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
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29 day of December, 2005, by and between KEYBANK NATIONAL ASSOCIATION
("Lender") and
TIERRA DEL SOL RESORT (PHASE 1), LTD., a Florida limited
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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").
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Lender and Borrower have entered into a Construction Loan Agreement
of even
date herewith
(the "Loan Agreement") wherein Lender has agreed to make a
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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
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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
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this
Addendum.
1.2 APPROVED
SALES PRICE: The
Lender's minimum contract sales prices
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for
each Unit set forth in EXHIBIT "A" attached hereto.
1.3 ASSIGNMENT
OF GOVERNING
DOCUMENTS:
That certain Conditional
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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
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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
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established in
accordance
with the Condominium Statute pursuant to
the
Condominium Documents.
1.6 CONDOMINIUM DEPOSIT(S): All reservations, deposits, down
payments,
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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
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submitted to
the condominium form of ownership under the Condominium
Statute.
1.10 CONTRACT
DEPOSITS: the collective reference to Condominium
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Deposits and Townhouse Deposits.
1.11 CONTRACT
OF SALE: A legally enforceable contract, in
form and
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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
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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.
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1.13 ESCROW
ACCOUNT: An account maintained with the
Escrow Agent at
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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.
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The
Escrow Agent approved by Lender is OVT Title Agency, LLC.
1.15 GOVERNING
DOCUMENTS:
the Condominium Documents as to the
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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
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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
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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
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Florida corporation.
1.19 MASTER
ASSOCIATION
DOCUMENTS: All of the
documents relating to
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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
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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,
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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
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an
applicable Unit; or (ii) the Minimum Release Price.
1.23 REQUEST FOR
PARTIAL RELEASE: Shall have the meaning set forth in
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Section 6.3(c) hereof
1.24 REQUIRED
CONTRACTS OF SALE:
Shall have the meaning set forth in
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Section 3.3 hereof.
1.25 TOWNHOUSE
DEPOSIT(S): All reservations, deposits, down payments,
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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
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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
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Project, and (ii) the Townhouse Units located within the
Project.
2.
ADDITIONAL
REPRESENTATIONS
AND WARRANTIES. In addition to the
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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
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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,
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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
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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
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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
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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
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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
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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
