Exhibit
10.5
CONSTRUCTION LOAN AGREEMENT
for a loan in the amount of
$40,000,000.00
MADE BY AND BETWEEN
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,
AND
KEYBANK NATIONAL ASSOCIATION,
a national banking association
200 E. Robinson Street, Suite 555
Orlando, Florida 32801
Dated as of December 29, 2005
<PAGE>
TABLE OF CONTENTS
-----------------
(CONT'D)
Page
----
Article 1 INCORPORATION OF RECITALS AND EXHIBITS
1
1.1
Incorporation of
Recitals.
1
1.2
Incorporation of
Exhibits.
2
Article 2 DEFINITIONS
2
2.1
Defined Terms.
2
2.2
Other Definitional
Provisions.
10
Article 3 BORROWER'S REPRESENTATIONS AND WARRANTIES
10
3.1
Representations and
Warranties.
10
3.2
Survival of
Representations
and Warranties.
13
Article 4 LOAN AND LOAN DOCUMENTS
13
4.1
Agreement to
Borrow and Lend; Lender's Obligation to
Disburse. 13
4.2
Loan Documents.
14
4.3
Term of the Loan.
15
4.4
Prepayments.
16
4.5
Required Principal
Payments.
16
4.6
Late Charge.
16
Article 5 INTEREST
16
5.1
Interest Rate.
16
5.2
Interest Rate
Agreements.
17
Article 6 COSTS OF MAINTAINING LOAN
17
6.1
Increased Costs
and Capital Adequacy.
17
6.2
Borrower Withholding.
18
Article 7 LOAN EXPENSE AND ADVANCES
19
7.1
Loan and Administration Expenses.
19
7.2
Lender's Attorneys'
Fees and Disbursements.
19
7.3
Time of Payment of Fees and Expenses.
19
7.4
Expenses and
Advances Secured by Loan Documents.
20
7.5
Right of Lender to Make Advances to Cure Borrower's
Defaults. 20
Article 8 NON-CONSTRUCTION REQUIREMENTS PRECEDENT TO THE OPENING OF
THE LOAN
20
8.1
Non-Construction
Conditions Precedent.
20
Article 9 CONSTRUCTION
REQUIREMENTS PRECEDENT TO THE OPENING OF THE LOAN 23
9.1
Required Construction
Documents.
23
Article 10
BUDGET AND CONTINGENCY FUND
24
10.1
Budget.
24
10.2
Budget Line
Items.
24
10.3
Contingency Fund.
25
10.4
Optional Method
for Payment of Interest.
25
<PAGE>
Article 11
SUFFICIENCY
OF LOAN
25
11.1
Loan In Balance.
25
Article 12
CONSTRUCTION
PAYOUT REQUIREMENTS
26
12.1
Applicability of
Sections.
26
12.2
Monthly Payouts.
26
12.3
Documents to
be Furnished for Each Disbursement.
26
12.4
Retainages.
27
12.5
Disbursements for
Materials Stored On-Site.
27
12.6
Disbursements for
Offsite Materials.
27
Article 13
FINAL DISBURSEMENT FOR CONSTRUCTION
28
13.1
Final Disbursement
for Construction.
28
Article 14
RESERVED
29
Article 15
OTHER COVENANTS
29
15.1
Borrower further
covenants and agrees as follows:
29
15.2
Authorized
Representative.
36
Article 16
CASUALTIES
AND CONDEMNATION
36
16.1
Lender's Election
to Apply Proceeds on Indebtedness.
36
16.2
Borrower's Obligation
to Rebuild and Use of
Proceeds Therefor. 37
Article 17
ASSIGNMENTS
BY LENDER AND BORROWER
37
17.1
Assignments and
Participations.
37
17.2
Prohibition
of Assignments and Transfers by Borrower.
37
17.3
Prohibition of
Transfers in Violation of ERISA.
38
17.4
Successors and
Assigns.
38
Article 18
TIME OF THE ESSENCE
38
18.1
Time is of the Essence.
38
Article 19
EVENTS OF DEFAULT
38
Article 20
LENDER'S REMEDIES IN EVENT OF DEFAULT
40
20.1
Remedies Conferred
Upon Lender.
40
Article 21
GENERAL PROVISIONS
41
21.1
Captions.
41
21.2
Modification; Waiver.
41
21.3
Governing Law.
42
21.4
Acquiescence Not to
Constitute Waiver of Lender's Requirements. 42
21.5
Disclaimer by
Lender.
42
21.6
Partial Invalidity;
Severability.
43
21.7
Definitions Include
Amendments.
43
21.8
Execution in
Counterparts.
43
21.9
Entire Agreement.
43
21.10 Waiver
of Damages.
44
21.11 Claims
Against Lender.
44
<PAGE>
21.12 Jurisdiction.
44
21.13 Set-Offs.
44
Article 22
NOTICES
45
Article 23
WAIVER OF JURY TRIAL
46
EXHIBITS
--------
EXHIBIT "A"
Legal Description
of Land
EXHIBIT "B"
Permitted
Exceptions
EXHIBIT "C"
Title Requirements
EXHIBIT "D"
Form
of Survey Certification
EXHIBIT "E"
Insurance
Requirements
EXHIBIT "F"
Architect's
Certificate
EXHIBIT "G"
Initial Budget
EXHIBIT "H"
Borrower's
Certificate
EXHIBIT "I"
Soft
and Hard Cost Requisition Form
EXHIBIT "J"
Borrower's Certificate
of Compliance
EXHIBIT "K"
Sources and
Uses of Funds
EXHIBIT "L"
Survey
Requirements
EXHIBIT "M"
Required Contracts
and Deposits
<PAGE>
CONSTRUCTION LOAN AGREEMENT
---------------------------
PROJECT COMMONLY KNOWN AS
"TIERRA DEL SOL PHASE I"
----------------------
THIS
CONSTRUCTION LOAN AGREEMENT ("Agreement") is made as of December
29,
-----------
-----
2005, by and between TIERRA DEL SOL RESORT
(PHASE 1), L.P., a Florida limited
partnership ("Tierra del Sol"), TDS TOWN HOMES (PHASE 1), LLC, a
Florida limited
---------------
liability company ("TDS Town Homes"), COSTA BLANCA I REAL ESTATE,
LLC, a Florida
---------------
limited liability
company ("Costa Blanca"), TDS AMENITIES, INC., a Florida
---------------
corporation ("TDS
Amenities") (Tierra del Sol, TDS Town Homes, Costa Blanca and
--------------
TDS Amenities
hereinafter
referred to, jointly
and severally, as "Borrower"),
----------
and KEYBANK NATIONAL ASSOCIATION, a national banking association,
its successors
and assigns ("Lender").
--------
W I T N E S S E T H:
--------------------
RECITALS
--------
A.
TDS Town Homes is the
owner in fee simple of land located in the County
of Polk, State of Florida, and legally described on EXHIBIT "A-1"
attached
hereto, and the
improvements located thereon (the "TDS Town Homes Land"), Costa
-------------------
Blanca is the owner in fee simple of land
located in the County of Polk, State
of Florida,
and legally described on EXHIBIT "A-2" attached hereto,
and the
improvements located
thereon (the "Costa Blanca Land"), TDS
Amenities is the
------------------
owner in fee simple of land located in the County of Polk, State of
Florida, and
legally described on EXHIBIT "A-3" attached hereto, and the
improvements located
thereon (the
TDS Amenities Land") (the TDS Town Homes Land,
the Costa Blanca
--------------------
Land and the TDS
Amenities Land hereinafter referred to as the "Land"). Each of
-----
TDS Town Homes, Costa Blanca and TDS
Amenities is a wholly-owned subsidiary of
Tierra del
Sol. Borrower proposes to develop and construct a luxury
townhome/condominium project as more particularly described in the
definition of
"Improvements" below.
B.
Borrower has applied to Lender for a revolving loan in the
maximum
principal amount
of FORTY MILLION AND NO/100 DOLLARS ($40,000,000.00)
(the
"Loan" or the "Phase 1 Loan") to reimburse Borrower for construction and
-----
--------------
development of the
Project, and Lender is willing to make the Loan on the terms
and conditions hereinafter set forth.
NOW,
THEREFORE,
in consideration of the mutual covenants and
agreements
herein contained, the parties hereto agree as follows:
ARTICLE 1
INCORPORATION OF RECITALS AND EXHIBITS
--------------------------------------
1.1
INCORPORATION OF RECITALS.
-------------------------
The
foregoing preambles
and all other recitals set forth herein are made a
part hereof by this reference.
1.2
INCORPORATION OF EXHIBITS.
-------------------------
EXHIBITS "A"
through "L," to this Agreement, attached hereto, are
incorporated in
this Agreement and expressly made a part hereof by this
reference.
-1-
<PAGE>
ARTICLE 2
DEFINITIONS
-----------
2.1
DEFINED TERMS.
-------------
The
following terms as used herein shall have the
following meanings (as
supplemented by the Addendum):
Acquisition Proceeds: As such term is defined in Section
8.1(t)(i).
--------------------
-----------------
Addendum: The
Addendum to Construction Loan Agreement -
Condominium and
--------
Townhouse Project Development.
Adjusted Daily
LIBOR Rate: An
interest rate per annum equal to the sum of
---------------------------
(a) the Daily LIBOR Rate plus (b) the LIBOR Rate Margin.
The Adjusted Daily
LIBOR Rate shall change immediately and contemporaneously with any
change in the
Daily LIBOR Rate.
Adjusted Prime
Rate: A rate per annum equal to the sum of
(a) the Prime
---------------------
Rate Margin
and (b) the greater of
(i) the Prime Rate or (ii) one percent (1%)
in excess of the
Federal Funds Effective Rate. Any change in the Adjusted Prime
Rate shall
be effective
immediately from and after such change in the Adjusted
Prime Rate (or the Federal Funds Effective Rate, as
applicable).
Affiliate: With
respect to a specified person or entity,
any individual,
---------
partnership,
corporation, limited
liability company, trust, unincorporated
organization, association or other entity which, directly or
indirectly, through
one or more intermediaries, controls or is controlled by or is under
common
control with
such person or entity,
including, without limitation, any general
or limited partnership in which such person or entity is a
partner.
Agreement: This Construction Loan Agreement.
---------
Applicable Rate: As such term is defined in Section 5.1(a).
---------------
--------------
Appraisal: An
MAI certified appraisal of the Project performed in
---------
accordance with
FIRREA and Lender's appraisal requirements by
Integra Realty
Resources.
Architect: Fugleberg Koch Architects, Inc.
---------
Architect's
Certificate: A certificate in the form of EXHIBIT "F" attached
------------------------
hereto executed by the Architect in favor of Lender.
Assignment of Rents:
An assignment of leases and rents made by Borrower in
--------------------
favor of Lender assigning all leases, subleases and other
agreements relating to
the use and occupancy
of all or any portion of the Project, and all present and
future leases, rents, issues and profits therefrom.
-2-
<PAGE>
Bankruptcy Code:
Title 11 of the United
States Code entitled "Bankruptcy"
----------------
as now or hereafter in
effect, or any successor thereto or any other present or
future bankruptcy or insolvency statute.
Bond: A Performance Bond and Labor and Material Payment Bond in
a form
----
approved by Lender,
with Major Subcontractor, as the case may be, as principal,
with a surety company acceptable to Lender and
licensed to do business in the
State, as surety, with a dual obligee rider in favor of Lender.
Budget: The
budget for the Project specifying all costs
and expenses of
------
every kind and nature whatever to be incurred by Borrower in
connection with the
Project prior to the Maturity Date.
Budget Line Item: As such term is defined in Section 10.2.
----------------
Business Day:
A day of the year on which banks are not required or
-------------
authorized to close in Orlando, Florida.
Buyer's Deposit
Shortfall Account: As such term is defined in Section
------------------------------------
15.1(w).
CDD:
As such term is defined in Section 8.1(t)(i).
---
CDD
Bonds: As such term is defined in Section 8.1(t)(i).
---------
CDD
Bond Trustee: Suntrust Bank
----------------
Change Order:
Any request for changes in the Plans and
Specifications
-------------
(other than minor field changes involving no extra cost).
Collateral Account: As
such term is defined in Section 15.1(t).
------------------
Collateral Account LC: As such term is defined in Section
15.1(t).
---------------------
Completion Date:
On or before the date twenty-one (21)
months after the
----------------
Construction Commencement Date.
Completion Guarantor:
PCL Construction Enterprises, Inc., a Colorado
---------------------
corporation.
Completion Guaranty:
A guaranty of the obligations of
General Contractor
--------------------
under the General
Contract executed by the Completion Guarantor and pursuant to
which the Completion Guarantor guarantees
the timely completion of the General
Contract in
accordance
with all provisions of the General Contract
and this
Agreement.
Condominium: As such term is defined in the Addendum.
-----------
Condominium Unit
or Condominium Units: As such term is defined in the
-----------------------------------------
Addendum.
Construction or
construction:
The construction and equipping of the
------------------------------
Improvements in
accordance
with the Plans and
Specifications, and all related
improvements required
to be performed by Borrower under Leases and/or Contracts
of Sale (as defined in the Addendum), and the installation of
all personal
property, fixtures and equipment required for the operation of the
Project.
Construction Commencement Date: On or before thirty (30) days from
the Date
------------------------------
of Closing.
-3-
<PAGE>
Construction Schedule:
A schedule satisfactory to Lender and Lender's
----------------------
Consultant,
establishing a
timetable for completion of the Construction,
showing, on
a monthly basis, the anticipated
progress of the Construction and
also showing that the
Improvements can be completed on or before the Completion
Date. The Construction
Schedule must demonstrate that Units can be delivered in
October, 2006 and each month thereafter in accordance with the
General Contract.
Contingency Fund:
A Budget Line Item which shall represent an amount
-----------------
necessary to
provide reasonable
assurances to Lender that additional funds are
available to be used if additional costs and expenses are incurred
or additional
interest accrues on the Loan, or unanticipated events or problems
occur.
Contract Deposit
or Contract Deposits: As such term is defined in the
------------------ --------------------
Addendum.
Contract of
Sale or Contracts of Sale: As such term is defined in
the
------------------- ---------------------
Addendum.
Control: As
such term is used with respect to any person or entity,
-------
including the
correlative
meanings of the terms "controlled by" and
"under
common control with",
shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies
of such person
or entity,
whether through the ownership of voting
securities, by contract or
otherwise.
Daily LIBOR
Rate: The rate per annum calculated by
Lender in good faith,
------------------
which Lender determines with reference to the rate per annum
(rounded upwards to
the next higher whole multiple of 1/16th if such rate is not such a
multiple) at
which deposits in United States dollars are offered by prime banks
in the London
Interbank Eurodollar
Market two LIBOR Business days prior to
the day on which
such rate is calculated by the Lender in an
amount comparable to the amount of
such advance and with a maturity equal to the LIBOR Rate Interest
Period.
Date
of Closing: December 29, 2005.
---------------
-----
Default or default: Any event, circumstance or condition, which, if
it were
------------------
to continue uncured,
would, with notice or lapse of time or both, constitute an
Event of Default hereunder.
Default Rate:
A rate per annum equal to the greater of: (i)
eighteen
-------------
percentage points
(18%) per annum; or (ii) three
percentage points (300 basis
points) in
excess of the
Applicable Rate, but shall not at any time exceed the
highest rate permitted by law.
Deficiency Deposit: As such term is defined in Section 11.1.
------------------
-------------
Environmental
Indemnity: An
environmental indemnity from the Borrower and
------------------------
Guarantors, jointly
and severally, indemnifying Lender with regard to all
matters related to Hazardous Material and other environmental
matters.
Environmental
Proceedings: Any
environmental
proceedings, whether
civil
--------------------------
(including actions by private parties), criminal, or administrative
proceedings,
relating to the Project.
Environmental Report:
An environmental report (a "Phase 1"
environmental
---------------------
assessment) prepared
at Borrower's expense by a qualified environmental
consultant approved
by Lender, dated not
more than six (6) months prior to the
Loan Opening
Date and addressed to Lender (or subject to separate letter
agreement permitting Lender to rely on such environmental
report).
-4-
<PAGE>
ERISA: The Employee Retirement Income Security Act of 1974, as
amended, and
-----
the regulations promulgated thereunder from time to time.
Escrow Account(s): As such term is defined in the Addendum.
-----------------
Event of Default: As such term is defined in ARTICLE 19.
----------------
Federal Funds
Effective Rate: Shall
mean, for any day, the rate per annum
------------------------------
(rounded upward
to the nearest on one-hundredth of
one percent (1/100 of 1%))
announced by
the Federal Reserve Bank of Cleveland on such day as
being the
weighted average
of the rates on
overnight federal funds transactions arranged
by federal funds
brokers on the previous trading day, as computed and announced
by such Federal Reserve Bank in substantially the
same manner as such Federal
Reserve Bank
computes and announces the weighted average it
refers to as the
"Federal Funds Effective Rate."
FIRREA: The Financial
Institutions Reform, Recovery And Enforcement Act of
------
1989, as amended from time to time.
General Contract:
The general contract(s) between Borrower and General
-----------------
Contractor, pertaining to the construction of all Improvements.
General Contractor: PCL Construction Services, Inc.
------------------
Governmental
Approvals:
Collectively, all consents, licenses, and permits
-----------------------
and all other authorizations or approvals required from any Governmental
Authority for the Construction in accordance with the Plans and
Specifications.
Governmental Authority: Any federal, state, county or municipal
government,
----------------------
or political subdivision thereof, any governmental or
quasi-governmental agency,
authority, board,
bureau, commission, department, instrumentality, or
public
body, or any court, administrative tribunal, or public utility.
Guarantor(s): The
individual
or collective reference to the Payment
------------
Guarantors and
the Performance and Completion Guarantors (but specifically
excluding the Completion Guarantor), as the context shall
imply.
Hazardous Material:
Means and includes gasoline, petroleum, asbestos
-------------------
containing materials,
explosives,
radioactive
materials or any hazardous or
toxic material, substance or waste which is defined by those or
similar terms or
is regulated
as such under any Law of any Governmental Authority having
jurisdiction over the
Project or any portion thereof or its use, including: (i)
any "hazardous
substance"
defined as such in (or for purposes of) the
Comprehensive
Environmental
Response, Compensation
and Liability Act, 42
U.S.C.A. Sec.
9601(14) as may be amended from time to time,
or any so-called
"superfund" or
"superlien" Law,
including the judicial interpretation thereof;
(ii) any "pollutant or contaminant" as defined in 42
U.S.C.A. Sec. 9601(33);
(iii) any material now defined as "hazardous
waste" pursuant to 40 C.F.R. Part
260; (iv) any petroleum, including crude oil or any fraction thereof; (v)
natural gas, natural gas liquids, liquefied natural gas, or
synthetic gas usable
for fuel; (vi) any "hazardous chemical" as
defined pursuant to 29 C.F.R. Part
1910; and (vii) any
other toxic substance or contaminant that is subject to any
other Law or other past or present requirement
of any Governmental Authority.
Any reference
above to a Law,
includes the same as it may be amended from time
to time, including the judicial interpretation thereof.
-5-
<PAGE>
Improvements: A
luxury townhome/condominium project consisting of 114
------------
townhomes, 180
mid-rise residential condominium units, and
one (1) commercial
condominium unit to be constructed on the Land, along with project
amenities and
other improvements
to be known as "Tierra del Sol", as more particularly
----------------
described in
the Plans and Specifications, together with any existing
improvements not
to be demolished. The Condominium will consist of
five (5)
buildings (the
"Condominium
Buildings"), each having 36 Condominium Units, and
----------------------
will be constructed on the Costa Blanca Land. The Project amenities
will include
a pool (including a "lazy river" feature), pool deck, two
spa pools, kiddie
pool, pool equipment
building, two pool-side restroom buildings, sports bar and
"beach" area
and will be constructed on the TDS
Amenities Land. The townhomes
will consist
of twelve (12) "Monaco" townhouse buildings consisting of 74
Townhouse Units,
and five "Marbella" townhouse buildings consisting of 40
Townhouse Units
(the Monaco buildings and the Marbella
buildings hereinafter
referred to
as the "Townhouse Buildings"), and
will be constructed on the TDS
-------------------
Town Homes
Land. The parking area
serving the Condominium Buildings (up to the
boundary of
the TDS Amenities Land) will be owned
by TDS Amenities until they
are deeded
to the master association at or before the time
control of it is
turned over to the owners.
In
Balance or in balance: As such term is defined in Article 11.
------------------------
----------
Including or including: Including but not limited to.
----------------------
Interest Rate
Agreement: An Interest
Rate Protection Product purchased by
-------------------------
Borrower from Lender, if applicable.
Interest Rate Protection Product: An interest rate hedging product,
such as
--------------------------------
a cap or swap or such other interest rate protection product.
Internal Revenue
Code: The Internal
Revenue Code of 1986, as amended from
-----------------------
time to time.
Land: As such term is defined in Recital A.
----
---------
Laws: Collectively,
all federal, state and local laws, statutes,
codes,
----
ordinances, orders,
rules and regulations, including judicial opinions or
precedential authority in the applicable jurisdiction.
Late
Charge: As such term is defined in Section 4.6.
-----------
-----------
Leases: The
collective
reference to all leases, subleases and
occupancy
------
agreements affecting
the Project or any
part thereof now existing or hereafter
executed and
all amendments, modifications or
supplements thereto approved in
writing by Lender.
Lender: As
defined in the opening paragraph of this Agreement, and
------
including any successor holder of the Loan from time to time.
Lender's Consultant: An independent consulting architect,
inspector, and/or
------------------
engineer designated by Lender in Lender's sole discretion.
LIBOR Business
Day: A Business Day on which dealings
in U.S. dollars are
--------------------
carried on in the London Interbank Eurodollar Market.
LIBOR Rate:
The rate per annum calculated by
Lender in good faith, which
-----------
Lender determines
with reference to the
rate per annum (rounded upwards to the
next higher
whole multiple of 1/16th if such rate is not such
a multiple) at
which deposits in United States dollars are offered by prime banks
in the London
Interbank Eurodollar
Market two LIBOR Business days prior to
the day on which
such rate is calculated by the Lender in an
amount comparable to the amount of
such advance and with a maturity equal to the LIBOR Rate Interest
Period.
-6-
<PAGE>
LIBOR Rate Interest Period: With respect to each amount bearing
interest at
--------------------------
a LIBOR based rate, a period of one LIBOR Business day, commencing
on the date a
disbursement of Loan proceeds is made, continued, or converted.
LIBOR Rate
Margin: Two and three-quarters percent (2.75%)
(two hundred
-------------------
seventy five (275) basis points) per annum.
Loan: As defined in Recital B.
----
Loan
Commitment: That certain Commitment Letter dated December 1, 2005,
and
---------------
executed by Borrower and Lender.
Loan
Documents:
The collective
reference to this Agreement, the documents
---------------
and instruments
listed in Section 4.2, and all the other documents and
instruments entered
into from time to
time, evidencing or securing the Loan or
any obligation
of payment thereof or performance of
Borrower's or Guarantors'
obligations in
connection with the
transaction contemplated hereunder, and any
Interest Rate Agreement (if applicable), each as amended.
Loan
Opening Date: The date of the first disbursement
of proceeds of the
-------------------
Loan.
Major Subcontractor: Any subcontractor under a Major
Subcontract.
-------------------
Major Subcontracts: All subcontracts between the General Contractor
and any
------------------
subcontractors and
material suppliers which provide for an
aggregate contract
price equal to or greater than $500,000.00.
Material Adverse
Change or material adverse change: If, in Lender's
--------------------------------------------------------
reasonable discretion, the business prospects, operations or
financial condition
of a person, entity or property has
changed in a manner which could materially
impair the value of
Lender's security for the Loan, prevent timely repayment of
the Loan or otherwise prevent the applicable person or entity from timely
performing any of its material obligations under the Loan
Documents.
Maturity Date: December 28, 2007, unless sooner repaid.
-------------
----
Maximum Outstanding
Loan Amount: The maximum principal amount of the Loan,
--------------------------------
at any time outstanding, as set forth in Section 4.1(a).
Maximum Aggregate Loan Amount: As such term is defined in Section
4.1(a).
-----------------------------
Mortgage: The
Mortgage, Assignment Rents, Security
Agreement and Fixture
--------
Filing, executed by
Borrower for the benefit of Lender securing this Agreement,
the Note, and all
obligations of Borrower in connection with the Loan, granting
a first priority lien on Borrower's fee interest in the Project,
subject only to
the Permitted Exceptions.
Net
Cash Flow: The gross income produced by the
Project from all sources
---------------
(including but not limited to all Net Sale Proceeds (as defined in
the Addendum)
and other sales and rental activities) 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
-7-
<PAGE>
Project (other
than those funded out of Loan proceeds); and (c)
reasonable
reserves for repairs and replacements to the Project (including
reserves for the
condominium
association, the homeowner's association, basic resort services
and
reserves under
the Operating Agreement), 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.
Net
Sale Proceeds: As such term is defined in the Addendum.
-----------------
Note: A promissory note, in the Maximum
Outstanding Loan Amount, executed
----
by Borrower and payable to the order of Lender, evidencing the
Loan.
Opening of
the Loan or Loan Opening: The first disbursement of Loan
-----------------------------------------
proceeds.
Operating Account: A deposit account opened and maintained by
Borrower with
-----------------
Lender, to be utilized in the manner set forth in Section
4.1(e).
--------------
Operating Agreement:
That certain Operating
Agreement entered into by and
--------------------
between Wright
Resort Villas & Hotels, Inc., and Sonesta
Orlando, Inc. dated
January 29, 2005.
Owner's Contingency:
A Budget Line Item
identifying funds to be disbursed
--------------------
to Borrower,
upon approved request, for the purpose of paying additional,
non-required expenses
related to the Project. In no event, however, shall
Owner's Contingency be available for distribution until Lender is
satisfied that
the Loan is in balance and sufficient to complete the improvements
planned.
Payment Guarantor(s): Malcolm J. Wright, American Leisure Holdings,
Inc., a
--------------------
Nevada corporation,
and TDS Development, LLC, a Florida limited liability
company.
Payment Guaranty: A
guaranty of payment executed by each Payment Guarantor
-----------------
and pursuant
to which the Payment Guarantors jointly and
severally guarantee
payment of principal, interest and other amounts due under the Loan
Documents.
Performance and
Completion
Guarantor(s):
Malcolm J. Wright, American
------------------------------------------
Leisure Holdings,
Inc., a Nevada corporation, and TDS Development, LLC, a
Florida limited liability company.
Performance and
Completion
Guaranty: 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 in accordance
with
all provisions
of this Agreement and
Borrower's obligation to keep the Loan In
Balance and to pay for all cost overruns.
Permitted Exceptions:
Those matters listed on Schedule B to the Title
---------------------
Policy to which title
to the Project may be subject at the Loan Opening (as set
forth on EXHIBIT "B", attached hereto) and thereafter such other title
exceptions as Lender may reasonably approve in writing.
Phase 1 Loan: As such term is defined in Recital B.
------------
Plans and Specifications: Detailed plans and specifications for the
--------------------------
Improvements, as
approved by Lender pursuant to Section 9.1(f), as
modified
--------------
hereafter with
Lender's prior written approval or as otherwise expressly
permitted by this Agreement.
-8-
<PAGE>
Prime Rate:
That interest rate
established from time to time by Lender as
-----------
Lender's Prime
Rate, whether or not
such rate is publicly announced; the Prime
Rate may not be the lowest interest rate charged
by Lender for commercial or
other extensions of credit;
Prime Rate Margin: 0 percent (0 basis points) per annum.
-----------------
Pro-Forma Projection:
A pro forma statement of projected income and
---------------------
expenses of Project.
Project: The
collective
reference to (i) the Land, together with all
-------
buildings, structures
and improvements located or to be located thereon,
including the
Improvements,
(ii) all rights, privileges, easements and
hereditaments relating or appertaining thereto, and (iii) all
personal property,
fixtures and equipment
required or beneficial for the operation thereof, all as
contemplated by the Plans and Specifications and the Budget.
Project Equity: As such term is defined in Section 8.1(a).
--------------
--------------
Project Escrow Account: As such term is defined in Section
4.1(f).
----------------------
--------------
Required Permits:
Each building permit, environmental permit, utility
-----------------
permit, land
use permit, wetland permit and any other permits,
approvals or
licenses issued
by any Governmental
authority which are required in connection
the Construction or operation of the Project.
Reserve Percentage:
The percentage which is specified by the Board of
-------------------
Governors of
the Federal Reserve System (or any successor) or any other
governmental or
quasi-governmental
authority with jurisdiction over Lender for
determining the
maximum reserve requirement (including, but not limited to, any
marginal reserve
requirement)
for Lender with respect to liabilities
constituting or
including (among other liabilities) Eurocurrency liabilities in
an amount equal to the Loan.
Retainage As such term is defined in Section 12.4.
---------
Soil
Report: A soil test report prepared by a licensed engineer
------------
satisfactory to
Lender indicating to the satisfaction of
Lender that the soil
and subsurface conditions underlying the Project will support the
Improvements.
State: The State of Florida.
-----
Subcontracts:
Subcontracts for
labor or materials to
be furnished to the
------------
Project.
TDS
Development, LLC, Account: As such term is defined in Section
15.1(v).
-----------------------------
---------------
Title Insurer: First
American Title Insurance Company, or such other title
--------------
insurance company licensed in the State as may be approved in
writing by Lender.
Title Policy: An ALTA Mortgagee's Loan Title Insurance Policy with
extended
------------
coverage issued
by the Title Insurer insuring the lien of the
Mortgage as a
valid first,
prior and paramount lien upon the Project and all
appurtenant
easements, and
subject to no other exceptions other than the Permitted
Exceptions and
otherwise satisfying the requirements of EXHIBIT "C"
attached
hereto and made a part hereof.
Townhouse Unit or Townhouse Units: As such term is defined in the
Addendum.
---------------------------------
-9-
<PAGE>
Transfer: Any
sale, transfer, lease (other than a Lease approved by
--------
Lender), conveyance
(other than conveyances approved by Lender),
alienation,
pledge, assignment,
mortgage, encumbrance hypothecation or other
disposition
(other than the
transfer of Townhouse Units and Condominium Units to individual
Unit purchasers) of: (a) all or any portion of the Project or any
portion of any
other security
for the Loan; (b) all or any portion of
the Borrower's right,
title and interest
(legal or equitable) in and to the Project or any portion of
any other security for
the Loan; or (c) any interest (other than warrants for a
2% partnership
interest in, and a pledge of partnership interests in (but not
a
transfer pursuant to
such pledge), Tierra del Sol Resort (Phase 1), Ltd, issued
to Stanford
International Bank, Ltd.) in Borrower or any interest in any
entity
which directly
or indirectly holds an interest in, or directly
or indirectly
controls, Borrower
(other than any minority ownership interest in American
Leisure Holdings, Inc.).
Unavoidable Delay: Any
delay in the construction of the Project, caused by
------------------
natural disaster,
fire, earthquake, floods, explosion, extraordinary
adverse
weather conditions,
inability to procure or a general shortage of labor,
equipment, facilities, energy, materials or supplies in the open
market, failure
of transportation, strikes or lockouts for which Borrower has
notified Lender in
writing.
Unit
or Units: As such term is defined in the Addendum.
-------------
Unit
Release Price: The Minimum Release Price (as defined in the
Addendum).
------------------
Usable Deposits:
Usable Deposits are defined as (i) 10% (2nd 10% deposits)
----------------
of the gross sales contract price of each
Condominium Unit; or (ii) 20% of the
gross sales
contract price of each Townhouse Unit (provided
the purchaser of
such Townhouse Unit(s) has executed any required waiver allowing
for use of said
deposit funds).
2.2
OTHER DEFINITIONAL PROVISIONS.
-----------------------------
All terms defined in this Agreement shall have the same meanings
when used in
the Note, Mortgage, any other Loan Documents, or any certificate or
other
document made or delivered pursuant hereto. The words "hereof",
"herein" and
"hereunder" and words of similar import when used in this Agreement
shall refer
to this Agreement.
ARTICLE 3
BORROWER'S REPRESENTATIONS AND WARRANTIES
-----------------------------------------
3.1
REPRESENTATIONS AND WARRANTIES.
------------------------------
To
induce Lender to execute this Agreement and perform its
obligations
hereunder, Borrower hereby represents and warrants to Lender as
follows:
(a) Borrower has good
and marketable fee simple title to the Project,
subject only to the Permitted Exceptions.
(b) Except as previously disclosed to Lender in writing, no
litigation
or
proceedings
are pending, or to the best of Borrower's knowledge
threatened, against
Borrower, Completion Guarantor or any Guarantor, which
could, if adversely determined, cause a Material Adverse Change with
respect to
Borrower, Completion Guarantor, any
Guarantor or the Project.
There are no pending Environmental Proceedings and Borrower has no
knowledge of
any threatened Environmental Proceedings or any facts or
circumstances which may give rise to any future Environmental
Proceedings.
-10-
<PAGE>
(c) Borrower is a duly
organized and validly existing Florida entity,
as
applicable,
and has full power and authority to
execute, deliver and
perform all
Loan Documents to which Borrower is a party, and such
execution, delivery
and performance have been duly authorized by all
requisite action on the part of Borrower.
(d) No consent, approval or authorization of or declaration,
registration or
filing with any
Governmental Authority or nongovernmental
person or entity, including any creditor,
partner, or member of Borrower,
Completion Guarantor
or any Guarantor, is
required in connection with the
execution, delivery
and performance of this Agreement or
any of the Loan
Documents other than
the recordation of the Mortgage, Assignment of Leases
and
Rents and the filing of UCC-1 Financing
Statements, except for such
consents, approvals
or authorizations of or declarations
or filings with
any
Governmental
Authority or
non-governmental person or entity where the
failure to
so obtain would not have an adverse effect on Borrower,
Completion Guarantor
or such Guarantor or which have been
obtained as of
any
date on which this representation is made or remade.
(e) The execution, delivery and performance of this Agreement,
the
execution and
payment of the Note and the granting of the
Mortgage and
other security
interests under the other Loan Documents have not
constituted and will
not constitute, upon the giving of notice or lapse of
time
or both, a breach or default under any other agreement to
which
Borrower, Completion Guarantor or any
Guarantor is a party or may be bound
or
affected, or a
violation of any law or court order which may affect the
Project, any part thereof, any interest therein, or the use
thereof.
(f) There is no
default under this Agreement or and of the other Loan
Documents, nor any
condition which, after notice or the passage of time or
both, would
constitute
a default or an Event of Default under said
documents.
(g) No condemnation of any portion of the Project, (ii) no
condemnation or
relocation of any roadways abutting the Project, and (iii)
no
proceeding to deny access to the Project from any point or planned
point
of
access to the Project, has commenced or, to the best of
Borrower's
knowledge, is contemplated by any Governmental Authority.
(h) The amounts set forth in the Budget present a
full and complete
itemization by
category of all costs, expenses and fees which
Borrower
reasonably expects
to pay or reasonably
anticipates becoming obligated to
pay
to complete the Construction and operate the Project (until the
Project
achieves breakeven
operations).
Borrower is unaware of any other such
costs, expenses
or fees which are material and are not covered by
the
Budget.
(i) Neither
the construction of the Improvements
nor the use of the
Project when completed and the contemplated accessory uses will
violate (i)
any
Laws (including subdivision, zoning, building, environmental
protection
and
wetland protection Laws), or (ii) any building permits,
restrictions of
record, or
agreements
affecting the Project
or any part thereof. Neither
the
zoning authorizations, approvals or variances nor any
other right to
construct or to use
the Project is to any extent dependent upon or related
to
any real estate other than the Land.
All Government Approvals required
for
the Construction in accordance with
the Plans and Specifications have
been
obtained or will be obtained prior to the
Loan Opening, and all Laws
relating to
the Construction and operation of the
Improvements have been
complied with
and all permits and licenses required
for the operation of
the
Project which cannot be obtained until the
Construction is completed
can
be obtained if the Improvements are completed
in accordance with the
Plans and Specifications.
(j) When constructed, the Project will have adequate
water, gas and
electrical supply,
storm and sanitary
sewerage facilities, other required
public utilities,
fire and police
protection, and means of access between
-11-
<PAGE>
the
Project and public
highways; none of the foregoing will be foreseeably
delayed or impeded by virtue of any requirements under any
applicable Laws.
(k) No brokerage fees or commissions are
payable by or to any person
in
connection with this Agreement or the Loan to be disbursed
hereunder.
(l) All financial statements and other information previously
furnished by
Borrower or any Guarantor to Lender in
connection with the
Loan are true, complete and correct and fairly present the financial
conditions of
the subjects thereof
as of the respective dates thereof and
do
not fail to state any material fact necessary to make such
statements or
information not
misleading, and no Material Adverse Change with respect to
Borrower or
any Guarantor has
occurred since the respective dates of such
statements and
information.
Neither Borrower nor any Guarantor has any
material liability,
contingent
or otherwise, not disclosed in such
financial statements.
(m) Except as disclosed by Borrower to Lender, (i) the Project is
in a
clean, safe and
healthful condition, and, except for materials used in the
ordinary course of
construction, maintenance and operation of the Project,
is
free of all Hazardous
Material and is in compliance with all applicable
Laws; (ii)
neither Borrower nor, to the best knowledge of
Borrower, any
other person or entity, has ever caused or permitted any Hazardous
Material
to
be placed, held,
located or disposed of on, under, at or in a manner to
affect the
Project, or any part thereof, and the Project
has never been
used
(whether by Borrower or, to the best knowledge of
Borrower, by any
other person
or entity) for any activities involving, directly or
indirectly, the
use, generation, treatment, storage,
transportation, or
disposal of any
Hazardous Material; (iii) neither the Project nor Borrower
is
subject to any existing, pending, or, to the best of Borrower's
knowledge, threatened
investigation
or inquiry by any Governmental
Authority, and the Project is not subject to any remedial
obligations under
any
applicable Laws pertaining to health or the environment; and (iv)
there
are
no underground tanks, vessels, or
similar facilities for the storage,
containment or accumulation of Hazardous Materials of any sort on,
under or
affecting the Project.
(n) The Project, or
each parcel comprising the Project, is or will be
taxed separately
without regard to any other property and for all purposes
the
Project may be mortgaged, conveyed and otherwise dealt with as an
independent parcel.
(o) Except
the Operating Agreement and various amenities leases,
Borrower and
its agents have not entered into any Leases,
subleases or
other arrangements
for occupancy of space within the
Project, except for
the
contracts for sale with third parties for the sale of Units.
(p) When the Construction is completed in
accordance with the Plans
and
Specifications, no building or other improvement will encroach upon
any
property line,
building line, setback line, side yard line or any recorded
or
visible easement (or other easement of which
Borrower is aware or has
reason to believe may exist) with respect to the Project.
(q) The Loan is not being made for the purpose of purchasing
or
carrying "margin
stock" within the meaning of Regulation G, T, U or X
issued by the Board of Governors of the Federal Reserve System, and
Borrower agrees to execute all instruments necessary to comply with
all the
requirements of Regulation U of the Federal Reserve System.
(r) Borrower
is not a party in interest to any plan defined or
regulated under ERISA,
and the assets of Borrower are not "plan assets" of
any
employee benefit plan
covered by ERISA or Section 4975 of the Internal
Revenue Code.
-12-
<PAGE>
(s) Borrower
is not a "foreign
person" within the meaning of Section
1445
or 7701 of the Internal Revenue Code.
(t) Other than "Sonesta Orlando Resorts at
Tierra del Sol", Borrower
uses
no trade name other than its actual name set forth herein. The
principal place of business of Borrower is as stated in Article
22.
----------
(u) Borrower's
place of formation or organization is the State
of
Florida.
(v) All statements set forth in the Recitals are true and
correct.
(w) Neither Borrower nor Completion Guarantor nor any Guarantor is
(or
will
be) a person with whom
Lender is restricted from doing business under
regulations of
the Office of Foreign Asset Control ("OFAC") of the
Department
of the Treasury of the United States of America
(including,
those Persons
named on OFAC's Specially Designated and Blocked
Persons
list) or under any statute, executive order
(including, the September 24,
2001
Executive Order Blocking Property and Prohibiting
Transactions With
Persons Who
Commit, Threaten to Commit, or Support Terrorism),
or other
governmental action
and is not and shall not engage in any
dealings or
transactions or
otherwise be associated with such persons. In
addition,
Borrower hereby
agrees to provide to the Lender with any additional
information that
the Lender deems
necessary from time to time in order to
ensure compliance with
all applicable Laws concerning money laundering and
similar activities.
3.2
SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
------------------------------------------
Borrower agrees that all of the representations and warranties set
forth in
Section 3.1 and elsewhere in this Agreement are true as of the date
hereof, will
-----------
be true at the Loan Opening and, except for matters which have been
disclosed by
Borrower and
approved by Lender in writing, at all times thereafter. Each
request for
a disbursement under the Loan Documents shall constitute a
reaffirmation of
such representations and warranties, as deemed modified
in
accordance with
the disclosures made
and approved as aforesaid, as of the date
of such request. It
shall be a condition precedent to the Loan Opening and each
subsequent disbursement that each of said representations and
warranties is true
and correct as of the
date of such requested disbursement. Each disbursement of
Loan proceeds shall be deemed to be a reaffirmation by Borrower
that each of the
representations and
warranties
is true and correct as of the date of such
disbursement, as
deemed modified in accordance with disclosures made and
approved as aforesaid. In addition, at Lender's request, Borrower
shall reaffirm
such representations
and warranties in writing prior to each disbursement
hereunder.
ARTICLE 4
LOAN AND LOAN DOCUMENTS
-----------------------
4.1
AGREEMENT TO BORROW AND LEND; LENDER'S OBLIGATION TO DISBURSE.
-------------------------------------------------------------
Subject to
the terms, provisions
and conditions of this Agreement and the
other Loan Documents, Borrower agrees to borrow from Lender and
Lender agrees to
lend to Borrower the Loan, for the purposes and subject
to all of the terms,
provisions and
conditions
contained in this Agreement. If Lender
consists of
more than one party, the obligations of each such party
with respect to the
amount it has agreed to loan to Borrower shall be
several (and not joint and
several) and shall be limited to its proportionate share of the
Loan and of each
advance.
-13-
<PAGE>
(a) The maximum principal amount of the Loan shall
not exceed FORTY
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 set forth herein. The
Loan shall be a revolving
loan
and Borrower may borrow, repay and reborrow funds
hereunder to pay
costs as shown on the Budget; provided that (i) the
maximum outstanding
principal balance
shall never exceed $40,000,000.00 (the "Maximum
-------
Outstanding Loan Amount"); (ii) the aggregate principal amount
borrowed may
-----------------------
not
exceed $72,550,00.00 (the "Maximum
Aggregate Loan Amount"); and (iii)
-----------------------------
the
Borrowers have at all times complied with
the terms and conditions of
the
Loan Documents. In addition, at Lender's sole discretion and
subject to
acceptable appraisals,
upfront plan and cost reviews, the absence of
default and other factors considered by the Lender, the aggregate
amount of
funds borrowed
hereunder may be increased, and/or the Lender
may permit
funds to be utilized for additional costs related to
the development of
other portions of the Project.
(b) Lender agrees, upon Borrower's compliance with and satisfaction
of
all
conditions
precedent to the Loan Opening and provided
the Loan is In
Balance, no Material
Adverse Change has occurred with respect to Borrower,
Completion Guarantor
or any Guarantor, or the Project and no
default or
Event of Default has occurred and is continuing hereunder, to Open
the Loan
to
finance a portion of the costs incurred by
Borrower in connection with
the
development of the Project and the construction of the
Improvements, to
the
extent provided for in the Budget.
(c) After the Opening of the Loan, Borrower shall be entitled
to
receive further
successive
disbursements
of the proceeds of the
Loan in
accordance with Articles 9, 12 and 13 within ten (10) days after
compliance
with
all conditions precedent thereto,
provided that (i) the Loan remains
In
Balance; (ii) Borrower has complied with all conditions
precedent to
disbursement from
time to time including the requirements
of Section 3.2
-----------
and
Articles 8, 9, 12 and 13; (iii) no Material Adverse Change has
occurred
----------------- --
with
respect to Borrower, Completion Guarantor or any
Guarantor, or the
Project and
(iv) no Event of Default and no material default exists
hereunder or under any other Loan Document.
(d) To the extent that Lender may have acquiesced in
noncompliance
with
any requirements
precedent to the Opening of the Loan or precedent to
any
subsequent
disbursement of Loan
proceeds, such acquiescence shall not
constitute a
waiver by Lender, and Lender may at any time after such
acquiescence require Borrower to comply with all such
requirements.
(e) Borrower
shall, prior to the Opening of the Loan, open an
Operating Account.
Borrower authorizes Lender to disburse Loan proceeds by
crediting the
Operating Account;
provided, however, that Lender shall not
-----------------
be
obligated to use such method. Lender is further
authorized to pay any
principal or
interest due upon the
Note when and as same shall become due
by
debiting funds on deposit in the Operating Account.
(f) Borrower, shall,
prior to the Opening of the Loan, open an Escrow
Account (the "Project
Escrow Account") to hold all Net Cash Flow from the
----------------------
Project. Once
the Project begins to generate Net
Cash Flow, Borrower may
only
borrow from the Loan interest in excess of the Net Cash Flow so
generated.
(g) The Escrow Agent for the Project Escrow Account shall be
Lender.
4.2
LOAN DOCUMENTS.
--------------
Borrower agrees
that it will, on or
before the Loan Opening Date, execute
and deliver
or cause to be executed and delivered to Lender the
following
documents in form and substance acceptable to Lender:
-14-
<PAGE>
(a) The Addendum.
(b) The Note.
(c) The Mortgage.
(d) The Assignment of Rents.
(e) The Completion Guaranty.
(f) The Payment Guaranty.
(g) Performance and Completion Guaranty.
(h) The Environmental Indemnity.
(i) A collateral 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
continuation
agreements from
the General Contractor, the architect and
other parties reasonably specified by Lender.
(j) A collateral assignment of Unit sale contracts, Governing
documents and developer's rights.
(k) A collateral assignment of all Contract Deposits.
(l) A collateral assignment of any management and/or operating
agreements.
(m) A collateral assignment of all contracts, agreements, and
proceeds
related to
the CDD and any associated bond offerings, to the extent
assignable.
(n) A collateral assignment of escrow accounts.
(o) A subordination, nondisturbance and
attornment agreement between
Lender and each of the tenants under any lease(s), if
applicable.
(p) Such UCC financing statements as Lender
determines are advisable
or
necessary to perfect or notify third parties
of the security interests
intended to be created by the Loan Documents.
(q) Such other documents, instruments or
certificates as 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 this Agreement and the Loan Documents, and to comply
with
the
laws of the State.
4.3
TERM OF THE LOAN.
----------------
All
principal,
interest and other
sums due under the Loan Documents shall
be due and payable in full on the Maturity
Date without relief from valuation
and appraisement laws.
-15-
<PAGE>
4.4
PREPAYMENTS.
-----------
Borrower shall have
the right to make prepayments of the Loan, in whole or
in part, without prepayment penalty, upon not less
than seven (7) days' prior
written notice
to Lender (except for prepayments resulting from the
sale of
Units, in which case no notice will be
required). No prepayment of all or part
of the Loan shall be
permitted unless same is made together with the payment of
all interest
accrued on the Loan through the date of
prepayment (unless said
prepayment(s) result
from the sale of Units, in which event said
prepayments
will be applied to principal only).
4.5
REQUIRED PRINCIPAL PAYMENTS.
---------------------------
(a) The Unit Release Price for each Unit shall be applied to
the
outstanding principal balance of the Loan.
(b) All principal shall be paid on or before the Maturity Date.
4.6
LATE CHARGE.
-----------
Any
and all amounts due hereunder or under
the other Loan Documents which
remain unpaid
more than five (5) days after the date said
amount was due and
payable shall
incur a fee (the "Late Charge") of the
greater of four percent
-----------
(4%) per annum of said amount or twenty-five dollars
($25.00), which payment
shall be in addition to all of Lender's other rights and remedies
under the Loan
Documents, provided
that no Late Charge shall apply to the final
payment of
principal on the Maturity Date.
ARTICLE 5
INTEREST
--------
5.1
INTEREST RATE.
-------------
(a) The Loan will bear interest at the Applicable
Rate, unless the
Default Rate
is applicable. The Adjusted Daily LIBOR Rate shall be
the
"Applicable Rate". For
each disbursement of proceeds of the Loan, Borrower
shall deliver to
Lender irrevocable notice (which may be (A) verbal notice
provided that
Borrower shall deliver to Lender facsimile confirmation
within twenty-four
(24) hours of such verbal notice or (B) electronic mail
notice within twenty-four (24) hours of such verbal notice of the
requested
amount of such
disbursement. Borrower shall pay interest in arrears on the
5th
day of every calendar month in the
amount of all interest accrued and
unpaid. All payments
(whether of principal or of interest) shall be deemed
credited to Borrower's
account only if received by 12:00 noon Orlando time
on
a Business Day;
otherwise, such payment shall be deemed received on the
next
Business Day.
(b) Interest
at the Applicable Rate (or Default Rate) shall be
calculated for the
actual number of days elapsed on the basis of a 360-day
year, including
the first date of the applicable period to, but not
including, the date of repayment.
(c) If the introduction of or any change in any Law,
regulation or
treaty, or
in the interpretation thereof by any Governmental
Authority
charged with
the administration or interpretation
thereof, shall make it
unlawful for
Lender to maintain the Applicable Rate at
an Adjusted Daily
LIBOR Rate with
respect to the Loan or any portion thereof, or to fund the
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<PAGE>
Loan
or any portion thereof in Dollars in the London interbank market,
then
(1) Lender shall notify Borrower that
Lender is no longer able to maintain
the
Applicable Rate at an Adjusted Daily LIBOR Rate, and (2) the
Applicable
Rate
for any portion of the Loan for which
the Applicable Rate is then an
Adjusted Daily LIBOR
Rate shall automatically be converted to the Adjusted
Prime Rate.
(d) The Loan shall bear interest at the Default
Rate at any time at
which an Event of Default shall exist.
5.2
INTEREST RATE AGREEMENTS.
------------------------
(a) Any indebtedness incurred pursuant to
an Interest Rate Agreement
entered into by
Borrower and Lender, if any, shall constitute indebtedness
evidenced by
the Note and secured by the Mortgage and the other
Loan
Documents to
the same extent and
effect as if the terms and provisions of
such
Interest Rate Agreement were set forth herein, whether or not
the
aggregate of
such indebtedness, together with the disbursements
made by
Lender of the proceeds of the Loan, shall exceed the face
amount of the
Note.
(b) Borrower hereby
collaterally assigns to Lender for the benefit of
Lender any
and all Interest Rate Protection Products
purchased or to be
purchased by
Borrower in connection
with the Loan, as additional security
for
the Loan, and agrees to provide Lender with any additional
documentation
requested by
Lender in order to confirm or perfect such
security interest
during the term of the Loan. If Borrower obtains
an
Interest Rate
Protection Product
from a party other than Lender, Borrower
shall deliver
to Lender such third party's consent to such
collateral
assignment. No
Interest Rate Protection Product purchased from a third
party may be secured by an interest in the Project.
(c) Borrower
shall, as a condition to the Opening of the Loan if
required by
Lender and otherwise within ten (10) Business Days after
Lender's request,
institute an interest rate hedging program
through the
purchase of
an Interest Rate
Protection Product with respect to the Loan.
The
Interest Rate Protection Product, the portion of the Loan (if less
than
the Maximum
Outstanding Loan Amount) to which such Interest Rate Protection
Product shall
apply, and the
financial institution providing the Interest
Rate
Protection
Product, shall be subject to Lender's prior written
approval in
its sole discretion. Borrower shall
afford Lender a right of
first opportunity
to provide all Interest Rate Protection Products
but
shall not be required to purchase such Interest Rate
Protection Product
from
Lender.
ARTICLE 6
COSTS OF MAINTAINING LOAN
-------------------------
6.1
INCREASED COSTS AND CAPITAL ADEQUACY.
------------------------------------
(a) Borrower
recognizes
that the cost to Lender of maintaining
the
Loan
or any portion thereof may fluctuate and Borrower agrees to pay
Lender
additional amounts
to compensate Lender for any increase in its actual
costs incurred in
maintaining the Loan or any portion thereof outstanding,
or
for the reduction of any amounts received or receivable from
Borrower as
a
result of:
(i) any change after the date hereof in any applicable Law,
regulation or
treaty, or in the interpretation or
administration
thereof, or
by any domestic or
foreign court, (A) changing the basis
of taxation
of payments under this Agreement to Lender
(other than
taxes imposed
on all or any portion of the overall net income
or
receipts of
Lender), or (B) imposing, modifying or applying any
reserve, special
deposit or similar requirement against assets
of,
deposits with or for
the account of, credit extended by, or any other
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<PAGE>
acquisition of
funds for loans by
Lender (which includes the Loan or
any applicable
portion thereof) (provided, however, that Borrower
------------------
shall not be charged again the Reserve
Percentage already accounted
for in the definition of the Adjusted Daily LIBOR Rate), or (C)
imposing on
Lender, or the London Interbank market generally,
any
other condition
affecting the Loan, provided that the result
of the
foregoing is to increase the cost to Lender of maintaining the Loan
or
any portion
thereof or to reduce the amount of any sum
received or
receivable from Borrower by Lender under the Loan Documents; or
(ii) the maintenance by Lender of reserves in accordance
with
reserve requirements
promulgated
by the Board of Governors of the
Federal Reserve
System of the United States with respect to
"Eurocurrency Liabilities" of a similar term to that of the
applicable
portion of
the Loan (without duplication for reserves already
accounted for in the calculation of a LIBOR Rate pursuant to the
terms
hereof).
(b) If the application of any Law, rule, regulation or
guideline
adopted or
arising out of the Basle Committee on
Banking Regulations and
Supervisory Practices
entitled "International Convergence of Capital
Measurement and
Capital Standards", or
the adoption after the date hereof
of
any other Law, rule, regulation or guideline regarding capital
adequacy,
or
any change after the date hereof in any of the
foregoing, or in the
interpretation or
administration
thereof by any domestic or foreign
Governmental
Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Lender,
with any
request or directive
regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable
agency, has
the
effect of reducing the rate of return on
Lender's capital to a level
below that
which Lender would have achieved but for such
application,
adoption, change
or compliance (taking
into consideration the policies of
Lender with respect to
capital adequacy), then, from time to time Borrower
shall pay to Lender such additional amounts
as will compensate Lender for
such
reduction with respect to any portion of the Loan outstanding.
(c) Any amount payable
by Borrower under subsection (a) or subsection
------------- ----------
(b)
of this Section 6.1 shall be paid within
five (5) days of receipt by
---
-----------
Borrower of a certificate signed by an authorized officer of Lender
setting
forth the amount due and the basis for the
determination of such amount,
which statement
shall be conclusive and binding upon Borrower, absent
manifest error.
Failure on the part of Lender to demand payment from
Borrower for
any such amount attributable to any
particular period shall
not
constitute a waiver of
Lender's right to demand payment of such amount
for
any subsequent or
prior period. Lender shall use reasonable efforts to
deliver to Borrower
prompt notice of any event described in subsection (a)
--------------
or
(b) above, of the amount of the reserve and
capital adequacy payments
---
resulting therefrom
and the reasons therefor and of the basis of
calculation of
such amount; provided,
however, that any failure by Lender
-----------------
to
so notify Borrower shall not affect Borrower's
obligation to pay the
reserve and capital adequacy payment resulting therefrom.
6.2
BORROWER WITHHOLDING.
--------------------
If
by reason of a change in any applicable Laws
occurring after the date
hereof, Borrower
is required by Law to make any deduction or
withholding in
respect of any taxes
(other than taxes imposed on or measured by the net income
of Lender or any
franchise tax imposed on Lender), duties or other charges from
any payment
due under the Note to
the maximum extent permitted by law, the sum
due from Borrower in respect of such payment shall
be increased to the extent
necessary to
ensure that, after the making of such deduction
or withholding,
Lender receives
and retains a net sum equal to the sum which it
would have
received had no such deduction or withholding been required to be
made.
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<PAGE>
ARTICLE 7
LOAN EXPENSE AND ADVANCES
-------------------------
7.1
LOAN AND ADMINISTRATION EXPENSES.
--------------------------------
Borrower unconditionally agrees to pay all reasonable expenses of
the Loan,
including all
amounts payable
pursuant to Sections 7.2 and 7.3 and any and all
------------ ---
other reasonable
fees owing to Lender pursuant to the Loan
Documents or any
separate fee
agreement, and also
including, without limiting the generality of
the foregoing, all recording, filing and registration fees and
charges, mortgage
or documentary taxes, all insurance premiums, title insurance
premiums and other
charges of
the Title Insurer, printing and
photocopying expenses, survey fees
and charges, cost of certified copies of instruments, cost of
premiums on surety
company bonds
and the Title Policy, charges of the Title Insurer or other
escrowee for administering disbursements, all fees and
disbursements of Lender's
Consultant, all
appraisal fees, insurance consultant's fees, environmental
consultant's fees, travel related expenses and all reasonable costs
and expenses
incurred by
Lender in connection with the determination of whether or
not
Borrower has
performed the
obligations undertaken by Borrower hereunder or has
satisfied any
conditions precedent
to the obligations of Lender hereunder and,
if any default or Event of Default occurs hereunder
or under any of the Loan
Documents or if the Loan or Note or any portion thereof is not paid
in full when
an
