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ADDENDUM TO CONSTRUCTION LOAN AGREEMENT CONDOMINIUM AND TOWNHOUSE PROJECT DEVELOPMENT

Construction Loan Agreement

ADDENDUM TO CONSTRUCTION LOAN AGREEMENT CONDOMINIUM AND TOWNHOUSE PROJECT DEVELOPMENT | Document Parties: AMERICAN LEISURE HOLDINGS, INC. | KEYBANK  NATIONAL ASSOCIATION You are currently viewing:
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AMERICAN LEISURE HOLDINGS, INC. | KEYBANK NATIONAL ASSOCIATION

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Title: ADDENDUM TO CONSTRUCTION LOAN AGREEMENT CONDOMINIUM AND TOWNHOUSE PROJECT DEVELOPMENT
Date: 1/12/2006

ADDENDUM TO CONSTRUCTION LOAN AGREEMENT CONDOMINIUM AND TOWNHOUSE PROJECT DEVELOPMENT, Parties: american leisure holdings  inc. , keybank  national association
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Exhibit 10.12



                     ADDENDUM TO CONSTRUCTION LOAN AGREEMENT
                  CONDOMINIUM AND TOWNHOUSE PROJECT DEVELOPMENT
                           CONSTRUCTION OF NEW PROJECT

     THIS ADDENDUM TO CONSTRUCTION LOAN AGREEMENT ("Addendum") is made as of the
                                                   ----------
  29   day   of   December,   2005,   by   and   between   KEYBANK   NATIONAL ASSOCIATION

("Lender")   and   TIERRA   DEL   SOL   RESORT   (PHASE   1),   LTD.,   a Florida limited
  --------
partnership, TDS TOWN HOMES (PHASE 1), LLC, a Florida limited liability company,
COSTA   BLANCA   I   REAL   ESTATE,   LLC,   a   Florida limited liability company, TDS
AMENITIES, INC., a Florida corporation (jointly and severally "Borrower").
                                                                ---------

     Lender and Borrower have entered into a Construction Loan Agreement of even
date   herewith   (the   "Loan   Agreement")   wherein   Lender   has   agreed to make a
                       ---------------
revolving   real   estate   construction loan (the "Loan") in the maximum principal
                                                 ----
amount   of   $40,000,000.00   to Borrower under the terms and conditions described
therein.

     By   the   terms   of this Addendum Lender and Borrower describe and set forth
the   terms   and   conditions   whereby   Units   (as   hereinafter   defined)    to   be
constructed   pursuant   to the Loan Agreement shall be from time to time released
from the lien of the Mortgage in order that Borrower may sell the Units.

     1.   ADDITIONAL DEFINITIONS. The following additional "Definitions" shall be
         ----------------------
added   to and be a part of Article I of the Loan Agreement. Any capitalized term
used   herein   shall,   if not specifically defined within this Addendum, have the
meaning defined and set forth in the Loan Agreement.

          1.1 ADDITIONAL COLLATERAL: Has the meaning set forth in Section 3.6 of
              ---------------------
     this Addendum.

          1.2   APPROVED   SALES PRICE: The Lender's minimum contract sales prices
               ---------------------
     for each Unit set forth in EXHIBIT "A" attached hereto.

          1.3   ASSIGNMENT   OF GOVERNING   DOCUMENTS:   That   certain   Conditional
                ----------------------------------
     Assignment   of   Unit   Sales   Contracts, Governing Documents and Developer's
     Rights   executed   of   even date herewith by Borrower in favor of Lender, as
     the   same   may be amended, supplemented, extended, renewed, replaced and/or
     restated from time to time in accordance with its terms

          1.4 CERTIFICATE OF UNIT OCCUPANCY: A permanent certificate issued by a
              -----------------------------
     municipality or an applicable department thereof certifying that all of the
     Units, as constructed, may be legally occupied.

          1.5   CONDOMINIUM:   Costa   Blanca   I   Condominium,   a condominium to be
               -----------
     established   in   accordance   with   the   Condominium Statute pursuant to the
     Condominium Documents.

          1.6 CONDOMINIUM DEPOSIT(S): All reservations, deposits, down payments,
              ----------------------
     or   the   like   paid   under   Contracts   of   Sale or reservation receipts for
     Condominium Units at the Project.

          1.7   CONDOMINIUM   DOCUMENTS:   All   of   the   documents   required by the
               ----------------------
     Condominium   Statute   or   otherwise,   relating   to   the   submission   of the
     applicable   portion   of   the   Project   to the provisions of the Condominium
     Statute   or   to   the   regulation, operation, administration or sale thereof
     after   such   submission,   including,   but   not   limited to a declaration of
     condominium, by-laws and rules and regulations of a condominium association
     or   associations, Master Association Documents, management agreement, plats

<PAGE>

     and   plans   and   the   of   the Contract of Sale and deed forms to be used in
     connection   with   the   sale   of   the Units, all of which must be reasonably
     acceptable to Lender in form and substance.

          1.8    CONDOMINIUM   STATUTE: Chapter 718, Florida Statutes, as it may
                --------------------
     be amended from time to time.

           1.9    CONDOMINIUM   UNIT(S):   Any   dwelling   unit   within   the   Project
                --------------------
     submitted   to   the   condominium   form   of   ownership   under the Condominium
     Statute.

          1.10   CONTRACT   DEPOSITS:   the   collective   reference   to   Condominium
                ------------------
     Deposits and Townhouse Deposits.

          1.11   CONTRACT   OF   SALE:   A legally enforceable contract, in form and
                ------------------
     content satisfactory to Lender and Lender's counsel, between Borrower and a
     bona   fide third party purchaser for the sale and purchase of an individual
     Unit   at   a   sales price of not less than the Minimum Release Price, with a
     Contract   Deposit   of   not   less   than   twenty   percent   (20%) of the total
     purchase   price   of   the Unit being sold, which Contract Deposit shall have
     been   paid   and such deposit shall constitute cash or immediately available
     funds   to   the   Escrow   Agent.   All   items   required   to   be disclosed to a
     purchaser under the Chapter 718, Florida Statutes shall have been delivered
     to each purchaser. Without limiting the foregoing requirements, a "Contract
     for   Sale"   shall   not   include   any   contracts   entered   into prior to the
     effective   date   of   all   necessary   filings   with the State of Florida and
     pursuant   to Chapter 718, Florida Statutes. Each contract must by the terms
     thereof   (i)   be   expressly   inferior   and   subordinate   to the lien of any
      mortgage   now   or   hereafter   existing which encumbers the Project, (ii) be
     non-assignable   without   the   Lender's prior written consent (which written
     consent   will not be unreasonably withheld or delayed), and (iii) otherwise
     comply   with   all   requirements   of   Governmental   Authorities   so that the
     purchaser   of   such   Unit   shall   have no election or right to rescind such
     contract   without the loss of its Contract Deposit. For the purpose of this
     Addendum,   a   purchaser   shall   not   be   considered a bona fide third party
     purchaser if it has contracted, directly or indirectly, for the purchase of
     more   than   two   (2)   Units. In addition, no more than two (2) Units may be
     purchased   by   purchasers   of   multiple units, and no more than thirty-five
     (35)   Units   may   be sold to Insiders (as hereinafter defined). Moreover, a
     bona   fide third party purchaser shall not include the Borrower, any member
     or   manager   of   the Borrower, any stockholder, director, officer, partner,
     member   or   manager   of   any member or manager of Borrower, or any partner,
     member   manager,   stockholder, director or officer of any constituent party
     of   any   member   or manager of the Borrower, or any member of the immediate
     family   or affiliate (as defined in Rule 405 of the Securities Act of 1933)
     of any of the foregoing parties (collectively, "Insiders"). Notwithstanding
                                                     --------
     any   contrary   provision   of this Section 1.11 or of any other provision of
     this   Addendum   or   any   other   Loan   Document,   Lender   hereby accepts and
     approves   all   Contracts   of Sale identified on EXHIBIT "B" attached hereto
     and   acknowledges that each of such Contracts of Sale identified in EXHIBIT
     "B" attached hereto constitute a "Required Contract of Sale" for purpose of
     Section   3.3 of this Addendum and an approved Contract of Sale for purposes
     of Section 8.1(b) of the Loan Agreement.

          1.12   DIVISION: Has the meaning set forth in Section 5.1(b) hereof.
                --------

          1.13   ESCROW   ACCOUNT:   An account maintained with the Escrow Agent at
                ---------------
     KeyBank   National   Association   into   which   all Contract Deposits are paid
     pursuant to this Addendum.

          1.14   ESCROW AGENT MEANS A FIRM OR INDIVIDUAL ACCEPTABLE TO LENDER.
                -------------------------------------------------------------
     The Escrow Agent approved by Lender is OVT Title Agency, LLC.

          1.15   GOVERNING   DOCUMENTS:   the   Condominium   Documents   as   to   the
                --------------------
     Condominium   Units,   and   the   Master   Association   Documents as to the fee
     simple Townhouse Units.

<PAGE>

          1.16 LOAN DOCUMENTS: Shall mean, in addition to those set forth in the
               --------------
     Definitions   in   the   Loan   Agreement, this Addendum, and the Assignment of
     Governing Documents.

          1.17   LOAN-TO-VALUE   RATIO:   The   ratio   obtained   by   dividing   the
                --------------------
     outstanding   principal   balance   due   on the Loan Amount (as of the testing
     date) by the fair market value of the Project as determined by an Appraisal

          1.18   MASTER   ASSOCIATION: Tierra del Sol Owners' Association, Inc., a
                -------------------
     Florida corporation.

          1.19   MASTER   ASSOCIATION   DOCUMENTS: All of the documents relating to
                ------------------------------
     the   creation,   regulation,   operation   and/or administration of the Master
     Association,   including the common properties, basic resort services and/or
     resort facilities, as defined therein.

          1.20   MINIMUM   RELEASE   PRICE:   The Lender's minimum release price for
                -----------------------
     each Unit shall be as set forth in EXHIBIT "A" attached hereto.

          1.21   NET   SALE PROCEEDS: Shall mean the purchase price for each Unit,
                 ------------------
     including   all   amounts   paid   for extras and the like (excluding, however,
     amounts   for   extras   and   the   like   paid for from sources other than Loan
     proceeds),   less:   (i)   third   party   brokerage fees to the extent due from
     Borrower; (ii) customary closing costs and adjustments paid by the Borrower
     (for   documentary stamp tax, recording fees and taxes, etc.); and (iii) any
     purchase deposits approved for use in the Project.

          1.22   RELEASE PRICE: The greater of (i) 100% of Net Sales Proceeds for
                -------------
     an applicable Unit; or (ii) the Minimum Release Price.

          1.23   REQUEST FOR PARTIAL RELEASE: Shall have the meaning set forth in
                ---------------------------
     Section 6.3(c) hereof

          1.24   REQUIRED   CONTRACTS OF SALE: Shall have the meaning set forth in
                ---------------------------
     Section 3.3 hereof.

          1.25   TOWNHOUSE DEPOSIT(S): All reservations, deposits, down payments,
                --------------------
     or   the   like   paid   under   Contracts   of   Sale or reservation receipts for
     Townhouse Units at the Project.

          1.26   TOWNHOUSE   UNIT(S):   Attached   dwelling units located within the
                -----------------
     Project   constructed,   or   to   be   constructed,   on   a lot not submitted to
     condominium ownership.

          1.27 UNIT OR UNITS: Means (i) the Condominium Units located within the
               -------------
     Project, and (ii) the Townhouse Units located within the Project.

     2.   ADDITIONAL   REPRESENTATIONS   AND   WARRANTIES.   In   addition   to   the
         --------------------------------------------
Representations   and   Warranties   of Borrower set forth in Section 3 of the Loan
Agreement, Borrower hereby represents and warrants to Lender:

          2.1   CONTRACTS   OF   SALE.   All   of the Contracts of Sale identified on
               -------------------
     EXHIBIT   "B",   attached   hereto, are in full force and effect and are valid
     and   subsisting;   to the best of Borrower's knowledge there are no defaults
     thereunder   or any defenses or offsets thereto on the part of any purchaser
     thereunder   and no notice has been received from any purchaser claiming any
     default   by the Borrower, as seller, thereunder or requesting a termination
     thereof.   No   modifications   or   amendments   have   been made to any of such
     Contracts   of   Sale except as previously disclosed in writing to Lender and

<PAGE>

     no   agreements   are   in   existence,   oral   or written, which would or could
     modify   the   obligations   of   the   Borrower,   as   seller, or the purchasers
     thereunder.   Except   as disclosed to Lender, Borrower has neither committed
     nor   suffered any act or omission which would or could constitute a default
     on   its part entitling any purchaser to damages, rights of set-off or right
     to   terminate   any   Contract of Sale. EXHIBIT "B" accurately identifies all
     Contract   Deposits   paid   by the purchasers under Contracts of Sale and all
     Contract   Deposits   for   Condominium Units only are being held, pursuant to
     the   form   of escrow agreement(s) previously approved by Lender in separate
     Escrow   Account(s)   under   the exclusive control of the Escrow Agent, which
     Escrow   Account(s)   meet   all of the requirements of the provisions of this
     Addendum.

          2.2   CONDOMINIUM   DOCUMENTS.   To the extent such approval is required,
               ----------------------
     the   Condominium   Documents   have   been approved by all applicable federal,
     state   or   local   governmental agencies or entities with approval authority
     over such documents, and Borrower agrees to maintain such approvals in good
     standing throughout the term of the Loan.

     3. ADDITIONAL COVENANTS. In addition to the covenants of Borrower set forth
        --------------------
in   Section   15   of   the   Loan Agreement, Borrower hereby agrees and promises as
follows:

          3.1 EXPENSES. In addition to the fees and expenses of Lender agreed to
              --------
     be   paid by Borrower under the Loan Agreement, Borrower shall pay (promptly
     upon   the   rendering   of   such a bill and delivery thereof to Borrower) all
     reasonable out-of-pocket expenses incurred by the Lender in connection with
     the review of any proposed easements, final approval and recordation of the
     Governing   Documents,   partial   releases,   and   satisfaction   of   a loan of
      character contemplated hereby.

          3.2   LEASE   OF   PROJECT.   Except   for   leases   of   Units   pursuant   to
               ------------------
     Borrower's   plan   to   operate   the   Project   as a resort, Borrower will not
     lease, sublease, license or grant any occupancy arrangement with respect to
     the   Project,   without   the   prior   written   consent   of   Lender   except as
     otherwise   expressly   permitted   under the Loan Agreement, Mortgage and the
     Assignment of Leases.

          3.3   CONTRACTS   OF   SALE.   Prior   to   the initial disbursement of Loan
               -------------------
     proceeds   (other   than initial closing expenses), Borrower shall deliver to
     Lender   Contracts for Sale for at least thirty-three (33) of the thirty-six
     (36) Units contained in each building to be constructed which shall produce
     aggregate   Net   Sale   Proceeds   sufficient   to   cover   120%   of the maximum
     aggregate   funding permitted under the Loan and with each sales price being
      otherwise acceptable to Lender based on Lender's underwriting analysis (the
     "Required   Contracts of Sale"). If at any time the foregoing requirement is
      ---------------------------
     not   satisfied, such failure shall constitute an Event of Default hereunder
     and   under   the   Loan   Agreement   unless   the   Borrower   provides to Lender
     substitute   Contracts   for   Sale of equal or greater purchase prices within
     thirty   (30)   days   of   the   occurrence of such failure. Borrower shall not
     modify,   amend,   cancel, rescind, extend, terminate, or otherwise change in
     any   manner   any   Contract of Sale without the prior written consent of the
     Lender.   Additionally,   Borrower   shall   not enter into any new Contract of
     Sale with a purchase price less than the Approved Sales Price. Furthermore,
     Borrower   shall not enter into any new Contract of Sale that will require a
     modification   to   the Plans, the cost of which exceeds five percent (5%) of
     the   Approved Sales Price for such Unit. All Contracts of Sale must include
     a   delivery   date   that can be achieved in accordance with the Construction
     Schedule.    Additionally,    a   matrix   must   be   approved   by   Lender   that
     demonstrates   on   a   Unit-by-Unit   basis that each Unit under a Contract of
     Sale   will be delivered within twenty-four (24) months from the date of the
     Contract   of   Sale.   No   extension   of   such   contracts may be made without
     Lender's approval.

          3.4   GOVERNING   DOCUMENTS.   Borrower   shall   not   modify,   amend,   or
               --------------------
     otherwise   change   (including   without   limitation,   any   change that would
     permit   any   purchaser   to   cancel   its respective Contract of Sale) in any
     manner   the   Governing   Documents   without the prior written consent of the
     Lender   (which   written   consent   will   not   be   unreasonably   withheld   or
     delayed).   Borrower   covenants and agrees that it shall comply with, to the

<PAGE>

      extent applicable to the Project, (a) all requirements of the Division, (b)
     all   regulations   promulgated   from   time   to time by the State of Florida,
     pursuant thereto, including without limitation, the filing requirements for
     the   Governing   Documents   (as   applicable),   and Borrower's obligations as
     developer   of   the   Condominium   and   the   Townhouse   Units,   and   (c)   all
     requirements   and requests of the Division in connection with the filing of
     the   Declaration   and   the   United   States   Department of Housing and Urban
     Development.   The   Borrower   shall pay in respect of any Units on or before
     the   expiration of any applicable grace or cure period all common expenses,
     charges   and   assessments,   special   or   general,   and   other items for the
     payment   of which the Borrower is or may hereafter be responsible under the
     terms of the Governing Documents.

          3.5   ESCROW   DEPOSITS.   Except   as   may   otherwise   be   required   by
               ----------------
     Governmental   Authorities,   all Contract Deposits for the Condominium Units
     shall be deposited into Escrow Account(s) maintained by the Escrow Agent at
     KeyBank   National Association. Borrower shall be responsible for all of the
     costs   of   such   Escrow   Account(s),   including, without limitation, all of
     Escrow   Agent's   fees   and   the   like. Borrower shall place or caused to be
     pla


 
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