EXHIBIT 10.1
XXXXXX X. XXXXXXXXXX
Senior Vice President
000 X. Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Tel. (000) 000-0000
Fax (000) 000-0000
August 15, 2005
Tierra del Sol Resorts, L.P.
c/o Resorts Development Group, LLC
0000 Xxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Attn.: Xxxxxxx X. Xxxxxx
Dear Xx. Xxxxxx:
KeyBank National Association (hereinafter "KeyBank", or "Lender") hereby
offers, subject to the terms and conditions hereinafter set forth, to make the
following commercial real estate mortgage construction loan (the "Loan"):
BORROWERS: (i) Tierra del Sol Resort, L.P., a limited
partnership organized under the laws of the State
of Florida; (ii) TDS Townhomes, LLC, a limited
liability company organized under the laws of the
State of Florida; (iii) Xxxxx Xxxxxx Real Estate,
Inc., a corporation organized under the laws of
the State of Florida; (iv) TDS Clubhouse, Inc., a
corporation organized under the laws of the State
of Florida, (v) TDS Amenities, Inc., a corporation
organized under the laws of the State of Florida;
(vi) Costa Xxxxxx XX Real Estate, LLC, a limited
liability company organized under the laws of the
State of Florida; (vii) Xxxxx Xxxxxx III Real
Estate, LLC, a limited liability company organized
under the laws of the State of Florida and (viii)
Tierra del Sol Resorts, Inc., a corporation
organized under the laws of the State of Florida
(the foregoing entities sometimes hereinafter
collectively referred to as the "Borrowers"). The
Borrowers shall be established in a manner
satisfactory to Lender, to be special purpose
entities (i.e., bankruptcy remote) and are
required to have an independent director.
REPAYMENT Xxxxxxx X. Xxxxxx ("Xxxxxx"), American
GUARANTORS: Leisure Holdings, Inc., a corporation organized
under the laws of the State of Florida ("ALH");
and LLC-6, a to-be-formed Florida limited
liability company, jointly and severally.
PERFORMANCE AND Xxxxxx, ALH, and LLC-6, an entity to be formed by
COMPLETION PCL, jointly and severally.
GUARANTORS:
COMPLETION PCL Construction Enterprises, Inc., a
GUARANTORS: corporation organized under the laws of the State
of Colorado ("PCL").
(The Repayment Guarantors, Performance and
Completion Guarantors and Completion Guarantor
collectively referred to as "Guarantors")
DESCRIPTION OF
PROJECT: The Loan (sometimes referred to herein as the
"Phase I Loan") is being committed for the
construction of a development known as "Tierra del
Sol" (the "Project"). The Loan which is the
subject of this Commitment is for Phase I of the
Project.
Additionally, an entity related to the
Lender, KeyBanc Capital Markets, is underwriting
the issuance of a Community Development District
("CDD") bonds, with net proceeds in the amount of
approximately $21,139,322, which will be used for
the payment of Project costs and to purchase
common land. Borrowers shall comply with all
requirements of KeyBanc with respect to the CDD
issuance.
USE OF PROCEEDS: The Loan proceeds are to be used solely for
the development of Phase 1 of Tierra del Sol
Resort (hereinafter called "Phase I") consisting
of a luxury townhouse/condominium community
consisting of 250 townhomes and 180 mid-rise
condominiums along with project infrastructure
(roadways, sewer, water, electric) and amenities
including a 100,000 square foot Clubhouse (85,000
sf under air) with concierge, casual and fine
dining restaurants, private theater, shops, a
world-class spa & fitness center, and other
improvements (the "Improvements") on land located
in Polk County, Florida (the "Land") (the Land,
Improvements and all related fixtures and personal
property are referred to as the "Project"), in
accordance with the Schedule of sources and uses
of funds and the Project budget set forth in
Exhibit "A", attached hereto, approved by the
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Xxxxxx xxxxxxxxx, as the same may be modified with
the prior written approval of the Lender, and to
pay such other related expenses and costs as shall
be approved in writing by the Lender.
LOAN AMOUNT: The principal amount of the Loan shall not
exceed NINETY-SIX MILLION SIX HUNDRED THOUSAND AND
NO/100 DOLLARS ($96,600,000.00) or so much thereof
as may be advanced from time to time to or for the
benefit of the Borrower subject to the terms and
conditions of the Construction Loan Agreement (the
"Loan Amount").
TERM /PRINCIPAL REPAYMENT: If not sooner paid, the entire principal
balance outstanding, together with all unpaid
interest thereon, fees, and costs and expenses
incurred by Lender, shall be due and payable in
full on the twenty-four ( 24 ) calendar month
anniversary of the Date of Closing ("Maturity").
PROJECT EQUITY REQUIREMENT: Borrowers shall provide evidence reasonably
satisfactory to the Lender that the project equity
("Project Equity") invested in the Project is not
less than the difference between the total Project
Cost as set forth in the Budget and the maximum
Phase I Loan amount; provided, however, in no
event shall the Project Equity be less than 44% of
the total cost of the Project as set out in the
Budget approved by the Lender hereunder or
$75,003,930, whichever is greater. The Project
Equity must be either (i) deposited with Lender
prior to the Date of Closing, and disbursed prior
to the first advance of the Loan or (ii) used to
pay Project costs approved by Xxxxxx, with
evidence of payment delivered to Lender prior to
the first advance of the Loan.
RELEASE PRICE: Release Price for the Loan shall be the
greater of (i) 100% of net sales proceeds or (ii)
individual unit release prices per a
to-be-determined stacking plan (acceptable to
Lender) that produces not less than a 1.20x
acceleration on the Loan.
INTEREST RATE: Advances of the proceeds of the Loan shall
bear interest at the 30-Day Daily Adjustable LIBOR
Rate plus the LIBOR Rate Margin. The LIBOR Rate
Margin shall be 2.75%. The LIBOR Rate shall be the
average rate as shown in Dow Xxxxx Markets
(formerly Telerate) (Page 3750) at which deposits
in United States Dollars are offered by first
class banks in the London Interbank Market at
approximately 11:00 a.m. (London time) two (2)
business days prior to the date an advance is made
in an amount of the advance and with a maturity
equal to the applicable Interest Period. The LIBOR
Rate will be adjusted for any applicable reserves
and taxes if required by future regulations.
Interest shall be calculated on the basis of
a 360-day year for the actual number of days
elapsed.
DEFAULT RATE: In the event of any default, the interest
rate shall be the greater of (i) three percent
(3%) in excess of the Interest Rate otherwise
applicable on each outstanding advance or (ii)
eighteen percent (18%), but shall not at any time
exceed the highest rate permitted by law.
INTEREST PAYMENTS: Interest on the principal balance outstanding
on the Loan from time to time shall be due and
payable monthly beginning on the 5th day of the
first calendar month following the Date of Closing
(as hereinafter defined) and continuing on the 5th
day of each consecutive calendar month thereafter.
INTEREST RATE PROTECTION: Borrowers may be required to institute an
interest rate hedging program through the purchase
of an interest rate swap, cap, or other such
interest rate protection product ("Interest Rate
Protection Product") with respect to the Loan. The
Interest Rate Protection Product, the portion of
the Loan (if less than the Loan Amount) to which
the Interest Rate Protection Product shall apply,
and the financial institution providing the
Interest Rate Protection Product shall be subject
to the prior approval of the Lender.
If Borrowers purchases the Interest Rate
Protection Product from the Lender, Borrowers
shall enter into the Lender's customary form
agreement for such purposes and any indebtedness
or other obligations of Borrowers arising under
such agreement shall be indebtedness secured by
the Mortgage and the other Loan Documents.
LOAN FEES: At Closing, fees shall be payable by
Borrowers to the Lender as follows:
1. COMMITMENT FEE: Upon the Borrowers'
acceptance of this Commitment, a Commitment
Fee of NINE HUNDRED SIXTY-SIX THOUSAND AND
NO/100 DOLLARS ($966,000.00) (1% of the Loan
amount) shall be paid on or before the Date
of Closing. $50,000.00 of this amount shall
be paid at the signing of this Commitment
Letter and shall be non-refundable.
2. LOAN ADMINISTRATION FEE: A Loan
Administration Fee of ONE HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($150,000.00)
shall be paid on or before the Date of
Closing and annually, in advance, thereafter
during the term of the Loan.
Borrowers acknowledge that each such Fees
shall be for the applicable services rendered,
supported by good, valuable and adequate
consideration. The Commitment Fee and the Loan
Administration Fee shall be deemed to be earned by
the Lender on the date of this Commitment and
shall not be refundable for any reason.
EXPENSES: Borrowers shall pay all costs and expenses
including (by way of illustration and not
limitation): recording fees, title insurance
costs, escrow fees, flood zone determination fee,
survey fees, appraisal costs, the Lender's outside
and in -house attorney's costs and fees, the
Lender's document preparation fee, engineer's fee,
inspecting architect's fee, environmental audit
and site inspection fees, and any and all other
costs of the Lender in connection with this
Commitment and the Loan.
LATE FEE: For any payment of principal or interest made
later than five (5) days following the due date,
Borrowers shall pay a late fee equal to the
greater of four percent (4%) of the amount of such
payment or Twenty-five Dollars ($25.00).
LOAN DOCUMENTS
AND SECURITY FOR
THE LOAN: The Loan shall be evidenced by a promissory
note (the "Note") for the Loan Amount and a
Construction Loan Agreement, and shall be secured
by:
1. A mortgage, assignment of leases and
rents, security agreement and fixture filing
(the "Mortgage") which Mortgage shall convey
to Lender (a) a first lien upon the
unencumbered fee simple title to the Land and
the Improvements and easements and rights of
way appurtenant thereto, which Land shall be
more fully described in a legal description
to be provided by the Borrowers to
satisfaction of the Lender, and (b) a first
lien and security interest in all fixtures
and personal property owned by Borrowers and
relating to or located on the Project, and
(c) assigning all leases, subleases and other
agreements relating to the use and occupancy
of all or any portion of the Project, and to
all present and future rents, leases, issues
and profits therefrom;
2. A Guaranty of Payment executed by each
Repayment Guarantor and pursuant to which the
Repayment Guarantors jointly and severally
guarantee payment of principal, interest and
other amounts due under the Loan;
3. A Guaranty of Performance and Completion
executed by each Performance and Completion
Guarantor and pursuant to which the
Performance and Completion Guarantors jointly
and severally guarantee the lien-free and
timely completion of the Project and
Borrowers' obligation to keep the Loan "in
balance" and to pay for all cost overruns;
4. A Guaranty of Completion executed by the
Completion Guarantor and pursuant to which
the Completion Guarantor guarantee the
lien-free and timely completion of the
Project.
5. Such UCC Financing Statements describing
the personal property relating to the Project
as Xxxxxx's counsel determines are necessary
to perfect or notify third parties of the
security interest intended to be created in
such property by the Loan Documents;
6. An Environmental Indemnity Agreement
executed by Xxxxxxxxx and the Guarantors,
jointly and severally;
7. An assignment of construction documents,
including, without limitation, the General
Contract, all architecture and engineering
contracts, Plans and Specifications, permits,
licenses, approvals and development rights,
together with consents to the assignment and
construction agreements from the Genera
Contractor, the architect and other parties
specified by Xxxxxx.
8. A collateral assignment of all contracts
and agreements related to sale of each
condominium unit (as applicable).
9. A collateral assignment of all purchase
deposits.
10. An assignment of any management and/or
operating agreements.
11. A Subordination, Nondisturbance and
Attornment Agreement between Lender and each
of the tenants under any lease(s), if
applicable; and
12. Such other documents, instruments or
certificates as the Lender and its counsel
may reasonably require, including such
documents as Lender in its sole discretion
deems necessary or appropriate to effectuate
the terms and conditions of the Construction
Loan Agreement and the other Loan Documents,
and to comply with the laws of this State.
All of the foregoing documents (the "Loan
Documents") shall be in form and substance
acceptable to the Lender and shall remain
effective for as long a period of time as any part
of the Loan is unpaid.
In addition, at Closing, Borrowers shall
deliver the opinions of Xxxxxxxxx' legal counsel,
in form and substance acceptable to Lender and
Xxxxxx's counsel, that
With respect to the Borrowers, the
Guarantors, the Land, and the Project, that:
(a) the transactions contemplated by this
Commitment do not violate any provision of
any law, restriction or the document
affecting the Borrowers, the Guarantor(s),
the Land, or the Project; (b) the Loan
Documents have been duly executed and
delivered, constitute legal, valid and
binding obligations of the Borrowers and
Guarantor and are enforceable in accordance
with their terms; (c) the Borrowers are
validly organized and existing corporations
and/or limited liability companies under the
laws of the State of Florida and qualified to
do business in the State of Florida, that
each has the legal capacity to own, develop
and operate the Land and the Project and to
perform its obligations under the Loan
Documents, and that the Loan has been duly
authorized by the Borrowers; (d) the
Guarantors, as applicable, are validly
organized and existing corporations and/or
limited liability companies under the laws of
the State of Florida and qualified to do
business in the State of Florida and are duly
authorized to execute and deliver the
Guaranties; (e) there is no threatened or
pending litigation that might affect the
Loan, the Guarantor(s), the Land, the Project
or the Borrowers; and (f) such other matters
(including an opinion with respect to zoning
of the Land and the Project) concerning the
Loan, the Loan Documents, the Land, the
Project, the Borrowers, or the Guarantor, as
the Lender or its counsel may require.
A non-consolidation opinion confirming that the
structure of the Loans and the organization of the
Borrowers and Guarantors is such that the Borrower will
constitute a "special purpose, bankruptcy remote
entity", separate from ALH and any other related or
commonly owned entities.
PRE-SALE
REQUIREMENT: Borrowers shall deliver to Lender prior to Closing
fully executed Qualified Contracts which will produce
aggregate net sales proceeds sufficient to cover 120%
of the Loan Amount. Qualified Contracts shall have the
following characteristics: (i) must be non-assignable;
(ii) must indicate 20% non-refundable deposits; and
(iii) Units sold pursuant to Qualified Contracts must
be deliverable within the timeframe required by the
contract. Furthermore, not more than 35 Phase I units
can be sold to individuals/entities associated with the
Project.
In addition, and as part of the Project Equity
requirement, Borrowers shall deliver to Lender, to be
held by, and pledged to Lender, Usable Deposits
totaling at least $25,498,108.00; or provide such
evidence to Lender, acceptable in Lender's sole
discretion, such Usable Deposits have been utilized in
accordance with the sources and uses of funds attached
as EXHIBIT "A". If Usable Deposits are not equal to or
greater than $25,498,108.00, in the aggregate,
Xxxxxxxx's equity requirement shall be increased on a
dollar for dollar basis for each dollar that Usable
Deposits are less than $25,498,108.00. Usable Deposits
are defined as: (i) 10% (2nd 10% deposits) of the gross
sales contract price of each Phase I condominium unit;
or (ii) 20% of the gross sales contract price of each
Phase I townhome unit.
Furthermore, prior to funding Phase I Loan
proceeds for a particular condominium building,
Borrowers shall deliver to Lender contracts of sale,
sufficient to Lender, for at least thirty-three (33)
units with evidence, sufficient to Lender, that
Borrowers have received full twenty percent (20%)
deposits for each of said contracts of sale.
APPRAISAL: Xxxxxx has received a written appraisal from
Integra Realty Resources dated March 15, 2005
reflecting an appraised value of $123,600,000.00. The
appraisal shall be updated, at Borrowers' cost, as and
when reasonably requested by Xxxxxx.
TITLE INSURANCE
POLICY: Counsel for Lender shall obtain, at Borrowers'
expense, an ALTA extended coverage lender's policy of
title insurance meeting the requirements set out in
Exhibit "D" attached hereto by a title company
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satisfactory to the Lender in the Loan Amount, insuring
the Lender that it has a first lien upon the Project,
and including insurance against construction liens and
encroachments by or upon the Project and with such
endorsements as may be required by the Lender, with all
so-called "Standard" exceptions deleted and containing
no exceptions other than those specifically approved by
the Lender (the foregoing hereinafter referred to as
the "ALTA Policy").
INSURANCE: Borrowers shall obtain and maintain either
Builder's Risk insurance coverage or permanent All Risk
insurance coverage as appropriate, satisfactory to the
Lender, on the real estate and personal property
securing this Phase I Loan. All insurance policies
shall be issued by carriers with a Best's Insurance
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Reports policy holder's rating of A and a financial
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size category of Class X and shall include a standard
mortgage clause (without contribution) in favor of and
acceptable to the Lender. The policies shall provide
for the coverages set forth in Exhibit "F" attached and
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any other coverage that the Lender may from time to
time deem necessary:
Each policy shall provide that it may not be
cancelled, reduced or terminated without at least
thirty (30) days prior written notice to Lender. The
initial policies shall be prepaid and delivered to the
Lender prior to closing and all renewal policies shall
be deposited with Lender as evidence of such insurance.
ENVIRONMENTAL
ASSESSMENT: Borrowers shall provide evidence (including a
"Phase I" environmental assessment) indicating that the
Land is free from risk, in the Lender's sole judgment,
from all hazardous substances, toxic substances or
hazardous wastes as defined by any federal, state, or
local law, statute, ordinance or regulation and is free
of all other contamination which, even if not so
regulated, is known to pose a hazard to the health of
any person on or about the Land, and that the Land is
not in a "Wetlands" or "Flood Plain" area, and contains
no underground storage tanks or oil or gas xxxxx. The
environmental consultant must be acceptable to the
Lender and shall be directly engaged by Borrowers at
Borrowers' cost. The Lender reserves the right, at
Borrowers' expense, to retain an independent consultant
to review any such evidence submitted by Borrowers or
to conduct its own investigation of the Land.
In addition, the Lender may, under appropriate
circumstances consider the use of environmental
insurance to mitigate the risks of certain conditions.
CONSTRUCTION
INSPECTIONS: The Lender shall require the services of an
outside consulting engineer (the "Xxxxxx's
Consultant"), to be engaged by the Lender at the cost
and expense of the Borrowers, to perform the following
services on behalf of the Lender:
a. To make an initial pre-cost analysis
verifying that the Improvements can be completed
for the amount available for construction from the
Loan budget established by the Lender for the
Borrowers;
b. To review and advise the Lender whether, in
the opinion of the Lender's Consultant, the final
plans and specifications are satisfactory for the
intended purposes thereof;
c. To make monthly inspections and certify that
construction is in accordance with the original
plans and specifications approved by the Lender to
certify that construction has reached the stated
percentage of completion, that the monthly
requisitions actually reflect the degree of work
performed to date and that the undisbursed
proceeds of the Loan are sufficient to complete
the construction;
d. To review and approve construction contracts
entered into by the Borrowers or the General
Contractor in connection with the construction of
the Project, for the purpose of providing the
Lender with an opinion as to the costs of
construction to be incurred to complete the
Project, and also for the purpose of assuring the
Lender that all such contracts deal adequately
with and include the work required to be performed
by the approved final plans and specifications.
NON-ASSIGNABILITY
OF COMMITMENT: This Commitment is made exclusively to the
Borrowers and is not assignable nor transferable
voluntarily or involuntarily by the Borrowers and any
such assignment or transfer or attempted assignment, or
transfer shall be null and void and shall result in
this Commitment being automatically and simultaneously
terminated.
LENDER
PARTICIPATION/
SYNDICATION CONTINGENCY: Borrowers acknowledges that the Lender will hold
$35,000,000.00 of the Loan and will need to syndicate
and/or participate the remaining $61,600,000.00 of its
interest in the Loan before closing, and as a condition
of closing, and Borrowers agree to, at Xxxxxx's
request, execute such additional promissory notes and
other instruments as may be appropriate to evidence its
obligation under the Loan to such syndicate banks as
may commit, in the future, to fund a portion of the
Loan amount according to the terms of the Construction
Loan Agreement.
Xxxxxx shall be the lead arranger and will manager
all aspects of the syndication, including the selection
of lenders, the determination of when lead arranger
will approach potential lenders and the final
allocation among lenders. Borrowers agree to assist
lead arranger actively in achieving a timely
syndication that is reasonably satisfactory to lead
arranger, such assistance to include, among other
things, (a) direct contact during syndication between
Borrowers' senior officers, representatives and
advisors, on the one hand, and prospective lenders, on
the other hand at such times and places as lead
arranger may reasonably request, (b) providing lead
arranger all financial and other information with
respect to Borrowers and the transactions contemplated
that lead arranger may reasonably request, including
but not limited to financial projections relating to
the foregoing, and (c) assistance in preparation of a
confidential information memorandum and other marketing
materials to be used in connection with the
syndication.
Xxxxxx, as Agent, shall be entitled with consent
of Borrowers (which shall not be unreasonably
withheld), to change the structure or terms of the Loan
if Lender determines that such changes are advisable in
order to ensure successful syndication or an optimal
credit structure for the Loan, provided the total Loan
Amount will not change. In addition, this Commitment is
subject to (among other things) the absence of (i) a
material adverse change in the business, condition
(financial or otherwise), operations, performance,
properties or prospects of Borrowers; and (ii) any
material change in loan syndication or financial or
capital market conditions generally from those
currently in effect. In the event that the Loan does
not close (x) as a result of (ii) above or (y) as a
result of Borrowers reasonably withholding its consent
to a change to the structure or terms of the Loan in
accordance with the terms hereof, then, in either case,
Borrowers shall be entitled to a refund of the fees
paid, less expenses incurred and amounts otherwise
designated as not being refundable.
INDEMNIFICATION: Borrowers and each Guarantor agrees to indemnify
and to defend and hold the Lender harmless against (i)
any brokerage commissions or finder's fees claimed by
any broker or other party in connection with the
transactions contemplated hereby and (ii) any losses,
costs, damages or expenses that the Lender may incur,
directly or indirectly, including attorneys' fees, as a
result of or in connection with the assertion against
the Lender of any claims relating to the presence or
removal of any environmental contamination on the
Project or any adjacent property.
DISBURSEMENT
PROCEDURES: All funds disbursed under the Loan shall be
subject to the Lender's Construction Loan Agreement,
which shall contain such terms, covenants, and
conditions as shall be satisfactory to the Lender,
including without limitation, the following:
Draw Request: All requests for disbursement of
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funds ("Phase I Loan Disbursement") shall be in writing
using the Lender's standard form of Borrower
Certificate and shall be submitted on a Standard AIA
Form G702 and G703, including any change orders on a
Standard AIA Form G701, and including invoices for any
"soft costs," and shall be for costs consistent with
the final Project cost breakdown as presented on
Lender's standard "Soft and Hard Cost Requisition" form
and accepted by the Lender in aggregate total and
itemization. Draw requests should not be made more
frequently than once per month. Lender may, in its sole
discretion permit disbursements for materials stored
off-site. Each draw request shall be certified by the
Borrowers and approved in writing by the Project
Architect or Engineer, and the Lender's independent
inspector.
Affidavits/Xxxx Xxxxxxx: The Borrowers shall
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submit with all Draw Requests affidavits certifying all
outstanding balances due but unpaid for work in place
for the Project. With each draw request, Xxxxxx shall
have the right to require the Borrowers to deliver to
the Lender waivers of liens from contractors in the
respective sum received by each such contractor for all
of Borrowers' preceding draw requests.
Title Insurance: Lender shall be provided with an
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endorsement to the ALTA Policy, as of the date of the
requested Phase I Loan Disbursement, showing no
additional liens or encumbrances upon the Project,
including identification of delinquent taxes.
Inspections: All inspections shall be completed by
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an agent for the Lender who may require further
information, including, but not limited to, documents
such as contracts and invoices, to complete the
analysis of the Draw Request. The Borrowers shall pay
the cost of these inspections as well as offsite stored
materials inspections, if applicable.
Foundation Survey: Upon completion of the each
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foundation, the Borrowers shall submit a foundation
survey complying with Exhibit "B" attached hereto.
Disbursements: All disbursements shall be made
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within approximately ten (10) days after receipt of all
information required by the Lender to approve the
requested disbursements.
Net Cash Flow. The Loan Agreement shall require
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that all Net Cash Flow from the Project must be
deposited with the Lender in a demand deposit account
in Borrowers' name but under the Lender's sole dominion
and control. Funds deposited in such account shall be
applied against the monthly payments on the Loan, and
Phase I Loan proceeds will be disbursed from the
interest reserve set out in the Budget only to the
extent the Net Cash Flow is not sufficient to make the
payments. "Net Cash Flow" means the gross income
produced by the Project from all sources reduced by (a)
ordinary and necessary operating expenses actually
incurred and paid with respect to the Project
(including amounts paid to affiliates of Borrowers only
if preapproved by the Lender), (b) reasonable capital
expenditures actually made with respect to the Project
(other than those funded out of Phase I Loan proceeds),
and (c) reasonable reserves for repairs and
replacements to the Project, but only if and to the
extent such reserves are funded in cash and deposited
with the Lender and pledged to the Lender as security
for payment of the Loan.
Funds will be disbursed directly into a demand
deposit account maintained by Borrowers at the Lender
specifically for the Project; provided, however, the
Lender reserves the right to pay individual contractors
directly or by check jointly payable to Borrowers and
any such contractor should circumstances warrant in
Xxxxxx's sole opinion. At Lender's option,
disbursements may be made by Xxxxxx into an escrow
account and subsequently disbursed to Borrowers by the
Title Company.
In Balance: The Loan shall remain "in balance" at
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all times. The Loan shall be deemed to be "in balance"
only at such times as Lender determines, in its
reasonable discretion, that the then undisbursed
portion of the Loan equals or exceeds the amount
necessary to pay all work done and not theretofore paid
for or to be done in connection with the completion of
the construction of the Project in accordance with the
plans and specifications or otherwise to be incurred in
connection with completion of the Project. If the
Lender determines that the Loan is not "in balance",
Borrowers shall within ten (10) days after written
request by Lender deposit the amount of the deficiency
with Lender which shall then be disbursed before any
further disbursements of Phase I Loan proceeds. Lender
shall not be obligated to make any disbursement of the
Loan at any time that the Loan is not in balance.
Retainage: At the time of each disbursement the
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Lender shall withhold ten percent (10%) (the
"Retainage") of the "hard costs" contained on each
requested Phase I Loan disbursement (i.e., the total
amount then due the General Contractor and the various
contractors, subcontractors and material suppliers for
costs of construction.) until such time as the Project
is 50% complete. Thereafter, the Retainage shall be
zero percent (0%). The Retainage shall be held until
completion of the Project and disbursed only at the
time of the final disbursement of the Loan; provided,
however, upon the satisfactory completion of 100% of
the work with respect to any individual trade or the
delivery of all materials pursuant to a purchase order
in accordance with the plans and specifications as
certified by the Lender's consultant, Xxxxxx may decide
on a case by case basis (but shall not be obligated) to
permit retainages with respect to such trade order to
be disbursed to Borrowers.
ADDITIONAL LOAN
CONDITIONS: 1. The plans and specifications, schedule,
Budget, and other written materials related to the
construction of the Project shall be subject to
Lender's review and approval, including, but not
limited to, a soil analysis and evidence of
compliance with the Americans with Disabilities
Act.
2. Construction of the Improvements shall be
commenced within thirty (30) days of Closing and
shall be completed within twenty-one (21) months.
3. Upon completion of all construction and prior
to disbursement of the final Retainage, Borrowers
shall submit evidence of completion of the
Project, consisting of (i) a Certificate of
Substantial Completion AIA Form G704 from the
supervising architect and General Contractor
certifying that the Project has been completed in
accordance with the final plans and specifications
as approved by the Lender; (ii) a certificate of
use and occupancy and any other certificates
required by the State of Florida or by any other
applicable governmental department, agency or
unit; (iii) a complete "As-Built" ALTA/ACSM final
survey of the Project complying with Exhibit "B"
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attached hereto; (iv) a rent roll and copies of
all leases for the Project; and (v) tenant
estoppel certificates in form and substance
acceptable to Lender.
4. All contracts for sale of condominium or
townhome units shall be submitted to and
acceptable to Lender in all respects, and must
include a delivery date that can be achieved as
evidenced by the final construction schedule. PCL
to present a final construction schedule to
Lender. This final schedule will be reviewed by
Xxxxxx and its third party construction inspector
and must be acceptable in all respects.
Additionally, a matrix must be approved by Lender
that demonstrates on a unit-by-unit basis that
each unit under contract will be delivered within
twenty-four (24) months from the date of contract,
and not less than three (3) months prior to the
required delivery date contained in each
respective purchase and sale agreement. No
extension of such contracts may be made without
Lender's approval.
5. Borrowers shall provide Lender with monthly
Project sales updates.
6. Borrowers and the Guarantor(s) shall submit
to Lender: (i) not later than one hundred eighty
(180) days after the end of each calendar year,
annual Federal Income Tax Returns; (ii) not later
than 90 days after the end of each fiscal year, an
annual, audited financial statement (or personal
financial statement, as applicable to Xxxxxxx X.
Xxxxxx), and (iii) not later than 45 days after
the end of each calendar quarter a company
prepared interim financial statement (as
applicable to all Borrowers and Guarantors with
the exception of Xxxxxxx X. Xxxxxx). Each
financial statement shall be prepared by a
certified public accountant acceptable to Lender
in accordance with generally accepted accounting
principles. Each financial statement shall be
certified as true, complete and correct by its
preparer and by Borrowers or, in the case of each
of the Guarantors' financial statements, by the
Guarantor to whom it relates. In addition, prior
to the Date of Closing and then not later than
sixty (60) days before the end of each fiscal year
of Borrowers, Borrowers shall deliver to Lender
the Project's updated annual operating budget for
the following fiscal year. Within fifteen (15)
days following the end of each month, Borrowers
shall deliver to Lender: (i) monthly unaudited
operating cash flow statements for the Project,
certified as true, complete and correct by
Borrowers showing actual sources and uses of cash
during the preceding month, and (ii) a current
rent roll and a summary of all leasing activity
then taking place with respect to the Project,
particularly describing the status of all pending
lease negotiations, if any. Borrowers and the
Guarantors shall provide such additional financial
information Lender reasonably requires. Borrowers
shall during regular business hours permit Lender
or any of its agents or representatives to have
access to and examine all of its books and records
regarding the development and operation of the
Project.
7. Borrowers shall erect a sign on the Land
indicating that the Lender is the source of
financing for the Project and to use the Loan
Amount, Borrowers' name and Project location in
any advertisement. Borrowers shall pay the costs
and expenses associated with such sign.
8. Until the Loan is paid in full, neither the
Borrowers nor any Guarantor(s) shall, without the
prior written consent of the Lender, create,
effect, consent to, attempt, contract for, agree
to make, suffer or permit any conveyance (other
than leases for portions of the Project in the
ordinary course of business), sale, assignment,
transfer, lien, pledge, mortgage, security
interest, encumbrance or alienation of, the
Project, or any interest in or portion of the
Project, or any interest in the Borrowers, which
is effected directly, indirectly, voluntarily,
involuntarily, or by operation of law or
otherwise.
9. Provided no Event of Default exists under any
of the Loan Documents at any time while the Loan
remains unpaid, the Lender will permit Borrowers
to pay the Property insurance premiums and real
estate taxes related to the Project outside of
escrow during the term of the Loan. Borrowers
shall furnish to the Lender evidence that the
insurance premiums and real estate taxes are paid,
at least five (5) days prior to the last date for
payment of such amounts before imposition of any
penalty or interest or termination of the
insurance policy, as applicable.
10. $8,038,370.00 of the CDD proceeds must be
utilized to purchase the Land from the current
owner, an entity related to the Borrowers and
then, concurrently, the Borrowers shall cause
$6,038,370.00 of such funds to be utilized in the
Project with the remaining $2,000,000.00 to be
placed in a collateral account to be pledged as
additional security for the Loan. Borrowers must
demonstrate to Xxxxxx's satisfaction that all CDD
funds will be utilized for qualified project
costs, and in accordance with the sources and
uses. Borrower shall assign to Lender any proceeds
to be received from the funding of approximately
$25,000,000.00 of Special Assessment Capital
Improvement Bonds (the "Bonds") for Phase I issued
by the Westridge Community Development District
(the "CDD").
11. Borrower shall provide satisfactory
agreements related to the CDD Bond issuance and
proceeds required among the CDD, the Borrower,
Lender, the Bond Trustee, and any other associated
parties.
12. Lender may hold, in escrow, letters of
resignation of the current board members of the
CDD, which letters can be release from escrow upon
the occurrence of an event of default hereunder.
13. Borrower shall assign to Lender all
contracts, agreements, proceeds related to the CDD
and any associated bond offerings.
14. PCL shall form a to-be-determined limited
liability company ("LLC-6") and shall fund LLC-6
with cash or comparable liquid assets in an amount
equal to or greater than $4,000,000.00.
$4,000,000.00 must be deposited with the Lender in
a demand deposit account in LLC-6's name but under
the Lender's sole dominion and control, and said
account shall be pledged as additional security
for the Loan. The account, as well as the LLC-6
Guaranty, will be released upon full repayment of
the Loan.
15. Fidelity & Deposit Company of Maryland shall
issue a $4,000,000.00 Financial Guarantee Bond for
the Project, which bond form will be acceptable to
Lender in all respects, and which is to remain in
place until the Loan is paid in full.
16. Borrowers and/or Guarantors shall deposit
$2,000,000.00 cash in a demand deposit account
under the Lender's sole dominion and control, and
said account shall be pledged as additional
security for the Loan. The account will be
released upon full repayment of the Loan.
17. Borrowers shall not obtain subordinate
financing unless approved by Xxxxxx.
18. Lender must review and approve of all
condominium documents, homeowners' association
documents, management agreements and CDD
documents, and the condominium documents must be
approved by all applicable state agencies and
filed with the State of Florida.
19. The partnership agreement between American
Leisure Holdings, Inc., and Raster Investments
must be acceptable to Lender in all respects.
20. Assignment of the operating agreement between
American Leisure Hospitality Group and Sonesta
Orlando, Inc.
21. Satisfactory OFAC and Patriot Act searches.
Borrowers and Guarantors shall cooperate with
Lender and provide all information necessary to
complete searches. Borrowers and Guarantors shall
complete the information attached as EXHIBIT "G".
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22. Borrowers shall open and maintain a
depository account with Lender for deposits
associated with the Project. Escrow Agent for any
and all deposits associated with the Project must
be acceptable to Lender.
23. General Contractor will be required to
demonstrate full payment and performance bonding
or Subguard insurance from Zurich in a form
approved by Lender.
24. Execution of this Commitment Letter by
Xxxxxxx X. Xxxxxx shall serve as authorization for
Lender to conduct personal background and
financial investigations, at Borrowers' expense.
ITEMS TO BE
DELIVERED
PRE-CLOSING: Borrowers shall furnish the following
documentation to the Lender at least ten (10) business
days prior to Closing, all in form, substance and
execution satisfactory to the Lender:
1. A complete set of final plans and
specifications for development of the Project.
2. A cost breakdown and itemization of all hard
and soft costs for the Project and the sources for
payment of such costs (herein called the "Budget).
This itemization shall include (i) a summary page
indicating costs of land, site work, construction
and soft costs on an AIA G703 form and (ii)
detailed schedules supporting the site work and
construction costs shown on the AIA G703 form
according to Construction Standards Institute
Division. General Contractor shall provide Lender
with proof of required insurance.
3. Evidence that the insurance required under
this Commitment has been obtained.
4. ALTA/ACSM Survey complying with the
requirements set forth on Exhibit "B" attached
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hereto.
5. All of the Engineer's or Architects'
Contracts and the General Contractor's contract
and all other primary contracts related to
construction of the Project.
6. A list of all known and contemplated
contractors used for development of the Project.
7. Soil analysis (including drainage) by a
qualified engineer evidencing that the soil
condition is suitable for construction of the
Improvements.
8. Evidence of compliance with all applicable
zoning requirements.
9. Evidence of availability of storm and
sanitary sewers and all utilities to the Project.
10. A Notice of Commencement complying with
applicable law.
11. Architect's Certificate of Compliance with
local governmental zoning and building ordinances
and architect's professional liability insurance.
12. As applicable, certified copy of Borrowers'
Articles of Incorporation, Articles of
Organization, Bylaws, Operating Agreement,
Certificates of Good Standing from the Secretary
of the State of Florida and resolutions
authorizing the action required of the Borrowers.
13. As applicable, certified copy of Guarantor's
Articles of Incorporation, Articles of
Organization, Bylaws, Operating Agreement,
Certificate of Good Standing from the Secretary of
the State of Florida and resolutions authorizing
the action required of the Guarantor.
14. The Borrowers' and any Guarantor's Federal
Tax I.D. Number or Social Security Number.
15. A Commitment for the issuance of the ALTA
Policy and copies of all items listed in Schedule
B thereof.
16. Construction Schedule setting forth the
approximate start and finish dates of all major
stages of the Project; such schedule shall provide
that the construction of the Improvements shall
commence on or before ninety (90) days after the
Date of Closing.
17. Evidence of all building permits and
governmental approvals necessary for the Project.
18. Current financial statements of the Borrowers
and any Guarantors which indicate no material
adverse change from those previously delivered to
the Lender.
19. A copy of the Lease(s) described on Exhibit
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"C" attached hereto, fully executed, and certified
---
by the Borrowers as being a true, correct and
complete copy and, if applicable, a copy of the
standard lease form to be used with respect to the
Project.
20. Performance and guaranty bonds satisfactory
to Lender in form and substance.
21. A report from Xxxxxx's Consultant (a)
demonstrating the adequacy of Xxxxxxxxx' proposed
Budget to complete the Project and (b)
confirmation that the Construction Schedule is
realistic and acceptable in all respects.
Additionally, a matrix must be approved by Xxxxxx
and Xxxxxx's Consultant that demonstrates on a
unit-by-unit basis that each unit under contract
can be delivered not less than three months prior
to the required delivery date contained in each
respective purchase and sale agreement.
22. Federal and state tax lien, judgment, UCC and
pending litigation searches for each Co-Borrower
and each Guarantor for each state and county in
which such entity was formed as well as the State
and county in which the Project is located - in
each case, not more than dated not more than sixty
(60) days prior to the Loan closing.
23. A duly executed Architect's Certificate in
the form of Exhibit "E" attached hereto.
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24. Any and all other documents reasonably
requested by Xxxxxx.
FLOOD PLAIN
DETERMINATION: The Lender shall obtain, at Borrowers' cost, a
Flood Zone Certificate certifying that the Premises are
not located in a special flood hazard area as
identified by FEMA.
FINANCIAL
CONDITION: As of the Date of Closing of the Loan, there shall
have been no material adverse change in the financial
condition or credit of any Co-Borrower or any Guarantor
or tenant of the Project nor in the value or condition
of the Project.
COMMITMENT
EXPIRATION: This Commitment is open for acceptance by the
Borrowers until 5:00 P.M. Orlando, Florida Time five
(5) days from the date of this Commitment. If it is not
accepted and returned to the Lender with the Commitment
Fee by said date, the Commitment shall immediately
become null and void without further notice.
PHASE I LOAN CLOSING
DATE: The Loan shall be closed no later than ninety (90)
days from the execution of this Commitment, or this
Commitment shall immediately become null and void
without further notice. As used herein, "Date of
Closing" and "Closing" shall mean that day on which the
Mortgage is filed for record with the appropriate
county recorders or clerks, and all other conditions of
this Commitment are satisfied.
XXXXXX'S COUNSEL: The Lender will be represented by the law firm of
Xxxxx & Xxxxxxx LLP. The principal contact attorney at
the firm will be Xxxxxxx X. Xxxxxxxxx, Xx., Esq.
(Telephone 000.000.0000; Fax 000.000.0000).
The Lender's obligation under this Commitment shall be subject to
satisfaction of all of the conditions contained herein. The issuance of this
Commitment shall not prejudice the Lender's rights of review and approval,
including without limitation, of all documents and materials heretofore
delivered to the Lender by or on behalf of the Borrowers.
This Commitment shall not be binding upon the Lender unless it is accepted
in writing by the Borrowers as provided herein, and delivered along with the
non-refundable Commitment Fee to Lender before the Commitment Expiration. The
terms of this Commitment, both prior to and after acceptance by Xxxxxxxxx, may
be waived or modified only by a written instrument signed by the Lender and
shall survive the execution of the Loan Documents, to the extent not
inconsistent therewith. This Commitment shall be governed by the laws of the
State of Florida, without regard to principles of conflict of laws. TIME IS OF
THE ESSENCE IN THIS COMMITMENT LETTER.
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------------
XXXXXX X. XXXXXXXXXX, Senior Vice President
ACCEPTANCE OF COMMITMENT
------------------------
The undersigned hereby acknowledges receipt of the foregoing Commitment
Letter this 16th day of August, 2005, and does hereby accept all of the terms,
conditions and time limitations set forth in the Commitment Letter by the
execution of same and by the payment herewith to the Lender of the Commitment
Fee referred to herein, which fee the undersigned acknowledges to be
non-refundable.
BORROWERS:
TIERRA DEL SOL RESORT, L.P., a Florida
limited partnership
By: TDSRLP, LLC, a Florida limited liability
Company, general partner
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Its: Managing Member of General Partner
TDS TOWNHOMES, LLC, a Florida limited
liability company
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Its: President of American Leisure Real
Estate Inc., a Managing Member
XXXXX XXXXXX REAL ESTATE, INC., a
Florida corporation
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Its: President
TDS CLUBHOUSE, INC., a Florida corporation
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Its: President
TDS AMENITIES, INC., a Florida corporation
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Its: President
COSTA XXXXXX XX REAL ESTATE, LLC, a
Florida limited liability company
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Its: President of American Leisure Real Estate
Inc., a Managing Member
XXXXX XXXXXX III REAL ESTATE, LLC, a
Florida limited liability company
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Its: President of American Leisure Real Estate
Inc., a Managing Member
GUARANTORS:
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
XXXXXXX X. XXXXXX
AMERICAN LEISURE HOLDINGS, INC., a
Florida corporation
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Its: President
