that Universal Investors is relying exclusively on
the representations contained herein.
(d) No Fraudulent Intent. Neither the execution nor delivery of this
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Agreement, nor the performance of any actions required hereunder, is being
consummated by UBHC with or as a result of any actual intent by UBHC to hinder,
delay or defraud any person or entity to which UBHC is now or shall hereafter
become indebted.
(f) No Bankruptcy Intent. Neither UBHC nor its subsidiary, Universal
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Beverages, Inc., has any intent to (i) file any petition under any chapter of
the Federal bankruptcy Code, or in any manner to seek relief, protection,
reorganization, liquidation, dissolution or similar relief for debtors under any
other local, state, federal, or other insolvency law or laws providing for the
relief of debtors or in equity, or directly or indirectly cause any other
Borrower to file any such petition or to seek any such relief, either at the
present time or any time hereafter, or (ii) directly or indirectly cause any
involuntary petition under any chapter of the Federal Bankruptcy Code to be
filed against it, either at the present time, or at any time hereafter.
(g) Background Facts. The statements contained in the Background set
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forth above are true and correct, to the best of its knowledge.
2. Conditional Forbearance. Universal Investors hereby covenants and agrees
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that unless and until such time as a Forbearance Default has occurred (as
hereinafter defined), Universal Investors shall forbear from scheduling a
foreclosure sale or otherwise executing on the Final Judgment (the
"Forbearance"), so long as the following conditions are satisfied:
(a) Takeout Financing. UBHC shall immediately commence efforts to
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obtain takeout financing in an amount sufficient to satisfy the Final Judgment
and shall diligently exercise its best efforts to close on such financing as
soon as possible.
(b) Consideration. UBHC shall enter into a Consent Amended Final
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Judgment of Foreclosure (the "Amended Final Judgment") with Universal Investors,
increasing the principal amount of the Final Judgment by the sum of $160,000,
which amount shall be payable to Universal Investors as consideration for the
Forbearance. As additional consideration for the Forbearance, UBHC shall issue
to Universal Investors, or such of its members, as Universal Investors may
designate, warrants to acquire 1,800,000 shares of common stock of UBHC, $.01
par value, at an exercise price of $.25 per share.
(c) Corporate Approvals. UBHC shall obtain approval of this
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transaction from its Board of Directors.
(d) Forbearance Default. No Forbearance Default shall have occurred.
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3. Forbearance Defaults. For purposes of this Agreement, each of the
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following shall constitute a Forbearance Default:
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(a) Breach of Covenant and Misrepresentation. UBHC shall materially
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breach, default under or fail to perform in all material respects any of his or
its respective covenants, agreements and obligations under this Agreement, or
any representation or warranty of UBHC hereunder shall be materially untrue.
(b) Failure to Obtain Takeout Financing. UBHC shall fail to satisfy
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the Amended Final Judgment within sixty (60) days of the date hereof.
(c) Bankruptcy. UBHC of Universal Beverages, Inc. shall file any
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petition under any chapter of the Federal Bankruptcy Code, or in any manner seek
relief, protection, reorganization, liquidation, dissolution or similar relief
for debtors under any other federal, state, local or other insolvency law or
laws providing for the relief of debtors, or any third party, directly or
indirectly, shall cause an involuntary petition under any chapter of the Federal
Bankruptcy Code or any other federal, state, local or other insolvency law or
laws to be filed against either of them, or, directly or indirectly, cause
either of them to become the subject of any proceeding for the relief of
debtors.
(d) Failure of Condition. Any of the conditions set forth in Section 2
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above shall fail to occur.
4. Miscellaneous Provisions.
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(a) Binding Effect. The parties, their heirs, successors, and assigns
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shall be bound by and inure the benefit of this Agreement and its terms,
covenants, conditions, provisions, obligations, undertakings, rights, and
benefits.
(b) Amendments and Waiver. This Agreement may not be amended or
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modified except by a writing signed by the party or parties to be bound. Any
waiver by any of the parties of a breach of a provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach hereof.
(c) Severability. If any court of competent jurisdiction holds that
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any provision of this Agreement is invalid, illegal, or unenforceable, the other
provisions of this Agreement will not be affected and will remain valid and
enforceable. Any provision of this Agreement held invalid, illegal, or
unenforceable shall, to the extent possible, be modified to be valid, legal, and
enforceable, and to clearly express the intent of the parties.
(d) Attorneys' Fees. In any action or proceeding (including, but not
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limited to mediation, arbitration, bankruptcy, and appeals) to enforce the
provisions of this Agreement, the prevailing party shall be entitled to recover
the costs of such action, including reasonable attorneys' fees, from the
non-prevailing party.
(e) Governing Law and Venue. This Agreement shall be governed by,
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interpreted under, and construed in accordance with the laws of the State of
Florida without regard to conflict of laws principles. The venue for any
controversy arising under or in connection with this Agreement shall be Xxxxx
County, Florida.
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(f) Remedies. All rights and remedies granted under this Agreement
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shall be cumulative and not exclusive of any other rights and remedies which the
parties may have at law or in equity. The parties may exercise all or any of
such rights and remedies at any one or more times without being deemed to have
waived any or all other rights or remedies which they may have.
(g) No Joint Venture. Nothing contained herein shall be construed to
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modify the borrower and lender relationship between UBHC and Universal
Investors, or to create any other relationship between the parties, or to
constitute the parties as joint venturers or partners for any purpose
whatsoever.
(h) Construction of the Agreement. Each party hereto hereby
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acknowledges and agrees that (i) such party has participated in the negotiation
of this Agreement, and no provisions of this Agreement shall be construed
against or interpreted to the disadvantage of any party hereto by any court or
other governmental or judicial authority by reason of such party having or being
deemed to have structured, dictated or drafted such provision; (ii) such party
at all times has been represented by legal counsel in the negotiation of the
terms of and in the preparation and execution of this Agreement, and has had the
opportunity to review and analyze this Agreement for a sufficient period of time
prior to the execution and delivery hereof; (iii) no representations,
warranties, covenants or agreements have been made by or on behalf of any party,
or relied upon by any party, in connection with the execution and delivery of
this Agreement, other than those that are expressly set forth in this Agreement,
and all prior statements, representations, warranties, covenants and agreements
of any party are totally superseded and merged into this Agreement; (iv) all of
the terms of this Agreement were negotiated at arms-length, and this Agreement
was prepared and executed without fraud, duress, undue influence or coercion of
any kind exerted by any of the parties upon the others; and (v) the execution
and delivery of this Agreement is the free and voluntary act of each party.
(i) No Third Party Beneficiaries. All covenants and agreements of the
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parties hereto are solely and exclusively for the benefit of the parties hereto,
and no other person or entity shall have standing to require performance of any
such covenants and agreements, and no other person or entity shall, under any
circumstances, be deemed to be a beneficiary of such obligations.
(j) Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original copy of this
Agreement and all of which, when taken together, shall be deemed to constitute
one and the same Agreement.
(k) Complete and Final Agreement. The parties represent that this
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Agreement, expresses a complete and final agreement between the parties unless
the parties subsequently modify this Agreement in a writing signed by the party
or parties to be bound thereby.
SIGNATURES APPEAR ON FOLLOWING PAGE
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IN WITNESS WHEREOF, the parties have executed this Forbearance Agreement on
the date first above written.
UBHC:
UNIVERSAL BEVERAGES
HOLDINGS CORPORATION
By: /s/
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Xxxxxxxx X. Xxxxx, President
UNIVERSAL INVESTORS:
UNIVERSAL REALTY INVESTORS, LLC
By: /s/
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Xxxxxxx Xxxxxxx
-------------------, Managing Member
