Exhibit 10.1
COMMITMENT LETTER
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December 1, 2005
Tierra del Sol Resort (Phase 1), 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 (PHASE 1), L.P., a limited
partnership organized under the laws of the State of
Florida; (ii) TDS TOWNHOMES (PHASE 1), LLC, a limited
liability company organized under the laws of the State of
Florida; (iii) XXXXX XXXXXX I REAL ESTATE, INC., a
corporation organized under the laws of the State of
Florida; (iv) TIERRA DEL SOL (PHASE 2), L.P., a limited
partnership organized under the laws of Florida; (v) TDS
AMENITIES, INC., a corporation organized under the laws of
the State of Florida; (vi) TDS CLUBHOUSE, INC., a
corporation organized under the laws of the State of
Florida; (vii) COSTA XXXXXX XX REAL ESTATE, LLC, a limited
liability company organized under the laws of the State of
Florida; (viii) XXXXX XXXXXX III REAL ESTATE, LLC, a limited
liability company organized under the laws of the State of
Florida; (ix) TDS TOWNHOMES (PHASE 2), LLC, a Florida
limited liability company; and (x) 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 Leisure
GUARANTORS: Holdings, Inc., a corporation GUARANTORS: 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 jointly
COMPLETION and severally.
GUARANTORS:
COMPLETION PCL Construction Enterprises, Inc., a corporation
GUARANTOR: organized under the laws of the State of Colorado ("PCL").
The Repayment Guarantors, Performance and Completion
Guarantors are collectively referred to as "Guarantors".
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DESCRIPTION OF The Loan (sometimes referred to herein as the "Phase I
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PROJECT Loan") is being committed for the construction of a
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development known as "Tierra del Sol" ("The Resort"). The
Loan which is the subject of this Commitment is for the
initial phase of Tierra del Sol.
Additionally, an entity related to the Lender, KeyBanc
Capital Markets ("KeyBanc"), is underwriting the issuance of
a Community Development District ("CDD") bonds, with net
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proceeds in the amount of approximately $21,500,000.00,
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 (hereinafter called "Phase I" of the
Resort) consisting of a luxury townhouse/condominium
community consisting of 114 townhomes and 180 mid-rise
condominiums (each townhome and condominium unit being
sometimes referred to herein as a "unit") along with project
amenities including pools and a poolside structure dining
"grille" restaurant to service the pools (the
"Improvements") on land located in Polk County, Florida (the
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"Land") (the Land, Improvements and all related fixtures and
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personal property are referred to as the "Project"), in
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accordance with the Schedule of sources and uses of funds
and the Project budget set forth in EXHIBIT"A", attached
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hereto, approved by the Lender hereunder, 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.
MAXIMUM The principal amount of the Loan shall not exceed FORTY
LOAN AMOUNT: MILLION AND NO/100 DOLLARS ($40,000,000.00) 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").
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TERM: If not sooner paid, the entire principal balance
outstanding, together with all unpaid interest thereon,
fees, and costs and expenses incurred by Xxxxxx, shall be
due and payable in full on the twenty-four (24) calendar
month anniversary of the Date of Closing ("Maturity").
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PRINCIPAL REPAYMENT/The Loan shall be a revolving loan and Borrower may
REVOLVING FEATURE: borrow, repay and reborrow funds hereunder to pay costs as
shown on the Budget; provided that (i) the maximum principal
balance shall never exceed $40,000,000.00; (ii) the
aggregate amount borrowed may not exceed $72,550,00.00; and
(iii) the Borrowers have at all times complied with the
terms and conditions of the Loan Documents. In addition, at
Xxxxxx's sole discretion and subject to acceptable
appraisals, upfront plan and cost reviews, the absence of
default and other factors.
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CONSIDERED BY THE LENDER, THE AGGREGATE AMOUNT OF FUNDS
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BORROWED HEREUNDER may be increased, and/or the Lender may
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permit funds to be utilized for additional costs RELATED TO
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THE DEVELOPMENT OF OTHER PORTIONS OF THE RESORT.
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PROJECT EQUITY Borrowers shall provide evidence reasonably
REQUIREMENT: 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 $57,913,746.00,
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 or at Closing 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 daily, floating 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 Borrowers shall be required to institute an interest
PROTECTION: 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
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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 SEVEN HUNDRED
TWENTY-FIVE THOUSAND FIVE HUNDRED AND NO/100 DOLLARS
($725,500.00) (1% of the Loan amount) shall be paid on
or before the Date of Closing.
2. LOAN ADMINISTRATION FEE: A Loan Administration Fee
of SEVENTY FIVE THOUSAND AND NO/100 DOLLARS
($75,000.00) 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 The Loan shall be evidenced by a promissory note (the
AND SECURITY FOR "Note") for the Loan Amount and a Construction Loan
THE 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 Xxxxxxxxx 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 General
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
a. 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.
b. 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 MAXIMUM AGGREGATE FUNDING PERMITTED UNDER
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THE Loan. Qualified Contracts shall have the following
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characteristics: (i) must be non-assignable WITHOUT
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WRITTEN PERMISSION BY LENDER, WHICH PERMISSION SHALL
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NOT BE UNREASONABLY WITHHELD OR DELAYED; (ii) must
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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 $17,209,078.00 on the initial 294
units being developed in Phase I,
together with all deposits (collected and to be
collected) with regard to the Project; 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 $17,209,078.00, 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 $17,209,078.00. 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) of
the 36 units contained in each building to be
constructed as in Phase I with evidence, sufficient to
Lender, that Borrowers have received full twenty
percent (20%) deposits for each of said contracts of
sale.
APPRAISAL: Prior to Closing, Xxxxxx must receive an updated
written appraisal from Integra Realty Resources based
on a bulk discount sellout appraised value of at least
$90,700,000.00, and satisfactory to lender in all
respects. 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
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 hens 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").ONE HALF OF LENDER'S COUNSEL'S
PORTION OF THE TITLEPREMIUM SHALL BE CREDITED AGAINST
THE LEGAL FEES PAYABLE BY THE BORROWERS.
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
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"F" attached and any other coverage that the Lender
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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 Borrowers shall provide evidence (including a
"Phase I" environmental ASSESSMENT: assessment dated
with 6 months from the date of Closing) 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 The Lender shall require the services of an
INSPECTIONS: outside consulting engineer (the INSPECTIONS: "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 This Commitment is made exclusively to the
COMMITMENT: 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/ Borrowers acknowledges that, following the
SYNDICATIION Closing, the Lender will endeavor to syndicate or
CONTINGENCY: participate portions of the Loan with other financial
institutions. Borrowers agree, at Xxxxxx's request, to
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 'book
manager' 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 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 and
interest and repayment terms 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.
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 All funds disbursed under the Loan shall be
PROCEDURES: subject to the Lender's Construction PROCEDURES: 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
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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 hens 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 hens 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.
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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, Lender 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 1. The plans and specifications, schedule,
CONDITIONS: 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"
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. $9,090,130.00 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
$7,687,676.00 of such funds to be utilized in the
Project with the remaining $1,402,454.00 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
received from the funding of approximately
$26,050,000.00 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. Further, during the term of the Loan, no
----------------------------------------
additional funding under CDD shall be permitted,
--------------------------------------------------
and Borrowers' shall not seek to amend or modify
--------------------------------------------------
the CDD. or the documents related thereto, without
--------------------------------------------------
Lender's consent. which may be granted or withheld
--------------------------------------------------
in Xxxxxx's sole discretion.
---------------------------
12. To the extent assignable, Borrower shall
assign to Lender all contracts, agreements,
proceeds related to the CDD and any associated
bond offerings.
13. Borrower 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, at
its option, may elect to invest such funds
directly the Bank. In either event, the
$4,000,000.00 must be deposited with the Lender in
a demand deposit account (in LLC-6's name., if
applicable) 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.
14. All project-related accounts of the Borrowers
---------------
shall be maintained with Lender, and all funds
------
thereon shall be pledged as collateral for the
Loan.
15. In addition to the sums described in Section
14, above, Borrowers and/or Guarantors shall
deposit $4,000,000.00 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.
16. Borrowers shall not obtain subordinate
financing unless approved by Xxxxxx.
17. 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.
18. Assignment of the operating agreement between
American Leisure Hospitality Group and Sonesta
Orlando, Inc.
19. Satisfactory OF AC 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".
------------
20. Borrowers, or the escrow agent utilized by
------------------------------------
Borrowers for such purpose, shall open and
-----------------------------
maintain a depository account with Lender for
deposits associated with the Project and for any
other portions of the Resort. Escrow Agent for any
------
and all deposits associated with the Project must
be acceptable to Lender.
21. General Contractor will be required to
demonstrate full payment and performance bonding
or Subguard insurance from Zurich in a form
approved by Lender.
22. PCL's construction schedule must demonstrate
that units can be delivered in July 2006 and each
month thereafter to be consistent with the revised
paydowns.
23. Upon pay-off of the Phase I Loan, in the
---- -------
event the concurrent real estate loan made by
----- ---- ------ --
Lender to a related borrower with regard to the
------
Phase II portion of the Resort (the "Phase II
--- ------ ----- --
Loan"), if such loan is not then financed with a
---- ------------- ----
construction loan or otherwise paid-off in full,
then 100% of the net sales proceeds from the
closing of Phase I units after repayment of the
Phase I Loan will be required to be applied to the
principal balance of the Phase II Loan, until
paid/refinanced. Notwithstanding the foregoing, in
the event that: (i) the Phase II Loan has been
repaid and (ii) the clubhouse and any remaining
project amenities have not been financed with a
separate loan; then 100% of the net sales proceeds
from the closing of Phase I units after retiring
the Phase I Loan will be held in a Lender
controlled account to be used to fund the
construction of the clubhouse and any remaining
project amenities.
Items to be Delivered Borrowers shall furnish the following
PRE-CLOSING 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
-----------
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. Prior to disbursement of Loan funds
----------------------------------------
pertaining thereto, evidence of all building
------------------------------
permits and governmental approvals necessary for
each building to be constructed in 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. Performance and payment bonds and/or
------
'subguard' insurance policy satisfactory to Lender
---------------------------
in form and substance.
20. 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.
21. 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.
22. A duly executed Architect's Certificate in
the form OF EXHIBIT "E" attached hereto.
23. Any and all other documents reasonably
requested by Xxxxxx.
FLOOD PLAIN 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 This Commitment is open for acceptance by the
EXPIRATON: 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 The Loan shall be closed no later than December
DATE: 30, 2005, 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).
MODIFICATION: This commitment replaces in its entirety that
certain Commitment among the parties hereto dated
August 15, 2005 and accepted August 16, 2005, and is
issued at Borrowers' request to address various
modifications to the timing and structure of the
Project's development.
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 begoverned 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.
[SIGNATURE PAGES TO FOLLOW]
KEYBANK NATIONAL ASSOCIATION
BY:/s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxxx,
Senior Vice President
December 13, 2005
ACCEPTANCE OF COMMITMENT
------------------------
The undersigned hereby acknowledges receipt of the foregoing Commitment
Letter this day of November, 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 (PHASE 1), L.P., A
Florida limited partnership A To Be Formed Entity
By: TDSRLP, LLC, a Florida limited liability
Company general partner A To Be Formed Entity
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Its: Its Proposed Authorized Signatory
---------------------------------
TIERRA DEL SOL (PHASE 2), L.P., a
limited partnership organized under the laws
of the State of Florida A To Be Formed Entity
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Its: Its Proposed Authorized Signatory
---------------------------------
TDS TOWNHOMES (PHASE 1), LLC, a Florida
limited liability company A To Be Formed
Entity
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Its: Its Proposed Authorized Signatory
---------------------------------
TDS TOWNHOMES (PHASE 2), LLC, a Florida
limited liability company A To Be Formed
Entity
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Its: Its Proposed Authorized Signatory
---------------------------------
XXXXX XXXXXX I REAL ESTATE, INC., A
Florida corporation
By:/s/ Xxxxxxx X. Xxxxxx
---------------------------------
Its: President
--------------------------------
COSTA XXXXXX XX REAL ESTATE, LLC., A
limited liability company organized under the
laws of the State of Florida
By: /s/Xxxxxxx X. Xxxxxx
---------------------------------
Its: President
--------------------------------
XXXXX XXXXXX III REAL ESTATE, LLC., A
limited liability company organized under the
laws of the State of Florida
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Its: President
---------------------------------
TDS Amenities, Inc., a Florida Corporation
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Its: President
--------------------------------
TIERRA DEL SOL RESORTS, INC., a Florida
corporation
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Its: President
---------------------------------
TDS CLUBHOUSE, INC., a corporation
organized under the laws of the State of
Florida
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Its: President
----------------------------------
GUARANTORS;
/s/ Xxxxxxx X. Xxxxxx
---------------------
XXXXXXX X. XXXXXX
AMERICAN LEISURE HOLDINGS, INC., A
Florida corporation
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Its: CEO
-------------------------------
