EXHIBIT 10.2
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 loan (the "Loan"):
BORROWER: TDS Resort Phase 2, L.P., a limited partnership
organized under the laws of the State of Florida (the
"Borrower"). The Borrower 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.
GUARANTOR(S): Xxxxxxx X. Xxxxxx ("Xxxxxx") and American Leisure
Holdings, Inc., a corporation organized under the laws
of the State of Florida ("ALH"); jointly and severally.
DESCRIPTION OF PROJECT: The Loan (sometimes referred to herein as the
"Phase II Loan") is being committed to concurrently
with a second loan in the amount of $96,600,000.00.
Both loans relate to construction of phases of a
development known as "Tierra del Sol" (the "Project").
The Loan which is the subject of this Commitment is for
Phase II of the Project, and the second loan is for
Phase I.
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
$21,139,322.00, which will be used for the payment of
Project costs and to purchase common land. Borrower
shall comply with all requirements of KeyBanc with
respect to the CDD issuance. This Loan will be
cross-defaulted with the Phase I Loan and any other
credits and/or obligations of the Borrower and/or
Guarantors.
USE OF
PROCEEDS: The Phase II Loan proceeds are to be used solely
for the purpose of being invested as equity in Phase I
property and to pay off existing land loans encumbering
Phase II of the Tierra del Sol project.
PHASE II LOAN AMOUNT: The principal amount of the Phase II Loan shall
not exceed FOURTEEN MILLION EIGHT HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($14,850,000.00) 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 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 eighteenth (18th)
calendar month anniversary of the Date of Closing
("Maturity").
EQUITY
REQUIREMENT: Borrower shall provide evidence reasonably
satisfactory to the Lender that Xxxxxxxx's land
appreciation equity invested in the Project indicates a
loan-to-value ratio of not more than fifty percent
(50%).
INTEREST RATE: The proceeds of the Loan shall bear interest at
the 30-Day LIBOR Adjusted Daily Rate plus the LIBOR
Rate Margin. The LIBOR Rate Margin shall be 3.10%. 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 Phase II Loan from time to time shall be due and
payable monthly beginning on the fifth (5th) day of the
first calendar month following the Date of Closing (as
hereinafter defined) and continuing on the fifth (5th)
day of each consecutive calendar month thereafter.
INTEREST
RATE PROTECTION: Borrower 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 Phase II Loan. The Interest Rate
Protection Product, the portion of the Phase II Loan
(if less than the Phase II 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 Borrower purchases the Interest Rate Protection
Product from the Lender, Borrower shall enter into the
Lender's customary form agreement for such purposes and
any indebtedness or other obligations of Borrower
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 Borrower to
the Lender as follows:
1. COMMITMENT FEE: At Closing, a Commitment Fee of
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ONE HUNDRED FORTY EIGHT THOUSAND FIVE HUNDRED AND
NO/100 DOLLARS ($148,500.00) (1% of the Phase II Loan
amount) shall be due and payable. $25,000.00 of this
amount shall be paid at the signing of this Commitment
Letter and shall be non-refundable.
2. EXIT FEE: When Loan is due and payable in full
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or is prepaid in full (whether at Maturity or at any
other rate), Borrower will pay to Lender an exit fee
equal to four percent (4%) of the Maximum Phase II Loan
Amount unless: (a) the Loan is repaid with a
construction loan from Lender or an affiliate of
Lender; or (b) Lender declines to grant a construction
loan to Borrower.
Borrower acknowledges that each such fees shall be
for the applicable services rendered, supported by
good, valuable and adequate consideration. The
Commitment 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: The Borrower 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 Phase II Loan.
LATE FEE: For any payment of principal or interest made
later than five (5) days following the due date,
Borrower 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 PHASE II LOAN: The Phase II Loan shall be evidenced by a
promissory note (the "Note") for the Phase II Loan
Amount and a 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 Borrower
to satisfaction of the Lender, and (b) a first
lien and security interest in all fixtures and
personal property owned by Xxxxxxxx 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 Phase II Loan;
3. 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;
4. An Environmental Indemnity Agreement executed
by Xxxxxxxx and the Guarantors, jointly and
severally;
5. A Subordination, Nondisturbance and
Attornment Agreement between Lender and each of
the tenants under any lease(s), if applicable;
6. A collateral assignment of security
agreements and contracts related to the Project;
7. A collateral assignment of all purchase
contracts and purchase deposits;
8. 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 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 Phase II Loan is
unpaid.
In addition, at Closing, Xxxxxxxx shall deliver
the opinion of Xxxxxxxx's legal counsel, in form and
substance acceptable to Xxxxxx and Xxxxxx's counsel,
that
a. with respect to the Borrower, 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 Borrower, 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 Borrower and Guarantors and are
enforceable in accordance with their terms; (c)
the Borrower is a validly organized and existing
[corporation or limited liability company] under
the laws of the State of Florida and qualified to
do business in the State of Florida, that it 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
Phase II Loan has been duly authorized by the
Borrower; (d) the Guarantor, as applicable, is a
validly organized and existing [corporation or
limited liability company] under the laws of the
State of Florida and qualified to do business in
the State of Florida and is duly authorized to
execute and deliver the Guaranty; (e) there is no
threatened or pending litigation that might affect
the Phase II Loan, the Guarantor(s), the Land, the
Project or the Borrower; (f) such other matters
(including an opinion with respect to zoning of
the Land and the Project) concerning the Phase II
Loan, the Loan Documents, the Land, the Project,
the Borrower, or the Guarantor, as the Lender or
its counsel may require.
b. A non-consolidated opinion confirming that
the structure of the Loans and the organization of
the Borrower 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.
APPRAISAL: Xxxxxx has received a written appraisal by Integra
dated March 15, 2005 reflecting an appraised value of
$29,700,000.00. The appraisal shall be updated, at
Xxxxxxxx's cost, as and when reasonably requested by
Xxxxxx.
TITLE INSURANCE
POLICY: Counsel for Lender shall obtain, at Borrower's
expense, an ALTA extended coverage lender's policy of
title insurance meeting the requirements set out in
Exhibit "C" attached hereto by a title company
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satisfactory to the Lender in the Phase II 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: Borrower 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 II 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 "D" attached
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hereto and 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: Borrower 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 Xxxxxxxx at
Borrower's cost. The Lender reserves the right, at
Xxxxxxxx's expense, to retain an independent consultant
to review any such evidence submitted by Borrower 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.
NON-ASSIGNABILITY
OF COMMITMENT: This Commitment is made exclusively to the
Borrower and is not assignable nor transferable
voluntarily or involuntarily by the Borrower 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: Borrower acknowledges that the Lender reserves the
right to syndicate and/or participate its interest in
the Phase II Loan and Borrower agrees to, at Xxxxxx's
request, execute such additional promissory notes and
other instruments as may be appropriate to evidence its
obligation under the Phase II Loan to such syndicate
banks as may commit, in the future, to fund a portion
of the Phase II Loan Amount according to the terms of
the Loan Agreement.
INDEMNIFICATION: The Borrower and any Guarantor agree 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.
ADDITIONAL LOAN
CONDITIONS: 1. Borrower and the Guarantor(s) shall submit to
Lender, at Xxxxxx's request: (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 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 Borrower and Guarantors with the
exception of 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 Borrower or, in the
case of each of the Guarantors' financial
statements, by the Guarantor to whom it relates.
Borrower and the Guarantors shall provide such
additional financial information Lender reasonably
requires. Borrower 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.
2. Borrower shall erect a sign on the Land
indicating that the Lender is the source of
financing for the Project and to use the Phase II
Loan Amount, Xxxxxxxx's names and Project location
in any advertisement. Borrower shall pay the costs
and expenses associated with such sign.
3. Until the Phase II Loan is paid in full,
neither the Borrower 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 Borrower, which is
effected directly, indirectly, voluntarily,
involuntarily, or by operation of law or
otherwise.
4. Provided no Event of Default exists under any
of the Loan Documents at any time while the Phase
II Loan remains unpaid, the Lender will permit
Borrower to pay the Property insurance premiums
and real estate taxes related to the Project
outside of escrow during the term of the Phase II
Loan. Borrower 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.
5. Upon repayment of the Phase I Loan, Borrower
shall assign as additional collateral for the Loan
the following collateral that will initially
secure the Phase I Loan:
a. Fidelity & Deposit Company of Maryland
$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.
b. $2,000,000.00 deposited by Borrower
and/or Guarantors in a demand deposit account
under the Lender's sole dominion and control.
This account will be released upon full
repayment of the Loan.
6. Lender shall have the right of first refusal
with regard to any construction financing for
Phase II of the Project.
7. A collateral assignment of all available cash
flow from Phase I, after the Phase I loan is
repaid in full, which cash flow shall be used to
pay down the principal balance of this Loan.
ITEMS TO BE
DELIVERED
PRE-CLOSING: Borrower 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. Evidence that the insurance required under
this Commitment has been obtained.
2. ALTA/ACSM Survey complying with the
requirements set forth on Exhibit "A" attached
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hereto.
3. Evidence of compliance with all applicable
zoning requirements.
4. Evidence of availability of storm and
sanitary sewers and all utilities to the Project.
5. As applicable, certified copy of Xxxxxxxx'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 Borrower.
6. 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.
7. Xxxxxxxx's and each Guarantor's Federal Tax
I.D. Number or Social Security Number.
8. A Commitment for the issuance of the ALTA
Policy and copies of all items listed in Schedule
B thereof.
9. Current financial statements of the Borrower
and any Guarantors which indicate no material
adverse change from those previously delivered to
the Lender.
10. A copy of the Lease(s) described on Exhibit
-------
"B" attached hereto, fully executed, and certified
---
by the Borrower 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.
11. Federal and state tax lien, judgment, UCC and
pending litigation searches for the 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 Phase II Loan closing. 12.
FLOOD PLAIN
DETERMINATION: The Lender shall obtain, at Borrower's 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 Phase II Loan,
there shall have been no material adverse change in the
financial condition or credit of 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
Borrower 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 II LOAN CLOSING
DATE: The Phase II 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.
In addition, pursuant to a Commitment Letter of
even date for Phase I of the Project, the "Phase II
Loan" must be closed simultaneously with the closing of
that certain construction loan in the amount of
$96,600,000.00 (the "Phase I Loan") being made by
Lender, at Xxxxxx's sole and absolute discretion, to:
(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 "Phase I
Borrowers"), pursuant to that certain Commitment Letter
of even date herewith executed by Lender, Phase I
Borrowers, Repayment Guarantors (as defined therein)
and Completion Guarantors (as defined therein).
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 Borrower.
This Commitment shall not be binding upon the Lender unless it is accepted
in writing by the Borrower 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 Xxxxxxxx, 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
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XXXXXX X. XXXXXXXXXX, Senior Vice President
ACCEPTANCE OF COMMITMENT
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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.
BORROWER:
TDS RESORT PHASE 2, L.P., a Florida
limited partnership
By: TDSRLP, LLC, a Florida limited
liability company, general parnter
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Managing Member
GUARANTORS:
/s/ Xxxxxxx X. Xxxxxx
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XXXXXXX X. XXXXXX
AMERICAN LEISURE HOLDINGS, INC., a Florida
corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Its: President
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