UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 16, 2005
AMERICAN LEISURE HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
Nevada 333-48312 75-2877111
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Park 80 Plaza East, Saddle Brook, NJ 07663
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (800) 546-9676 ext. 2076
N/A
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(Former name or former address,
if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On August 16, 2005, American Leisure Holdings, Inc. (the "Registrant")
obtained commitments from KeyBank National Association ("KeyBank") for two
credit facilities to be used in the development of The Sonesta Orlando Resort at
Tierra del Sol, a 972 luxury, town home and condominium unit property to be
located in the heart of the Orlando, Florida theme park area. KeyBank has
committed to fund or to syndicate $96,600,000 as a development and construction
facility for the first phase of the resort which will consist of a luxury
vacation home community comprised of 250 town homes and 180 mid-rise
condominiums. KeyBank has also committed to fund a second loan in the amount of
$14,850,000 as a land loan for the second phase of the resort. Both loans are
expected to close within sixty to ninety days. The loans will be subject to
various terms and conditions standard in the industry for these types of loans
as generally described in the commitment letters attached hereto as Exhibits
10.1 and 10.2. The first phase has been fully pre-sold for $166,000,000. Total
sales to date on both phases currently total $255,000,000. Completion of all 972
units is scheduled during 2007.
$96,600,000 Loan Commitment
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On August 16, 2005, KeyBank National Association ("KeyBank") and Tierra Del
Sol Resort, Limited Partnership (the "Partnership"), a special purpose
development company of which a subsidiary of the Registrant is the 99% limited
partner, along with seven special purpose entities that are owned by the
Partnership (collectively, the "Borrowers"), entered into a commitment letter
for KeyBank to loan the Borrowers up to $96,600,000 to construct the first phase
of The Sonesta Orlando Resort at Tierra del Sol. The first phase is scheduled to
include 430 vacation units, a 126,000 square foot clubhouse (84,000 approximate
square footage under air), and a large swimming and recreation complex which
will include a combination pool and lazy river swimming feature, an outdoor
sports bar and food service area, restroom facilities, showers, water-slides,
beach volleyball and extensive sundecks. The total projected cost of the first
phase is $171,637,930. KeyBank received a written appraisal from Integra Realty
Resources on March 15, 2005 reflecting an appraised value of the land of
$123,600,000. The Borrowers are required to begin construction within thirty
days of closing and complete the first phase within twenty-one months.
Construction has already begun on the project.
The loan will be for a term of twenty-four months from the date of closing.
Advances of proceeds of the loan will bear interest at the 30-Day LIBOR Adjusted
Daily Rate plus the LIBOR Rate Margin of 2.75% (as those terms are defined by
the parties) subject to adjustment for any applicable reserves and taxes if
required by future regulations. Interest will be due and payable monthly
beginning on the fifth day of the first month following closing. In the event of
default, the interest rate will be the greater of 3% in excess of the interest
rate otherwise applicable on each outstanding advance or 18%. KeyBank may
require the Borrowers to institute an interest rate hedging program through the
purchase of an interest rate swap, cap, or other such interest rate protection
product from KeyBank or any qualified banking institution.
The loan will be evidenced by a promissory note and a construction loan
agreement. The loan will be secured by a first lien on The Sonesta Orlando
Resort at Tierra del Sol, including the land, improvements, easements, rights of
way; a first lien and security interest in all fixtures and personal property,
an assignment of all leases, subleases and other agreements relating to the
resort; an assignment of construction documents; a collateral assignment of all
contracts and agreements related to the sale of each condominium unit; a
collateral assignment of all purchase deposits and any management and/or
operating agreement. The Registrant, its Chief Executive Officer, Malcolm J.
Wright and a Florida single purpose limited liability company to be capitalized
by PCL Construction Enterprises, Inc. ("PCL") will guarantee repayment of the
loan. Those parties will guaranty performance and completion. Mr. Wright
obtained a surety bond in the amount of $4,000,000 to collateralize his personal
guarantee for this loan and the $14,850,000 loan discussed below. PCL, an
international construction company and parent to the company that will serve as
general contractor, will guaranty completion of the resort based on a fixed
price and time schedule pursuant to a construction contract. PCL will be
required to pay substantial penalties if the time schedule is not met. The
Borrowers and some of the guarantors will enter into an environmental indemnity
agreement. KeyBank will enter into a subordination, nondisturbance and
attornment agreement with each tenant under any lease. KeyBank plans to hold
approximately $50 million of the combined commitments with the balance
syndicated to other banking organizations. Syndication of the loan, typical in
projects of this size, is a condition of closing (timing), but not a condition
of the commitment except for a material adverse change in the condition of the
Borrowers and of loan syndication market conditions generally.
The Borrowers will pay 1% of the loan amount as a commitment fee. The
Borrowers will pay $150,000 per year as a loan administration fee. The Borrowers
are obligated to pay all costs and expenses of KeyBank in connection with the
commitment and closing of the loan.
The Borrowers are required to maintain Project Equity in the project equal
to 44% of the total cost, which must be deposited with KeyBank prior to closing
or used to pay costs approved by KeyBank. The Borrowers are required to provide
KeyBank with pre-construction sales contracts on 100% of the units in Phase I
with net proceeds equal to or exceeding 120% of the loan amount. The Borrowers
are required to deliver, or demonstrate valid expenditure of, pre-construction
sales deposits of $25,498,108 to KeyBank as part of the equity requirement
otherwise the equity requirement is increased, dollar-for-dollar for each dollar
that deposits are less than this amount.
Westridge Community Development District Bonds
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The first phase of sitework for 600 units at an estimated cost of
$19,200,000 will be funded by the Westridge Community Development District from
the sale bonds issued on a non-recourse basis to the Registrant. The district
was initially created by the Registrant and enabled by an order of a Florida
State District Court. The Borrowers will assign to KeyBank any proceeds to be
received from the funding of approximately $25,000,000 of Special Assessment
Capital Improvement bonds issued by the Westridge Community Development
District. KeyBank Capital Markets, an entity related to KeyBank, will underwrite
the issuance of the bonds, with net proceeds in the amount of approximately
$21,139,322, of which $8,038,370 will be used for land, $6,038,370 will be used
for costs to construct the resort, and $2,000,000 will be placed in a collateral
account to be pledged as additional security for the $96,600,000 construction
loan.
$14,850,000 Loan Commitment
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On August 16, 2005, KeyBank also committed to provide up to $14,850,000 to
be used solely for the purpose of being invested in the equity in the first
phase of The Sonseta Orlando Resort at Tierra del Sol and to pay off existing
land loans encumbering the second phase of the resort. The second phase is
scheduled to include 542 vacation units and additional resort amenities,
including miniature golf, a flow rider water attraction, a wave pool, a rapid
river and a children's multilevel interactive water park as well as additional
clubhouse improvements, include the finishing, equipping and furnishing of
banquet and meeting rooms, casual and fine dining restaurants, a full service
spa, a sales center and an owners' club. KeyBank received a written appraisal
from Integra Realty Resources on March 15, 2005 reflecting an appraised value of
$29,700,000 which satisfies Borrower's requirement to provide KeyBank with
evidence that the land appreciation equity invested in the resort indicates a
loan-to-value ratio of not more than 50%.
The loan will be for a term of eighteen months from the date of closing.
Advances of proceeds of the loan will bear interest at the 30-Day LIBOR Adjusted
Daily Rate plus the LIBOR Rate Margin of 3.10% subject to adjustment for any
applicable reserves and taxes if required by future regulations. Interest will
be due and payable monthly beginning on the fifth day of the first month
following closing. In the event of default, the interest rate will be the
greater of 3% in excess of the interest rate otherwise applicable on each
outstanding advance or 18%. KeyBank may require the Borrower to institute an
interest rate hedging program through the purchase of an interest rate swap,
cap, or other such interest rate protection product.
The loan will be evidenced by a promissory note and a loan agreement. The
loan will be secured by a first lien on the second phase of The Sonesta Orlando
Resort at Tierra Del Sol, including the second phase land, improvements,
easements, rights of way, fixtures; a first lien and security interest in all
fixtures and personal property, an assignment of all leases, subleases and other
agreements relating to the resort; a guaranty of payment by the Registrant and
its Chief Executive Officer, Malcolm J. Wright; an environmental indemnity
agreement by the Borrower, the Registrant and Mr. Wright; a subordination,
nondisturbance and attornment agreement relating to any leases; a collateral
assignment of security agreements and contracts related to the resort; and a
collateral assignment of all purchase contracts and purchase deposits. Mr.
Wright obtained a surety bond in the amount of $4,000,000 to collateralize his
personal guarantee for this loan and the $96,600,000 loan discussed above.
The Borrower will pay 1% of the loan amount as a commitment fee. The
Borrower will pay an exit fee equal to 4% of the maximum loan amount for the
second phase unless the loan is repaid with a construction loan from KeyBank or
KeyBank declines to grant a construction loan to the Borrower. The Borrower is
obligated to pay all costs and expenses of KeyBank in connection with the
commitment and the closing of the loan. Construction on the second phase is
expected to start during 2006 and overlap with construction on the first phase.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit No. Description
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10.1 Commitment Letter with KeyBank National Association for
$96,000,000 for Phase I
10.2 Commitment Letter with KeyBank National Association for
$14,850,000 for Phase II
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN LEISURE HOLDINGS, INC.
By: /s/ Malcolm J. Wright
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Malcolm J. Wright
Chief Executive Officer
Dated: August 17, 2005