As filed with the Securities and Exchange Commission on May 28, 1999
Registration No. 333-73415
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-11
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LELY GOLF VILLAS I LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Governing Instruments)
3185 Horseshoe Drive South
Naples, Florida 34104
Telephone: (941) 649-6310
(Address of Principal Executive Offices)
A. Jack Solomon
President
Ronto Golf Developments, Inc.
3185 Horseshoe Drive South
Naples, Florida 34104
Telephone: (941) 649-6310
(Name, Address and Telephone Number of Agent for Service)
Copy to:
Robert C. Brighton, Jr., Esquire
Ruden, McClosky, Smith, Schuster, & Russell, P.A.
200 East Broward Boulevard
Fort Lauderdale, Florida 33301
(954) 764-6660
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CROSS REFERENCE TABLE
LOCATION IN PROSPECTUS
OF INFORMATION REQUIRED BY PART I
OF FORM S-11
Item No. Caption Location in Prospectus
- -------- ------- ----------------------
<S> <C> <C>
Item 1 Forepart of Registration Statement and Front Cover
Outside Front Cover Page of Prospectus
Item 2 Inside Front and Outside Back Cover Front and Outside Back Cover
Pages of Prospectus
Item 3 Summary Information, Risk Factors Questions and Answers; Summary;
and Ratio of Earnings to Fixed Risk Factors
Charges
Item 4 Determination of Offering Price Determination of Offering Price
Item 5 Dilution N/A
Item 6 Selling Security Holders N/A
Item 7 Plan of Distribution Plan of Distribution
Item 8 Use of Proceeds Use of Proceeds
Item 9 Selected Financial Data N/A
Item 10 Management's Discussion and N/A
Analysis of Financial Condition and
Results of Operation
Item 11 General Information as to Registrant Questions and Answers; Summary;
Lely Golf I
Item 12 Policy with Respect to Certain N/A
Activities
Item 13 Investment Policies of Registrant N/A
Item 14 Description of Real Estate Questions and Answers; Summary;
The Resort
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Item No. Caption Location in Prospectus
- -------- ------- ----------------------
Item 15 Operating Data N/A
Item 16 Tax Treatment of Registrant and Its Certain Federal Tax Aspects
Security Holders
Item 17 Market Price of and Dividends on N/A
Registrant's Common Equity and
Related Stockholder Matters
Item 18 Description of Registrant's Securities Questions and Answers; Summary
Item 19 Legal Proceedings N/A
Item 20 Security Ownership of Certain
Beneficial Owners and Management Lely Golf I
Item 21 Directors and Executive Officers Lely Golf I
Item 22 Executive Compensation Lely Golf I
Item 23 Certain Relationships and Related Questions and Answers; Summary;
Transactions Lely Golf I
Item 24 Selection, Management and Custody N/A
of Registrant's Investments
Item 25 Policies with Respect to Certain N/A
Transactions
Item 26 Limitations of Liability N/A
Item 27 Financial Statements and Information Financial Statements; Projections
Item 28 Interests of Named Experts and Experts; Legal Matters
Counsel
Item 29 Disclosure of Commission Position on N/A
Indemnification for Securities Act
Liabilities
Item 30 Quantitative and Qualitative N/A
Disclosures About Market Risk
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LOCATION IN PROSPECTUS
OF INFORMATION REQUIRED BY PART II
OF FORM S-11
Item No. Caption Location in Prospectus
- -------- ------- ----------------------
Item 31 Other Expenses of Issuance and Distribution N/A
Item 32 Sales to Special Parties N/A
Item 33 Recent Sales of Unregistered Securities N/A
Item 34 Indemnification of Executive Committee
Members and Administrative Partner N/A
Item 35 Treatment of Proceeds from Stock Being
Registered N/A
Item 36 Financial Statements and Exhibits Financial Statements;
Projections
Item 37 Undertakings N/A
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PRELIMINARY PROSPECTUS DATED MAY __, 1999 -- SUBJECT TO COMPLETION
FALA BELLA RESORT AND GOLF CLUB OF NAPLES
200 Resort Condominium Units
Coupled with a Mandatory Rental Agreement
We are Lely Golf Villas I Limited Partnership, a special purpose limited
partnership formed to develop, construct and sell up to 200 fully-furnished
resort condominium units in the Naples, Florida area. These units are part of a
golf resort condominium and related resort properties called Fala Bella Resort
and Golf Club of Naples. The units are of various sizes and dimensions and
include an undivided interest in common elements and certain rights to use the
Flamingo Island and Mustang golf courses located in Lely Resort. If you decide
to purchase a unit, you will be required to enter into a rental program
agreement with one of our affiliates providing for the rental of your unit.
We are offering these fully-furnished resort condominium units at prices ranging
from approximately $139,990 to $240,000, depending upon the size of the specific
unit and its location. The aggregate offering price for the sale of units may be
up to $38,000,000.
Before purchasing a unit, consider the risk factors beginning on page __. These
risk factors include:
o Rental income is not guaranteed. The amount of rental income that you
receive can vary depending on various factors. In some circumstances,
your rental income may be insufficient to pay all costs of ownership.
o You may act as your own agent in the resale of your unit or use a
securities broker. We cannot assure you that there will be an organized
market for the resale of units.
o We have engaged MeriStar Management Company, L.L.C., an experienced
hotel resort operator, to act as the operator of Fala Bella. The
success of Fala Bella depends in significant part on the efforts of the
resort operator. One of our general partners is an experienced
developer of residential properties in southwest Florida. However, this
is our first experience as a developer or manager of resort properties.
o We have entered into an agreement that provides owners of units with
preferred rights to the use of two championship golf courses. However,
in certain circumstances these rights may be cut off or otherwise
materially adversely affected.
o The income tax treatment of your investment in a unit depends on
various factors including personal use of your unit.
We will directly offer and sell the units through employees who will not be
specially compensated for the sale.
Neither the Securities and Exchange Commission nor any state securities
commission has approved nor disapproved the securities, nor determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
_________________, 1999
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell the securities and it is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
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QUESTIONS AND ANSWERS
1. Q: What is a resort condominium unit?
A: A resort condominium unit is a residential condominium unit
that is part of a resort facility. The units we are offering
are part of the Fala Bella Resort and Golf Club of Naples. If
you purchase a unit, your unit will be rented with other units
for short-term recreational purposes pursuant to a mandatory
Rental Program Agreement between you and our affiliate, Lely
Golf Villas II Limited Partnership, as Rental Manager. Each
unit is a fully furnished suite that includes a kitchen,
living area and either two bedrooms and two bathrooms and
three- bedrooms and three-bathrooms. The three-bedroom unit
may be used as a two-bedroom, two-bathroom suite with a hotel
room that can be rented separately. Each unit includes a
washer-dryer, televisions and a fully-equipped kitchen. Under
the Rental Program Agreement, you will be paid the rental
income derived from your unit, less related expenses. These
expenses include a commission paid to the Rental Manager for
rental services provided under the Rental Program Agreement,
certain Annual Licensing Fees for use by the unit owners of
the Flamingo Island and Mustang golf courses (the "Golf
Courses") and a reserve for repair and replacement of
furnishings, housewares and certain other items (the "Interior
Maintenance Fund").
2. Q: What kind of resort facility is Fala Bella?
A: Fala Bella is an upscale resort facility designed primarily
for golf enthusiasts. Fala Bella's facilities include a 7,500
square foot practice green, adult and kiddie pools, a cabana,
a tanning beach, a volleyball court and two tennis courts.
These amenities will be part of the condominium's common
elements. Fala Bella will also offer residents and rental
guests use of an exercise room, men and women's saunas, a spa
and a massage facility, as well as a sports bar and grill.
These amenities will be contained in commercial units of the
condominium that will be initially owned and operated by the
Rental Manager or one of our affiliates. In addition to the
condominium, Fala Bella includes a separate check-in facility
containing a lobby and reception area and related facilities.
This building will initially be owned by us or one of our
affiliates. We expect Fala Bella's first residential building
to be completed by the end of the second quarter of 1999.
Units are expected to be available for rental beginning in
November 1999. Except for the check-in facility, we expect to
complete the amenities by January 31, 2000.
3. Q. What is Lely Resort?
A: Fala Bella is part of Lely Resort, a 2,900 acre country club
community under development by Lely Development Corporation.
Lely Development is a leading land developer in Collier
County, Florida with over 25 years of experience. Under
present plans, Lely Resort will be a mixed-use residential
community that includes custom homes, mid-rise condominium
units, retail sites and office and commercial properties. Lely
Resort currently features two public courses to be served by a
12,000 square foot under air conditioning public clubhouse
expected to be completed in 2000. Lely Resort also includes
one private 18-hole golf course served by a 27,000 square foot
under air conditioning private club house. Owners and
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guests of Fala Bella will be able to use the public clubhouse
but will not have access to the private clubhouse. We cannot
assure you that Lely Resort will be completed in accordance
with present plans.
4. Q: What are my rights to use the Golf Courses in season?
A: Each unit owner has the right to play without the payment of
green fees an 18-hole round of golf 42 times each year in
season (from November 1 through April 30) on the Golf Courses
up to a maximum of 100 rounds for all persons who qualify as a
"unit owner" of your unit. You and each other person who
qualifies as a "unit owner" of your unit may make reservations
for tee times up to one year (but not less than 4 days) in
advance for dates during which your unit is not rented. If
your unit is rented, you may still play on a space available
basis without payment of a green fee up to the number of free
rounds per unit owner discussed above. If you own a
three-bedroom unit and are occupying the hotel room or the
two-bedroom suite while renting the remainder of your unit,
your unit is considered "rented" and you will not have
reservation privileges. You will be required to pay standard
fees and costs charged by the operator of the Golf Courses for
golf cart and equipment rental and for goods or services,
other than green fees, both in and out of season. You will
also be required to pay green fees to play in season in excess
of the 42 individual or 100 total free play times. See
Question 7 for a discussion of who qualifies as a "unit
owner".
5. Q: What are my rights to use the Golf Courses out of season?
A: You may use the Golf Courses and will not be charged green
fees for your excess plays out of season during the months of
May through October from 1999 to 2004, if you exceed your 42
free play times or 100 rounds for all unit owners of your
unit. However, commencing in May 2005, you will be charged
one-half of the published resort green fee for uses in excess
of your free play times out of season.
6. Q: Are there any other limitations on my preferred use of the
Golf Courses?
A: From December 16 through April 15, your ability to play golf
without the payment of green fees is limited to a maximum of
seven days during any one 30-day period. Once all seven days
have been used, you must wait ten days before being eligible
to schedule additional tee times, except that there may be one
period of up to 14 days of use per season within a particular
30-day period. In addition, you may not use the Golf Courses
for ten days before and after the first and last day of this
14-day period. Your total preferred use of the Golf Courses
from December 16 through April 15 cannot exceed 28 days. From
April 16 through December 15, you may use the Golf Courses as
often as you wish, subject to availability of tee times. All
use of the Golf Courses, including use by reservation, is
subject to availability. To reduce the chance that no tee
times will be available when you wish to play, you may reserve
a tee time by providing the Resort Operator with written
notice up to one year in advance of the date(s) when you wish
to play. In any event, if you wish to reserve a tee time, you
must reserve at least 4 days in advance. Failure to play at a
reserved time without timely cancellation will be charged as a
use against your 42 individual and 100 total
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free play times. A "cancellation" or "no show" fee will be
assessed if all free play times have been used.
7. Q: Who is considered a "unit owner" for purposes of use of the
Golf Courses?
A: A "unit owner" includes (1) one person and that person's
immediate family, comprised of a husband, wife and their
dependent children under 25, (2) two adults who live together
and hold themselves out to the public as the equivalent of a
married couple and their dependent children under 25, or (3)
two joint tenants. In addition, a corporation operating an
ongoing commercial business that owns a unit may designate one
person and that person's immediate family or two individuals
to have the privileges of a unit owner. These designees may be
changed once a year upon payment of a nominal administrative
fee.
8. Q: Who is going to operate Fala Bella?
A: The Rental Manager has engaged MeriStar Management Company,
L.L.C., an affiliate of MeriStar Hotels & Resorts, Inc., as
Resort Operator. The Resort Operator and certain of its
affiliates manage and operate various hotel assets, including
most of the hotels owned by American General Hospitality
Corporation. In southwest Florida, the Resort Operator manages
South Seas Plantation, a resort hotel offering numerous
amenities including golf and tennis, located in Captiva,
Florida, and the Radisson Suites Beach Resort, a resort hotel
located in Marco Island, Florida. Subject to the terms of the
Resort Management Agreement, you and Fala Bella's hotel guests
will be permitted to use the beach facilities of the Radisson
Suites Beach Resort.
9. Q: What happens if the agreement with MeriStar Management is
terminated without another experienced resort operator being
available to take over?
A: In the event that the agreement with MeriStar Management is
terminated without an experienced operator being available to
take over, the Rental Manager or one of our affiliates will
operate Fala Bella until an experienced resort operator can be
retained. In the event the Resort Management Agreement is
terminated, we would also need to obtain access to other beach
facilities.
10. Q: What will be the involvement of Lely Golf I and Lely Golf II
after the offering?
A: Lely Golf I will collect a royalty fee from Lely Golf II under
the terms of the Assignment and Assumption Agreement. This
agreement provides for the assignment of golf and rental
rights to Lely Golf II. Lely Golf II will collect user fees
for use of the Golf Courses from non-unit owners as provided
under the Use and Access Agreement with Golf Enterprises,
Inc., as amended. This agreement provides rights to use the
Golf Courses. If all of the units constructed are not sold,
Lely Golf I will be a unit owner that will generally be
treated the same as every other unit owner. Lely Golf I
expects in most cases to include these units in the rental
program. In addition, we or one of our affiliates will
initially own and the Rental Manager will operate four
commercial condominium units. These commercial
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condominium units will be used for Fala Bella's bar and grill,
an exercise room, a spa, the saunas and the massage room, as
well for vending and storage purposes.
11. Q: How often can I use my unit?
A: From December 16 through April 15, you may occupy your unit up
to a total of 28 days. During this period, you are also
restricted to a maximum of seven days during any one 30- day
period. Once all seven days have been used, you must wait ten
days before being eligible to occupy your unit again, except
that there may be one period of up to 14 days of occupancy
within a particular 30-day period. However, you may not occupy
your unit for ten days before and after the first and last day
of such occupancy. From April 16 through December 15, you may
occupy your unit as much as you wish, subject to availability.
To reduce the chance that your unit will be unavailable, you
may provide the Resort Operator with written notice in advance
of the dates during which you wish to use your unit.
You should be aware that the amount of your personal usage of
your unit may limit your tax deductions relating to your unit.
Frequent use of your unit, particularly in season, will also
significantly reduce your income from the rental of your unit.
12. Q: How does the Rental Program Agreement work?
A: You are required to enter into a Rental Program Agreement with
the Rental Manager when you purchase your unit. Under the
Rental Program Agreement you will agree to make your unit
available for rental and to limit your use of your unit as
described in the answer to Question 11. The Rental Manager,
acting through the Resort Operator, will serve as exclusive
rental agent for your unit and manage the rental and
maintenance of your unit. The Resort Operator will rent your
unit on terms and conditions determined by the Rental Manager,
including the rental rate. Neither the Rental Manager nor the
Resort Operator guarantees a specific rental occupancy rate or
a specific level of rental income.
13. Q: What are my costs and expenses relating to the rental of my
unit?
A: Gross rental revenue does not include sales taxes, resort
taxes or similar taxes or charges. The Rental Manager will
deduct from gross rental revenue related travel agent fees,
airline booking fees, and credit card and check collection
fees and any other applicable collection or booking fees to
obtain "Adjusted Gross Rental Revenue". From this Adjusted
Gross Rental Revenue, the Rental Manager will subtract an
amount initially equal to 3% of the Adjusted Gross Rental
Revenue derived from the rental of your unit during the prior
month to create and maintain an Interior Maintenance Fund. The
Interior Maintenance Fund will be used to pay for the repair
or replacement of furnishings, linens, decorative items,
accessories, floor and wall coverings, equipment and
appliances. The Rental Manager will subtract a rental
commission of 50% of Adjusted Gross Rental Revenue to be paid
to the Rental Manager for managing the rental and maintenance
of your unit. The Rental Manager may in its discretion deduct
from your portion of the Adjusted Gross Rental Revenue any
costs incurred by Lely Golf I, the Rental Manager or the
Resort Operator with respect to your unit. Such costs may
include unpaid taxes, assessments, liens, judgments, and
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deficiencies in amounts required to replace, repair and
maintain the interior of the units in excess of amounts
contained in the Interior Maintenance Fund and your Annual
Licensing Fee relating to use of the Golf Courses.
14. Q: When will I receive my rental revenue check?
A: After making the deductions described in Question 13, the
Rental Manager will pay you the balance of rental revenue
received from the rental of your unit during the preceding
month, if any, by check on or about the 20th day of each
month. If rental revenues are insufficient to pay the costs
described in the answer to Question 13 above, you may be
billed by the Rental Manager for the deficiency or it may be
deducted from future rental revenues.
15. Q: What happens if Fala Bella loses money?
A: Lely Golf I and Lely Golf II bear any risk of loss for
expenses related to the general operation of Fala Bella. You
and other unit owners are only responsible for making up any
shortfalls related to your unit or the common elements of the
condominium, either directly or through the condominium
association (the "Association"). Lely Golf I has agreed to
guarantee that Association assessments will not exceed $2,800
and $3,500 per annum for two-bedroom and three-bedroom units,
respectively, and will pay all Association expenses not paid
from dues, other than special assessments, until the end of
the "Guarantee Period", defined as the earlier of December 31,
2001 or the "Majority Election Date" (as defined in the
Association's Articles of Incorporation). During the Guarantee
Period, insofar as we are subsidizing the Association, we will
not be required to pay Association assessments for units owned
by us.
16. Q: Will there be any debt or lien on my unit or the common
elements following completion of construction?
A: At the time you purchase your unit, the only debt that relates
to your unit will be debt that you incur in connection with
the purchase of your unit, debt related to the Lely Community
Development District ("CDD") obligations and real estate taxes
as described in Question 17 below. The construction of Fala
Bella will be financed by Lely Golf I and unsold units will be
subject to the lien of Lely Golf I's lender. At the closing of
the sale of your unit, the portion of the debt relating to
your unit will be discharged from the sale proceeds and the
related lien removed as to your unit and your use of the
common elements. In the event that you default on your
Association assessments, a lien may be placed on your unit.
CDD obligations and real estate taxes are liens on your unit.
If these obligations are not paid, action may be taken to
foreclose these liens. In addition, if there is a default on
Annual Licensing Fees by you or any of the other unit owners,
a lien may be placed on your unit.
17. Q: What payments will I make as a unit owner?
A: You must pay any loan you obtain to buy your unit, the real
property taxes on your unit and your share of other expenses
not paid by the Association or Lely Golf I. In addition, each
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unit owner is required to pay an Annual Licensing Fee of
$3,500 (increasing by 4% per year beginning November 1, 2002)
payable in ten equal monthly installments from November to
August relating to use of the Golf Courses. Based on current
estimates, annual real estate taxes will range from
approximately $1,800 to $3,000 and quarterly Association
assessments initially be $729 per quarter for 2-bedroom units
and $907 per quarter for 3- bedroom units, including the $30
annual assessment payable to the Lely Resort Master Property
Owners Association, Inc. Debt service on mortgages on your
unit, if any, will depend on the particular terms of any
individual loan. Net rental revenue from the rental of a unit
will likely be insufficient to service a typical mortgage.
Unit owners must also pay the CDD obligations of Fala Bella of
approximately $2,120 per unit. A unit owner's CDD obligation
may be paid in full at closing or at any time thereafter but
must be paid over a twelve-year period starting with the year
beginning 2000 with unpaid amounts bearing interest at 9% per
annum in the amount of $296 per unit each year. The CDD also
assesses or taxes the unit owners for the cost for annual
operating costs. The current annual assessment is about $282
per unit.
18. Q: Are there any other charges that I may be responsible for in
connection with using my unit?
A: If you use your unit's local or long-distance phone service,
use housekeeping or laundry services, or charge golf-related
expenses or the cost of various sundries to your unit account
while occupying your unit, you must pay these amounts to the
Rental Manager prior to check-out.
19. Q: Is Lely Golf I obligated to complete the construction of my
unit and Fala Bella's amenities?
Until Lely Golf I has 44 binding contracts to sell units it is
not obligated to complete the sale of any unit. However, once
Lely Golf I has sold 44 units or waived this condition, it is
obligated to complete the construction of at least 44 units
and all of Fala Bella's amenities described in this
Prospectus, except for the separate check-in facility Lely
Golf I may decide to stop construction at any time following
completion of 44 units.
20. Q: How do I purchase a unit?
A: You will sign a sales agreement that will be accepted or
rejected by us following the effective date of the
registration statement of which this Prospectus is a part. At
the time that your sales agreement is accepted by us (or after
the registration statement is effective, at the time you
execute a sales agreement) you will be required to pay a
deposit equal to 10% of the purchase price of your unit. An
additional 10% deposit is required within ten days after
issuance of a building permit provided that construction of
your unit has commenced and 44 binding sales agreements have
been signed. This money will be held in escrow in an interest
bearing account until the completion of your unit. In the
event your unit is not completed, the funds deposited by you
will be returned with interest and you will have no further
obligations. In addition, under Florida condominium law, you
are entitled to rescind your sales agreement during a 15-day
period commencing on the last of the date of execution of your
sales agreement, the date you receive all documents required
by law and the date you receive any material amendment to a
document previously received that
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has an adverse effect on you. Your funds cannot be held for
more than two years from the date you sign a sales agreement.
21. Q: What payments will I be required to make at the closing of the
purchase of my unit?
A: In addition to paying the balance of the purchase price for
your unit, you will be required to pay the following: an
administrative fee of $500 to the Rental Manager, $550 to the
Association as a working fund contribution and closing costs
of 1.5% of your purchase price. In addition, you must pay an
amount equal to the Annual Licensing Fee of $3,500 (increasing
by 4% per year beginning November 1, 2002), representing the
prorated amount for the period from closing to October 31 and
an advance payment for next year in the amount of the balance.
You are also required to pay prorated amounts for Association
assessments, and pay all utility deposits. Real estate taxes
and CDD assessments will be prorated. If you use an attorney
you will be required to pay your attorney's fees and expenses
and you will also be required to pay the cost of any financing
should you decide to finance the purchase of your unit.
22. Q: What is the Association and who runs it?
A: The Association is the organization that represents the unit
owners in managing and maintaining the common elements owned
collectively by the unit owners. Each unit owner automatically
becomes a member of the Association when the unit owner
purchases a unit. The Association is run by its board of
directors. Lely Golf I will appoint the initial board of
directors. The board will be elected by the unit owners from
among the unit owners after control of Fala Bella is passed to
the unit owners from Lely Golf I. As units are sold, Lely Golf
I will gradually cede control over the Association to the unit
owners in accordance with the Florida Condominium Act. Lely
Golf I will have the right to elect at least one director as
long as it holds for general sale at least 5% of the units.
The board approves the annual operating plan and budget for
the Association.
23. Q: How does the Association work?
A: The Association is responsible for collecting and paying all
common expenses, such as electricity, water, sewer and cable
television, and for maintaining common areas, certain
amenities and the structural components of your unit's
building. The Association is also responsible for collecting
and paying the Annual Licensing Fees, if not paid by the
individual unit owners. Association assessments will be paid
directly by the unit owners to the Association.
Lely Golf I will initially guarantee payment of certain
Association expenses to the extent not covered by Association
assessments. See the answer to Question 15.
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24. Q: Do I own the contents in my unit?
A: Yes. The purchase price for your unit includes the initial
items of the standard "Furnishings Package" and "Housewares
Package" listed in Annex C to this prospectus. However, you
may not remove, alter or add to any of these items.
25. Q: Who is responsible for maintaining my unit?
A: Other than certain minor repairs and replacement of the
"Housewares Package" made without charge by the Rental
Manager, you are responsible for the cost of maintaining your
unit and replacing its contents. The cost of maintenance and
any repairs or replacements will generally be paid from your
Interior Maintenance Fund, but if money in your Interior
Maintenance Fund is insufficient, the Rental Manager will bill
you directly or deduct the deficiency from future rental
revenues. Bills not paid by the unit owner within 30 days may,
at the sole discretion of the Rental Manager, be paid by the
Rental Manager. In such cases, the Rental Manager will deduct
the amount paid, together with a 10% surcharge, from future
rental revenues payable to you. In all cases you will remain
liable for any amounts unpaid, as well as accrued interest on
unpaid amounts at the highest interest rate permitted by law
(currently 18% per annum). Maintenance of your unit and repair
and replacement of its contents will be determined by the
Rental Manager in its sole discretion, although, to the extent
practicable, the Rental Manager will attempt to consult with
you prior to repairing or replacing any of your unit's
contents.
26. Q: Who is responsible for insuring my unit?
A: As the owner you are responsible for insuring the contents of
your unit and maintaining a property damage and bodily injury
liability policy in the minimum amount of $300,000 per
occurrence naming the Rental Manager and the Resort Operator
as additional insureds. The Association will maintain
insurance covering each building containing commercial and
residential units, the amenities owned by the unit owners
collectively and the common elements.
27. Q: May I sell my unit?
A: You may sell your unit at any time. However, you must provide
prior notice to the Rental Manager and give prior notice and
receive the approval of the Association. If the Association
does not approve your purchaser, it must provide you with a
substitute purchaser. In addition, your purchaser will be
subject to the Rental Program Agreement and must sign such
documents as the Rental Manager may request as a condition to
the transfer. In connection with the sale of your unit, you
will also be required to pay a fee of $5,000 to the Rental
Manager who is obligated to pay this amount to Golf
Enterprises. This fee will be increased by 4% each year
beginning on November 1, 2000.
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28. Q: Is there a market for the resale of units?
A: Presently there is no market for resales of the units and no
organized public market is anticipated to develop. The units
will not be listed on any securities exchange or quoted on
Nasdaq. Resales must comply with applicable securities and
real estate law and are likely to occur only in privately
negotiated transactions.
29. Q: Is there any risk that my rights to use the Golf Courses could
be cut-off?
A: Your rights to use the Golf Courses are derived from the
rights granted to Lely Golf I by Golf Enterprises, the
operator of the Golf Courses, under the Use and Access
Agreement. These rights terminate on June 30, 2034, the date
on which the subleases under which Golf Enterprises operates
the Golf Courses expires, unless earlier terminated or revoked
in the event of breach of the Use and Access Agreement. Your
rights to use the Golf Courses will be automatically extended
for so long as the subleases under which Golf Enterprises uses
the Golf Courses are extended. However, if these subleases are
not extended, Golf Enterprises will not be able to extend the
Use and Access Agreement past June 30, 2034. In addition,
there is the risk that there could be defaults, either under
the subleases or the underlying ground leases, or foreclosure
by mortgagees or other lienholders on the Golf Courses that
could cause an earlier termination of Golf Enterprises'
subleases. Lely Golf I has the right under certain
circumstances to cure these defaults, but these rights do not
apply in all cases and may be impractical to exercise in some
circumstances. If there is a termination of Golf Enterprises'
rights under the subleases your rights to use the Golf Courses
will be cut-off. In addition, if Annual License Fees, as well
as any other payments owed to Golf Enterprises by any party to
the Use and Access Agreement, are not paid after expiration of
grace periods, your rights to use the Golf Courses may be
suspended or terminated.
30. Q: How well is the U.S. and Florida resort industry doing?
A: According to a survey published by PKF Consulting in its 1998
edition of Trends in the Hotel Industry, average daily room
rates at all resort properties nationally grew 5.4% in 1997
with increases in the South Atlantic region advancing 3.7%
over 1996. These growth rates trailed growth for rates at all
hotels. However, the average daily room rate for resort
properties exceeded the average daily room rate for all hotels
by 34.3%. PKF believes that resort properties will increase in
value by 28.8% with a projected 30% increase in profits during
the period from 1997 to 2000. According to a report prepared
for Lely Golf I by Horwath Landauer Hospitality Consulting,
Inc. in late 1997, the market for golf-oriented resort
properties in the Naples, Florida area is very strong. Based
on published reports and statistical information provided by
Landauer, although occupancy rates declined in 1998 slightly
from levels reached in 1997, room revenues continued to climb
in 1998 in the Naples, Florida area.
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31. Q: What are the tax implications of owning a unit?
A: You are responsible for consulting with your own tax adviser
to determine your individual tax consequences relating to your
purchase of a unit.
However, as a matter of general information, you will be
required to report on your federal income tax return the
income from the rental of your unit. The Rental Manager will
provide you with an annual statement describing revenues and
expenses that can be used in preparing your federal income tax
return.
You may be able to deduct property taxes, interest expense and
depreciation for your unit. However, your tax deductions may
be limited or eliminated by certain provisions of the Internal
Revenue Code, including provisions governing vacation home
rentals, passive activity losses, interest expense
limitations, and at-risk limitations.
You will be required to pay any income and/or capital gains
taxes and property taxes that may result from the ownership of
your unit. Unit owners other than individuals, i.e.,
corporations, partnerships, limited liability companies,
trusts, and foreign individuals and entities, may have
additional considerations associated with ownership of a unit,
and must consult their tax advisors to determine the proper
treatment of income or expense associated with ownership of a
unit.
Additional information about the tax implications of the
purchase of a unit is provided in "Certain Federal Tax
Aspects" beginning on page ___ of this Prospectus.
32. Q: Are there risks involved in purchasing a Unit?
A: There are inherent risks in any investment. While we have
tried to present as realistic a picture as possible, Fala
Bella may not perform as well as anticipated. Conditions that
today are favorable to the resort industry both nationally and
locally may change substantially before or after Fala Bella
opens. There are many factors, including but not limited to
local competition, taxes and governmental regulations, and the
state of the local, national and international economies that
are not within the control of Lely Golf I, Lely Golf II, or
the Resort Operator. Even though we believe our analysis
points to Fala Bella being successful, we cannot assure you
that this will be the case. Several of the specific risks
related to a purchase of a unit are described in "Risk
Factors" beginning on page ___ of this Prospectus.
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SUMMARY
This summary highlights selected information from this
Prospectus and may not contain all of the information that is important to you.
To understand what ownership of a unit means and for a more complete description
of the legal terms involved, you should read carefully this entire Prospectus,
including the financial statements and projections and the documents in the
Annexes.
Lely Golf I The units are being offered by Lely Golf Villas I
Limited Partnership, a Delaware limited partnership.
The general partners of Lely Golf Villas I Limited
Partnership are Ronto Golf Developments, Inc., a
Florida corporation, and Westbrook Lely Golf Villas
I, L.L.C., a Delaware limited liability company.
Ronto Golf Developments, Inc. is one of the companies
of The Ronto Group, which is a group of affiliated
private companies engaged in land development and
residential construction, consulting and advisory
services. The Ronto Group typically allies itself
with funding partners with real estate experience.
Its projects are located primarily in southwest
Florida. Westbrook Lely Golf Villas I, L.L.C. is a
special purpose company formed by Westbrook Partners,
L.L.C., a Delaware limited liability company, to act
as a general partner of Lely Golf I. Westbrook
Partners, L.L.C. is a fully integrated real estate
investment management company that invests in a broad
range of real estate related properties and
securities, including office, retail and industrial
properties, apartments, hotels, residential lot
developments, and resort properties, as well as
commercial mortgage-backed and other real estate
investments and securities consistent with its
investment objectives. You will not acquire any
ownership interest in Lely Golf I, Ronto Golf
Developments, Inc. or Westbrook Lely Golf Villas I,
L.L.C., or any of their affiliated entities, by
purchasing a unit.
Lely Golf I will be managed and operated by the
officers and employees of Ronto and Westbrook, and
their affiliated entities. See "Management of Fala
Bella."
Lely Golf I maintains its principal executive offices
at 3185 Horseshoe Drive South, Naples, Florida 34104
and its telephone number is (941) 649-6310. Lely Golf
I also has sales offices at 7985 Mahogany Run Lane,
Naples, Florida 34113 and its telephone number is
(941) 732-9920.
The Units Each unit is a fully-furnished suite with kitchen
facilities and living and sleeping areas. If all 200
units are constructed, the unit mix will consist of
136 two- bedroom, two-bathroom units having 1,061
square feet of air conditioned space and 64
three-bedroom, three-bathroom units having 1,320
square feet of air conditioned space. The
three-bedroom unit may be used as a three-bedroom
suite or as a two- bedroom, two-bathroom suite, plus
a hotel room. Each unit also includes an undivided
interest in the common elements of the condominium
and certain rights with respect to use of the Golf
Courses. Your use of your unit is subject to the
terms and conditions of the Declaration of
Condominium of Fala Bella Resort and Golf Club of
Naples, the Articles of Incorporation and By-laws of
the Association and the Rental Program Agreement.
Among other things, these documents limit the in
season use of a unit by unit owners. See "Summary of
Condominium Declaration and Related Documents."
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Fala Bella Fala Bella Resort and Golf Club of Naples is part of
Lely Resort and is located in the greater Naples
metropolitan area of Collier County, Florida. Fala
Bella consists of the condominium and certain other
properties that are owned by Lely Golf I or Lely Golf
II. The condominium includes both the residential
units offered for sale by this Prospectus and the
commercial units which will be initially owned by
Lely Golf I or Lely Golf II. The residential units
will be constructed in 17 phases, each phase
consisting of a single two-story building. The
initial 2 buildings will contain 10 units and 15
buildings will contain 12 units. Offers to purchase
at least 44 units must be accepted before we are
obligated to close the sale of any unit. We may waive
this condition but once this condition is satisfied
or waived by us, we are obligated to construct at
least 44 units and to complete amenities described in
this Prospectus. After the initial 44 units are
constructed, we may decide not to construct and offer
for sale any additional units. If all of the units in
any phase are not sold, we will hold these units for
sale or rent the units pursuant to the Rental Program
Agreement generally on the same terms and conditions
applicable to other unit owners, including the
payment of Association assessments. However, during
the Guarantee Period when we are paying Association
deficits, we are not obligated to pay condominium
assessments. In addition, we are not obligated to
make payments payable to ourselves or one of our
affiliates such as the payment of rental commissions.
Although Fala Bella's amenities do not include beach
access, the Rental Manager currently intends to
provide beach access in Collier County for unit
owners and guests. The Resort Management Agreement
provides that the Resort Operator will allow unit
owners and guests use of the beach (located
approximately 13 miles from Fala Bella) at its
Radisson Suite Beach Resort of Marco Island without
charge.
Construction of the first phase consisting of ten
residential units began in November 1998 and is
anticipated to be completed by the end of the second
quarter of 1999. Except for the check-in facility,
construction of the resort amenities is anticipated
to be completed by January 31, 2000. If the reception
building is not completed when rental of units
commences, we intend to use a portion of the
recreation area as a temporary reception and
registration area for guests of Fala Bella. See "Fala
Bella."
Lely Resort Lely Resort is a 2,900 acre country club community
under development by Lely Development Corporation, a
leading land developer in Collier County for over 25
years. Upon completion, Lely Resort will be a mixed
use residential community that includes custom homes,
mid-rise condominium units, retail sites and office
and commercial property. The community is being
developed in three phases: Flamingo Plantation,
Mustang Plantation and Classics Plantation. Fala
Bella is part of Flamingo. In addition to the
Condominium Declaration and the Association Articles
and Association By-laws, unit owners are also subject
to the Declaration of Covenants and Restrictions for
Lely Resort and the Articles of Incorporation and
By-laws of Lely Resort and the Neighborhood
Declaration. See "Lely Resort."
The Golf Courses Lely Golf I is a party to the Use and Access
Agreement for Lely Golf Villas with Golf Enterprises,
Inc., as amended, providing for use of the Golf
Courses.
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Golf Enterprises is a privately-held golf course
management company that subleases and manages some of
the golf properties of its affiliate, American Golf
Corporation. American Golf is a privately-held golf
course management company having a portfolio of golf
facilities that includes private country clubs,
resorts, daily fee public facilities and practice
centers located in 29 states and 10 facilities in the
United Kingdom.
Robert Trent Jones, Sr. designed and built the
Flamingo Island Club course, which opened to the
public in April 1990. Lee Trevino and W.M. Graves,
Inc. designed the Mustang Golf Club course which
opened to the public in December 1997. The Flamingo
Island course is a 18 hole, par 72 course measuring
6,292 yards in length and the Mustang course is a 18
hole, par 72 course measuring 7,217 yards in length.
Both Golf Courses are managed by Golf Enterprises.
We have agreed to permit Golf Enterprises to use a
portion of the property owned by us adjacent to Fala
Bella as a temporary clubhouse. Under the terms of
the Use and Access Agreement, Golf Enterprises is
obligated to close the temporary clubhouse in 2000
and to construct a permanent clubhouse, which will
include a pro shop and restaurant, in 2000. See "The
Golf Courses."
The Rental
Program
Agreement Each unit owner must enter into the Rental Program
Agreement with the Rental Manager when purchasing a
unit. Under the Rental Program Agreement, each unit
must be made available for rent whenever it is not
occupied by the unit owner. The Rental Program
Agreement also restricts your use of your unit in the
peak season. See "Management of Fala Bella-Rental
Program Agreement". The number of days a unit owner
or certain related parties of the unit owner uses the
unit may affect the tax consequences associated with
ownership of a unit. See "Certain Federal Tax
Aspects--Section 280A."
Under the Rental Program Agreement, the Rental
Manager will be paid a management fee equal to 50% of
annual Adjusted Gross Rental Revenue (as defined in
the Rental Program Agreement). Each unit owner will
also pay an Annual Licensing Fee for use of the Golf
Courses, a quarterly Association assessment and an
amount to be used as your Interior Maintenance Fund.
Regardless of whether a unit owner's unit is rented,
the unit owner is responsible for these expenses.
Unit owners will be billed directly for any shortfall
to the extent that rental revenues are not sufficient
to pay allocated expenses. See "Management of Fala
Bella -- Rental Program Agreement."
The Resort
Operator The Rental Manager has engaged MeriStar Management
Company, L.L.C., an affiliate of MeriStar Hotels &
Resorts, Inc., to serve as the operator of Fala
Bella. MeriStar Management is included in the
MeriStar Group's Resorts division which focuses on
sun, golf and ski oriented properties. These resorts
are located in California, Florida, Georgia,
Massachusetts, Vermont and the U.S. Virgin Islands
and are operated under nationally recognized brand
names such as Hilton(R), Sheraton(R), Westin(R),
Marriott(R), Doubletree(R)and Radisson(R). The
MeriStar
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Group is the successor to the leasing and management
company interests of CapStar Management Company and
American General Hospitality Corporation. About half
of the hotels leased or managed by the MeriStar group
are owned by MeriStar Hospitality Corporation, a real
estate investment trust and an affiliate of the
MeriStar Group. In southwest Florida, the Resort
Operator manages South Seas Plantation, a resort
hotel offering numerous amenities including golf and
tennis, located in Captiva, Florida, and the Radisson
Suites Beach Resort, a resort hotel located in Marco
Island, Florida. Under the terms of the Resort
Management Agreement, you and Fala Bella's hotel
guests will be permitted to use the beach facilities
of the Radisson Suites Beach Resort.
Under the Resort Management Agreement, the Resort
Operator has agreed to manage Fala Bella and perform
the Rental Manager's obligations under the Rental
Program Agreement until May __, 2004, unless sooner
terminated in accordance with the terms of the Resort
Management Agreement. Under the terms of the Resort
Management Agreement, the Resort Operator may
terminate the agreement if at least 150 units are not
completed by December 31, 2002. The Rental Manager
will be responsible for paying the fees and expenses
of the Resort Operator, other than a $15 fee payable
by you for each confirmed reservation made through
the Resort Operator's Vacation Planning Center. See
"Management of The Resort -- Resort Management
Agreement."
In the event that the agreement with MeriStar
Management is terminated without an experienced
operator available to take over, Lely Golf II or one
of its affiliates will operate Fala Bella. Neither
Lely Golf I nor Lely Golf II has any experience
managing a resort.
Development of
the Resort The deposits made on units will not be used to
finance construction of Fala Bella, or any of the
units or any properties related to Fala Bella, such
as the Golf Courses or the reception area until after
the closing of the purchase of a unit. All net
proceeds of the offering representing the purchase
price of the units will be paid to Lely Golf I upon
the closing of each sale of a unit and will not be
available to fund operation of Fala Bella. See "Use
of Proceeds." The total estimated acquisition,
construction, development, marketing costs, financing
costs, including a return on internally generated
funds, and overhead costs in connection with the
project are currently estimated to be approximately
$35,500,000. Actual costs may vary depending on final
design, control of construction costs, the length of
time to construct and market the project and
unforeseen factors such as labor and material
shortages.
If all of the units are sold at prices within the
price range set forth on the cover of this Prospectus
(which prices may be adjusted within the range upward
or downward from time to time based on marketing and
other factors), we anticipate gross revenue of up to
approximately $38,000,000. The gross revenue less the
above total costs represent our pre-tax profit.
Pre-tax profits will be available to pay fees and
distributions to our general and limited partners and
taxes. Lely Golf I and its affiliates will also
receive income from (1) development fees, (2)
management fees related to the rental of units, (3)
the use of the Golf Courses by
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users pursuant to the rental program and (4) other
miscellaneous sources related to the operation of
Fala Bella.
Ronto will act as administrative partner with respect
to the development of Fala Bella. Under the
Development Agreement, Ronto will administer the
design, construction, marketing, sales and financing
of Fala Bella in such capacity. For its services,
Ronto will be reimbursed for its allocated overhead
costs until all units are sold and occupied. Certain
employees of an affiliate of Ronto will be loaned to
Lely Golf I and Lely Golf II for certain purposes,
including marketing and sales and in connection with
rental management.
Certain
Transactions and
Related Parties Lely Golf I, Lely Golf II, Ronto and certain of their
respective affiliates are parties to various
agreements and will receive various fees for services
provided and be reimbursed for various expenses
relating to the development and operation of Fala
Bella, including the Development Agreement and the
Rental Program Agreement as described above. Pursuant
to the Assignment and Assumption Agreement, Lely Golf
I assigned its rights under the Use and Access
Agreement, other than certain rights associated with
a unit owner's rights to use the Golf Courses,
including rights relating to the rental of the units
and the use of the Golf Courses by certain designated
users. In consideration of this assignment, Lely Golf
II will pay Lely Golf I quarterly royalties equal to
__% of the gross rental fees and __% of the gross
fees generated from use of the Golf Courses.
Expenses The amount of the Association assessments (initially
$907 per quarter for 2- bedroom units and $729 per
quarter for 3-bedroom units and payments into the
Interior Maintenance Fund (initially equal to 3% of
the Adjusted Gross Revenues for the unit (as defined
in the Rental Program Agreement)) will be adjusted
periodically. Annual Licensing Fees are initially
$3,500 per annum payable in ten equal installments
from November through August. At the time of purchase
of a unit, you will be required to pay an amount
equal to the Annual Licensing Fee representing the
prorated amount for the period from closing to
October 31 and an advance payment for the next year
in the amount of the balance. A unit owner must pay a
fee at the time of a transfer of a unit of $5,000,
except in the case of transfers to immediate family
members and in certain other limited circumstances.
Annual Licensing Fees and fees payable upon the
transfer of a unit will increase by 4% per year
beginning November 1, 2002 and November 1, 2000,
respectively.
Distributions The Rental Manager will distribute to unit owners the
net rental revenue obtained from the rental of the
unit owner's unit by the 20th day following the end
of each month. Net rental revenue is the amount
determined by deducting from Adjusted Gross Rental
Revenue, the Management Fee, Annual Licensing Fees,
payments to the Interior Maintenance Fund and certain
other costs and expenses incurred and/or payable by
the unit owner. The Rental Manager will provide to
the unit owners: an itemized statement of income and
expenses relating to rental of a unit; an annual
accounting for the Interior Maintenance Fund; and
appropriate information for income tax preparation
purposes.
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Risks of
Projections Since Fala Bella is a new development project, it has
no operating history on which to rely. For this
reason, this Prospectus includes certain projections
of operating results for the rental of units and the
costs of ownership. While we believe that our
projections are based on a reasonable range of
assumptions and consider those factors that are
likely to impact on the expected income to be derived
from rental of a unit and the expected costs of
ownership, projections are not predictions of
anticipated results. Actual results are likely to be
different, perhaps materially. The selection and
evaluation of the factors to be included in the
projections is highly subjective and the projections
do not consider all of the factors that may affect
the income you may receive from your particular unit
or the costs of ownership. Factors such as
anticipated occupancy levels and average daily room
rates are based on numerous variables, many of which
are outside of our ability to control, including the
impact of competitive resorts, and local, national
and international economic conditions.
Prices of Units The initial range of purchase prices of units has
been established based on our evaluation of market
conditions and our costs. We are not required to
maintain the initial price schedule and may adjust
the price of individual units up or down from time to
time in response to market conditions and demand.
Adjustments may not be uniformly applied to all units
of the same type. The price of a unit cannot be
changed once a purchase agreement has been executed
for such unit. The initial range of purchase prices
for the first four buildings, totalling 44 units, is
set forth in Annex A and a schedule specifying all
other payments required to be paid by a purchaser at
closing is set forth in Annex F.
Purchase
Procedure To purchase a unit, you must execute a real estate
sales agreement in the form attached to this
Prospectus as Annex B. Following acceptance by us
your contract is irrevocable, subject to the 15-day
period permitted for rescission of the sales
agreement under Florida law. We will not accept any
sales agreement until after the effectiveness of the
registration statement of which this Prospectus is a
part. You may revoke your sales agreement at any time
prior to acceptance.
Following execution of a sales agreement, if the
registration statement relating to the offering of
the units is effective under the Securities Act, you
are required to make a down payment in the amount of
10% of the purchase price of your unit. An additional
10% must be paid within ten days after issuance of a
building permit provided that construction of your
unit has commenced and we have entered into binding
sales agreements for the construction of at least 44
units (or waived this condition). Your down payment
will be held in an interest bearing escrow account
for your benefit until the closing of the purchase of
your unit. Your down payment is nonrefundable if you
breach the sales agreement but is refundable if your
unit is not completed, your offer to purchase the
unit is validly revoked or the purchase is rescinded
in accordance with Florida law. At closing, you must
pay: the balance of the purchase price; a one-time
administrative fee of $500; a $550 payment as a
Association working fund contribution; $3,500
(increasing by 4% per year beginning November 1,
2002), representing your Annual Licensing Fee,
prorated from your closing date to October 31, with
the balance applied to your next year's
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Annual Licensing Fee; closing costs in the amount of
1.5% of the purchase price of the unit; all pro rated
amounts (e.g., real estate taxes, CDD assessments and
Association assessments); and all utility deposits
required by any utility company. You also will be
responsible for your legal fees, if any, and any
costs relating to any financing by you for the
purchase of your unit, if applicable. There will be a
separate closing for each unit.
We are not obligated to close the sale of any unit
until 44 units are sold. However, once this condition
is satisfied or waived, we are obligated to construct
at least 44 units and all of the amenities described
in this Prospectus except for the separate check-in
facility. We may discontinue the offer and sale of
units at any time after satisfying or waiving this
condition without notice in our sole discretion.
Financing Each prospective unit owner will be required to pay
the purchase price and all other amounts due at
closing in cash. However, prospective owners may
obtain financing from any available source. We may,
but are not obligated to, make referrals for
financing in connection with a purchase of an unit.
Failure to receive financing will not relieve a
prospective owner from the obligation to purchase a
unit.
Tax
Considerations You are urged to consult with your own tax advisors
concerning the tax effect of ownership by you of a
unit under federal and applicable state law.
Unit owners must report income from the rental of a
unit as income for federal and applicable state
income tax purposes. You will be entitled to any
available deductions associated with ownership of the
unit for federal income tax purposes, including
deductions for property taxes, investment interest
expense and depreciation. However, you should be
aware that your use of your unit will impact on the
income tax treatment of your ownership of your unit
and the availability of such deductions.
For a more complete discussion of certain income tax
consequences of unit ownership see "Certain Federal
Tax Aspects" beginning on page ____.
The Condominium
Association When you purchase your unit, you will automatically
become a member of the Association. The Association
will supervise the maintenance of the condominium
common areas and will pay certain common charges. In
addition, the Association will be liable for the
payment of the Annual Licensing Fees to the extent
not paid by a unit owner.
The board of directors is responsible for managing
the Association, including preparation of the
Association's annual operating plan and budget. The
number of directors on the board will initially be
three. We will initially appoint all three directors
of the Association. Unit owners will elect 1/3 of the
directors after we convey 15% of the Total
Condominium Units (as defined in the Articles of
Incorporation of the Association). Unit owners will
elect a majority of the directors after the earliest
to occur of the following:
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(1) Three years after 50% of all units which are
to be conveyed have been conveyed;
(2) Three months after 90% of all units which
are to be conveyed have been conveyed;
(3) When all units that are to be conveyed are
completed, some are conveyed and no other
units are being offered for general sale;
(4) When some units have been conveyed and no
other units are being constructed or offered
for general sale; or
(5) Seven years after recordation of the
Condominium Declaration.
We may elect at least one director as long as we are
offering for general sale at least 5% of the units.
Directors will have a two-year staggered term of
office once control of the board is transferred to
the unit owners. There will be a minimum of three
directors.
RISK FACTORS
You are urged to consider carefully the following risk factors, together with
the other information contained in this Prospectus, including the financial
statements and projections and the documents included in the Annexes, before
purchasing a unit.
Revenue Insufficient to Cover Expenses
Net rental revenue paid to you may be insufficient to pay your
mortgage, if applicable. Costs related to your ownership of a unit may also
exceed your net rental revenue. You are responsible for ownership costs,
including the Annual Licensing Fee, regardless of the amount of rental income
received.
If there is a default on the Annual Licensing Fees by any of the unit
owners that is not cured, even though you have paid your own Annual Licensing
Fee obligation, Golf Enterprises may impose a lien on your unit that may be
foreclosed in the same way as a mortgage. If there is a failure to pay any of
the obligations to Golf Enterprises by any of the unit owners or any of the
other parties to the Use and Access Agreement, you may lose use of the Golf
Courses. In addition, if there is a significant default by unit owners on other
fees and expenses, there may be insufficient funds to operate Fala Bella
generally. This could make it impossible to operate Fala Bella on a rental basis
and could result in a general decline in the value of Fala Bella and the
individual units. In such event, while the defaulting unit owners will not be
relieved from their obligations to pay delinquencies, the remaining unit owners
may be subject to increased or special assessments in order to defray the
operating shortfall.
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Limited Resale Market
There will not be an organized resale market for the sale of your unit.
The units will not be listed on a national securities exchange or quoted by
Nasdaq. Resales will occur only in privately negotiated transactions and may
only be made directly by the unit owner or through a sales representative
appropriately licensed under applicable federal and state securities and real
estate law. Your resale ability could be further diminished if Fala Bella's
performance does not reach expectations. You, therefore, may not be able to sell
your unit quickly or at a price you feel equal to its value in an emergency.
Consequently, the purchase of a unit should be considered only as a long-term
investment.
Significant Income Tax Considerations to Owners
The following is a brief summary of the most significant tax
considerations discussed under "Certain Federal and State Income Tax Aspects"
involved in an investment in a unit and the rental arrangement contemplated by
the Rental Program Agreement.
You are strongly urged to review this material with your financial
advisor and to discuss the tax consequences of an investment in a unit with your
own tax advisors.
Section 183 Hobby Loss Rules
The Internal Revenue Code of 1986, as amended (the "Code"),
distinguishes between activities engaged in for profit and activities not
engaged in for profit. Your ability to deduct your share of any losses from
renting your unit may be limited by Section 183 of the Code, which is commonly
called the "hobby loss rule". If the rental program contemplated by the Rental
Program Agreement is subject to the hobby loss rules, the amount you will be
able to deduct for your share of expenses and losses from renting your unit will
be limited to the rental income you receive. See "Certain Federal and State
Income Tax Aspects -- Tax Consequences of Renting to Unit Owners -- Section
183."
Vacation Home Rental Rules
Your share of any losses from the rental of your unit may be further
limited by the vacation home rental rules in the Code. Section 280A of the Code
establishes a gross income limitation and an expense allocation formula for
apportioning deductions between personal (that is, your use of your own unit by
you and your family members) and business use of a dwelling unit. Your unit is
considered a dwelling unit for federal income tax purposes. You will be
permitted to deduct expenses related to the ownership and rental of your unit
only to the extent such expenses are allocable to business use of your unit. In
addition, if personal use of your unit by you and your family members exceeds
the greater of 14 days or 10% of the number of days during the year that your
unit is rented for fair value, your deductible expenses will be limited to your
income from renting your unit. See "Certain Federal and State Income Tax Aspects
- -- Tax Consequences of Renting For Unit Owners -- Section 280A."
Passive Activity Rules
The rental of your unit under the Rental Program Agreement is
considered a passive activity under the Code. Losses from passive activities
generally may only be deducted against income from the same or other passive
activities. See "Certain Federal and State Income Tax Aspects -- Tax
Consequences of Renting For Unit Owners -- Income and Losses from Passive
Activities."
19
<PAGE>
Factors That May Affect Use of Golf Courses
Golf Enterprises operates the Golf Courses as sublessee under subleases
that expire on June 30, 2034. If these subleases are not extended, Golf
Enterprises will not be able to extend the Use and Access Agreement past June
30, 2034. In addition, there is the risk that there could be defaults, either
under the subleases or the underlying ground leases, or foreclosure by
mortgagees or other lienholders on the Golf Courses that could cause an earlier
termination of Golf Enterprise's subleases. We have the right under certain
circumstances to cure these defaults, but these rights do not apply in all cases
and may be impractical to exercise in some circumstances. If there is a
termination of Golf Enterprises' rights under the subleases your rights to use
the Golf Courses will be cut-off.
Your rights to use the Golf Courses may also be materially adversely
affected by a breach of the Use and Access Agreement by us or our assignee, by
the unit owners or otherwise, after expiration of applicable grace periods.
Risks in Relying on Projections
Since Fala Bella is a new development project, it has no operating
history. Therefore, this Prospectus contains projections using hypothetical
assumptions about rental income payable to unit owners. These projections do not
relate to all units or any specific unit. Projections are not predictions of
actual results. Actual results are likely to be different, perhaps materially.
Factors that will affect actual performance include, but are not limited to,
occupancy rate achieved, actual rental rate, effects of competition, strength of
tourism and the strength of the regional, national and international economies.
If actual results are materially worse than those set forth in the projections,
unit owners may experience material adverse consequences, including the need to
pay additional funds to meet ownership costs (such as Annual Licensing Fees and
Association assessments), and to make payments on any loan obtained by a unit
owner to purchase a unit.
Forward Looking Statements
Since Fala Bella has not yet been completed or commenced operations,
all statements in this prospectus regarding Fala Bella and its operation are
forward-looking statements within the meaning of federal securities law. Such
statements can be identified by the use of forward-looking terminology such as
"may," "will," "expect" "anticipate," "estimate," "continue" or other similar
words. These statements discuss future expectations, contain projections of
results of operations or of financial condition or state other "forward-looking"
information. When considering such forward-looking statements, you should keep
in mind the other risk factors contained in this prospectus. Although we believe
that the expectations reflected in these forward-looking statements are based on
reasonable assumptions, there are certain factors such as general economic
conditions, local real estate conditions, or weather conditions that might cause
a difference between actual results and those forward-looking statements. This
discussion should be read in conjunction with a review of our financial
statements, including the related notes to the financial statements, and the
projections, including the related assumptions, included in this Prospectus
beginning at pages F-1 and P-1, respectively.
20
<PAGE>
Year 2000
The year 2000 issue is the result of computer programs that were
written using two digits rather than four to define the year. Management of Lely
Golf I and Lely Golf II are aware of the potential problems, including the
inability to collect and maintain the information necessary to operate the
rental program, and is currently assessing the potential impact on Fala Bella.
One factor in evaluating candidates to serve as resort operator is the
preparations that the resort operator candidate has taken with respect to the
potential problems attendant to a failure to be year 2000 compliant. Since we
have not completed our evaluation, we are currently unable to estimate the cost
of compliance.
Our goal is to ensure that all of our critical systems and those of the
resort operator are under their respective direct control and remain
operational. However, certain systems and processes may be interrelated with
systems outside their control, such as the systems and operations of travel
agents, tour group operators and other booking agencies, and their can be no
assurance that all implementations will be successful. Under our present
analysis of the most reasonable likely worst case scenario for year 2000
disruptions, there is the concern that telecommunications and electric
industries serving Fala Bella may fail, causing temporary disruptions in the
construction of Fala Bella and the ability of the Rental Manager to rent units.
We are currently unable to estimate the cost of becoming year 2000
compliant, but do not anticipate that it will have a material adverse effect on
the construction and operation of Fala Bella.
Dependence on the Resort Operator
The success of Fala Bella will depend to a great extent on the efforts
and abilities of the Resort Operator. The Resort Operator has been engaged for a
five-year term commencing May 1999, subject to earlier termination under certain
circumstances. In particular, the Resort Operator may terminate the Resort
Management Agreement if at least 150 units are not sold by December 31, 2002.
If the Resort Operator were to terminate its arrangement to manage Fala
Bella, and another experienced resort operator was not immediately available,
Lely Golf II or one of its affiliates would operate Fala Bella. Lely Golf II has
no experience managing a resort.
If Lely Golf II is required to operate Fala Bella for an interim
period, Fala Bella may be without the benefits of an advanced reservation
booking system and national advertising that is generally provided by an
experienced operator and otherwise at a disadvantage with respect to some of its
competition.
Experience of Lely Golf I and the Lely Golf II
The Ronto Group has more than 20 years' experience in developing and
constructing residential real estate properties in Florida. However, Fala Bella
is the first resort condominium project and rental program developed or managed
by the management of Lely Golf I or Lely Golf II.
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<PAGE>
Dependence on Golf Enterprises
Fala Bella's ability to attain satisfactory occupancy and room rates is
dependent on access to the Golf Courses, which has been arranged with Golf
Enterprises under the Use and Access Agreement. Neither we nor the unit owners
will have any ability to control or direct the operations of Golf Enterprises or
the use or condition of the Golf Courses, except to the limited extent set forth
in the Use and Access Agreement. If Golf Enterprises fails to properly operate
or maintain the Golf Courses, occupancy and room rates of Fala Bella could be
materially adversely affected.
Competition
The success of Fala Bella will be determined by, among other things,
its location, quality of accommodations, room rate structure and the quality and
availability of play on the Golf Courses. Fala Bella will compete with existing
hotels and resorts, as well as with future hotels and resorts that may be
developed in proximity to Fala Bella. Visit Naples, Inc. reported that in 1998
there were 5,398 hotel rooms in Naples among 72 hotels and motels. According to
a report prepared for us by Horwath Landauer Hospitality Consulting, Inc., in
1996 there were 2,309 comparable resort-oriented rooms in the Naples hotel
supply. These rooms compete with Fala Bella in varying degrees on the basis of
location, potentially common customer base, quality level of facilities and room
rate structure. However, the majority of these hotels are located on beachfront,
a factor that mitigates seasonality and attracts a different market. According
to the Landauer Report, outside of the Naples area, there are Florida golf
resort properties with rooms totaling 3,609 in 1996. The majority of these
resorts are much larger than Fala Bella and generally are located in the
interior of Florida. In addition, most of these properties provide significant
amounts of meeting space in order to capitalize on the meeting group market to
supplement golf demand. As a result, the majority of demand is meeting group
oriented. In the Naples area we believe that there are currently only three
resorts that are directly competitive with Fala Bella. None of these resorts
currently provide privileged access to golfing. However, additional projects for
resort facilities have been announced that may compete with Fala Bella, if
completed. Competition in the future may be affected by changes in the hotel and
resort market in the Naples area, changes in local or regional population
patterns, changes in disposable income characteristics, changes in travel
patterns and preferences, and periodic over-building that can adversely affect
patronage levels. See "The Resort Industry -- Resort Market; and -- The Naples
Market."
Potential Liability of Ownership
Included in your Association assessments will be a share of insurance
premiums for property damage, public liability and fire and other hazard
insurance carried by the Association against certain risks of operating the
condominium. In addition, under the Rental Program Agreement, each unit owner is
required to carry property, casualty and liability insurance of at least
$300,000. However, the amount of insurance carried by the Association, the unit
owner or Rental Manager may prove inadequate. There are certain risks which may
be uninsurable or not insurable on reasonable terms. In the event insurance is
unavailable for any reason, the Association will have to self-insure for all or
part of any potential loss or to seek coverage at higher rates from alternative
carriers.
You may personally have joint and several liability for tort and
contract claims as a result of ownership of your unit or as a party to the
Rental Program Agreement. You are urged to consult an insurance advisor or
attorney with respect to the nature and extent of such personal liability and to
determine
22
<PAGE>
what additional liability insurance coverage, if any, may be necessary or
appropriate for your particular circumstances.
Seasonal Fluctuations
The Naples resort market is seasonal, with demand fluctuating at
different levels throughout the year. This seasonality will cause fluctuations
in the gross revenue generated from the rental of your unit. See "The Resort
Industry -- The Naples Market -- Seasonality".
Operating Uncertainties
The value of Fala Bella and an investment in the units will depend in
part on the ability of the Resort Operator to achieve, maintain or increase
gross revenue sufficient to cover operating expenses and generate a reasonable
return for the unit owners. Income from an investment in the units may be
adversely affected by a range of factors in addition to increased competition as
discussed above. These factors include, but are not limited to, increases in
operating costs as a result of inflation and other factors, which the Rental
Manager may determine cannot be offset by increased revenue, strikes and other
labor disturbances by Fala Bella's employees, increases in energy costs and
other expenses of travel, weather conditions (including the impact of damages
caused by hurricanes, tornadoes and floods) and adverse effects on general and
local economic conditions. Due to the orientation of Fala Bella to use of the
Golf Courses, Fala Bella is particularly dependent upon the quality and
availability of play on the Golf Courses. Occupancy by tourists who do not play
golf is expected to be minimal. All of these and other factors could reduce Fala
Bella's ability to generate revenue.
Potential Liability for Violation of Environmental Laws
Under various federal, state, and local environmental laws, a current
or previous owner or operator of real property may be liable for the costs of
removal or remediation of hazardous or toxic substances. Such laws, ordinances
and regulations often impose liability, whether or not the owner or operator
knew of, or was responsible for, the presence of such hazardous or toxic
substances. We are not aware of any material violations of currently applicable
environmental laws. However, violations may occur in the future or more
stringent laws may be enacted. If this occurs, Lely Golf I, Lely Golf II or the
unit owners could suffer material adverse consequences as a result.
Risks in Relying on Industry Data
We have obtained various industry data set forth in this Prospectus
regarding the golf and resort industry from PKF Consulting's report on Trends in
the Hotel Industry, a report prepared for us by Horwath Landauer Hospitality
Consulting, Inc., information provided by MeriStar Management Company and from
certain public sources. Industry information as a whole or on specific markets
may not be indicative of results that can be achieved in the Naples market or by
Fala Bella and may not be applicable to a resort focused on golf or which
includes a rental program. We have not independently verified the resort
industry data contained in the national studies cited or obtained from other
sources. The sources of this information are not affiliated with us or
associated in any way with this offering.
23
<PAGE>
Experience of Association Directors
Following relinquishment of control of the Association by Lely Golf I,
the Association will be controlled by the unit owners sitting on the board of
directors. These directors will not be full-time residents of Fala Bella and may
have little or no experience in operating a resort or a rental program between
unit owners and tenants. The operating inexperience of the directors may result
in the directors not being able to recognize or take corrective action if and
when required.
FALA BELLA
General
Fala Bella is a golf-oriented condominium-hotel. It is currently
anticipated that Fala Bella will consist of 200 fully furnished suites located
in 2 buildings of 10 units and 15 buildings containing 12 units each,
complemented by resort and recreational facilities, on a site of approximately
20 acres in the Naples, Florida area. Fala Bella is part of Lely Resort and is
located approximately five miles from the Naples airport and 37 miles from the
Fort Myers/Southwest Florida International Airport. Each building of the
condominium will be two stories. Lely Golf I will construct a check-in facility.
Separate commercial condominium units will house certain recreational amenities,
including a bar and grill, his and her saunas, a spa, massage facilities and an
exercise room. In addition, there will be a golf practice area, a cabana, adult
and kiddie swimming pools, tanning beach, a volleyball court, two tennis courts
and parking facilities.
In response to our market studies, we have determined that a mix of
two- and three-bedroom units with certain amenities and recreational activities
will be most attractive to potential users of Fala Bella.
We believe that Fala Bella will fill a void in the Naples market for
resort facilities that cater to the golf enthusiast. According to market
research conducted for us, the mix of the facilities provided at Fala Bella and
located nearby, including the Golf Courses, comprises an ideal setting that is
not duplicated at other area resorts or at golf resorts located inland.
The floor plans for the units and the building layouts indicating the
location of the units and other resort facilities are set forth in Annex D to
this Prospectus.
THE GOLF COURSES
Golf Enterprises is the operator of the Golf Courses. It is a privately
held golf course management company that subleases and manages some of the golf
properties of its affiliate, American Golf Corporation. American Golf is a
privately held golf course management company having a portfolio of golf
facilities that include 260 private country clubs, resorts, daily fee public
facilities and practice centers located in 29 states and 10 facilities in the
United Kingdom.
The Golf Courses are included in American Golf Country Clubs ("AGCC").
AGCC is a separate and distinct operating division of American Golf dedicated to
private club acquisition, management and member service in the United States and
abroad. AGCC's portfolios include over 60 private country clubs. According to
American Golf, these country clubs are considered by the industry to be among
the most desirable golf properties in the country.
24
<PAGE>
Robert Trent Jones, Sr. designed and built the Flamingo Island course,
which opened to the public in April, 1990 and Lee Trevino and W.M. Graves, Inc.
designed the Mustang Golf course which opened to the public in December, 1997.
The Flamingo Island course is a 18 hole, par 72 course measuring 6,292 yards in
length and the Mustang course is a 18-hole, par 72 course measuring 7,217 yards
in length. Both Golf Courses are managed by Golf Enterprises.
Golf Enterprises will erect a temporary club house, that will include a
restaurant and pro shop, on property owned by Lely Golf I that is adjacent to
Fala Bella. Under the Use and Access Agreement, Golf Enterprises has agreed to
complete a permanent club house in 2000. This clubhouse will be available to
those persons staying at Fala Bella and the general public.
LELY RESORT
Lely Resort is a 2,900 acre country club community under development by
Lely Development Corporation, a leading land developer in Collier County for
over 25 years. Upon completion, Lely Resort will be a mixed use residential
community that includes custom homes, mid-rise condominium units, retail sites
and office and commercial property. The community is being developed in three
phases: Flamingo Plantation, Mustang Plantation and Classics Plantation. Fala
Bella is part of Flamingo Plantation.
THE RESORT INDUSTRY
General
The resort industry is very cyclical and profitability is determined in
part by the relative availability of supply to demand. Demand is closely linked
to the strength of the economy. The growth of supply, however, is closely linked
to the availability of capital, which may be less or more than existing demand.
According to the report prepared for Lely Golf I by Horwath Landauer
Hospitality Consulting, Inc. (the "Landauer Report"), Fala Bella is comparable
and may be considered to compete with three distinct groups of properties. The
first group consists of resort-oriented hotels in the local Naples-Marco Island
area that attract leisure and group demand. The second group consists of inland
Florida resorts which are golf- oriented, some of which feature organized rental
pool programs. The third group includes other Florida resorts, many of which are
located beachfront and cater to upscale meeting groups, as well as discretionary
leisure travelers.
The performance of the U.S. or Florida resort industry as a whole may
not be indicative of results that can be achieved in the Naples area. Factors
that would not necessarily have a material effect on the national industry
because it is geographically diverse may have a significant impact on a smaller
market. Individual resort markets may underperform or outperform the industry as
a whole. In addition, the results of resort hotels in the Naples area or golf
oriented resorts located inland are not directly comparable to the market for a
Naples-based golf oriented property such as Fala Bella. Finally, condominium
hotel properties included in a rental program or pool are affected by factors
that may not be applicable to these other properties.
25
<PAGE>
Resort Market
Resorts that are focused on a particular area of interest, such as
golf, sometimes experience results that contrast with the performance of the
resort market generally. Resort properties in the Naples area generally feature
waterfront locations, some with direct golf access, and offer luxury
accommodations and services. In addition, many of these hotels are considered
"flagship" properties or destination resorts. As such they cater to upscale
meeting groups and discriminating leisure travelers and command higher room
rates compared to other properties, including Fala Bella. This would be true of
two of the golf-oriented resorts currently planned for the Naples area.
Currently, we believe there are no condominium hotel resorts that
include golfing arrangements in the Naples market.
Florida
Tourism is Florida's second largest industry and plays a significant
economic role throughout the state. We believe that the growth of the tourism
industry in Florida is based on the following:
o Favorable climate
o Natural beauty
o More leisure time
o Number and quality of resort hotels and
championship golf courses
o Development of new tourist attractions
o Low airfare structure
o Expansion of sporting events
o Shopping
o Healthy economy
o Aggressive tourism development
Comparable Resort Properties Operating Performance
The performance, measured by annual occupancy percentage and average
daily rate (ADR), of a representative set of Naples/Marco Island hotel resort
properties, according to the Landauer Report, as updated by information provided
by Landauer, is as set forth in the following table:
Naples/Marco Island Resort Hotels
- --------------------------------------------------------------------------------
YEAR OCCUPANCY ADR
- --------------------------------------------------------------------------------
1995 69% $142
1996 72% $144
1997 72% $155
1998 71% $164
- --------------------------------------------------------------------------------
Note: The hotel resort properties represented include Registry
Resort Naples, Naples Beach Hotel and Golf Club, Marriott's
Marco Island Beach Resort & Golf Club, Inn at Pelican Bay
Edgewater Beach Hotel, Radisson Suite Beach Hotel and Marco
Island Hilton Beach Resort.
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<PAGE>
These properties had a total of 2,310 rooms in 1998. In the
first three months of 1999 occupancy at these hotels equaled
80% and ADR was $235 compared to 82% and $229, respectively,
in 1998.
The performance of a representative set of Florida golf resort
properties, according to the Landauer Report, as updated by information provided
by Landauer, is as set forth in the following table:
Florida Golf Resorts
- --------------------------------------------------------------------------------
YEAR OCCUPANCY ADR
- --------------------------------------------------------------------------------
1995 55% $115
1996 56% $121
1997 58% $134
1998 58% $150
- --------------------------------------------------------------------------------
Note: The golf resort properties represented include Westin
Innisbrook Resort, Marriott at Sawgrass Resort, PGA National
West Palm Beach, Saddlebrook, Wyndham Resort and Spa Fort
Lauderdale and Doral Golf Resort. These properties had a total
of 3,552 rooms in 1998. In the first three months of 1999,
occupancy at these golf resorts equaled 69% and ADR was $210
compared to 75% and $191, respectively, in 1998.
The Naples Market
Naples
Fala Bella is located in Collier County within the Naples metropolitan
area, a residential and resort community located on the southwest coast of
Florida.
According to the Landauer Report, Naples has experienced growth in
nearly all sectors of its economy that is above the growth rate for Florida and
the United States. The majority of this growth has been concentrated in the
central and western portions of Naples near the commercial business district and
along the gulf coast. The highest rate of growth has been experienced in retail
sales and in sales by eating and drinking establishments located in the area.
According to information provided by National Decision Systems, retail sales and
sales by eating and drinking places in Naples are anticipated to continue to
grow at a relatively high rate compared to Florida and the United States through
2003.
Golf is a major attraction in Naples and contributes to the health of
the tourism sector. Naples is second in the nation for the highest number of
golf holes per capita and hosts an annual Senior PGA and a LPGA event each
winter.
Competition
We believe that three condominium hotel properties in the southwest
Florida market are directly competitive with Fala Bella. These are Pointe Estero
Resort, Gullwing Beach Resort and Marco Beach Ocean Resort. The following chart
sets forth some of the characteristics of these properties:
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<PAGE>
<TABLE>
<CAPTION>
Property Year Opened No. of Rooms Facilities/Amenities
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pointe Estero Resort 1988 60 - TV's in every bedroom and
living room
- Swimming pool
- Jacuzzi
- Recreational activities
- Cookouts
Gullwing Beach Resort 1998 66 - Beach access
- Swimming pool
- Decorator designed rooms
- Guest services
- Turnkey ownership
Marco Beach Ocean Resort * 103 - Six floor plan choices
- Two swimming pools
- Restaurant building
- Concierge service
- Health spa
- Fitness training
- Two jacuzzi spas
- Reciprocal membership
with
Royal Tarpon Yacht Club
- ---------------
* Anticipated for 2000.
</TABLE>
The factors considered in determining this competitive supply
included: (1) the number of rooms and amount and quality of meeting space, (2)
quality and value of overall facilities and amenities, (3) character and style
of Fala Bella, (4) rate structure and market position, and (5) location factors
such as surrounding land uses.
These properties are competitive largely based upon their size, price
points and location. Each offers certain amenities comparable to the amenities
offered by Fala Bella. However, none of these properties offer privileged access
to golf, though golf facilities are available at local public courses. The cost
of tee times at these public golf facilities is approximately equal to prices
that will be paid by Fala Bella's guests, though less than amounts that will be
paid by a unit owner when such prices are calculated as part of the price of
ownership of a unit. The quality of the golf facilities themselves are generally
of lower caliber than the Flamingo and Mustang golf courses.
In addition, there are a number of condominiums and hotels in the
Naples area that offer golf as one of their featured recreational activities
such as the Naples Beach & Golf Hotel, Fiddler's Creek and Naples Heritage. Lely
Resort also includes condominium units that offer access to the Lely golf
courses.
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<PAGE>
Resort Market Seasonality
The Naples resort market is affected by seasonality with demand
fluctuating at different levels throughout the year. The severity of demand
fluctuation has lessened in recent years as a result of the increasing
popularity of the area. Strongest demand occurs from January through April.
According to information provided by the Economic Development Council of Collier
County, Inc., during peak periods in 1998, occupancy in Naples ranged from 78.3%
to 85.5%. During this period, there is less disparity between weekend and
weekday demand. As a result, the resort market experiences numerous fill nights
(periods in which the market is at capacity). Moderate demand occurs during the
months of May, October and November. In 1998, occupancy percentages ranged from
70% to 74.3%. The resort market experiences numerous fill nights on the weekends
during this period. The slow season is from June through September. In 1998,
market occupancy ranged from 49% to 66%. December is in a category of its own
and in 1998 had an occupancy rate of 60%.
Unsatisfied Demand
As a result of significant tourist activity and a strong demand for
proximity to the area's high quality golf facilities, Naples experiences high
levels of unsatisfied demand during certain times of the year. Unsatisfied
demand is that demand which is not able to be accommodated in the direct market
area due to facility size or capacity constraints and exists whenever a market
experiences periods of 100% occupancy. As a result of seasonality, unsatisfied
demand can exist even though the average annual occupancy for the market is less
than 100%.
Market Demand
The overall demand for resort lodging accommodations in the Naples
area is generated primarily by leisure destination travelers and the meeting
group market. However, because of the number and quality of the golf facilities
in the Naples area, lodging demand by golf enthusiasts who come to the area
primarily to play golf is high.
Future Demand Growth
We believe that room demand in the Naples/Marco Island area will grow
in the beginning years of the millennium, notwithstanding the slower demand
growth experienced in 1997 and the slight decline seen in 1998. We presently
anticipate that new additions to the competitive supply will induce demand into
the market. Induced demand is new demand that enters a market as a direct result
of the introduction of a new hotel product. This demand is over and above the
normal demand growth experienced by the marketplace. As a result of their more
unique physical attributes, variety of amenities, and ability to cater to all
demand segments, resort oriented hotels, more than any other lodging type,
possess the ability to induce new demand into a marketplace.
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<PAGE>
Prospective New Resort Supply
We estimate that approximately 1,000 new hotel rooms (excluding Fala
Bella's 200 units) will be constructed in the Naples market within the next
three years, including both resort hotels and golf-oriented resorts. This is in
addition to the approximately 550 new rooms added to the Naples hotel supply in
1998 and 1997.
Plans for the construction of three significant golf resort properties
have been announced. Florida Panthers Holdings, a publicly-held sports and
leisure company, announced a project for the construction of a world-class golf
resort and country club in Naples. The project will include a semi-private,
18-hole golf course and a luxury 250-room hotel. Plans to construct a 295-room
golf lodge that will be operated by the Ritz-Carlton luxury hotel chain have
also been announced. In addition, WCI Communities and Hyatt Equities announced
an agreement for the development of a 450-room Hyatt Regency resort hotel in
southern Lee County (between Naples and Fort Meyers) that will include an
18-hole championship golf course that will primarily serve guests of the hotel,
but which will also be open to the public for daily-fee play.
In addition, a Doubletree Hotel having 101 rooms and a 250-room
Pulling Hotel is planned for Naples and a Staybridge Suite Hotel is planned for
Bonita Springs.
PROJECTED PERFORMANCE OF FALA BELLA
The following represents the base projected financial performance of
two- and three-bedroom units for the fifth year of operations of Fala Bella.
Currently we believe rental operations will stabilize in the fourth year of
operations when all of the units are expected to be completed and available for
rental. We believe that rental revenues will show continued improvement in the
fifth year of operations. These projections of financial performance are the
mid-point of the range of projections of occupancy and rental rates appearing on
page P-1 and should be read in conjunction with the projections, including the
assumptions underlying the projections. Investors who plan to finance the
purchase of their unit should also review the Debt Service Matrix included with
the projections.
Investors should recognize that the projections are not intended to be
predictions about the performance of Fala Bella. We believe that the assumptions
on which the projections are based are reasonable. At our request, Landauer has
reviewed our base projections for Fala Bella's fifth year of operations and,
based on their assessment of economic and market conditions as of May 11, 1999,
concluded that our projections for occupancy and room rate levels for Fala Bella
in its fifth year of operations appear reasonable. However, actual results will
differ from the results contained in the projections, perhaps materially.
Investors are encouraged to consult with their own advisors with respect to the
assumptions upon which the projections are based and are encouraged to review
the discussion of risk factors regarding Fala Bella and its operations set forth
under "Risk Factors" beginning on page __. Investors who require financing to
purchase a unit should understand that net cash available is unlikely to be
sufficient to amortize a typical mortgage.
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<PAGE>
BASE PROJECTIONS OF ANNUAL
INCOME AND EXPENSES
(UNAUDITED)
RENTAL REVENUES
2 BEDROOM UNIT
GROSS INCOME1 $32,068
LESS:
Travel Agent Commissions (1.80%) (577)
Credit Card Fees (1.90%) (609)
VPC Reservation Expense2 (654)
------------
ADJUSTED GROSS INCOME $30,228
LESS:
Management Fee3 (15,114)
Interior Maintenance Fund4 (907)
NET RENTAL REVENUES PAYABLE TO OWNER $14,207
============
- --------
1 Assumes an annualized occupancy rate of 55.68% and an average daily rate
(ADR) of $158. Personal usage is not considered as affecting occupancy.
2 Under the Resort Management Agreement, the Resort Operator will be paid a
fee of $15 per confirmed reservation placed through its Vacation Planning
Center (VPC). The projected fee assumes 75% of all bookings are derived
through the VPC with an average length of stay of 3.5 nights per booking.
3 Under the Rental Management Agreement, the Rental Manager will be paid a
management fee equal to 50% of Adjusted Gross Income (as defined in the
Rental Management Agreement) for securing and servicing rentals.
4 The Interior Maintenance Fund will be funded with 3% of Adjusted Gross
Income payable monthly. Assumes expenditures for repair or replacement of
furnishings, linens, floor and wall coverings, equipment and appliances
will equal the amount funded.
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<PAGE>
OWNERSHIP EXPENSES
(UNAUDITED)
2 BEDROOM UNIT
NET RENTAL REVENUES PAYABLE TO OWNER: $14,207
LESS OWNERSHIP EXPENSES:
Annual Condominium Assessment1 (3,126)
Real Estate Taxes2 (2,025)
CDD3 (623)
Insurance4 (150)
Annual Licensing Fee5 (3,786)
NET CASH AVAILABLE6 $4,497
======
- --------
1 Based on a budget for 1999, which includes the $30 current annual
assessment for the Lely Resort Master Property Association, Inc., and
assumes a constant assessment for the year 2000 increased at a 3%
compounded annual rate for each year thereafter.
2 Assumes tax rate of 1.5% on an assessed value equal to 90% of $150,000
(assumed purchase price of $165,000 less $15,000 for furnishings).
3 A Lely Resort Community Development District operating assessment of $327
(based on 1999 budget, increased 3% per year compounded rate) is assumed
for year 2004 plus a maximum of $296 for annual amortization of existing
CDD indebtedness of $2,120 per unit at Jan. 1999.
4 Estimated annual premium payable for the minimum $300,000 per occurrence
coverage for property damage and bodily injury liability insurance required
by the Rental Program Agreement.
5 An Annual Licensing Fee is payable to Golf Enterprises for golf privileges
of $3,500 per year increasing 4% per year after November 1, 2002.
6 Does not include costs incidental to use of a unit by the unit owner such
as laundry, housekeeping, telephone, etc. Net Cash Available is before debt
service, if any.
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<PAGE>
BASE PROJECTIONS OF ANNUAL
INCOME AND EXPENSES
(UNAUDITED)
RENTAL REVENUES
3 BEDROOM UNIT
GROSS INCOME1 $40,090
LESS:
Travel Agent Commissions (1.80%) (722)
Credit Card Fees (1.90%) (762)
VPC Reservation Expense2 (984)
-----------
ADJUSTED GROSS INCOME 37,622
LESS:
Management Fee3 (18,811)
Interior Maintenance Fund4 (1,129)
NET RENTAL REVENUES PAYABLE TO OWNER $17,682
============
- --------
1 Assumes hotel rooms always separately rented. Also assumes an annualized
occupancy rate of 55.68% and an average daily rate (ADR) of $158 for
two-bedroom units and, 28.12% annualized occupancy rate and a $78 ADR for
hotel rooms. Personal usage is not considered as affecting occupancy.
2 Under the Resort Management Agreement, the Resort Operator will be paid a
fee of $15 per confirmed reservation placed through its Vacation Planning
Center (VPC). The projected fee assumes 75% of all bookings are derived
through the VPC with an average length of stay of 3.5 nights per booking.
3 Under the Rental Management Agreement, the Rental Manager will be paid a
management fee equal to 50% of Adjusted Gross Income for securing and
servicing rentals.
4 The Interior Maintenance Fund will be funded with 3% of Adjusted Gross
Income payable monthly. Assumes expenditures for repair or replacement of
furnishings, linens, floor and wall coverings, equipment and appliances
will equal the amount funded.
33
<PAGE>
OWNERSHIP EXPENSES
(UNAUDITED)
3 BEDROOM UNIT
NET RENTAL REVENUES PAYABLE TO OWNER: $17,682
LESS OWNERSHIP EXPENSES:
Annual Condominium Assessment1 (3,891)
Real Estate Taxes2 (2,498)
CDD3 (623)
Insurance4 (150)
Annual Licensing Fee5 (3,786)
NET INCOME6 $6,734
- --------
1 Based on Association's budget for 1999, which includes the $30 current
annual assessment for the Lely Resort Master Association Property, Inc.,
and assumes a constant assessment for the year 2000 increased at a 3%
compounded annual rate for each year thereafter.
2 Assumes tax rate of 1.5% on an assessed value equal to 90% of a $185,000
($200,000 purchase price less $15,000 for furnishings).
3 A Lely Resort Community Development District operating assessment of $327
(based on 1999 budget, increased 3% per year compounded rate) is assumed
for each year 2004 plus a maximum $296 for annual amortization of existing
CDD indebtedness of $2,120 per unit at Jan., 1999.
4 Estimated annual premium payable for the minimum $300,000 per occurrence
coverage for property damage and bodily injury liability insurance required
by the Rental Program Agreement.
5 An Annual Licensing Fee is payable to Golf Enterprises for golf privileges
of $3,500 per year increasing 4% per year after November 1, 2002.
6 Does not include other costs incidental to use of a unit by the unit owner
such as laundry, housekeeping, telephone, etc. Net Cash Available is before
debt service, if any.
34
<PAGE>
Golf Vacation Benefits
The use of your unit for a golf vacation destination provides
substantial savings compared to a stay at a golf-oriented resort. These benefits
should be considered, together with the ownership costs and rental revenues
related to ownership of a unit.
As a primary benefit of ownership of a unit, each unit owner possesses
preferred rights to use of the Golf Courses. These rights entitle a unit owner
to play an aggregate of 100 rounds or 42 rounds of golf per individual unit
owner per year (with reservations up to a year in advance) without payment of
any green fees. For a more complete discussion of these rights and certain
limitations on their use, see Questions 4 through 7 under "Questions and
Answers". These rights translate into substantial savings for a unit owner who
plays golf.
As an example, assume a unit owner elects to play 7 rounds each month
for a year, a total of 84 rounds. Based on the 1999 green fee schedule of the
Golf Enterprises, the savings to an owner would be over $6,000. These savings
exceed the current Annual Licensing Fee of $3,500.
A unit owner who uses his unit also enjoys substantial savings
compared to someone who rents. Each unit owner is entitled to free use of his
unit, subject to incidental charges and certain seasonal restrictions discussed
in Question 11 under "Questions and Answers". As an example, assume a unit owner
elects to use his unit two days each month for a year. The savings at the
projected rates for a two-bedroom unit would be over $3,500 for the twenty-four
room nights. If instead a unit owner chooses to use his unit one week a month in
January, February and March the savings would be over $4,200.
You should note that rental revenues may be adversely affected by
owner use, especially in periods of high occupancy levels by hotel guests.
Moreover, projected unit expenses do not include costs incidental to owner use
such as laundry, housekeeping, and telephone.
Market Penetration
The operating results set forth in the projections are predicated on a
number of assumptions relating to the physical and locational characteristics of
Fala Bella. These assumptions include Fala Bella's overall facility, as well as
the fact that Fala Bella has a preferential use and access agreement with Golf
Enterprises providing unit owners and guests with access to quality golf
facilities. We believe that resort-oriented facilities and the Use and Access
Agreement with Golf Enterprises providing preferred rights to the use of the
Golf Courses will provide a significant competitive advantage for Fala Bella in
the Naples marketplace. Additionally, we considered the following factors in
preparing the projections:
o the estimated future performance of the overall competitive
lodging market
o the advantages and disadvantages of Fala Bella relative to
the existing and future competitive market (assuming its
location, overall facilities, and access to the Golf
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<PAGE>
Courses with the rights provided to unit owners under the Use
and Access Agreement)
o the estimated mix of different types of demand for Fala Bella
o the estimated rate structure for Fala Bella
o the impact of potential new resort supply in the competitive
market
Different assumptions about market penetration serve as a basis for
the projections of future occupancy performance for Fala Bella. Market
penetration is a measurement of the level of demand captured by a given resort
in relation to its fair market share based on the number of resort rooms it has
relative to the number of rooms in the market. Market penetration is expressed
as a percentage, with a resort capturing its fair market share having a market
penetration rate of 100%.
Occupancy
Our projections assume that occupancy of the units will increase as
construction and marketing of Fala Bella is completed and will stabilize in the
fourth year of operations. We project continued growth in rental revenues in the
fifth year of operations. We believe that Fala Bella is competing in a growing
market for both generalized resort facilities and golf-oriented resort
facilities. For this reason, we expect to attain a relatively high occupancy
rate even though Fala Bella's market penetration of the general resort market in
the Naples area may not be significant. By working with MeriStar Management, we
expect to penetrate the group and meeting market, as well as the market for golf
enthusiasts, both locally and nationally. We expect demand growth in the group
and meeting market in particular to increase occupancy in years three and four
of operations.
Conclusion
We believe that the Naples market for resort facilities, as well as
the market for resort facilities that cater to golf enthusiasts, to experience
continued growth into the foreseeable future. Factors contributing to the
strength of the market and its overall potential growth are:
o Growth of southwest Florida as a resort destination
o Local municipal commitment to aggressive tourism marketing
o Positive economic trends within the State of Florida
generally and southwest Florida particularly
o Continued growth in interest in golf as a recreational
activity
o Growth and greater service capacity of the Southwest Florida
International Airport
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<PAGE>
Fala Bella provides a unique blend of location and facilities. Unit
owners and guests will have the benefit of access to two championship golf
courses. We expect that Fala Bella will be positioned below the midpoint rate
range for comparable resort hotels and will achieve occupancy levels above the
competitive supply.
THE RESORT OPERATOR
The Rental Manager has engaged MeriStar Management Company, L.L.C., an
affiliate of MeriStar Hotels & Resorts, Inc., as Resort Operator. The Resort
Operator and certain of its affiliates manage and operate various hotel assets,
including most of the hotels owned by American General Hospitality Corporation,
making it one of the largest independent hotel management companies in the
United States based on number of rooms under management. The Resort Operator is
included in the MeriStar Group's Resorts division which focuses on sun, golf and
ski oriented properties. These resorts are located in California, Florida,
Georgia, Massachusetts, Vermont and the U.S. Virgin Islands and are operated
under nationally recognized brand names such as Hilton(R), Sheraton(R),
Westin(R), Marriott(R), Doubletree (R) and Radisson(R). The MeriStar group is
the successor to the leasing and management company interests of CapStar
Management Company and American General Hospitality Corporation. About half of
the hotels leased or managed by the MeriStar group are owned by MeriStar
Hospitality Corporation, a real estate investment trust and an affiliate of the
MeriStar group. In southwest Florida, the Resort Operator manages South Seas
Plantation, a resort hotel offering numerous amenities including golf and
tennis, located in Captiva, Florida, and the Radisson Suites Beach Resort, a
resort hotel located in Marco Island, Florida. Subject to the terms of the
Resort Management Agreement, you and Fala Bella's hotel guests will be permitted
to use the beach facilities of the Radisson Suites Beach Resort.
MANAGEMENT OF FALA BELLA
The Resort Operator will manage the rental of the units, and maintain
the units on behalf of the Rental Manager and the unit owners pursuant to the
Resort Management Agreement and the Rental Program Agreement. The Resort
Management Agreement does not provide for the management of the condominium or
the Association. The following discussion is a summary of these agreements.
Please refer to Annexes E-1 and E-2 to this Prospectus for the full text of
these agreements.
Rental Program Agreement
Each unit owner is required to enter into the Rental Program Agreement
with Lely Golf II as Rental Manager. A unit may not be rented to anyone except
pursuant to the Rental Program Agreement. Under the Rental Program Agreement,
you agree to make your unit available for rental whenever you are not occupying
your unit. Personal use of a unit is subject to certain restrictions
37
<PAGE>
in season (December 16 to April 15). During this period, you may occupy your
unit for up to 28 days, but may not stay for more than seven days during any one
30-day period. Once all seven days have been used, you must wait ten more days
before using your unit. However, once during this period, you may use your unit
for one 14-day period provided that you have not used your unit for the prior
10-day period and do not use it again for an additional ten days. The Rental
Manager will seek suitable renters to rent the unit who will pay a rental rate
set by the Rental Manager.
The amount of your personal use of your unit may affect the
deductibility of certain expenses associated with ownership of your unit. Use of
your unit, particularly in season will also reduce your rental income.
Rental Revenue
Rental revenue does not include funds collected for taxes or other
governmental requirements, including sales tax and tourist taxes. The rental
revenue you receive will be adjusted by deduction of all applicable travel agent
fees, airline booking fees, credit card and check collection fees, and any other
applicable collection or booking costs. This Adjusted Gross Rental Revenue is
subject to other deductions described below.
Interior Maintenance Fund
The Rental Manager will deduct 3% of Adjusted Gross Rental Revenue
from the prior month's Adjusted Gross Rental Revenue to hold in the Interior
Maintenance Fund. The Interior Maintenance Fund will bear interest that will be
added to the Fund. The Interior Maintenance Fund will be used by the Rental
Manager to repair or replace furnishings, linens, decorative items, accessories,
floor and wall coverings, equipment and appliances as the Rental Manager may
deem necessary. In making these repairs, the Rental Manager will consult with
you to the extent practicable. If amounts in the Interior Maintenance Fund are
insufficient, you are responsible for paying any shortfall. The Rental Manager
may, but is not obligated to, advance funds that may be repaid from future
rental revenues or billed to you. The Rental Manager will provide you with an
annual accounting of all monies held or disbursed from the Interior Maintenance
Fund.
Management Fee
For its services under the Rental Program Agreement, you will pay the
Rental Manager a management fee equal to 50% of the Adjusted Gross Rental
Revenue derived from the rental of your unit (the "Management Fee"). The Rental
Manager will deduct the Management Fee from the Adjusted Gross Rental Revenue
received in the previous month.
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<PAGE>
Distributions
The Rental Manager will distribute to you by check the balance of
Adjusted Gross Rental Revenue for the preceding month remaining after payment of
the Interior Maintenance Fund amount and the Management Fee on or about the 20th
day of each month. The Rental Manager reserves the right to deduct for other
costs or expenses incurred by the Rental Manager with respect to the unit,
including without limitation, unpaid taxes, assessments, judgments, deficiencies
in the amount available from the Interior Maintenance Fund for the repair,
replacement and maintenance of the units, Annual Licensing Fees, and other
charges payable by the unit owner or guests for use of services or the purchase
of goods while in residence in the unit.
Reports to Unit Owners
Under the Rental Program Agreement, the Rental Manager will provide
you with monthly statements of revenues derived from the rental of your unit and
the amount deducted from the gross revenues in arriving at your Adjusted Gross
Rental Revenue. In addition, the Rental Manager will provide each of you with
information by January 31 of each year for purposes of preparing your tax
returns. The Rental Manager will also provide you with an annual statement of
income and expenses charged to the Interior Maintenance Fund and any other
expenditures made for the maintenance, repair or replacement of your unit and
its contents.
Indemnification
The Rental Program Agreement provides that you will indemnify the
Rental Manager and the Resort Operator against losses or damages resulting from
their performance under the Rental Program Agreement, including claims arising
out of neglect or misconduct by you or your guests and for damage to any person
or property.
Administrative Fee
The Rental Program Agreement provides for the payment of a one-time
administrative fee at the closing of the purchase of a unit of $500 to defray
the cost of the computerized rental and income tax reporting systems,
administrative expenses related to initial set-up and management of the computer
system, and set-up of the telephone systems.
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<PAGE>
Insurance and Other Provisions
The Rental Program Agreement requires you to maintain property and
casualty insurance that covers the contents of your unit and liability to guests
and others in the amount of $300,000 per occurrence, as well as provisions
regarding assignment of your unit, electronic services, pest control and certain
other matters.
Sale of a Unit
Prior to entering into an agreement to resell your unit, you must
provide the proposed purchaser with a copy of the Rental Program Agreement. You
must notify the Rental Manager within five days after putting your unit up for
sale. You must also notify the Rental Manager of the proposed conveyance ten
days in advance of closing. In addition, you must pay a fee of $5,000 to the
Rental Manager which is obligated to pay Golf Enterprises a transfer fee in this
event. The transfer fee will increase annually by 4% beginning on November 1,
2000.
Under the Condominium Declaration, when you enter into an agreement to
sell your unit, you must furnish to the Association written notice of the name
of the proposed purchaser within ten days after the execution of the sales
agreement, together with a copy of the purchase agreement. The Association must
approve or disapprove the proposed purchaser within 20 business days after
receipt of notice. If the Association disapproves the purchase, it must within
30 days after the Association received notice of the proposed sale, furnish you
with an approved purchaser who will purchase the your unit on terms as favorable
to you as the terms set forth in your notice to the Association. If the
Association fails to furnish a substitute purchaser, your may sell your unit to
the originally proposed purchaser.
Resort Management Agreement
Under the Resort Management Agreement, MeriStar Management has agreed
to manage Fala Bella and perform the Rental Manager's obligations under the
Rental Program Agreement for a five-year term ending May __, 2004, subject to
earlier termination under certain circumstances, including termination by the
Resort Operator if at least 150 units are not completed on or before December
31, 2002.
Compensation
The Rental Manager will pay to the Resort Operator each month in
arrears a management fee (the "Basic Fee") equal to the sum of (1) 2.5% of Total
Non-Golf Revenues (as defined in the Resort Management Agreement) plus (2) 0.5%
of Total Net Golf Revenues (as defined in the Resort Management Agreement),
subject to a guaranteed minimum monthly payment of $7,500 until the later to
occur of (x) the first anniversary of the commencement of the Resort Management
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Agreement and (y) the date on which all the units have been completed. In
addition, the Rental Manager will pay the Resort Operator an incentive fee for
each fiscal year equal to 15% of the amount by which Net Operating Income (as
defined in the Resort Management Agreement) with respect to such fiscal year
exceeds $900,000 (pro rated for each partial year), up to 4% of Total Revenues
(as defined in the Resort Management Agreement), including the Basic Fee. The
Resort Operator will also be paid a monthly fee of $3,000 for provision of its
centralized accounting services.
You must pay the Resort Operator a fee of $15 for each confirmed
reservation for your unit placed through its Vacation Planning Center. This fee
will be deducted from your rental revenues and is in addition to the Management
Fee payable to the Rental Manager under the Rental Program Agreement.
Beach Access
The Resort Management Agreement provides that so long as the Rental
Manager is not in default under the Resort Management Agreement, the Resort
Operator will permit unit owners and their guests to use the beach at the Resort
Operator's Radisson Suite Beach Resort of Marco Island without charge. The costs
of such access, including transportation to the beach, will be absorbed by the
Rental Manager as an operating expense under the Resort Management Agreement. In
some circumstances, the Resort Operator will receive the right to use the Golf
Courses that could limit the privileged use of the Golf Courses by you and the
guests of Fala Bella.
SUMMARY OF CONDOMINIUM DECLARATION AND RELATED DOCUMENTS
As described elsewhere in this Prospectus, Fala Bella is a part of
Lely Resort. Each unit is also subject to the Declaration of General Covenants,
Conditions and Restrictions for Lely Resort (the "Community Declaration") and
the Neighborhood Declaration (as defined in the Condominium Declaration), as
well as the Condominium Declaration, the Association Articles and the
Association By-laws (collectively, the "Documents"). The Documents impose
certain covenants, conditions and restrictions on the units and unit owners. The
following discussion of these Documents is a summary of the material terms of
these Documents but does not purport to be complete and is qualified in its
entirety by reference to such Documents, which are included as Exhibits to the
registration statement of which this Prospectus is a part. Capitalized terms
used without definition have the meanings provided in the Document that is being
described.
The Community Declaration
The Community Declaration provides for the following:
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o covenants and easements that run with the land comprising Lely
Resort, creating certain community standards for all
communities within Lely Resort
o a plan of development for Lely Resort
o Neighborhoods within Lely Resort operated by individual
homeowner or Associations within the framework of the
Community Association
o maintenance of the community Common Areas by the Community
Association
o rights and representation of Members of the Community
Association, whether or not resident in an area designated as
a Neighborhood
o assessment and lien rights of the Community Association
against units within Lely Resort
o functional and aesthetic use restrictions (e.g., requires
approval for modifications to the water management system and
changes in the color of the exteriors of residential units)
The Community Articles
The Community Articles are the organizational document for a Florida
not-for-profit corporation named Lely Resort Master Property Owners Association
(the "Community Association"). The creation of the Community Association is
required under the Community Declaration. The Community Articles authorize and
empower the Community Association to perform the maintenance, administration and
other responsibilities required under the Community Declaration. The initial
Board of Directors and officers of the Community Association are appointed in
the Community Articles. Under the Community Articles all owners of residential
dwelling units with Lely Resort are given the status of Members of the
Association and one vote on Community Association matters.
The Community By-Laws
The Community By-Laws provide for the formal administration of the
Community Association, including enforcement of the provisions of the Community
By-Laws, the rules and regulations adopted by the Community Association and the
enforcement of the provisions of the Community Declaration. The Community
By-Laws also provide for:
o requirements for the election and terms of the members of the
board of directors and officers of the Community Association
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o procedures in the event of vacancy, replacement or removal of
members of the board of directors and officers of the
Community Association
o powers of the board, including specific powers to levy and
collect assessments for the Community Association, and
officers of the Community Association
o meetings of the board of directors and members
o requirements for membership in the Community Association
The Neighborhood Declaration
The Neighborhood Declaration designates Fala Bella as a Neighborhood
under the provisions of the Community Declaration.
Condominium Declaration
The Condominium Declaration describes the phases of the condominium
development, including the residential units offered hereby and the commercial
units. The Condominium Declaration also describes and sets forth the rights of
unit owners with respect to common elements, provides for voting rights with
respect to the units and sets forth the plan for development of the condominium
units and common elements and amenities to be owned by the unit owners.
Generally, the Condominium Declaration sets forth provisions regarding insurance
requirements, condemnation and casualty occurrences and certain other events
affecting the condominium units generally. Among other things, the Condominium
Declaration provides for occupancy and use restrictions, sets forth the rights
of unit owners to use the Golf Courses, sets restrictions on sale of units,
signs, pets, clotheslines, litter and other external and aesthetic aspects of
Fala Bella. We provide additional information about the Condominium Declaration
under the captions "Voting Rights", "Meetings", "Board of Directors" and
"Insurance".
The Association
The Association will be formed as a Florida non-profit corporation to
perform various management and supervisory functions at the condominium on
behalf of the unit owners pursuant to the Condominium Declaration. The
Condominium Declaration, established by Lely Golf I as developer, will create
the condominium, including the units and the common elements. A unit owner
automatically becomes a member of the Association. Membership in the Association
may not be transferred or retained separately from any unit.
The Association will supervise and assure the performance of all
appropriate maintenance, management, repair, and administration of the common
elements of the condominium. Operation
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of the rental aspects of Fala Bella will be the responsibility of the Resort
Operator and Rental Manager, pursuant to the terms of the Resort Management
Agreement and the Rental Program Agreement.
Voting Rights
All voting rights are vested exclusively in the members of the
Association. The Association Articles and the Condominium Declaration provide
that there will be a period of control of the board of directors of the
Association by Lely Golf I until the earliest to occur of the following:
Unit owners will elect 1/3 of the directors after Lely Golf I sells
15% of the Total Condominium Units (as defined in the Association Articles).
Unit owners will elect a majority of the directors after the earliest to occur
of the following:
(1) Three years after 50% of all Units which are
to be conveyed have been conveyed;
(2) Three months after 90% of all Units which
are to be conveyed have been conveyed;
(3) When all Units that are to be conveyed are
completed, some are sold and no Units are
being offered for general sale;
(4) When some of the Units have been conveyed
and no other Units are being constructed or
offered for general sale; or
(5) Seven years after recordation of the
Condominium Declaration.
Lely Golf I may elect at least one director as long as it is offering
for general sale at least 5% of the units.
Directors will have a two-year staggered term of office once control
of the board is transferred to the unit owners. There will be a minimum of three
directors.
Board members and officers appointed by Lely Golf I while in control
are not required to be unit owners. Each unit owner will be entitled to cast one
vote for each unit owned by such owner in all meetings of the members of the
Association. Only a single vote may be cast for each unit, regardless of how
title is held. If a unit is owned by more than one person and the unit owners
are unable to agree among themselves as to how their vote or votes shall be
cast, they will lose their right to vote on the matter in question.
Under the Condominium Declaration, a special assessment exceeding
$50,000 may be levied only upon an affirmative vote of 51% of the unit owners
entitled to vote on such matters except to
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replace or repair Condominium property or property contemplated by the
Condominium Declaration to be owned by the Association. The Condominium
Declaration may only be amended or modified by an affirmative vote of 90% of the
owners entitled to vote thereon, except where applicable law otherwise requires
or in cases involving the exercise of development rights by the developer,
interference with Fala Bella as a transient resort facility, eminent domain,
relocation of limited common elements or boundaries between units, subdivision
of units, or termination of the condominium.
Meetings
Under the Association by-laws, meetings of the members of the
Association will be held annually commencing in 2000. The purpose of the annual
meeting is to hear reports of the officers, elect members of the board of
directors and transact other appropriate business. Special meetings of the
members may be called by the President or Vice President of the Association or
by a majority of the board of directors or at the request of 1/3 of the members.
Meetings of the board of directors of the Association will be held
annually to elect officers of the Association. Regular meetings of the board of
directors shall be held at such time and place as determined by a majority of
the board of directors and special meetings of the board of directors may be
called by the Secretary at the request of one-third of the directors.
Board of Directors; Officers
The initial members of the board of directors of the Association are:
A. Jack Solomon, Mark S. Taylor and Karen Welks. The initial officers of the
Association are: President - A. Jack Solomon; Vice President - Mark S. Taylor;
and Secretary and Treasurer - Karen Welks. Each of these individuals are
employees of Ronto or one of its affiliates.
Insurance
The Association will maintain property and casualty insurance on the
exterior of the buildings, common elements of Fala Bella and the amenities that
are owned by the unit owners. The amount of the insurance coverage, as well as
other terms of coverage will be determined by the board of directors in
accordance with the requirements of the Condominium Declaration.
LELY GOLF I
Management
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Lely Golf I is a limited partnership and its management is determined
in accordance with the provisions of the Agreement of Limited Partnership (the
"Partnership Agreement") by and among Westbrook and Ronto as general partners,
and Westbrook Real Estate Fund II, L.P. and Westbrook Real Estate Co-Investment
Partnership II, L.P. as limited partners. Under the terms of the Partnership
Agreement, management of Lely Golf I is vested in an Executive Committee. The
Executive Committee has three members, two of which are appointed by Westbrook
and one of which is appointed by Ronto.
Executive Committee
The initial members of the Executive Committee are Jonathan H. Paul
and Richard P. Hoch, as Westbrook's appointees, and A. Jack Solomon, as Ronto's
appointee.
Occupation and
Name Date Appointed Business Experience Age
- ---- -------------- ------------------- ---
Richard P. Hoch 1998 Director-Acquisitions 38
of Westbrook Real
Estate Partners,
L.L.C., a real estate
investment management
company, since
February 1995. From
January 1990 to
February 1995, Mr.
Hoch was employed by
Price Waterhouse
L.L.P. as a Senior
Manager performing
real estate advisory
services for pension
funds, investment
companies, real estate
developers/operators
and other
institutions.
Jonathan H. Paul 1998 Principal and Managing 34
Principal of Westbrook
Real Estate Partners,
L.L.C. since May 1994.
From September 1990 to
May 1994 Mr. Paul was
employed by Morgan
Stanley & Co., Inc. as
a Senior Associate
engaged in real estate
and corporate
investment banking and
principal activities.
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Occupation and
Name Date Appointed Business Experience Age
- ---- -------------- ------------------- ---
A. Jack Solomon 1998 President and Chief 52
Executive Officer of
Ronto Management
Group, Inc., a real
estate management and
development consulting
company, as well as
other companies in The
Ronto Group of
companies operating in
the United States
since June 1995. From
1967 to June 1995, Mr.
Solomon served in
various senior
executive capacities
for The Ronto Group of
companies operating in
the United States, as
well as serving as
Chief Executive
Officer of the Ronto
Group of companies
operating in Canada.
In such capacities he
performed
administrative and
analytical services in
connection with the
identification,
development,
construction and
marketing of
commercial and
residential real
estate.
As provided under the Partnership Agreement, the Executive Committee
has designated Ronto as the initial Administrative Partner. The Administrative
Partner conducts the day-to-day business of Lely Golf I and performs asset
management services for Lely Golf I. The Administrative Partner has the power
and authority to enter into contracts and take other actions on behalf of Lely
Golf I that have been authorized by the Executive Committee specifically or in
the context of approval of Lely Golf I's budget. The Administrative Partner also
has authority regarding matters requiring expenditures up to $5,000 or for
budget items in an amount up to 5% above the amounts authorized in the budget
approved by the Executive Committee, whichever is greater.
Executive Officers
In its capacity as Administrative Partner, Ronto has appointed the
following individuals, each of whom is employed by Ronto or one of its
affiliates, to act in executive capacities on behalf of Lely Golf I:
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Occupation and
Name Date Appointed Business Experience Age
- ---- -------------- ------------------- ---
A. Jack Solomon President See above under Executive 52
Committee.
Karen E. Welks Secretary and Treasurer of Ronto Management 40
Treasurer Group, Inc. and other companies
in The Ronto Group since
December 1993.
Kenneth C. Torrens Vice President Vice President - Marketing/Sales 52
of Ronto Management Group,
Inc. and other companies in The
Ronto Group since June 1998;
from January 1997 to June 1998,
Director of Sales for F.D.C.; and
from June 1996 to June 1998,
Director of Sale/Marketing for
Black Diamond Ranch.
Mark S. Taylor Vice President Vice President - Land 42
Development of Ronto
Management Group, Inc. and
other companies in The Ronto
Group since 1997; from October
1986 to October 1997,
Superintendent of Land
Development of Ronto
Management Group, Inc. and
other companies in The Ronto
Group.
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Security Ownership of Certain Beneficial
Owners and Management
Name Beneficial Ownership Interest
- ---- -----------------------------
A. Jack Solomon general partnership interest1, 2
Ronto general partnership interest2
Westbrook general partnership interest3
Richard P. Hoch general partnership interest3, 4
Jonathan H. Paul general partnership interest3, 5
Westbrook Real Estate Fund II, L.P. general partnership interest3, 6
Westbrook Real Estate Partners, L.L.C. general partnership interest3, 6
Development of Fala Bella
Lely Golf I, organized in February 1998, was formed solely to design,
develop, finance, construct and market Fala Bella. Lely Golf I will finance the
construction of Fala Bella through third-party construction financing,
internally generated equity funds and loans from its partners. The total
estimated acquisition, construction, development (including funding of the
obligation for a
- --------
1 Mr. Solomon is the President, sole director and, together with his wife,
owns 26.5% of the voting stock of Ronto, a general partner of Lely Golf I.
Under the terms of the Partnership Agreement, Mr. Solomon has been
appointed the representative of Ronto on the Executive Committee of Lely
Golf I.
2 Ronto is a general partner and the acting administrative partner of Lely
Golf I. Under the terms of the Partnership Agreement, Ronto is entitled to
25% of partnership distributions.
3 Westbrook is a general partner of Lely Golf I. Under the terms of the
Partnership Agreement, Westbrook is entitled to 1% of partnership
distributions.
4 Under the Partnership Agreement, Mr. Hoch has been appointed one of the two
representatives of Westbrook on the Executive Committee of Lely Golf I.
5 Under the Partnership Agreement, Mr. Paul has been appointed one of the two
representatives of Westbrook on the Executive Committee of Lely Golf I.
6 Westbrook Real Estate Fund II, L.P. and Westbrook Real Estate Co-investment
Partnership, L.P. are the managing members of Westbrook.
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break-even cash flow for the first year), marketing costs, financing costs
(including a return on internally generated funds), and overhead costs in
connection with the project are estimated to be approximately $35,500,000.
Actual costs may vary depending on final design, control of construction costs,
the length of time to construct and market the project and unforeseen factors
such as labor and material shortages. Any deposit paid prior to closing will not
be used to finance construction of your unit. Management of Lely Golf I includes
certain members of management of Ronto and Westbrook and, together with certain
other officers of Ronto and its affiliates, will provide Lely Golf I with
expertise in project development, finance, marketing and administration. Lely
Golf I will fund any amount required to keep Association assessments under
$2,800 and $3,500 for each two- and three-bedroom unit, respectively, per year
during the Guarantee Period from net proceeds of the offering and other sources,
if required.
Prior Developments by The Ronto Group
The Ronto Group of companies has developed and constructed a variety
of projects, primarily in southwest Florida, including: Royal Marco Point, a
beach-front development in Hideaway Beach, Marco Island, Florida consisting of
villas, cottages and mid-rise condominiums; The Habitat, also in Hideaway Beach,
a golf course condominium; Forest Glen of Naples, a residential golf course
community in Naples, Florida; Independence Bay in Deerfield Beach, Florida, a
land development and construction program consisting of single family villas and
garden apartments; Silverlake in Boynton Beach, Florida, a single-family home
subdivision; The Gates of Hillsboro in Deerfield Beach, Florida, a single family
home subdivision involving both land development and home building; The
Crestview at Heritage Greens in Naples, Florida, a community development
consisting of coach homes and luxury villas; and The Shores at Gulf Harbour in
Fort Myers, Florida, mid-rise luxury condominium development.
DETERMINATION OF PURCHASE PRICE
The initial purchase price of the units has been determined by Lely
Golf I solely on the basis of its subjective evaluation of marketing
considerations and construction and development costs. No independent valuations
have been obtained for purposes of determining the value of the units. Lely Golf
I may increase or lower the purchase price in response to market conditions and
demand based on configuration, view or location. Adjustments could be applied in
different amounts to the same type of units based on location and may not be
uniformly applied to all units of the same type. The price of a unit cannot be
changed once a sales agreement has been executed for such unit. There can be no
assurance that units can be resold at or in excess of the purchase price. No
organized market for the trading of units is expected to develop as a result of
this offering. Units may only be offered for resale personally or through
securities broker-dealers that satisfy applicable Florida real estate sale
requirements.
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USE OF PROCEEDS
Assuming that the maximum number of units offered hereby are sold at
the highest price in the proposed range of prices for each unit category, the
gross proceeds from the sale of units will be approximately $38,000,000 million
exclusive of offering expenses estimated at $_________. All of the net proceeds
of this offering will be paid to Lely Golf I except for amounts paid in addition
to the purchase price for closing costs that are payable to third parties and
for the amount paid to fund the Association deficits. None of the net proceeds
representing the purchase price of the units will be available to fund
operations of Fala Bella. The net proceeds of the offering less total estimated
costs of $35,500,000 represent Lely Golf I's pre-tax profit and are available to
pay management fees to Ronto under the Development Agreement, distributions to
Lely Golf I's general and limited partners and income taxes. Lely Golf I and
Lely Golf II will derive income from Fala Bella's operations, in addition to
income received from the offering.
PLAN OF DISTRIBUTION
The units are being offered directly by Lely Golf I through employees
of Ronto, one of its general partners. Neither Lely Golf I nor these employees
are licensed as broker-dealers under the Securities Exchange Act of 1934, as
amended. In connection with the offering of the units, Lely Golf I has
registered as an issuer-dealer under the laws of the State of Florida and has
registered its employees participating in the sale of units as sales associates
under Florida securities law. These employees will not be specially compensated
for serving as sales agents in connection with the offer and sale of the units.
Lely Golf I will pay finders fees to real estate brokers in connection with the
offering of the units.
HOW TO PURCHASE
To purchase a unit, you must execute a sales agreement in the form
attached as Annex B and agree to be bound by its terms. All sales agreements are
subject to review, approval and acceptance by Lely Golf I, whose decision shall
be final. You must pay a down payment of 10% of the purchase price for your unit
following acceptance by Lely Golf I (or, after effectiveness of the registration
statement, at the time you sign the sales agreement). You must pay an additional
deposit of 10% of the purchase price within 10 days after the issuance of a
building permit if construction of your unit has commenced and the last day of
the Presale Period has passed. Checks must be made payable to "Ruden, McClosky,
Smith, Schuster & Russell, P.A., Escrow Account."
Under Florida condominium law you have the right to rescind the
purchase for a 15-day period commencing on the last to occur of the date of
execution of your sales agreement, the date you receive all documents required
by law and the date you receive any material amendment to a document previously
received by you that has an adverse effect on you.
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Funds deposited as down payments will be held by Ruden, McClosky,
Smith, Schuster & Russell, P.A., as escrow agent (the "Escrow Agent"), in an
interest-bearing escrow account for your benefit until the closing of your unit
when these funds will be released to Lely Golf I. In the event your unit is not
completed or Lely Golf I rejects your sales agreement, all funds held in escrow,
together with accrued interest thereon, if any, will be refunded. Amounts held
in escrow are non-refundable if you breach the sales agreement.
Upon completion of your unit, you will be required to pay to the
closing agent the balance of the purchase price and closing costs of 1.5% of the
purchase price, prorated amounts (for example, real estate taxes) and other
costs, including the costs of attorney and financing fees, if any. See Annex F
for estimated amounts. Upon payment of the balance of the purchase price, the
closing agent will record a deed to you from Lely Golf I and the Escrow Agent
will disburse the purchase proceeds to Lely Golf I, net of all closing costs.
The Rental Program Agreement shall be recorded prior to any mortgage or other
lien you create on the unit.
You may procure financing from any available source and will be
required to qualify for financing based on the requirements of the particular
lender. Your inability to obtain financing will not excuse or delay your
obligation to purchase your unit. Lely Golf I may, but is not obligated to,
refer you to a source of financing. All financing costs will be your obligation
if you elect to finance the purchase of your unit.
CERTAIN FEDERAL TAX ASPECTS
Set forth below is a summary of the material federal income tax
considerations related to the offering, but does not address all tax
considerations that may apply to a particular owner. This summary of the tax
aspects is based on the Internal Revenue Code of 1986, as amended (the "Code"),
on existing Treasury Department regulations ("Regulations"), and on
administrative rulings and judicial decisions interpreting the Code. Legislative
amendments, administrative changes and judicial decisions could modify or change
completely statements and opinions expressed below about the federal income tax
consequences of the purchase and rental of a unit. Additionally, the
interpretation of existing law and regulations described here may be challenged
by the Internal Revenue Service during an audit of a unit owner's individual
return.
The following summary of tax aspects generally assumes that the
investor is an individual and is a United States citizen or resident. The
following discussion is only a summary and is limited to those areas of federal
income tax law that are considered to be most important to individual investors
owning interests in the units. Although the Rental Manager will furnish the unit
owners with such information regarding the units as is required for income tax
purposes, each unit owner will be responsible for preparing and filing his own
tax returns.
Accordingly, prospective investors are urged to consult, and must
depend upon, their tax advisors regarding their individual circumstances
(especially if the prospective investor is not an
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individual) and the federal, state, local and other tax consequences arising out
of their participation as unit owners.
Tax Consequences to Unit Owners of Rental of Units
General
Each unit owner will be required to report his rental income with
respect to his unit on his individual return. The extent to which a unit owner
may deduct his or her unit's expenses will depend upon: (1) whether the rental
activity engaged in is with the intent of making a profit (Code Section 183);
(2) whether the unit constitutes a "dwelling unit" (Code Section 280A); (3)
whether the rental activity is a "passive activity" (Code Section 469); (4)
whether the taxpayer is "at risk" with respect to the activity (Code Section
465); and (5) the limitations on interest deductions. Additional provisions of
the Code may also limit a specific taxpayer's deductions. Moreover, to the
extent that a unit owner's share of losses exceeds the basis of his unit, such
excess losses cannot be utilized in that year by that unit owner for any
purpose, but are suspended and allowed as a deduction (subject to the
limitations described above) when the unit owner's adjusted basis for his unit
at the end of any year exceeds zero (before reduction by the suspended loss).
Section 183
Section 183 of the Code provides that, in the case of an activity
engaged in by an individual or an S corporation, certain deductions attributable
to such activity will be limited to the gross income generated by such activity
if the activity is not engaged in for profit. Losses disallowed under Section
183 are not merely suspended but are permanently denied. The Regulations under
Section 183 provide a three-tier system of permitted deductions up to a maximum
of the gross income from the activity. The Regulations also provide rules for
allocation of expenses to the specific tiers.
Section 1.183-2 of the Regulations provides that all facts and
circumstances are to be taken into account and no one factor or combination of
factors is determinative. The Regulations list nine factors that will generally
be considered, but caution that other factors may also be relevant. Because the
presence or absence of a profit objective is in part a factual issue which
depends upon the individual circumstances of each unit owner, it is impossible
to presently predict with accuracy whether a particular unit owner will be able
to establish that he or she has a profit objective.
Section 183 creates a presumption in favor of the determination that
the activity is engaged in for profit if a profit (without regard to operating
loss carryforwards) is realized in three out of five consecutive years. To allow
the presumption to work, a unit owner is given an election to postpone the
determination of whether the presumption applies until the end of the fourth
taxable year following the taxable year in which he first purchased his unit and
engaged in rental activity. A unit owner should consider making an election as
prescribed in the Regulations to preserve the ability
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to take advantage of this presumption and the delay in determining its
application. A unit owner should note that we are not giving any assurances or
making any representations concerning whether a unit owner can expect a profit
from the rental of a unit within four years.
Section 280A
The Section 280A home business expense disallowance rule applies to
any "dwelling unit" used by the taxpayer as a residence. For these purposes,
"taxpayers" include individuals, partnerships, trusts, estates, and S
corporations. Section 280A does not apply to a C corporation, except in its
capacity as a member of a partnership or S corporation or as a beneficiary of a
trust or estate. A "dwelling unit" includes a house, apartment, condominium,
mobile home, boat or other similar property that provides basic living
accommodations. The Regulations provide an objective standard for determining
whether a taxpayer's use of a dwelling unit causes it to be considered a
residence.
The Code and Regulations impose a gross income limitation upon
deductions for any owner whose unit is used by the unit owner for personal use
for a number of days during a taxable year which exceeds the greater of (i) 14
days, or (ii) 10% of the number of days during the year for which the unit is
rented for fair value. Personal use includes use by the taxpayer, use by the
taxpayer's family, use by an individual pursuant to a reciprocal arrangement
that permits the taxpayer use of another unit, days on which the unit is rented
for less than fair rental, use by other unit owners in a time sharing
arrangement or use by the taxpayer of other units in the rental arrangement, and
use of the unit as a result of a charitable donation by the taxpayer. If a unit
owner's use exceeds the greater of (i) 14 days or (ii) 10% of the number of days
during the year for which the unit is rented for fair value, the Section 280A
gross income limitation will apply and a unit owner's use of the available
deductions from the rental of a unit will be limited to the expenses incurred by
a unit owner in connection with the rental of the unit owner's unit. If a unit
owner escapes the Code Section 280A limitation, the availability of deductions
is determined by the Hobby Loss rules of Code Section 183, above.
Section 280A also establishes an expense allocation fraction to be
used in apportioning deductions between personal and business use of a property
to which Section 280A applies. The expense allocation formula permits deduction
of the fraction of expenses associated with the property (other than those
expenses that are otherwise deductible even if a property is used for personal
use such as mortgage interest and real estate taxes) of which the numerator is
the number of days the property is rented at fair market value, and the
denominator of which is the total of the days the property is actually used
(either for business or personal use).
Income and Losses from Passive Activities
The Code characterizes certain activities as producing either passive
or portfolio income and loss. Deductions of passive activity losses incurred by
an individual, estate, trust, or personal service
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corporation or, with modifications, certain closely held corporations, may not
be used to offset non-passive activity income. In general, passive activity
losses can be used only to offset passive income, not wages or portfolio income
(such as dividends, interest, annuities and royalties). The passive activity
rules do not apply to regular C corporations, other than personal service
corporations or certain closely-held corporations. For ownership of units by a
pass-through entity, such as a partnership, S corporation, or grantor trust, the
passive loss rules apply (if at all) to owners or beneficiaries, with a separate
determination being made for each separate taxpayer.
In general, a passive activity is one which: (1) is a trade or
business activity in which the taxpayer does not materially participate; or (2)
is a rental activity.
Investments in rental activities generally produce passive income and
loss. Rental activities are treated as passive without regard to whether they
involve the conduct of trade or business or whether the taxpayer materially
participates. The Regulations provide that where the actual or prospective
customer's payments are principally for the use of tangible property, the
activity is a rental activity, even if payments are made pursuant to a service
contract or other arrangement that is not denominated as a lease. There are
several exceptions provided by the Regulations to treatment as a rental
activity; however, we do not believe that any of the exceptions apply to the
rental of a unit. Therefore, we believe that income from the rental of a unit
will most likely be treated as passive income.
To the extent that a unit owner has passive losses from other
activities, he should be able to offset those passive losses against income and
profits from the rental of a unit. Losses and credits disallowed by the passive
activity rules are suspended and may be carried forward and treated as losses
and credits from passive activities in each successive taxable year until offset
by income from passive activities or allowed against other income as a result of
the complete disposition of the taxpayer's interest in that activity. When a
taxpayer's entire interest in an activity is disposed of in a fully taxable
transaction (other than to a related party), any remaining suspended loss
incurred in connection with that specific activity is allowed in full, first
against income or gain from such activity during the year of disposition, second
against net income or gain from all other passive activities, and thereafter
against income from all sources, including active income.
Application of At-Risk Limitations
Generally, Code Section 465 limits losses that a taxpayer can claim in
real estate and other enumerated activities to the amount that the taxpayer has
at risk with respect to such activities. Losses that are disallowed in any year
because of the "at-risk" limitations are carried over to succeeding years and
can be used in those years to the extent that the partner's at-risk amount has
increased. A taxpayer is considered at risk in any activity with respect to (i)
the net amount of money and the adjusted basis of property contributed by the
taxpayer to the activity, (ii) any amount with respect to the activity if the
taxpayer is considered personally liable for the repayment of that amount, and
(iii) the taxpayer's proportionate share of any amount borrowed with respect to
the activity of holding real property if the lender is an institutional lender
or government or guaranteed
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by the government and the loan is secured by real property used in the activity
("qualified nonrecourse financing"). A taxpayer is not considered to be "at
risk" to the extent he or she is protected against loss through nonrecourse
financing, guarantees, stop loss agreements or similar agreements. A taxpayer's
at-risk amount is increased by profits earned in the activity and decreased by
losses occurring in the activity. In determining the amount of loss, if any,
disallowed under Section 465, Sections 183 (hobby loss provisions) and 280A
(limitations on personal use of Units) are applied prior to the application of
Section 465, and Section 469 (passive loss rules) is applied after any
limitation under Section 465 is determined.
Limitation on Interest Deductions
The deductibility of any interest expense incurred by a unit owner in
purchasing a unit may be limited by the Code. Generally, investment interest may
be deducted to the extent of a taxpayer's net investment income. Investment
interest expense does not include any interest expense which is taken into
account in determining the income or loss from a passive activity, but does
include (i) interest on indebtedness incurred or continued to purchase or carry
property held for investment, (ii) a partnership's interest expense attributable
to portfolio income under the passive loss rules, and (iii) the portion of
interest expense incurred or continued to purchase or carry an interest in a
passive activity to the extent attributable to portfolio income (within the
meaning of the passive loss rules). Net investment income includes gross income
from property held for investment, gain attributable to the disposition of
property held for investment, and amounts treated as gross portfolio income
pursuant to the passive loss rules less deductible expenses (other than
interest) directly connected with the production of investment income.
Investment interest deductions which are disallowed may be carried forward and
deducted in subsequent years to the extent of net investment income in such
years.
In addition, interest expense associated with the purchase and finance
of a unit may constitute as "qualified residence interest" if (i) a unit owner's
personal use of a unit exceeds the greater of 14 days or 10% of the number of
days it is rented out for a fair rental in any year, (ii) the Owner elects to
treat the unit as the unit owner's second residence, and (iii) the loan is
secured by the unit. Note that "qualified residence interest" may only be
claimed by a taxpayer with respect to his principal residence and one other
residence used by the taxpayer for personal use.
Owners who intend to finance the purchase of their units with borrowed
funds should consult their own tax advisors before borrowing such funds and
should maintain careful records of any debt they incur to carry or acquire their
units, because the interest on such debt may be interest which is taken into
account under Code Section 469 (passive activity rules) in computing income or
loss from a passive activity, or under certain circumstances, may qualify as
qualified residence interest.
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Depreciation / Amortization
Each unit owner will separately determine the applicable allowance for
depreciation with respect to such unit and any tangible personal property
associated with such unit for any year, subject to the limitations described
above. Applicable conventions for depreciation generally require that
residential rental property be depreciated on the straight-line basis over 27
1/2 years, while tangible personal property is generally depreciated over a
5-year period on an accelerated basis. Section 179 of the Code allows a taxpayer
(other than trusts, estates and certain noncorporate lessors) to expense certain
depreciable business assets in the year of acquisition by electing to treat the
cost of new property as an expense rather than as a capital expenditure subject
to depreciation. The deductions for which the election are made are allowed for
the tax year in which the Section 179 property is placed in service and are in
lieu of a depreciation deduction. Generally, a taxpayer may elect to expense
only tangible personal property under Section 179. The deduction which may be
taken under Section 179 is subject to yearly dollar limitations; the limits for
1999 and 2000 are $19,000 and $20,000, respectively.
Depreciation deductions available to a unit owner may not exceed the
taxable income to a unit owner from the rental of his unit. Each unit owner
should consult with his tax advisor to determine the availability of
depreciation deductions based upon unit ownership.
Sale of a Unit
If a unit is held solely for business purposes for more than one year
by an owner who is not a dealer with respect to such unit, gain or loss realized
on the sale of such unit generally will be considered gain or loss from the sale
of a Section 1231 asset and will be so taken into account in computing the
taxpayer's net Section 1231 gain or loss for the taxable year. A net Section
1231 gain generally is treated as a long-term capital gain, while a net Section
1231 loss is treated as an ordinary loss. Any gain on the sale of a unit that is
treated as "unrecaptured Section 1250 gain" (essentially, the depreciation
claimed with respect to a unit which is not required to be recaptured) will be
taxed at rates that are greater than the tax rate applicable to long term
capital gains. For example, the maximum rate on long term capital gains realized
by an individual is 20%, while the maximum tax rate on unrecaptured Section 1250
gain is 25%. If any gain on the sale of a unit represents recapture of
depreciation of personal property, that portion of the gain will be taxable as
ordinary income.
No loss will be allowed in connection with the sale of a unit held for
personal use. Any gain realized on the sale of a unit held for personal use will
be a long-term or a short-term capital gain, depending upon whether the unit was
held for more than one year. If a unit is held partly for personal use and
partly for business use, an apportionment of the gain or loss will be required
and each portion will be reported in accordance with the principles stated
above.
In the event of a unit owner's sale or other transfer of a unit, the
unit owner will report all income, gain, loss, deduction or credit only for the
time period that he owned the unit.
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Possible Changes in Federal Tax Laws
The Code is subject to change by Congress, and interpretations of the
Code may be modified or affected by judicial decisions, by the Treasury
Department through changes in Regulations and by the Service through its audit
policy, announcements, and published and private rulings. Such changes may be
retroactive. Accordingly, the ultimate effect on an owner's tax situation may be
governed by laws, regulations or interpretations of laws or regulations which
have not yet been proposed, passed or made, as the case may be. Although
significant changes historically have been given prospective application, no
assurance can be given that any changes made in the tax law affecting an
investment in a unit would be limited to prospective effect.
Investment by Foreign Persons
The rules governing the federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships, and other foreign
investors ("foreign persons") are complex, and no attempt has been made herein
to discuss such rules. Potential investors that are foreign persons should
consult with their tax advisors to fully determine the impact on them of United
States federal, state and local income tax laws.
It should be noted, however, that there is imposed a withholding
requirement on distributions of rental income and dispositions of a United
States real property interest, which includes United States real estate and
interests in entities, such as partnerships, holding United States real estate.
Therefore, distributions of rental income and disposition of the property or
disposition of a unit will give rise to a withholding requirement.
Corporate Investors
The tax consequences of ownership of a unit by a corporation may
differ significantly from the tax rates applicable to individuals. Code Section
183 (the hobby loss rules) does not apply to corporate owners. Code Section 280A
(limitations on personal use of units) does not apply to corporations that are
not electing S corporations. Code Section 469 (the passive loss rules) applies
only to certain closely held C corporations and personal service corporations.
However, deduction of expenses associated with the acquisition and ownership of
a unit by a corporation may be disallowed or restricted under other Code
sections. Corporations that purchase units should consult their own tax advisor
regarding the application of Section 274 of the Code, which prohibits the
deduction of certain expenses incurred with respect to facilities used for
entertainment, amusement or recreation. There are numerous issues involved in
corporate ownership, and corporations should obtain tax advice from their own
counsel before purchasing a unit.
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State and Local Taxes
Presently, Florida imposes no state income taxes on individuals,
partnerships, or limited liability companies treated as partnerships under
federal law, but it does impose an income tax on all corporations (regardless of
where incorporated) at the rate of 5.5% on the net income deemed to be earned in
Florida. For this purpose, corporate unit owners would be liable for Florida
income tax on their taxable income from the rental of their units.
A unit owners' taxable income (or loss) from the rental of their units
may have to be included in determining their reportable income for state or
local tax purposes in the jurisdiction in which they are residents or are
domiciled. However, such state and local income taxes will normally be
deductible for federal income tax purposes. Depending upon the applicable state
and local laws, tax benefits which are available to unit owners for federal
income tax purposes may not be available for state or local income tax purposes.
Because the state and local income tax liabilities will vary with the
facts of each unit owner's particular circumstances, prospective unit owners are
urged to consult with their own tax advisers regarding the state and local
income tax consequences of ownership and rental of their unit.
LEGAL MATTERS
Ruden McClosky Smith Schuster & Russell, P.A. will pass upon the
validity of the offering of units for Lely Golf I. Prospective owners should not
consider Ruden McClosky Smith Schuster & Russell, P.A. to be their legal counsel
with respect to this offering or any other related matter and are strongly
encouraged to seek the advice of qualified and independent legal counsel with
respect to entering any of the agreements or contracts contemplated by this
offering and any other related matters, including the tax implications of the
purchase of a unit. No opinion shall be rendered as to the tax consequences of
the purchase or ownership of a unit.
AUDIT MATTERS
The financial statements of Lely Golf I for the period from inception
(February 12, 1998) through December 31, 1998, appearing in this prospectus and
registration statement have been audited by Arthur Andersen LLP, independent
certified public accountants, as indicated in their report with respect thereto,
and are included herein in reliance upon the authority of said firm as experts
in accounting and auditing in giving said reports.
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OTHER EXPERTS
The tables on pages ___ setting forth the historical operating
performance of the comparable resort supply has been derived from the report
prepared for Lely Golf I by Horwath Landauer Hospitality Consulting, Inc.
Landauer has expressed no opinion on the information presented on the resort
market and has neither provided any analysis with respect thereto nor conducted
any audit or other procedure to independently verify the information obtained
from sources other than Landauer. The conclusions contained in this Prospectus
regarding the information presented are those of Lely Golf I. Landauer is not
affiliated with Lely Golf I or associated in any way with this offering.
USE OF SALES MATERIAL
Sales materials may be used in connection with this offering only when
accompanied or preceded by the delivery of this Prospectus. Such sales materials
may include a booklet, slides, films, video, disk "fact" sheets, articles,
publications, and brochures describing the offering, and Fala Bella. Units may
be offered only by means of the Prospectus.
ADDITIONAL INFORMATION
This Prospectus may be supplemented or amended. For further
information with respect to the units offered by this Prospectus, reference is
made to the Registration Statement, including the exhibits thereto. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to are not necessarily complete. Please obtain and review the
actual agreement for further information. The Registration Statement, together
with exhibits thereto, may be inspected at the public reference facilities of
the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549,
without charge and copies of the material contained therein may be obtained at
prescribed rates from the Commission's public reference facilities in
Washington, D.C. The Commission also maintains a Web site that contains reports,
proxy and information statements and other materials that are filed through the
Commission's Electronic Data Gathering, Analysis, and Retrieval system. This Web
site can be accessed at http://www.sec.gov. Lely Golf I has filed a registration
statement which includes this Prospectus with the Securities and Exchange
Commission. This registration statement contains information not included in the
Prospectus, including copies of most of the agreements described in the
Prospectus.
Copies of documents referred to in this Prospectus not included in the
Annexes may be obtained by written request made to Lely Golf I at 7985 Mahogany
Run Lane, Naples, Florida 34113, Attention: Ms. Shirley Calhoun.
We cannot accept your offer to buy a Unit until the SEC declares the
registration statement effective or at any time when the SEC has suspended the
effectiveness of the registration statement. Moreover, we cannot offer or sell
the Units in any state until the offer is registered or qualified under the laws
of that state. Units may only be offered by Prospectus.
60
<PAGE>
FINANCIAL STATEMENTS
Index to Financial Statements
Document Page
- -------- ----
Report of Independent Certified Public
Accountants F-2
Balance Sheet as at December 31, 1998 F-3
Statement of Expenses for the period from F-4
inception (February 12, 1998) through
December 31, 1998
Statement of Changes in Partners' Capital for F-5
the period from inception (February 12, 1998)
through December 31, 1998
Statement of Cash Flows for the period from F-6
inception (February 12, 1998) through
December 31, 1998
Notes to Financial Statements F-7
F-1
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Partners of
Lely Golf Villas I Limited Partnership:
We have audited the accompanying balance sheet of Lely Golf Villas I Limited
Partnership (a Delaware limited partnership in the development stage) (the
"Partnership") as of December 31, 1998, and the related statements of expenses,
changes in partners' capital, and cash flows for the period from inception
(February 12, 1998), through December 31, 1998. These financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Lely Golf Villas I Limited
Partnership as of December 31, 1998, and its expenses and its cash flows for the
period from inception (February 12, 1998), through December 31, 1998, in
conformity with generally accepted accounting principles.
/S/ ARTHUR ANDERSEN LLP
Miami, Florida,
February 23, 1999
F-2
<PAGE>
LELY GOLF VILLAS I LIMITED PARTNERSHIP
(A Limited Partnership in the Development Stage)
BALANCE SHEET
-------------
ASSETS
------
December 31 March 31,
1998 1998
---- ----
(Unaudited)
DUE FROM AFFILIATES $ 180,973 $ 96,780
CONSTRUCTION IN PROCESS 6,130,463 7,283,074
OTHER ASSETS 1,562 89,578
---------- ----------
Total assets $6,312,998 $7,469,432
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES $ 471,971 $ 357,190
BONDS PAYABLE 443,323 424,009
NOTES PAYABLE TO PARTNERS 4,035,750 5,451,255
---------- ----------
Total liabilities 4,951,044 6,232,454
PARTNERS' CAPITAL 1,361,954 1,236,978
---------- ----------
Total liabilities and partners' capital $6,312,998 $7,469,432
========== ==========
The accompanying notes are an integral part of this balance sheet.
F-3
<PAGE>
LELY GOLF VILLAS I LIMITED PARTNERSHIP
--------------------------------------
(A Limited Partnership in the Development Stage)
STATEMENT OF EXPENSES
---------------------
FROM
INCEPTION
(February 12,
1998) FOR THE THREE
THROUGH MONTHS ENDED
December 31, March 31,
1998 1999
-------- --------
(Unaudited)
MARKETING AND SELLING EXPENSES $ 21,754 $124,976
-------- --------
NET LOSS $ 21,754 $124,976
======== ========
The accompanying notes are an integral part of this financial statement.
F-4
<PAGE>
LELY GOLF VILLAS I LIMITED PARTNERSHIP
--------------------------------------
(A Limited Partnership in the Development Stage)
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
-----------------------------------------
<TABLE>
<CAPTION>
Westbrook
Westbrook Westbrook Real Estate
Ronto Golf Lely Golf Real Estate Co-Investment
Developments, Inc. Villas I, L.L.C. Fund II, L.P. Partnership II, L.P. Total
------------------ ---------------- ------------- -------------------- -----
<S> <C> <C> <C> <C> <C>
CAPITAL CONTRIBUTIONS $183,708 $16,000 $1,055,256 $128,744 $1,383,708
Net Loss (5,438) (218) (14,348) (1,750) (21,754)
------- ------ -------- -------- ------------
BALANCE, December 31, 1998 178,270 15,782 1,040,908 126,994 $1,361,954
-------- ------- ---------- -------- ----------
Net Loss (31,244) (1,250) (82,426) (10,056) (124,976)
-------- ------- -------- --------- -----------
BALANCE, March 31, 1999 $147,026 $14,532 $958,482 $116,938 $1,236,978
======== ======= ======== ======== ==========
(Unaudited)
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-5
<PAGE>
LELY GOLF VILLAS I LIMITED PARTNERSHIP
--------------------------------------
(A Limited Partnership in the Development Stage)
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
-----------------------
FROM
INCEPTION For
(February 12, 1998) Three Months
THROUGH Ended
December 31, 1998 March 31, 1999
------------------- --------------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (21,754) $ (124,976)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities, net of noncash transactions-
Increase in due from affiliates (180,973) 84,193
Increase in other assets (1,562) (88,016)
Increase in accounts payable and accrued liabilities 471,971 (114,781)
----------- -----------
Net cash provided by (used in) operating activities 267,682 (243,580)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase and improvement of real estate (5,230,125) (971,425)
----------- -----------
Net cash used in investing activities (5,230,125) (971,425)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable to partners 3,578,735 1,234,319
Payments on bonds payable -- (19,314)
Capital contributions from partners 1,383,708 --
----------- -----------
Net cash provided by financing activities 4,962,443 1,215,005
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS -- --
CASH AND CASH EQUIVALENTS, beginning of period -- --
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ -- $ --
=========== ===========
NONCASH TRANSACTIONS:
Land improvements acquired by assumption of liability for
Community Development District Bonds $ 443,323 $ --
=========== ===========
Capitalized interest on notes payable and bonds payable $ 457,015 $ 181,186
=========== ===========
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-6
<PAGE>
LELY GOLF VILLAS I LIMITED PARTNERSHIP
--------------------------------------
(A Limited Partnership in the Development Stage)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1998
-----------------
1. ORGANIZATION:
Lely Golf Villas I Limited Partnership (a Delaware limited partnership, ) (the
"Partnership") was formed on February 12, 1998, to acquire and develop land into
a resort and condominium units in Naples, Florida (the "Project"), by Ronto Golf
Developments, Inc. ("Ronto"), a Florida corporation, as a 25% general partner,
Westbrook Lely Golf Villas I, L.L.C. ("Westbrook GP"), a Delaware limited
liability company and an affiliate of the limited partners, as a 1 % general
partner; and Westbrook Real Estate Fund II, L.P. ("Westbrook"), a Delaware
limited partnership; and Westbrook Real Estate Co-Investment Partnership II,
L.P. ("WRECIP"), a Delaware limited partnership, as 65.95351 % and 8.04649%
limited partners, respectively.
In accordance with the partnership agreement (the "Agreement"), Ronto is to
contribute $185,000. Westbrook GP, Westbrook, and WRECIP (collectively, the
"Westbrook Partner Group") are to make initial contributions of $3,700,000 less
the amount of the Westbrook and WRECIP loans described below. Additionally, if
needed, and at the discretion of the Westbrook Partner Group, additional funds
may be advanced to the Partnership by the Westbrook Partner Group in the form of
shortfall loans, as defined, or as additional capital contributions at the ratio
of 95% by the Westbrook Partner Group to 5% by Ronto. Pursuant to the terms of a
bridge loan as discussed in note 5, the Westbrook Partner Group agreed to
advance up to an additional $3,000,000 to the Partnership, which is expected to
provide funding for costs until a construction loan with a third-party lender is
obtained.
The Partnership plans to develop and sell 200 resort condominium units in 17
phases. Phase one, which commenced construction in November 1998, consists of
ten residential units. Development has not yet begun on the remaining 16 phases
expected to include 190 units. The Partnership is also constructing a recreation
area and parking facilities that will be owned as a common area by the
purchasers of the units. The purchaser of each unit must enter into a rental
agreement with an affiliate of the Partnership providing for the rental of the
unit. The purchasers of the units will be granted golf privileges for an
additional annual fee at two nearby golf courses which are not assets of the
Partnership.
As of December 31, 1998, no condominium units had been sold.
The Partnership is in the development stage, has yet to generate any revenues,
and has no assurance of future revenues. The Partnership's ability to complete
its development plans depend on continued funding by the Westbrook Partner
Group, its ability to obtain additional construction financing and its ability
to generate sales of condominium units.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation and Use of Estimates
- ------------------------------------------
The accompanying financial statements were prepared in conformity with generally
accepted accounting principles. The preparation of the financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
F-7
<PAGE>
Cash and Cash Equivalents
- -------------------------
The Partnership considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. At December 31, 1998,
the Partnership's cash was included in the account of a related partnership, and
is included in due from affiliates in the accompanying financial statements.
Construction in Process
- -----------------------
The Partnership's real estate inventories consist of land and development in
process. The balance includes direct and indirect land costs and onsite
improvement costs which are capitalizable to the Project. The Partnership
carries its real estate inventories at historical cost, which is not in excess
of net realizable value.
Real estate taxes and interest associated with the property under development
are capitalized until the development is complete or development activities have
ceased. Real estate taxes of $37,411 in 1998 were capitalized to the Project.
Interest in the amount of $457,015 was capitalized in 1998.
Accounting for the Impairment of Long-Lived Assets
- --------------------------------------------------
In accordance with Statement of Financial Accounting Standards No.121,
"Accounting for the Impairment of Long- Lived Assets and Long-Lived Assets to be
Disposed Of," the Venture records impairment for losses on its real estate
assets when events or circumstances indicate that the assets might be impaired
and the undiscounted cash flows estimated to be generated by those assets are
less than the carrying amount of the assets. No such impairment losses have been
recognized to date.
Revenue Recognition
- -------------------
The Partnership will recognize profit from the sale of condominium units when
adequate down payment is obtained, the collectibility of the remaining sale
price is assured, and the Partnership is not obligated to perform significant
activities after the sale. Accordingly, profit on condominium unit sales will
generally be recognized upon delivery of completed units to third party
purchasers. Profit on sales which do not meet the criteria for profit
recognition will be deferred and recognized when the criteria for profit
recognition have been satisfied. The Partnership had not sold any units as of
December 31, 1998.
Marketing and Selling Expenses
- ------------------------------
Costs incurred to market and sell the Project are generally expensed, except for
those costs reasonably expected to be recovered form the sale of the Project
which are incurred for tangible assets to be used throughout the selling period,
such as sales facilities, model units, semi-permanent signs, and legal fees for
the preparation of prospectuses.
Income Taxes
- ------------
No provision for income taxes has been recorded in the financial statements as
the partners are required to report their share of the Partnership's earnings in
their respective income tax returns. The Partnership's tax returns and the
amounts of allocable income or loss are subject to examination by federal and
state taxing authorities. If such examinations result in changes to income or
loss, the tax liability of the partners could be changed accordingly.
Distributions of Cash Flow and Allocation of Net Income or Loss
- ---------------------------------------------------------------
Net income or loss shall be allocated in accordance with the provision of the
Agreement, including provisions related to preferred returns.
Cash available for distribution is to be distributed in accordance with the
provisions of the Agreement, which requires the repayment of any letter of
credit reimbursement, shortfall loans, and all amounts due and payable under the
F-8
<PAGE>
Westbrook and WRECIP loans, as described below, before net cash flow, as
defined, is distributed to the partners. No cash was available for distribution
during 1998.
3. CONSTRUCTION IN PROCESS:
On March 3, 1998, the Partnership purchased approximately 20 acres of land.
Subsequently, the Partnership began construction of a resort consisting of 200
lodging units to be built in 17 phases, and a resort center and recreation area
including a golf practice area, a pool and spa, tennis courts, and a bar and
grill. At December 31, 1998, costs capitalized to construction in process
totaled $6,130,463, including the purchase price of the land.
4. BONDS PAYABLE:
The land purchased by the Partnership ties within the Lely Community Development
District ("CDD") and is subject to special assessments. The total special
assessment relating to the Series 1991 Bond issue designated at closing was
$443,323 and bears interest at 9% per annum. The Lely CDD assesses the
Partnership annually for debt service on the bonds, including accrued interest
and principal sufficient to fully amortize the bonds at their maturity in 2011.
The CDD also assesses the Partnership for certain administrative fees and annual
operating and maintenance costs. Associated land improvements totaling $443,323
are included in construction in process.
The combined principal maturities of the CDD bonds payable and the related party
notes payable discussed in Note 5 are as follows:
Year Amount
---------- ----------
1999 $1,098,048
2000 621,052
2001 622,947
2002 625,012
2003 627,263
hereafter 884,751
----------
$4,479,073
==========
5. RELATED-PARTY TRANSACTIONS:
Due from affiliates includes $81,500 and $99,471 due from two partnerships
affiliated with Ronto and Westbrook.
Effective March 4,1998, the Partnership entered into promissory note agreements
with Westbrook (the "Westbrook Note") and with WRECIP (the "WRECIP Note") in the
amounts of $2,228,159 and $271,841, respectively. The Westbrook and WRECIP Notes
have a maturity date of the earlier of the date the last remaining condominium
unit is sold or March 4, 2005, and bear interest at the rate of 20 % per annum,
compounded quarterly, and added to the principal balance of the note. Quarterly
interest payments are required beginning December 4,1999. Semiannual principal
payments of $267,379 and $32,621, respectively, are required beginning March 4,
2000. During 1998, interest of $384,193 and $46,873, respectively, was accrued
and added to the principal balance of the Notes.
Both the Westbrook Note and the WRECIP Note are secured by a pledge agreement
(the "Pledge Agreement") from Ronto to Westbrook of all of Ronto's interests in
the Partnership.
Effective July 6,1998, the Partnership began receiving additional advances from
Westbrook and WRECIP under a separate bridge loan agreement (the "Bridge Loan").
Advances pursuant to the Bridge Loan totaled $961,437 and
F-9
<PAGE>
$117,298 from Westbrook and WRECIP, respectively, at December 31, 1998. The
advances bear interest at the greater of 10.5% per annum or the 30 day LIBOR
plus 500 basis points per annum. Interest of $23,127 and $2,822 was accrued and
added to the principal balance of the Westbrook and WRECIP Bridge Loans,
respectively, at December 31, 1998. The Bridge Loan is payable in full at its
maturity on August 31, 1999, which date may be extended until November 30, 1999,
at the option of Westbrook. The Bridge Loan is secured by the Pledge Agreement.
Subsequent to December 31,1998, and through, February 23, 1999, an additional
$720,633 has been advanced to the Partnership pursuant to the Bridge Loan.
The Partnership accrued a development fee of $343,496 which is defined as the
actual costs incurred by Ronto attributable to the Partnership for the period
ended December 31, 1998, which was capitalized to construction in process. The
unpaid portion at December 31, 1998, of $5,996 is included in accrued expenses.
F-10
<PAGE>
PROJECTIONS
(UNAUDITED)
Index to Projections
Document Page
- -------- ----
Significant Projection Assumptions P-2
Summary of Base Projections P-6
Base Projections P-10
Projections Over Base P-11
Projections Under Base P-12
Notes to Debt Service Matrix P-13
Debt Service Matrix P-14
P-1
<PAGE>
FALA BELLA RESORT AND GOLF CLUB OF NAPLES
SIGNIFICANT PROJECTION ASSUMPTIONS
(UNAUDITED)
The following financial projections present projected financial results
for two- and three-bedroom units, with the three-bedroom unit rented as a
two-bedroom suite and a separate hotel room, for the Fala Bella Resort and Golf
Club of Naples. These financial results are for the year ending December 31,
2004. The projections present a base case using certain base hypothetical
assumptions about room occupancy and rental rates. In addition to the base case,
we have included two other scenarios of projected financial results derived by
increasing and decreasing our base hypothetical assumptions about occupancy and
rates by 7%, but employing the same other hypothetical assumptions.
We have also included with these projections an analysis of debt
service of a mortgage on the units using different assumptions about interest
rates and loan to value ratio. Finally, our projections include an analysis that
ascribes a value to the golf use rights and occupancy rights for a unit based
upon certain assumptions described in greater detail below.
Management of Fala Bella believes that the hypothetical assumptions
used in the projections represent facts and conditions which are material to
projected financial results and are reasonable as of May 1999 in light of
information then available to management.
In May 1999, Landauer updated specific market area data used in its
November 1997 report, evaluating local lodging and market conditions and the
local forces influencing property performance and reviewed our projected
financial results for Fala Bella's stabilized fifth year of operations. Based
upon this review, Landauer concluded that our projected occupancy and room rate
levels for Fala Bella's stabilized fifth year of operations appear reasonable.
Projected financial results are results that are derived based on the
hypothetical assumptions used, not predictions of actual results. Actual
financial results can and will be different from projected financial results.
Factors that will affect actual performance include, but are not limited to,
occupancy rate achieved, actual rental rates, effects of competition, strength
of tourism and the strength of the local, regional, national and international
economies.
Fala Bella is not yet completed and has not yet commenced operations.
For this reason, and because of the nature of projected financial results, the
following projections are forward-looking statements within the meaning of the
federal securities laws. We urge you to review the entire Prospectus of which
these projections are a part and consider in particular the risk factors
beginning on page __ of the Prospectus before purchasing a unit.
Capitalized terms used herein without definition have the same meanings
as those terms have when used in the Prospectus.
P-2
<PAGE>
The following financial projections have not been audited by Arthur
Andersen, L.L.P.
1. Project Description and Basis of Hypothetical Assumptions:
Lely Golf I, a special purpose limited partnership, owns a parcel of
land in Lely Resort near Naples, Florida. Lely Golf I is offering for sale up to
200 fully-furnished resort condominium units that are being constructed on that
parcel. In addition to the resort condominium units, Lely Golf I is building
certain amenities on the parcel. Unit owners are required to make their units
available for rental in a mandatory rental program pursuant to a Rental Program
Agreement with Lely Golf II, an affiliate of Lely Golf I.
Management has reviewed and evaluated numerous sources of information
that they believe to be relevant to support the assumptions for revenues and
expenses in these projections. These sources include, but are not limited to, a
project specific market study by Horwath Landauer Hospitality Consulting, Inc.,
industry publications, market data for the Naples resort market and the Florida
golf resort market and certain facility requirements, plans, cost analyses, site
surveys, related budgets and real estate consultation. Management has analyzed
this information for consistency and completeness in developing these
projections. See discussion in the Prospectus under the captions "The Resort
Industry" and "Projected Performance of Fala Bella".
2. Summary of Significant Assumptions:
* Fala Bella will be developed as a destination golf resort
condominium with all of the amenities described in the
Prospectus.
* The anticipated date for rental of the initially completed
units is November, 1999.
* 200 units are projected to be in the rental program by the end
of 2002, consisting of 136 two bedroom and 64 three bedroom
units (rentable as 64 two-bedroom units and 64 hotel rooms).
* Occupancy and average daily room rates will be as shown in the
Base Projections and as shown in the Over-Base Projections and
Under Base Projections.
* Qualified, competent, and efficient management personnel will
be operating the rental program. See the discussion in
Questions 8 and 9 of the "Questions and Answers" and under the
caption "Resort Operator" in the Prospectus.
* Rights to use the Golf Courses will be as provided in the Use
and Access Agreement and the Rental Program Agreement. See the
discussion in Questions 4 through 7 of the "Questions and
Answers" and under the caption "Management of Fala Bella
Rental Program Agreement" in the Prospectus.
P-3
<PAGE>
* The projections presented assume inflation rates varying
between 3 to 3.5% per annum with corresponding increases in
revenues and expenses.
* Lely Golf I will retain ownership of any unsold units and will
include the unsold units in the rental program while
continuing to market the unsold units.
3. Occupancy Rates and Average Daily Room Rates:
* Owner usage is assumed to take place when units are otherwise
vacant. Maximum permitted utilization by an owner in months of
highest occupancy will result in a decrease in rental revenue.
* Average daily rates and occupancy levels are averages and do
not attempt to differentiate between units based on potential
rate differences associated with location, view or floor. It
is generally assumed that any higher rates will be largely
offset by lower overall occupancy levels. Moreover, because
units with preferred locations have higher selling prices,
projected returns on investment are not anticipated to vary
materially.
* The hotel facilities and amenities described in this
Prospectus and the hiring of an experienced management group
are anticipated to allow Fala Bella to competitively
participate in the destination resort marketplace in the
Naples, Florida area. The projections assume fluctuating
occupancy levels and average daily rates in the first three
years following commencement of operations during which time
Fala Bella will bring additional units into the rental program
and establish its niche in the marketplace. The projections
assume that financial results will stabilize in the fourth
year of operations but that results will continue to improve
through the fifth operating year (the year ending December 31,
2004) as the marketing initiatives of the resort manager,
particularly with respect to groups, help Fala Bella to
penetrate the market.
* The alternative projections, "Projections Over Base" and
"Projections Under Base" show the combined effects of a 7%
increase in average daily rates and a 7% increase in the
assumed occupancy levels or a 7% combined decrease in both
factors, respectively.
For purposes of alternative analysis and by reference to the Base
Projections:
o A 1% increase in overall occupancy levels for 2-bedroom units
given a constant $158 average daily rate would increase the
net due owner by $261 per year.
o A 1% increase in the average daily rate for a 2-bedroom unit
given a constant 55.68% occupancy level would increase the net
due owner by $299 per year.
P-4
<PAGE>
o For a 3-bedroom unit, the increase in net due owner for a 1%
increase in occupancy levels at a constant average daily rate
would be $387 per year and a 1% increase in the average daily
rates at a constant occupancy level would increase net due
owner by $329 per year.
P-5
<PAGE>
SUMMARY OF
BASE PROJECTIONS OF ANNUAL
INCOME AND EXPENSES
(UNAUDITED)
RENTAL REVENUES
2 BEDROOM UNIT
GROSS INCOME1 $32,068
LESS:
Travel Agent Commissions (1.80%) (577)
Credit Card Fees (1.90%) (609)
VPC Reservation Expense2 (654)
------------
ADJUSTED GROSS INCOME $30,228
LESS:
Management Fee3 (15,114)
Interior Maintenance Fund4 (907)
NET RENTAL REVENUES PAYABLE TO OWNER $14,207
============
- --------
1 Assumes an annualized occupancy rate of 55.68% and an average daily rate
(ADR) of $158. Personal usage is not considered as affecting occupancy.
2 Under the Resort Management Agreement, the Resort Operator will be paid a
fee of $15 per confirmed reservation placed through its Vacation Planning
Center (VPC). The projected fee assumes 75% of all bookings are derived
through the VPC with an average length of stay of 3.5 nights per booking.
3 Under the Rental Management Agreement, the Rental Manager will be paid a
management fee equal to 50% of Adjusted Gross Income (as defined in the
Rental Management Agreement) for securing and servicing rentals.
4 The Interior Maintenance Fund will be funded with 3% of Adjusted Gross
Income payable monthly. Assumes expenditures for repair or replacement of
furnishings, linens, floor and wall coverings, equipment and appliances
will equal the amount funded.
P-6
<PAGE>
OWNERSHIP EXPENSES
2 BEDROOM UNIT
NET RENTAL REVENUES PAYABLE TO OWNER: $14,207
LESS OWNERSHIP EXPENSES:
Annual Condominium Assessment1 (3,126)
Real Estate Taxes2 (2,025)
CDD3 (623)
Insurance4 (150)
Annual Licensing Fee5 (3,786)
NET CASH AVAILABLE6 $4,497
- --------
1 Based on the proposed separate budget for year 2000 increased at a 3%
compounded annual rate, includes assessments for Lely Resort Master
Property Association, Inc. of $30 per annum.
2 Assumes tax rate of 1.5% on an assessed value equal to 90% of $150,000
(assumed purchase price of $165,000 less $15,000 for furnishings).
3 A Lely Resort Community Development District operating assessment of $327
(based on 1999 budget, increased 3% per year compounded rate) is assumed
for year 2004 plus a maximum of $296 for annual amortization of existing
CDD indebtedness of $2,120 per unit at Jan. 1999.
4 Estimated annual premium payable for the minimum $300,000 per occurrence
coverage for property damage and bodily injury liability insurance required
by the Rental Program Agreement.
5 An Annual Licensing Fee is payable to Golf Enterprises for golf privileges
of $3,500 per year increasing 4% per year after November 1, 2002.
6 Does not include costs incidental to use of a unit by the unit owner such
as laundry, housekeeping, telephone, etc. Net Cash Available is before debt
service, if any.
P-7
<PAGE>
BASE PROJECTIONS OF ANNUAL
INCOME AND EXPENSES
(UNAUDITED)
RENTAL REVENUES
3 BEDROOM UNIT
GROSS INCOME1 $40,090
LESS:
Travel Agent Commissions (1.80%) (722)
Credit Card Fees (1.90%) (762)
VPC Reservation Expense2 (984)
-----------
ADJUSTED GROSS INCOME 37,622
LESS:
Management Fee3 (18,811)
Interior Maintenance Fund4 (1,129)
NET RENTAL REVENUES PAYABLE TO OWNER $17,682
============
- --------
1 Assumes hotel rooms always separately rented. Also assumes an annualized
occupancy rate of 55.68% and an average daily rate (ADR) of $158 for
two-bedroom units and, 28.12% annualized occupancy rate and a $78 ADR for
hotel rooms. Personal usage is not considered as affecting occupancy.
2 Under the Resort Management Agreement, the Resort Operator will be paid a
fee of $15 per confirmed reservation placed through its Vacation Planning
Center (VPC). The projected fee assumes 75% of all bookings are derived
through the VPC with an average length of stay of 3.5 nights per booking.
3 Under the Rental Management Agreement, the Rental Manager will be paid a
management fee equal to 50% of Adjusted Gross Income for securing and
servicing rentals.
4 The Interior Maintenance Fund will be funded with 3% of Adjusted Gross
Income payable monthly. Assumes expenditures for repair or replacement of
furnishings, linens, floor and wall coverings, equipment and appliances
will equal the amount funded.
P-8
<PAGE>
OWNERSHIP EXPENSES
3 BEDROOM UNIT
NET RENTAL REVENUES PAYABLE TO OWNER: $17,682
LESS OWNERSHIP EXPENSES:
Annual Condominium Assessment1 (3,891)
Real Estate Taxes2 (2,498)
CDD3 (623)
Insurance4 (150)
Annual Licensing Fee5 (3,786)
NET INCOME6 $6,736
- --------
1 Based on the proposed separate budget for year 2000 increased at a 3%
compounded annual rate, includes assessments for Lely Resort Master
Property Owners Association, Inc. of $30 per annum.
2 Assumes tax rate of 1.5% on an assessed value equal to 90% of a $185,000
($200,000 purchase price less $15,000 for furnishings).
3 A Lely Community Development District operating assessment of $327 (based
on 1999 budget, increased 3% per year compounded rate) is assumed for each
year 2004 plus a maximum $296 for annual amortization of existing CDD
indebtedness of $2,120 per unit at Jan., 1999.
4 Estimated annual premium payable for the minimum $300,000 per occurrence
coverage for property damage and bodily injury liability insurance required
by the Rental Program Agreement.
5 An Annual Licensing Fee is payable to Golf Enterprises for golf privileges
of $3,500 per year increasing 4% per year after November 1, 2002.
6 Does not include other costs incidental to use of a unit by the unit owner
such as laundry, housekeeping, telephone, etc. Net Cash Available is before
debt service, if any.
P-9
<PAGE>
FALA BELLA RESORT AND GOLF CLUB
BASE PROJECTIONS
(For Year 5 of Operations)
(UNAUDITED)
<TABLE>
<CAPTION>
AVAILABILITY JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
- ------------ --- --- --- --- --- --- --- --- --- --- --- --- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DAYS 31 28 31 30 31 30 31 31 30 31 30 31 365
2 BDRM 200 6,200 5,600 6,200 6,000 6,200 6,000 6,200 6,200 6,000 6,200 6,000 6,200 73,000
HOTEL ROOM 64 1,984 1,792 1,984 1,920 1,984 1,920 1,984 1,984 1,920 1,984 1,920 1,984 23,360
TOTAL AVAIL 8,184 7,392 8,184 7,920 8,184 7,920 8,184 8,184 7,920 8,184 7,920 8,184 96,360
OCCUPANCY
2 BDRM (%) 65% 85% 85% 65% 50% 45% 50% 45% 30% 45% 50% 55% 55.68%
HOTEL (%) 40% 60% 60% 60% 25% 10% 15% 10% 10% 20% 15% 15% 28.12%
2 BDRM (Days) 4,030 4,760 5,270 3,900 3,100 2,700 3,100 2,790 1,800 2,790 3,000 3,410 40,650
HOTEL ROOM (Days) 794 1,075 1,190 1,152 496 192 298 198 192 397 288 298 6,570
TOTAL OCCUPIED 4,824 5,835 6,460 5,052 3,596 2,892 3,398 2,988 1,992 3,187 3,288 3,708 47,220
PERCENT OCCUPIED 59% 79% 79% 64% 44% 37% 42% 37% 25% 39% 42% 45% 49%
AVERAGE DAILY
RATE ($)
2 BDRM 185.00 210.00 210.00 190.00 135.00 115.00 113.00 110.00 105.00 115.00 115.00 170.00 157.78
HOTEL ROOM 70.00 95.00 95.00 80.00 75.00 60.00 65.00 60.00 60.00 60.00 60.00 60.00 78.14
BLENDED RATE 166.08 188.81 188.81 164.92 126.72 111.35 108.80 106.68 100.66 108.15 110.18 161.17 146.70
ROOM REVENUE ($)
2 BDRM 745,550 999,600 1,106,700 741,000 418,500 310,500 350,300 306,900 189,000 320,850 345,000 579,700 6,413,600
HOTEL ROOM 55,552 102,144 113,088 92,160 37,200 11,520 19,344 11,904 11,520 23,808 17,280 17,856 513,376
TOTAL 801,102 1,101,744 1,219,788 833,160 455,700 322,020 369,644 318,804 200,520 344,658 362,280 597,556 6,926,976
AVERAGE RENTAL
($ per Unit)
AVG 2 BDRM REVENUE 3,728 4,998 5,534 3,705 2,093 1,553 1,752 1,535 945 1,604 1,725 2,899 32,068
AVG HOTEL REVENUE 868 1,596 1,767 1,440 581 180 302 186 180 372 270 279 8,022
AVG 3 BDRM REVENUE 4,596 6,594 7,301 5,145 2,674 1,733 2,054 1,721 1,125 1,976 1,995 3,178 40,090
</TABLE>
P-10
<PAGE>
FALA BELLA RESORT AND GOLF CLUB
PROJECTIONS OVER BASE
(For Year 5 of Operations)
(Occupancy and Room Rates Increased by 7% Over Base)
(UNAUDITED)
<TABLE>
<CAPTION>
AVAILABILITY JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
- ------------ --- --- --- --- --- --- --- --- --- --- --- --- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DAYS 31 28 31 30 31 30 31 31 30 31 30 31 365
2 BDRM 200 6,200 5,600 6,200 6,000 6,200 6,000 6,200 6,200 6,000 6,200 6,000 6,200 73,000
HOTEL ROOM 64 1,984 1,792 1,984 1,920 1,984 1,920 1,984 1,984 1,920 1,984 1,920 1,984 23,360
TOTAL AVAIL 8,184 7,392 8,184 7,920 8,184 7,920 8,184 8,184 7,920 8,184 7,920 8,184 96,360
OCCUPANCY
2 BDRM (%) 69.55% 90.95% 90.95% 69.55% 53.50% 48.15% 53.50% 48.15% 32.10% 48.15% 53.50% 58.85% 59.58%
HOTEL (%) 42.80% 64.20% 64.20% 64.20% 26.75% 10.70% 16.05% 10.70% 10.70% 21.40% 16.05% 16.05% 30.09%
2 BDRM (Days) 4,312 5,093 5,639 4,173 3,317 2,889 3,317 2,985 1,926 2,985 3,210 3,649 43,496
HOTEL ROOM (Days) 849 1,150 1,274 1,233 531 205 318 212 205 425 308 318 7,029
TOTAL OCCUPIED 5,161 6,244 6,913 5,406 3,848 3,094 3,635 3,198 2,131 3,410 3,518 3,967 50,525
PERCENT OCCUPIED 63% 84% 84% 68% 47% 39% 44% 39% 27% 42% 44% 48% 52.43%
AVERAGE DAILY
RATE ($)
2 BDRM 197.95 224.70 224.70 203.30 144.45 123.05 120.91 117.70 112.35 123.05 123.05 181.90 168.82
HOTEL ROOM 74.90 101.65 101.65 85.60 80.25 64.20 69.55 64.20 64.20 64.20 64.20 64.20 83.61
BLENDED RATE 177.71 202.03 202.03 176.46 135.59 119.14 116.41 114.15 107.71 115.72 117.90 172.45 156.97
ROOM REVENUE ($)
2 BDRM 853,580 1,144,442 1,267,061 848,371 479,141 355,491 401,058 351,370 216,386 367,341 394,991 663,699 7,342,931
HOTEL ROOM 63,601 116,945 129,474 105,514 42,590 13,189 22,147 13,629 13,189 27,258 19,784 20,443 587,764
TOTAL 917,182 1,261,387 1,396,535 953,885 521,731 368,681 423,205 364,999 229,575 394,599 414,774 684,142 7,930,695
AVERAGE RENTAL
($ per Unit)
AVG 2 BDRM REVENUE 4,268 5,722 6,335 4,242 2,396 1,777 2,005 1,757 1,082 1,837 1,975 3,318 36,715
AVG HOTEL REVENUE 994 1,827 2,023 1,649 665 206 346 213 206 426 309 319 9,184
AVG 3 BDRM REVENUE 5,262 7,549 8,358 5,891 3,061 1,984 2,351 1,970 1,288 2,263 2,284 3,638 45,898
</TABLE>
P-11
<PAGE>
FALA BELLA RESORT AND GOLF CLUB
PROJECTIONS UNDER BASE
(For Year 5 of Operations)
(Occupancy and Room Rates Decreased by 7% From Base)
(UNAUDITED)
<TABLE>
<CAPTION>
AVAILABILITY JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
- ------------ --- --- --- --- --- --- --- --- --- --- --- --- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DAYS 31 28 31 30 31 30 31 31 30 31 30 31 365
2 BDRM 200 6,200 5,600 6,200 6,000 6,200 6,000 6,200 6,200 6,000 6,200 6,000 6,200 73,000
HOTEL ROOM 64 1,984 1,792 1,984 1,920 1,984 1,920 1,984 1,984 1,920 1,984 1,920 1,984 23,360
TOTAL AVAIL 8,184 7,392 8,184 7,920 8,184 7,920 8,184 8,184 7,920 8,184 7,920 8,184 96,360
OCCUPANCY
2 BDRM (%) 60.45% 79.05% 79.05% 60.45% 46.50% 41.85% 46.50% 41.85% 27.90% 41.85% 46.50% 51.15% 51.79%
HOTEL (%) 37.20% 55.80% 55.80% 55.80% 23.25% 9.30% 13.95% 9.30% 9.30% 18.60% 13.95% 13.95% 26.15%
2 BDRM (Days) 3,748 4,427 4,901 3,627 2,883 2,511 2,883 2,595 1,674 2,595 2,790 3,171 37,805
HOTEL ROOM (Days 738 1,000 1,107 1,071 461 179 277 185 179 369 268 277 6,110
TOTAL OCCUPIED 4,486 5,427 6,008 4,698 3,344 2,690 3,160 2,779 1,853 2,964 3,058 3,448 43,914
PERCENT OCCUPIED 55% 73% 73% 59% 41% 34% 39% 34% 23% 36% 39% 42% 45.57%
AVERAGE DAILY
RATE ($)
2 BDRM 172.05 195.30 195.30 176.70 125.55 106.95 105.09 102.30 97.65 106.95 106.95 158.10 146.73
HOTEL ROOM 65.10 88.35 88.35 74.40 69.75 55.80 60.45 55.80 55.80 55.80 55.80 55.80 72.67
BLENDED RATE 154.45 175.59 175.59 153.37 117.85 103.55 101.18 99.21 93.62 100.58 102.47 149.89 136.43
ROOM REVENUE ($)
2 BDRM 644,826 864,554 957,185 640,891 361,961 268,551 302,974 265,438 163,466 277,503 298,391 501,383 5,547,123
HOTEL ROOM 48,047 88,344 97,810 79,709 32,174 9,964 16,731 10,296 9,964 20,592 14,945 15,444 444,019
TOTAL 692,873 952,898 1,054,995 720,600 394,135 278,515 319,705 275,734 173,430 298,095 313,336 516,826 5,991,142
AVERAGE RENTAL
($ per Unit)
AVG 2 BDRM REVENUE 3,224 4,323 4,786 3,204 1,810 1,343 1,515 1,327 817 1,388 1,492 2,507 27,736
AVG HOTEL REVENUE 751 1,380 1,528 1,245 503 156 261 161 156 322 234 241 6,938
AVG 3 BDRM REVENUE 3,975 5,703 6,314 4,450 2,313 1,498 1,776 1,488 973 1,709 1,725 2,748 34,673
</TABLE>
P-12
<PAGE>
Notes to Debt Service Matrix
Mortgage financing is available from a number of institutional lenders for
qualified individuals purchasing an investment property.
It is your decision whether to finance a portion of the purchase price of your
unit.
Mortgage programs and interest rates vary from lender to lender, as do the
related costs and fees charged by each lender.
Net financing cost as presented in the matrix is projected in the fifth year of
a thirty year loan and excludes the principal portion of total annual cost. The
amount of the total annual payment attributable to principal reduction increases
each year of the loan and therefore the amount paid as interest or the net
financing cost will decline.
Net financing cost is also exclusive of any loan fees or costs charged by the
lender.
To use the debt service matrix, first select a projected interest rate on the
loan, determine the purchase price on the unit and then the amount of the
mortgage to find the associated total annual net financing cost. For example,
given a 7 percent interest rate, a $150,000 purchase price and a 60 percent or
$90,000 mortgage, the fourth year net financing cost is $5,933.
With a 6 1/2 percent interest rate mortgage, a $180,000 purchase price and a 70
percent or $126,000 mortgage, the fourth year net financing cost is $7,681.
P-13
<PAGE>
<TABLE>
<CAPTION>
DEBT SERVICE MATRIX
Interest Rate 6 1/2%
-------------
40% Net Financing 50% Net Financing 60% Net Financing 70% Net Financing
Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5
------------- --------------- -------------- --------------- -------------- ---------------- ----------- -------------
Sale Price
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$140,000 $56,000 $3,414 $70,000 $4,267 $84,000 $5,121 $98,000 $5,974
$150,000 $60,000 $3,658 $75,000 $4,572 $90,000 $5,486 $105,000 $6,401
$160,000 $64,000 $3,901 $80,000 $4,877 $96,000 $5,852 $112,000 $6,828
$170,000 $68,000 $4,145 $85,000 $5,182 $102,000 $6,218 $119,000 $7,254
$180,000 $72,000 $4,389 $90,000 $5,486 $108,000 $6,584 $126,000 $7,681
$190,000 $76,000 $4,633 $95,000 $5,791 $114,000 $6,949 $133,000 $8,108
$200,000 $80,000 $4,877 $100,000 $6,096 $120,000 $7,315 $140,000 $8,534
$210,000 $84,000 $5,121 $105,000 $6,401 $126,000 $7,681 $147,000 $8,961
$220,000 $88,000 $5,364 $110,000 $6,706 $132,000 $8,047 $154,000 $9,388
Interest Rate 7%
-------------
40% Net Financing 50% Net Financing 60% Net Financing 70% Net Financing
Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5
------------- --------------- -------------- --------------- -------------- ---------------- -------- -------------
Sale Price
<C> <C> <C> <C> <C> <C> <C> <C> <C>
$140,000 $56,000 $3,692 $70,000 $4,614 $84,000 $5,537 $98,000 $6,460
$150,000 $60,000 $3,955 $75,000 $4,944 $90,000 $5,933 $105,000 $6,922
$160,000 $64,000 $4,219 $80,000 $5,274 $96,000 $6,328 $112,000 $7,383
$170,000 $68,000 $4,483 $85,000 $5,603 $102,000 $6,724 $119,000 $7,844
$180,000 $72,000 $4,746 $90,000 $5,933 $108,000 $7,119 $126,000 $8,306
$190,000 $76,000 $5,010 $95,000 $6,262 $114,000 $7,515 $133,000 $8,767
$200,000 $80,000 $5,274 $100,000 $6,592 $120,000 $7,910 $140,000 $9,229
$210,000 $84,000 $5,537 $105,000 $6,922 $126,000 $8,306 $147,000 $9,690
$220,000 $88,000 $5,801 $110,000 $7,251 $132,000 $8,701 $154,000 $10,152
Interest Rate 7 1/2%
-------------
40% Net Financing 50% Net Financing 60% Net Financing 70% Net Financing
Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5
------------- --------------- -------------- --------------- -------------- ---------------- -------- ------------
Sale Price
<C> <C> <C> <C> <C> <C> <C> <C> <C>
$140,000 $56,000 $3,976 $70,000 $4,970 $84,000 $5,964 $98,000 $6,958
$150,000 $60,000 $4,260 $75,000 $5,325 $90,000 $6,390 $105,000 $7,455
$160,000 $64,000 $4,544 $80,000 $5,680 $96,000 $6,816 $112,000 $7,952
$170,000 $68,000 $4,828 $85,000 $6,035 $102,000 $7,242 $119,000 $8,449
$180,000 $72,000 $5,112 $90,000 $6,390 $108,000 $7,668 $126,000 $8,946
$190,000 $76,000 $5,396 $95,000 $6,745 $114,000 $8,094 $133,000 $9,443
$200,000 $80,000 $5,680 $100,000 $7,100 $120,000 $8,520 $140,000 $9,940
$210,000 $84,000 $5,964 $105,000 $7,455 $126,000 $8,946 $147,000 $10,437
$220,000 $88,000 $6,248 $110,000 $7,810 $132,000 $9,372 $154,000 $10,934
P-14
<PAGE>
Interest Rate 8%
-------------
40% Net Financing 50% Net Financing 60% Net Financing 70% Net Financing
Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5 Mortgage Cost - Yr. 5
------------- --------------- -------------- --------------- -------------- ---------------- -------- ------------
Sale Price
<C> <C> <C> <C> <C> <C> <C> <C> <C>
$140,000 $56,000 $4,316 $70,000 $5,396 $84,000 $6,475 $98,000 $7,554
$150,000 $60,000 $4,625 $75,000 $5,781 $90,000 $6,937 $105,000 $8,093
$160,000 $64,000 $4,933 $80,000 $6,166 $96,000 $7,400 $112,000 $8,633
$170,000 $68,000 $5,241 $85,000 $6,552 $102,000 $7,862 $119,000 $9,173
$180,000 $72,000 $,5,550 $90,000 $6,937 $108,000 $8,325 $126,000 $9,712
$190,000 $76,000 $5,858 $95,000 $7,323 $114,000 $8,787 $133,000 $10,252
$200,000 $80,000 $6,166 $100,000 $7,708 $120,000 $9,250 $140,000 $10,791
$210,000 $84,000 $6,475 $105,000 $8,093 $126,000 $9,712 $147,000 $11,331
$220,000 $88,000 $6,783 $110,000 $8,479 $132,000 $10,175 $154,000 $11,870
</TABLE>
P-15
<PAGE>
ANNEXES
Annex Description
- ----- -----------
Annex A Schedule of Purchase Prices
Annex B Form of Sales Agreement
Annex C Furnishings, Fixtures and Housewares
Annex D Floor Plans
Annex E-1 Form of Rental Program Agreement
Annex E-2 Resort Management Agreement
Annex F Estimated Closing Costs
<PAGE>
================================================================================
TABLE OF CONTENTS
Page
Questions and Answers....................................
Summary..................................................
Risk Factors.............................................
Fala Bella...............................................
The Golf Courses.........................................
The Lely Resort..........................................
The Resort Industry......................................
Projected Performance
of Fala Bella.........................................
The Resort Operator......................................
Management of Fala Bella.................................
Summary of Condominium
Declaration and Related
Documents.............................................
Lely Golf I..............................................
Determination of Purchase Price..........................
Use of Proceeds..........................................
Plan of Distribution.....................................
How to Purchase..........................................
Certain Federal and State
Income Tax Aspects....................................
Legal Matters............................................
Audit Matters............................................
Other Experts............................................
Use of Sales Materials...................................
Financial Statements..................................F-1
Projections...........................................P-1
Annexes...............................................A-1
Until __________, 1999, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
================================================================================
200 Resort Condominium Units
Coupled with a Mandatory
Rental Program Agreement
----------
PROSPECTUS
----------
Fala Bella Resort
and Golf Club of Naples
______________, 1999
================================================================================
<PAGE>
<TABLE>
<CAPTION>
ANNEX A
LELY GOLF VILLAS
SUGGESTED UNIT PRICING GRID
Seventeen Buildings - Multiple Phases
Projected Unit Mix
3 Bedroom 64
2 Bedroom 136
1st Floor2nd Floor 1st Floor2nd Floor Total per
3 BDRM 2 BDRM Building
Number of Units --
<S> <C> <C> <C> <C> <C>
Typical 2 2 4 4 12
Initial*** 2 0 4 4 10
BUILDING # UNIT PRICING
- ---------- ------------
<S> <C> <C> <C> <C> <C>
*** 1 179990 -- 139990 144990
*** 2 179990 -- 139990 144990
3 BASE 184990 191990 149990 154990
----
4 196990 206490 161990 169490
5 198990 208490 163990 171490
6 198990 207990 163990 170990
7 192990 199990 157990 162990
8 202990 211990 167990 174990
9 196990 203990 161990 166990
10 206990 215990 171990 178990
11 100990 207990 165990 170990
12 210990 219990 175990 182990
13 204990 211990 169990 174990
14 214990 223990 179990 186990
15 208990 215990 173990 178990
16 218990 227990 183990 190990
17 217990 226990 182990 189990
AVERAGE UNIT PRICE 180590
------------------ ------
AVERAGE 2 BEDROOM PRICE 168519
----------------------- ------
AVERAGE 3 BEDROOM PRICE 206240
----------------------- ------
</TABLE>
A-1
<PAGE>
ANNEX B
REAL ESTATE SALE AGREEMENT
FALA BELLA RESORT AND GOLF CLUB OF NAPLES, A CONDOMINIUM
This is a Real Estate Sale Agreement to acquire a condominium parcel in
a Florida condominium. As such, Florida law requires the following to be placed
on the first page of the Agreement:
ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING THE
REPRESENTATIONS OF DEVELOPER. FOR CORRECT REPRESENTATIONS, REFERENCE
SHOULD BE MADE TO THIS AGREEMENT AND THE DOCUMENTS REQUIRED BY SECTION
718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR
LESSEE.
ANY PAYMENT IN EXCESS OF TEN PERCENT (10%) OF THE PURCHASE PRICE MADE
TO DEVELOPER PRIOR TO CLOSING PURSUANT TO THIS AGREEMENT MAY BE USED
FOR CONSTRUCTION PURPOSES BY DEVELOPER.
This Real Estate Sale Agreement ("Agreement") is made __________ , 19__
between LELY GOLF VILLAS I LIMITED PARTNERSHIP, a Delaware limited partnership
having offices at 3185 Horseshoe Drive South, Naples, Florida 34104 ("Seller" or
"Developer") and ______________ , residents of __________ with a mailing address
of ________________________ ("Buyer"), (whether one or more).
W I T N E S S E T H :
Seller agrees to sell and Buyer agrees to purchase the
condominium parcel hereinafter described:
Buyer agrees to buy a condominium parcel ("Condominium
Parcel") in FALA BELLA RESORT AND GOLF CLUB OF NAPLES, A
CONDOMINIUM ("Condominium"). The Condominium Parcel shall
consist of: (i) Resort Unit of Phase (Building ) (hereinafter
referred to as the "Resort Unit") in the Condominium; (ii) a
percentage of undivided ownership interest in the common
elements; and (iii) other appurtenances as described in and
subject to the Declaration of Condominium of Fala Bella Resort
and Golf Club Naples, A Condominium ("Declaration") and any
amendments thereto, as recorded or to be recorded in the
Public Records of Collier County, Florida ("County"), and the
other "Governing Documents" (as hereinafter defined) furnished
pursuant to Section 718.503, Florida Statutes.
The sale and purchase will be made upon, subject to and in accordance with the
following terms and conditions.
1. Purchase Price and Closing Costs
A. Purchase Price
The "Purchase Price" for the
Resort Unit (exclusive of closing costs).........$___________
B. Payment of Purchase Price
i. Deposit:
(1)Initial deposit due upon
the execution hereof............$___________
(2) Balance of Ten Percent (10%)
due within fifteen (15) days of
Buyer's execution
of this Agreement...............$___________
(3) Additional Ten Percent (10%) deposit due
the later of:
B-1
<PAGE>
(a) ten (10) days after the due date of the
first Ten Percent (10%); (b) the Presale
Requirement has been satisfied, or has been
waived by Seller; or (c) ten (10) days after
notification that the building permit has
been issued.
ii. Balance of Purchase Price at closing by cash or
cashier's check (subject to prorations and
closing expenses).......................$___________
C. Notwithstanding the statutory language providing that
deposits above ten percent (10%) shall be used for cash reserves, all
deposits shall be held in escrow as set forth in the Standards.
D. Title Insurance
Prior to closing Seller will cause a title insurance
commitment to be issued to Buyer to insure title to the Resort Unit subject to
no exceptions other than those matters contained in Article IV of the Standards,
standard printed exceptions and exclusions, and other matters affecting title
which are to be released of record at the closing.
E. Estimated Completion Date Seller estimates that the Resort
Unit will be completed and ready for occupancy on or before subject to
Article II of the Standards.
F. Brokerage The provision initialed below is selected by
Buyer:
___ Buyer hereby represents that the sale of the
Condominium Parcel pursuant to this Agreement was
facilitated by the following brokerage company:
("Broker").
___ Buyer hereby represents that no Broker was involved
in facilitating this Agreement.
G. Rental Program Agreement and Owner Occupancy
At closing, Buyer agrees to execute the Rental Program Agreement in
substantially the form of Exhibit "A" attached to this Agreement. Buyer
acknowledges that the Rental Program Agreement shall be recorded prior to any
mortgage obtained by Buyer. Buyer's failure or refusal to execute the Rental
Program Agreement shall allow Seller, at Seller's option, to declare Buyer in
default, and to immediately terminate this Agreement. Buyer acknowledges that
owner occupancy of the Resort Unit is limited by the terms of the Declaration
and the Rental Program Agreement; specifically waives any objection, standing,
or right to challenge or question such limitations; and acknowledges that the
terms of this Agreement provide for adequate and full consideration for the
terms of same, notwithstanding the limitations on owner occupancy of the Resort
Unit.
The terms of this Paragraph F shall be deemed to survive the closing of
the purchase of the Resort Unit and the default of either party. It is binding
on Seller and Buyer and on their respective successors and assigns.
H. Miscellaneous
1. Purchaser acknowledges that the Condominium will contain a
minimum of forty-four (44) Units and shall contain two hundred four (204) Units
if all phases of the Condominium are submitted to condominium ownership as
planned. The legal description of the portion of the land constituting the
initial phase of the Condominium ("Phase 1") is described in Exhibit B, attached
to the Declaration and made a part thereof. The legal descriptions of the
portions of the land constituting each subsequent phase of the Condominium are
also described in Exhibit B of the Declaration.
2. (Strike inapplicable wording) Seller warrants that the
Condominium Parcel (has/has not) been occupied. In the event the inapplicable
wording is not stricken, the Condominium Parcel has been occupied.
2. STANDARDS AND OTHER BUYER OBLIGATIONS. The parties hereby agree that Seller
shall sell and Buyer shall buy the Condominium Parcel upon the foregoing terms
and conditions and the Standards for Real Estate Transactions ("Standards"),
consisting of eight (8) pages, which are attached hereto and made a part hereof,
the form
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<PAGE>
of Rental Program Agreement which is attached hereto and made a part hereof as
Exhibit "A", and riders and addenda to this Agreement. Buyer acknowledges that
Buyer is obligated to comply with the terms of the Standards, the Rental Program
Agreement, and all other documents attached to this Agreement which are
incorporated into this Agreement and all Governing Documents.
IN WITNESS WHEREOF, the parties have hereunto affixed their hands and
seals on the day and year set forth under their respective names.
Lely Resort Community Development District imposes taxes or
assessments, or both taxes and assessments, on this property
through a special taxing district. These taxes and assessments
pay the construction, operation, and maintenance costs of
certain public facilities of the district and are set annually
by the governing board of the district. These taxes and
assessments are in addition to county and all other taxes and
assessments provided for by law.
ANY PAYMENT IN EXCESS OF TEN PERCENT (10%) OF THE PURCHASE
PRICE MADE TO DEVELOPER PRIOR TO CLOSING PURSUANT TO THIS
CONTRACT MAY BE USED FOR CONSTRUCTION PURPOSES BY DEVELOPER.
BUYER: SELLER:
LELY GOLF VILLAS I LIMITED PARTNERSHIP,
a Delaware limited partnership
Print Name:
Social Security Number: By: RONTO GOLF DEVELOPMENTS, INC.,
Date: a Florida corporation, a General Partner
Home Telephone:
Office Telephone:
Facsimile: By:
Print Name:
Title:
Print Name:
Social Security Number: (Corporate Seal)
Date:
Home Telephone:
Office Telephone:
Facsimile:
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<PAGE>
STANDARDS FOR REAL ESTATE TRANSACTIONS
I. ESCROW OF DEPOSIT MONIES
Seller has established an escrow account or accounts in
accordance with Section 718.202 of the Act (as hereinafter defined) with RUDEN,
McCLOSKY, SMITH, SCHUSTER & RUSSELL, P.A., located at 5150 North Tamiami Trail,
Suite 602 Newgate Tower, Naples, Florida 34103 (the "Escrow Agent"), pursuant to
an agreement between the Escrow Agent and Seller dated ___________________,
1999, as the same may be amended (the "Escrow Agreement"), as a deposit on
account of the Purchase Price and pursuant to the terms and conditions of the
Agreement, the Escrow Agreement, and in accordance with the provisions of
Section 718.202, Florida Statutes(which accounts shall hereinafter be referred
to as the "Escrow Accounts"). Seller reserves the right to designate a different
Escrow Agent ("New Escrow Agent") provided the New Escrow Agent is one of the
parties designated by Section 718.202 of the Act. In the instance where the
Agreement is executed prior to the Completion Date, all deposit monies received
by Seller from Buyer prior to closing pursuant to the Agreement shall be
deposited in an Escrow Account (the "Escrow Account"). Such payments shall be
held in the Escrow Account, together with payments of other purchasers of
condominium parcels in the Condominium. Buyer may, upon written request to the
Escrow Agent, obtain a receipt for his or her deposit(s). Buyer, by his or her
execution of the Agreement, expressly authorizes the Escrow Agent to disburse
Buyer's payments held in the Escrow Account to Seller upon written notice to the
Escrow Agent by Seller that closing has occurred or that Buyer is in default as
provided herein, whichever shall first occur. Escrow Agent is hereby authorized
to act and rely exclusively on this last stated authorization as its instruction
from Buyer to so release such payments held in the Escrow Account. Interest, if
any, earned on the Escrow Account shall be paid to Buyer unless there is a
default by Buyer whereupon the interest, if any, shall be paid to Seller. The
funds shall only be placed in an interest bearing account if Buyer provides the
necessary W-9 and any other forms required by Escrow Agent's Bank. Buyer and
Seller agree to indemnify and hold Escrow Agent harmless from any claims or
damages which may result from Escrow Agent's escrowing or disbursing of Buyer's
payments held in the Escrow Account other than those claims or damages resulting
from Escrow Agent's gross negligence or willful malfeasance.
II. THE RESORT UNIT
A. Seller will build the Resort Unit substantially in accordance with
plans and specifications, and amendments thereto, pertaining to such Resort Unit
(the "Plans"). The Plans are on file with Seller and are available for
inspection by Buyer during business hours.
(i) If the Resort Unit is not yet built, Seller may substitute
materials, fixtures, equipment and appliances of substantially equal quality as
those specified in the Plans. Seller may also make changes in construction as
may be required by its mortgage lender(s), or any governmental authority having
jurisdiction over the Condominium Parcel, or as may be otherwise required by
material shortages, drainage considerations, work stoppages or emergencies. In
the event of a conflict between the Plans and any model unit inspected by Buyer,
the Plans will control.
(ii) Buyer acknowledges that no oral representations as to the
design or construction of the Resort Unit may be relied upon.
(iii) Prior to the signing of the Agreement, Seller will have
furnished to Buyer a floor plan of the Resort Unit. Such floor plan represents
only a graphic approximation of the scale and dimensions designated therein;
construction is controlled by the Plans, which provide much greater detail and
exactitude. The completed Resort Unit may vary from the floor plan, the model
(if any) and the Plans as provided above and also to an extent consonant with
normal trade, custom, practice and tolerance in the construction industry.
B. Notwithstanding any other provisions of the Agreement and the
Governing Documents (as hereinafter defined), Seller shall not be required to
commence or complete construction of the proposed improvements, or to convey the
Condominium Parcel to Buyer, until forty-four (44) units in the Condominium
which is the subject of the Agreement have been contracted for purchase,
pursuant to legally enforceable purchase agreements between Seller and
purchasers ("Presale Requirement"). Once the Presale Requirement has been
satisfied, Seller shall send written notice thereof to Buyer. The day the
Presale Requirement has been satisfied or waived by Seller as hereinafter set
forth is referred to herein as the "Sales Date." Buyer acknowledges that no
right of cancellation exists for the period of time prior to the Sales Date
except for matters otherwise provided for herein. If within the "Presale Period"
(as hereinafter defined) the Presale Requirement has not been (i) satisfied; or
(ii) waived by Seller by written notice of such waiver mailed to Buyer, then
Seller shall cause all of Buyer's deposits to be returned to Buyer whereupon the
Agreement shall be terminated and
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<PAGE>
neither party shall have any claim against the other. The "Presale Period'"
shall be the period within one hundred (180) days from ___________, 1999 (the
date the first purchaser signed a purchase agreement for the purchase of a unit
in the Condominium.) If Seller proceeds after the Presale Requirement or waives
the Presale Requirement, Seller commits to construct at least forty-four (44)
units in the Condominium.
C. Notwithstanding Seller's representation of a completion date set
forth herein, the expression of an estimated time of delivery on the part of
Seller is made as an accommodation to Buyer to assist Buyer in formulating
future plans, but shall not be considered as time which is of the essence of the
Agreement, and shall be subject to amendment by Seller should Seller's progress
or plans be altered by conditions unforeseen by or outside the control of
Seller, and any such amendment shall not require formal or specific notice by
Seller to Buyer. Buyer understands and agrees that Seller can neither imply nor
guarantee a firm completion and availability date for the Resort Unit (other
than that guarantee as set forth in the last sentence of this paragraph), such
advance projections being, and by their nature having to be, approximations
only. Seller shall make reasonable efforts to meet or to accelerate estimated
construction schedules, but Seller shall not be obligated to make, provide or
compensate Buyer or any other party or person for any accommodations, mortgage
rate or cost increases, or other costs incurred by Buyer as a result of delayed
or accelerated completion. In any event, however, Seller agrees to substantially
complete construction of the Resort Unit within two (2) years of the date Buyer
executes the Agreement (the "Completion Date").
D. Buyer acknowledges that the Initial Packages (as defined in the
Rental Program Agreement provided to Buyer), furnishings, fixtures, wall
coverings, moldings or other decorating improvements, carpeting, other floor
coverings, cabinets, and paints appearing in the model unit which will be
included in the Resort Unit may be of a different quality, color or grade than
as shown in the model unit. Buyer further acknowledges that quality, colors or
grades of items supplied by Seller may vary due to shortages, discontinuances of
selections, substantial increases in the costs of same, color run variations, or
requirements of governmental agencies. Unless otherwise indicated in the model
unit or on the brochure feature sheet used by Seller, the Initial Packages, and
kitchen appliances and plumbing fixtures as shown in the model units, or
substitutions of similar quality for reasons described above, are included in
the Purchase Price of the Condominium Parcel, as are carpeting, other floor
coverings, cabinets, and paints.
III. ADDITIONAL PURCHASE PRICE MATTERS AND CLOSING COSTS
A. The balance of the Purchase Price shall be paid in US funds by cash,
wire transfer, or by cashier's check drawn on a financial institution with
offices in Collier or Lee County, Florida.
B. Seller shall pay the costs of clearing Seller's title, the premium
for an owner's policy of title insurance furnished by Developer, documentary
stamps on the deed, Seller's prorated share of all property taxes and
condominium and other assessments for the year in which the transaction is
closed, and the fees of Seller's attorneys.
C. Buyer shall pay to Seller the sum of one and one-half percent
(1.50%) of the Purchase Price for closing costs. Buyer shall also pay all
prorated amounts, fees, contributions, and other costs provided for in the
Agreement, all utility deposits required by any utility company for service to
the Resort Unit; and Buyer's legal fees, if any, and Buyer's financing costs, if
applicable. Buyer shall also pay all Condominium assessments and real estate
taxes coming due after closing and insurance.
D. If Buyer elects not to be furnished an owner's policy of title
insurance by Seller, and notifies Seller in writing at least thirty (30) days
prior to Closing, the Buyer shall be credited with an amount equal to thirty
percent (30%) of the minimum risk rate promulgated by the Insurance Commissioner
for the State of Florida.
E. Buyer shall pay an amount equal to the "Annual License Fee" (defined
in Article XII) in effect at the time of Closing ($3,500 through October 31,
2002 with four (4%) percent increases each year thereafter) with the pro rata
portion of the Annual License Fee being paid for the remainder of the year of
Closing and the balance being placed in the "Annual License Fee Account" (as
that term is defined in the Rental Program Agreement) toward payment of the next
year's Annual License Fee.
F. In addition to the other closing costs and prorations for which
Buyer is responsible under the terms of the Agreement, Buyer will be charged
Five Hundred Fifty ($550.00) Dollars as a "Working Fund Contribution" to the
Fala Bella Resort and Golf Club Naples Condominium Association, Inc.
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<PAGE>
G. Buyer shall also be charged, in accordance with the terms of the
Rental Program Agreement, Five Hundred Dollars ($500.00) as an initial one-time
administrative expense to cover the costs of the Rental Program as described in
the Rental Program Agreement.
IV. TITLE INSURANCE
A. Prior to closing Seller will cause a title insurance commitment to
be issued to Buyer to insure title to the Resort Unit subject to no exceptions
other than those matters contained in Paragraph B below, standard printed
exceptions and exclusions, and other matters affecting title which are to be
released of record at the closing. Subsequent to closing, unless Buyer has
elected in writing to waive title insurance, Seller will deliver to Buyer an
owner's policy of title insurance insuring title to the Resort Unit to Buyer in
an amount equal to the Purchase Price and otherwise conforming to said
commitment. Seller will also cause to be delivered at closing a mortgagee's
policy of title insurance in an amount required by the mortgage lender for an
added charge to Buyer of Two Hundred Fifty Dollars ($250.00).
Seller will not provide Buyer with an abstract of title or a survey.
B. Seller shall issue a title insurance commitment to ensure title to
the Resort Unit subject to no exceptions, except those set forth in the
Agreement and except those set forth below:
1. Defects, liens, encumbrances, adverse claims or other matters,
if any, created, first appearing in the public records or
attaching subsequent to the effective date hereof but prior to
the date the Proposed Insured acquires for value of record the
estate or interest or mortgage thereon covered by this
Commitment.
2. Rights or claims of parties in possession not shown by the
public records.
3. Easements, liens or encumbrances, or claims thereof, not shown
by the public records.
4. Encroachments, overlaps, boundary line disputes, and any other
matters which would be disclosed by an accurate survey and
inspection of the premises.
5. Any lien, or right to a lien, for services, labor, or material
heretofore or hereafter furnished, imposed by law and not
shown by the public records.
6. Real Estate and tangible personal property taxes for the year
of closing and subsequent years, which are not yet due and
payable.
7. Subject to an easement contained in the Warranty Deed from
Lely Development Corporation to Lely Golf Villas I Limited
Partnership, recorded on March 9, 1998, in O.R. Book 2396,
Page 842, of the Public Records of Collier County, Florida.
8. Subject to reservation of all gas, oil and mineral rights
lying at a depth in excess of 125 feet from the surface.
9. Subject to the provisions of Lely, a Resort Community, Master
Plan of Golf Course Drainage/Excavation prepared by Wilson,
Miller, Barton & Peek, Inc., being more fully referenced at
EW-162 on sheets 3 and 10 thereof (Lake 10 Excavation), and
the South Florida Water Management Permit issued pursuant
thereto.
10. Subject to all matters shown on the Plat of Lely Resort Phase
One as shown on Plat recorded in Plat Book 16, Pages 87
through 89 of the Public Records of Collier County, Florida.
11. Subject to Palmer Cablevision restrictive covenants dated
November 16, 1987 and recorded November 25, 1987 in O.R. Book
1311, Pages 1685 through 1703 of the Public Records of Collier
County, Florida.
12. Subject to the Declaration of General Covenants, Conditions
and Restrictions for Lely Resort dated March 13, 1990 and
recorded March 16, 1990 in O.R. Book 1513, Pages 835 through
867 of the Public Records of Collier County, Florida.
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<PAGE>
13. Subject to restrictions contained in the PUD Document and
Development Order for Lely, a Resort Community, Collier County
Ordinance 85-17, Development Order 85-3 as amended by
Resolution 85-249, as amended by Ordinance 91-29, as amended
by Ordinance 92-15, as amended by Resolution 92-165, as
amended by Development Order 92-2, and Resolution No. 92-166,
and as the same may
be further amended.
14. Subject to certain other rights, privileges and licenses
retained by Lely Development Corporation and contained in that
certain License Agreement, recorded March 9, 1998, in O.R.
Book 2396, Page 850, of the Public Records of Collier County,
Florida.
15. Subject to Lely Community Development District recorded
January 16, 1991 in O.R. Book 1586, Pages 530 through 541,
inclusive, of the Public Records of Collier County, Florida.
16. Subject to existing assessment due to Lely Resort CDD, on
which only the minimum payment for the year of closing shall
be pro-rated at closing.
17. Also subject to any additional taxes and/or assessments levied
by Lely Resort CDD for the year of closing and subsequent
years.
18. Subject to that certain Use and Access Agreement for Lely Golf
Villas recorded on March 13, 1998, in O.R. Book 2398, at Page
521, Public Records of Collier County, Florida, as amended.
19. Subject to that certain Assignment and Assumption recorded on
, in O.R. Book , Page , of the Public Records of Collier
County, Florida.
20. Subject to that certain Rental Program Agreement to be
recorded the Public Records of Collier County, Florida.
21. Subject to all matters shown on the Plat of Fala Bella Resort
and Golf Club of Naples, as shown on Plat recorded in Plat
Book , Pages through , of the Public Records of Collier
County, Florida.
22. Declaration of Neighborhood Covenants for Fala Bella Resort
and Golf Club of Naples and accompanying Check-in Center,
recorded in O.R. Book ____, Page ____ of the Public Records of
Collier County, Florida, as same may be amended.
23. Subject to the terms, provisions, covenants, liens, conditions
and options contained and rights and easements established by
the Declaration of Condominium of Fala Bella Resort and Golf
Club Naples, A Condominium, and all exhibits thereto, recorded
in O.R. Book , Page , of the Public Records of Collier County,
Florida, as the same may be amended. Such Declaration and/or
Amendments establishes and provides for easements, liens,
charges, assessments, a right of first refusal, and the prior
approval of a future purchaser or occupant.
24. Liens for work or materials furnished at the request of the
Buyer.
25. All documents and restrictions contemplated by Agreement and
the Standards of which this list of Permitted Exceptions is a
part.
26. All restrictions, reservations, conditions, limitations,
affirmative covenants and obligations, easements and other
matters of record, including without limitation such zoning or
other restrictions upon the use of the property as may be
imposed by governmental authorities having jurisdiction.
Notwithstanding the inclusion of any matter herein, if such matter has been
terminated of record, the inclusion of such matter herein shall not act to
reestablish such matter.
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<PAGE>
V. CLOSING OF THE SALE
A. Closing will be not sooner than fifteen (15) days after the Resort
Unit is substantially completed and approved for occupancy by an appropriate
governmental agency. The issuance of a Certificate of Occupancy (C.O.) by the
appropriate governmental agency shall be conclusive evidence that the building
is substantially completed. Upon the issuance of the C.O., time shall be of the
essence of the Agreement. Seller may give such notice orally and an affidavit by
a representative of Seller that such notice was given on a specific date shall
be conclusive evidence of such notice. Any failure of the Buyer to receive such
notice by reason of Buyer's failure to advise Seller of any change of address or
phone number shall not relieve the Buyer of its obligation to close on the date
as scheduled by the Seller. Seller may postpone the closing for good cause, but
it must provide the Buyer with notice of the new day for closing. Should Buyer
fail to close on the closing date set by Seller as provided herein, Seller may
treat such failure to close as a default or, in the event Seller agrees to close
at a later date, Buyer shall further be required to pay to Seller, at the time
of closing, a sum equal to eighteen percent (18%) per annum calculated on a
daily basis on the outstanding balance of the Purchase Price, as interest from
the date set for closing by Seller to the date of the actual closing.
B. Closing will be made through a closing agent selected by Seller. On
the closing date, at the offices of the closing agent or such other place as
Seller may designate, Buyer shall pay to Seller in cash the total Purchase Price
and all other sums payable to Seller hereunder. No portion of the Purchase Price
may be withheld from Seller, or deposited in escrow, on account of incomplete
work upon the Resort Unit at the time of closing. Seller agrees to complete all
such work as soon after closing as is reasonably possible. Seller will deliver
possession of the Resort Unit to Buyer at closing.
C. Upon payment in full, Seller will deliver to Buyer a Special
Condominium Warranty Deed, duly executed by Seller, conveying to Buyer title to
the Resort Unit subject to items set forth or contemplated by the Agreement and
these Standards, including, without limitation, the Permitted Exceptions
detailed in Article IV of these Standards.
D. The rights of Seller and Buyer pursuant to the terms and conditions
of the Agreement are and will be subject and subordinate to the lien of any
mortgage now or hereafter placed by Seller on the Condominium or on the Resort
Unit prior to closing, and to all amendments, modifications, renewals,
consolidations and extensions thereof, and all voluntary and involuntary future
advances thereunder; provided, however, that unless Buyer has agreed to assume
same Seller shall cause any such mortgage to be discharged of record as to the
Condominium Parcel contemporaneously with the delivery or recording of the deed
to the Condominium Parcel. At Seller's option, such mortgage may be discharged
with the proceeds of the sale of the Condominium Parcel.
E. The acceptance of the deed by Buyer shall be deemed to be acceptance
of full performance and discharge of every agreement and obligation on the part
of Seller to be performed pursuant to the provisions of the Agreement and these
Standards except obligations, if any, under the "Sole Warranties" (as defined in
Article VI of these Standards).
VI. WARRANTY PROVISIONS
A. Buyer acknowledges that at the time of execution of the Agreement,
Seller has no reason to know of any particular purpose of Buyer in purchasing
the Resort Unit and items of personal property sold pursuant to the Agreement
other than for use in accordance with the terms of the Rental Program Agreement
provided to Buyer. Buyer acknowledges and agrees that the only warranties
applicable to the Condominium are those that may validly be imposed thereon by
statutory law on the date hereof, as set forth in Section 718.203, Florida
Statutes, as such section exists as of the date of the Agreement ("Sole
Warranties"). Buyer further acknowledges and agrees that, to the extent allowed
by law, Seller makes no other express or implied warranties whatsoever in regard
to the Resort Unit, the common elements, any fixtures or items of personal
property sold pursuant to the Agreement or any other real or personal property
whatsoever sold hereby.
SELLER MAKES THIS EXPRESSLY IN LIEU OF ALL OTHER EXPRESS
OR IMPLIED WARRANTIES CONCERNING THE RESORT UNIT SOLD OR
TO BE CONSTRUCTED HEREUNDER AND THE PROPERTY SOLD
HEREUNDER OR PREVIOUSLY PURCHASED FROM SELLER, AND ANY
OTHER REPRESENTATIONS, STATEMENTS OR PROMISES MADE BY
ANY PERSON ARE UNAUTHORIZED AND ARE NOT BINDING UPON
SELLER. ALL OTHER WARRANTIES WITH RESPECT
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<PAGE>
TO THE RESORT UNIT AND THE PROPERTY HEREUNDER ARE HEREBY
DISCLAIMED, TO THE EXTENT PERMITTED BY LAW, WHETHER
IMPLIED OR ARISING BY OPERATION OF LAW, COURSE OF
DEALING, CUSTOM AND PRACTICE, OR OTHERWISE, INCLUDING,
BUT NOT LIMITED TO, ANY WARRANTIES OF HABITABILITY,
MERCHANTABILITY, AND FITNESS FOR PARTICULAR PURPOSE; AND
BUYER REPRESENTS THAT BUYER HAS READ AND UNDERSTOOD THIS
PROVISION, AND THAT BUYER UNDERSTANDS AND AGREES THAT,
BY ENTERING INTO THE AGREEMENT AND ACCEPTING THE
BENEFITS OF THE LIMITED WARRANTY DESCRIBED ABOVE, BUYER
HAS KNOWINGLY RELINQUISHED ANY AND ALL OTHER WARRANTIES
OF ANY KIND OR NATURE REGARDING THE RESORT UNIT AND THE
PROPERTY.
B. Notwithstanding anything to the contrary in the Agreement, Buyer
acknowledges and agrees that Seller shall be irreparably harmed if Buyer
undertakes the repair or replacement of any defective portion of the Resort
Unit, common elements, fixtures, items of personal property or any other real or
personal property in connection with the Resort Unit during the time in which
the Sole Warranties remain in effect. Accordingly, Buyer hereby agrees: (i) to
promptly, upon Buyer's knowledge of the existence of any such defective portion,
provide written notice to Seller specifying each such defective portion, upon
the receipt of which Seller shall have thirty (30) days ("Repair Period") to
commence to repair or replace such defective portion and diligently pursue the
completion thereof; and (ii) not to repair, replace or otherwise adjust any such
defective portion during the Repair Period; provided, however, that if Seller
fails to commence the repair or replacement of such defective portion within the
Repair Period, Buyer may repair or replace same. If Buyer fails to comply with
the provisions of this Paragraph, Buyer will be deemed to have breached his or
her obligation to mitigate damages and Buyer's conduct shall constitute an
aggravation of damages.
C. It is hereby agreed that the maximum liability of Seller under the
Sole Warranties shall be the replacement cost of the defective portion of the
Resort Unit, common elements, fixtures, items of personal property or other real
or personal property. Seller shall have the sole right to determine whether the
defect shall be corrected by repair or replacement. In no event shall Seller be
liable to Buyer or the Association or any other person or entity for
consequential or exemplary damages, or for personal injuries arising from any
breach of the Sole Warranties.
D. Buyer hereby acknowledges that: (i) the Sole Warranties shall not
apply if the defective portion of the Resort Unit, common elements, fixtures or
any other real or personal property has resulted from or been caused by, in
whole or in part, the misuse of same (whether intentional or unintentional) by
any person, firm or entity other than Seller or from an accident, casualty or
physical alteration or modification; and (ii) the Sole Warranties are further
conditioned upon routine maintenance being performed, unless such maintenance is
an obligation of Seller or a Seller-controlled association.
E. The terms of this Article VI shall be deemed to survive the closing
of the purchase of the Resort Unit. It is binding on Seller and Buyer and on
their respective successors and assigns.
VII. DEFAULT BY EITHER PARTY
A. If the Agreement is not performed by Buyer in accordance with its
terms, it may be terminated by Seller and upon such termination Seller may
retain all amounts paid by Buyer hereunder as liquidated damages. Such damages
are not a penalty, but represent actual damages which Seller will sustain upon
any default by Buyer, which damages will be substantial but are not capable of
precise determination. In such event, Buyer will not file any action against
Seller seeking the return of any portion of the payments made under the
Agreement or any reduction in the amount of such liquidated damages.
B. If the Agreement is not performed by Seller in accordance with its
terms, Seller being in default and Buyer not being in default hereunder, after
fifteen (15) days written notice to Buyer from Seller and an opportunity to
cure, provided, however, if it is a non-monetary item which cannot be cured
within fifteen (15) days and Seller commences to cure within such fifteen (15)
day period and proceeds with due diligence, the opportunity to cure shall be
extended, but not beyond the Completion Date, Buyer may seek specific
performance or any other remedy available at law or in equity.
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VIII. ATTORNEYS' FEES
In connection with any litigation arising out of the Agreement, the
prevailing party shall, if successful, be entitled to recover all costs
incurred, including reasonable attorneys' fees, through and including all
appellate levels and post-judgment proceedings. The provisions of this Article
VII shall survive the Closing.
IX. PHASE CONDOMINIUM PLAN AND GOVERNING DOCUMENTS
A. Plan of Development. Seller is developing the Condominium as a phase
condominium as provided for by the Act (as hereinafter defined) with each
building and certain land constituting a separate phase of the Condominium in
accordance with the plan of phase development described in Article 7 of the
Declaration and in conjunction with the development of the "Subsequent Phase(s)"
as described in Article 6 of such Declaration. Buyer acknowledges that the
Condominium will contain a minimum of ten (10) residential resort units, and is
expected to contain two hundred (200) residential resort units and four (4)
commercial units if all phases of the Condominium are submitted to condominium
ownership as planned. The Seller has committed to the construction of at least
forty-four (44) units in the Condominium if the Presale Requirement is satisfied
or waived. Buyer acknowledges that Seller shall not be obligated to submit the
Subsequent Phases to condominium ownership and the decision to submit the
Subsequent Phases to condominium ownership as part of the Condominium shall be
in the sole discretion of Seller. Buyer further acknowledges that there will be
one (1) condominium association responsible for the management of the
Condominium. If, as and when the Subsequent Phases are added, the condominium
property shall be enlarged and expanded so as to include the real property, the
improvements thereon, the easements and the rights appurtenant thereto which are
submitted to condominium ownership as part of the Subsequent Phases. Buyer
acknowledges that he or she has read and reviewed (or will read and review prior
to the expiration of the 15-day period described in Paragraph B below) Articles
5, 6, and 7 of the Declaration, which constitute a complete description of the
phasing of the Condominium and which are incorporated herein by reference. Buyer
acknowledges that the Condominium will be located in a planned community known
as Lely Resort, which planned community is located in a Community Development
District known as Lely Resort Community Development District.
As further limitation of the Sole Warranties enumerated in
Article VI of these Standards, Buyer acknowledges and understands that Seller
shall be responsible only for the phase(s) in the Condominium that Seller
developed and constructed. Buyer acknowledges and understands that Seller has
neither developed or constructed the "Common Areas" (as defined in the Governing
Documents, a term defined in Paragraph C below) located in or upon the Lely
Resort Community nor any other commonly used properties or facilities located in
or upon the Lely Resort Community. To the maximum extent permitted by law, Buyer
agrees and acknowledges that Seller has made no representations or warranties,
whether express or implied whatsoever, with respect to the Common Areas and
other commonly used properties or facilities located in or upon the Lely Resort
Community. Buyer agrees to not seek or pursue any action against Seller in any
manner or forum for any relief, including, but not limited to, monetary damage,
injunctive relief, or any other remedy that may occur or arise, either directly
or indirectly, from and in connection with any and all facilities not developed
and constructed by Seller in or upon the Lely Resort Community. The covenants
and provisions of this paragraph shall survive the closing and delivery of the
deed.
B. Condominium Law Statement. The Condominium Act, Chapter 718, Florida
Statutes, 1997, as amended through the date of execution of the Agreement
("Act"), requires that the following statement be contained in contracts for the
sale of a condominium parcel:
THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN
NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN FIFTEEN (15)
DAYS AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE
BUYER, AND RECEIPT BY BUYER OF ALL OF THE ITEMS REQUIRED TO BE
DELIVERED TO HIM OR HER BY THE DEVELOPER UNDER SECTION
718.503, FLORIDA STATUTES. THIS AGREEMENT IS ALSO VOIDABLE BY
BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO
CANCEL WITHIN FIFTEEN (15) DAYS AFTER THE DATE OF RECEIPT FROM
THE DEVELOPER OF ANY AMENDMENT WHICH MATERIALLY ALTERS OR
MODIFIES THE OFFERING IN A MANNER THAT IS ADVERSE TO THE
BUYER. ANY PURPORTED WAIVER OF THESE VOIDABILITY RIGHTS SHALL
BE OF NO EFFECT. BUYER MAY EXTEND THE TIME FOR CLOSING FOR A
PERIOD OF NOT MORE THAN FIFTEEN (15) DAYS AFTER THE
B-7
<PAGE>
BUYER HAS RECEIVED ALL OF THE ITEMS REQUIRED. BUYER'S RIGHT TO
VOID THIS AGREEMENT SHALL TERMINATE AT CLOSING.
C. Documents Described and Provisions to Cancel. Buyer acknowledges
that prior to the execution of the Agreement, all of the statutory information
to be delivered to Buyer concerning this Condominium required by the Act, or as
otherwise legally required or contemplated by the Agreement and/or these
Standards (the "Governing Documents") has been delivered to Buyer, the receipt
of which is hereby acknowledged by Buyer. The terms and conditions of the
Governing Documents are hereby incorporated by reference into the Agreement.
Buyer agrees to read and become familiar with the Governing Documents referred
to in this Paragraph prior to the expiration of the period in which Buyer may
cancel the Agreement under Paragraph B above and to rely solely on these
Governing Documents to the exclusion of all other written or oral
representations in deciding whether or not to exercise the right to cancel under
Paragraph B above. Buyer has fifteen (15) days from the date indicated on the
signature page on which Buyer executes the Agreement to exercise the right of
cancellation set forth in Paragraph B above, by delivering written notice to
Seller at: 3185 Horseshoe Drive South, Naples, Florida 34104 (which is the place
for giving any notices to Seller under the Agreement). Buyer agrees that the
Governing Documents may be changed or amended, if necessary, to meet the
requirements of a mortgagee, public authority or title insurance company. Buyer
agrees to be bound by the terms of the Governing Documents, to acquire the
Condominium Parcel subject thereto and to execute any documents required to
implement the same, including the Special Condominium Warranty Deed described in
Article V of theses Standards.
X. NON-RELIANCE BY BUYER
Buyer hereby represents to Seller that Buyer has not relied and is not
relying upon any warranties, promises, guarantees or representations made by
Seller, any agent of Seller, or anyone else acting or claiming to act on behalf
of Seller with respect to the purchase by Buyer of the Resort Unit or the other
matters set forth herein unless specifically reduced to writing and made a part
of the Agreement or the Governing Documents.
XI. LELY RESORT COMMUNITY DEVELOPMENT DISTRICT
Buyer acknowledges that a uniform community development district, as
defined in Chapter 190, Florida Statutes, known as the Lely Resort Community
Development District (hereinafter "District"), has been established. The
District includes the Property, may include all or a portion of Lely Resort, and
may also include property in addition to Lely Resort. The District provides
certain urban community development services and has the authority to levy and
collect fees, rates, charges, taxes and assessments to pay for, finance and
provide such services. The District is empowered to plan, establish, acquire,
construct or reconstruct, enlarge or extend, equip, operate, and maintain
systems and facilities for basic infrastructures which may include without
limitation: (1) water management and control lands within the District and the
connection of some or any of such facilities with roads and bridges; (2) roads
and bridges; (3) potable water distribution; (4) sewage collection; and (5)
waste water management. The District imposes taxes and/or assessments on Lely
Resort through a special taxing district. These taxes and/or assessments pay for
the construction, operation, and/or maintenance costs of certain public
facilities within the District and are set annually by the governing board of
the District, in addition to the existing special assessment lien(s) which will
become liens on the Condominium Parcel and will become the Buyer's obligation as
of Closing. These taxes and assessments are in addition to county and all other
taxes and assessment provided for by law. These fees, rates, charges, taxes and
assessments either appear on the annual real estate tax bill for each Owner in
which case they are payable directly to the Collier County Tax Collector, or
they appear on a separate bill issued to each Owner by the District. All taxes
of the District constitute a lien upon those portions of Lely Resort owned by
any Owner. The District has the power to issue any types of bonds permitted by
Chapter 190, Florida Statutes. Buyer acknowledges that other services may be
added to the District's responsibilities.
Buyer agrees, by acceptance of a deed or other instrument conveying
title to the Property, or any portion thereof, for itself, its successors or
assigns, to pay any and all fees, rates, charges, taxes and assessments imposed
by the District with respect to the Property and Buyer agrees to abide by all of
the District's regulations, as same may be amended from time to time. BUYER
SPECIFICALLY AGREES TO DISCLOSE, IN WRITING TO ANY SUBSEQUENT BUYER(S) OF THE
PROPERTY, OR ANY PORTION THEREOF, THAT SUCH PROPERTY IS WITHIN THE DISTRICT AND
THAT SUCH BUYER SHALL BE SUBJECT TO DISTRICT ASSESSMENTS AS THE SAME MAY EXIST
FROM TIME TO TIME. BUYER HEREBY EXPRESSLY AGREES TO INDEMNIFY, DEFEND AND HOLD
HARMLESS SELLER AND ITS AFFILIATES AND THEIR RESPECTIVE DIRECTORS, OFFICERS AND
EMPLOYEES FROM ANY AND ALL CLAIMS, LOSSES, DAMAGES, COSTS, CHARGES, OR EXPENSES
ARISING OUT OF OR RESULTING FROM BUYER'S FAILURE TO COMPLY WITH THIS ARTICLE
B-8
<PAGE>
XI. THIS PROVISION AND THE DUTIES, OBLIGATIONS AND LIABILITIES SET FORTH HEREIN
SHALL SURVIVE THE CLOSING OF THE TRANSACTION CONTEMPLATED IN THE AGREEMENT.
XII. USE OF LELY RESORT GOLF CLUB AND GOLF FEES
Buyer understands and agrees that the use of the Golf Facilities (as
defined in the Use and Access Agreement defined hereinbelow) by Buyer are
subject to all provisions of that certain Use and Access Agreement for Lely Golf
Villas recorded on March 13, 1998, in Official Records Book 2398, at Page 521,
Public Records of Collier County, Florida, as amended (the "Use and Access
Agreement"), to all provisions of the Rental Program Agreement, the form of
which is attached to and incorporated into the Agreement as Exhibit "A", all
provisions of the Declaration, and to all provisions of that certain Assignment
and Assumption between Seller and Lely Golf Villas II Limited Partnership, a
Delaware limited partnership (the "Assignment and Assumption")
Buyer specifically acknowledges, agrees, and accepts that Designated
User golf rights as set forth in the Use and Access Agreement have been
previously conveyed to Rental Manager (as defined in the Rental Program
Agreement and the Assignment and Assumption) in the Assignment and Assumption,
and will not be passed on to Buyer through purchase of the Resort Unit,
execution of the Rental Program Agreement, or otherwise. Buyer specifically
waives any objection, standing, or right to challenge or question same, or to
make any claim whatsoever against any monies, proceeds, royalties or rights that
may arise or flow therefrom.
Buyer further specifically acknowledges, agrees, and accepts his or her
responsibility for the fees and costs for which a Unit Owner is responsible in
connection with the golf rights of a Resort Unit Owner including without
limitation the Annual License Fees and other fees and costs as set forth in the
Declaration, the Assignment and Assumption, and the Use and Access Agreement,
and specifically waives any objection, standing, or right to challenge the
provisions of the Declaration and the Use and Access Agreement, and acknowledges
that the terms of the Agreement provide for adequate and full consideration for
the terms of same, notwithstanding the responsibilities and obligations with
respect to fees and costs of a Resort Unit Owner in connection with such Owner's
golf rights.
Buyer also specifically waives any objection, standing, or right to
challenge or question the golf rights as set forth for Owners under the
Declaration; hereby accepts the limited golf rights as a Unit Owner granted by
the Declaration pursuant to portions of the Use and Access Agreement that will
be conveyed to Buyer at closing; and acknowledges that the terms of the
Agreement provide for adequate and full consideration therefor.
The terms of this Article XII shall be deemed to survive the closing of
the purchase of the Resort Unit. It is binding on Seller and Buyer and on their
respective successors and assigns.
XIII. MISCELLANEOUS
A. The Agreement will be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors
and assigns; provided that Buyer shall not assign or transfer the Agreement or
any of Buyer's rights hereunder without Seller's consent which may be withheld
in Seller's sole and absolute discretion, and any act in derogation hereof shall
be null and void and Seller may, at Seller's option, declare Buyer in default
and immediately terminate the Agreement.
B. In the event of total destruction of the Resort Unit by fire,
windstorm, hail, hurricane, earthquake, explosion or other casualty prior to
closing, Buyer or Seller may terminate the Agreement if the Resort Unit cannot
be restored prior to the Completion Date.
C. Whenever the context shall so require, the singular shall include
the plural, the masculine gender shall include the feminine and neuter, and vice
versa.
D. The Agreement embodies the entire agreement between Seller and Buyer
with respect to the Resort Unit. No amendment or modification of the Agreement
shall be valid unless contained in a writing executed by the party against whom
enforcement is sought.
E. Time is hereby declared to be of the essence in the performance by
Buyer of each of Buyer's obligations.
B-9
<PAGE>
F. All notices and demands to be given or served pursuant to the terms
of the Agreement, unless otherwise specified herein, shall be given (i) by
certified or registered mail, return receipt requested, addressed to the parties
at their respective addresses set forth herein and will be deemed delivered and
received three (3) days after deposited into the United States mail with
sufficient postage; or (ii) by nationally recognized overnight courier service,
addressed to the parties at their respective addresses set forth herein, and
will be deemed delivered and received one (1) business day after delivery to
such overnight courier service.
G. If two or more persons are named as Buyer, any one of them is
authorized to act as agent for, with the right to bind, the other(s) in all
matters of every kind or nature with respect to the Agreement.
H. Buyer is prohibited from recording the Agreement or any memorandum
hereof, and upon attempted recordation Seller may, at Seller's option, declare
Buyer in default and immediately terminate the Agreement.
I. Buyer realizes and acknowledges that entry upon the project or the
property during construction can be dangerous and that hazards may exist which
are not observable. Buyer's entry shall be solely at his or her own risk. Buyer
does hereby waive any and all claims against Seller for injury or loss to
persons or property arising out of or in connection with such entry by Buyer or
any other person accompanying him or her or entering at his or her direction,
and Buyer shall defend and hold Seller harmless from and against any injury,
loss, damage, or expense to persons or property arising out of or in connection
with any such entry. Buyer may not enter the property without Seller's
permission.
J. Buyer acknowledges that South Florida Water Management District is
the local permitting authority for surface water permits. Therefore, Buyer
understands and acknowledges that on-site lakes, if any, are designed as water
management areas and are not designed as aesthetic features. Due to low ground
water elevations within the immediate area, lakes located on site, if any, may
be extremely shallow during several months of the year. Buyer further
understands and acknowledges that Seller (who is also the developer of the
Condominium) has no control over such elevations. Buyer waives and forever
releases all claims, demands and causes of action, if any, that Buyer may have
at any time or times against Seller for all fluctuations in the water elevations
in the lakes around the Condominium or in the Condominium, including the absence
of any water in the lakes. The provisions of this subparagraph k shall survive
closing and delivery of the deed to the Buyer.
K. Exterior walls will be insulated with batt insulation to a nominal
thickness of 6", which, according the manufacturer, will yield an R value of 19.
Interior walls will not be insulated. Roof areas shall be insulated with blown
insulation to an average thickness of 18" which, according to the manufacturer,
will yield an R value of 19. Seller reserves the right to use different types of
insulation with different thicknesses and R-Values in accordance with the
provisions of Article II of these Standards.
L. Buyer acknowledges and agrees that there will be a lien against the
Resort Unit for any assessment due from the owner of the Resort Unit and not
paid to the Association, the Community Association, or the CDD. Buyer further
acknowledges and agrees that there will be a lien against the Resort Unit for
any assessment or payment due from the owner(s) of the Resort Unit, whether owed
by the Resort Unit individually or the Condominium as a whole, or otherwise
under the Use and Access Agreement, and not paid in a timely manner, to GEI (as
defined in the Use and Access Agreement).
M. Florida Statutes, Section 404.056, requires the following
notification:
RADON GAS: Radon is a naturally occurring radioactive gas
that, when it has accumulated in a building in sufficient
quantities, may present health risk to persons who are exposed
to it over time. Levels of radon that exceed Federal and State
Guidelines have been found in buildings in Florida. Additional
information regarding radon and radon testing may be obtained
from your county public health unit.
Seller has performed no tests to determine radon levels. There
are no warranties, express or implied, concerning the presence of radon gas.
Buyer understands and agrees that the prevention of radon gas accumulation in
the Resort Unit is the exclusive responsibility of Buyer. BUYER HEREBY WAIVES
ALL CLAIMS AND CAUSES OF ACTION OF ANY KIND OR CHARACTER AGAINST SELLER FOR
DAMAGES, LOSS OR EXPENSE ARISING FROM OR ASSOCIATED WITH THE PRESENCE OF RADON
GAS, KNOWN OR UNKNOWN.
B-10
<PAGE>
N. Buyer represents and warrants that the sale of the Resort Unit
pursuant to the Agreement was facilitated by the Broker as indicated in the
Agreement (there shall be deemed to be no Broker for the sale unless indicated
in the Agreement at the time of execution thereof), and that no action or
inaction or conduct on the part of Buyer would give rise to a real estate
commission being due to any other real estate broker or salesman other than said
Broker. Buyer agrees to indemnify and hold Seller harmless from the claims of
any such person claiming a real estate commission including, but not limited to,
any "Legal Fees" which Seller may incur as the result of any such claims. This
representation, warranty and agreement shall survive the closing. "Legal Fees"
as used in this subparagraph mean: (i) reasonable fees for attorney and
paralegal services incurred in negotiation and preparation for trial, whether or
not a proceeding is actually begun, through and including all trial and
appellate levels and postjudgment proceedings; and (ii) costs through and
including all trial and appellate levels and postjudgment proceedings.
O. Buyer acknowledges that Seller or a company or other entity
affiliated with Seller shall have the right to utilize all of the common
elements of the Condominium and any models and/or sales office located or to be
located in Lely Resort and/or the Condominium in connection with the sale of
units in this or in other projects or developments.
P. Prior to closing and upon notice from Seller, Buyer shall inspect
the Resort Unit with Seller and shall specify any work required to conform the
Resort Unit to the plans and specifications. Seller shall have a period of sixty
(60) days from the date of inspection by Buyer to complete all appropriate work.
No requests for adjustments, improvements or repairs shall be honored by Seller
unless set forth at the time of inspection. The fact that Seller has still to
complete the work contemplated pursuant to the inspection shall not delay or
postpone the obligation of Buyer to close and pay the balance of the Purchase
Price.
Q. The Agreement shall be construed in accordance with the laws of the
State of Florida and venue shall be exclusively in Collier County, Florida.
R. Buyer acknowledges, prior to or at the time of signing of the
Agreement, having received the Energy Efficiency Rating brochure described in
Section 553.996(2), Florida Statutes. The building's energy efficiency rating
shall be provided upon request to Buyer pursuant to F.S. 553.996(1)(b). The
aforesaid disclosures are for the use of Buyer only.
B-11
<PAGE>
EXHIBIT "A"
RENTAL PROGRAM AGREEMENT
Attach copy with full exhibits thereto, even if duplicate of what is contained
in the Offering Circular.
<PAGE>
ANNEX C
<TABLE>
<CAPTION>
FURNISHINGS, FIXTURES & HOUSEWARES
FURNITURE & FIXTURES
THREE-BEDROOM UNITS
LIVING/DINING ROOM
Item No.
---- ---
<S> <C> <C>
Bar stools 3
Round table 1
Dining chairs 6
Chandelier 1
Sofa 1
Coffee table 1
End table 1
End table lamp 1
Floor lamp 1
Armoire/TV cabinet 1
Window treatments 1 set
Artwork 1
Silk plant 1
Television/remote control [size?] 1
LANAI
Item No.
Patio table 1
Chairs 4
Silk plant 1
MASTER BEDROOM
Item No.
King bed 1
C-1
<PAGE>
MASTER BEDROOM
Item No.
---- ---
King headboard 1
Nightstands 2
Nightstand lamps 2
TV cabinet/armoire 1
King coverlet and dust ruffle 1 set
Window treatments 1 set
Artwork 1
Television/remote control [size?] 1
Clock radio 1
DEN/BEDROOM NO. 3
Item No.
---- ---
Queen sleeper sofa 1
End table 1
End table lamp 1
Side chair 1
Sofa table 1
Sofa table lamp 1
Mirror 1
Coffee table 1
Window treatments 1 set
Mini blind 1
Artwork 1
Clock radio 1
BEDROOM NO. 2/ LOCKOUT HOTEL ROOM
Item No.
Double beds 2
Double-bed headboards 2
Coverlets and dust ruffles 2
Nightstand 1
C-2
<PAGE>
BEDROOM NO. 2/ LOCKOUT HOTEL ROOM
Item No.
---- ---
Nightstand lamp 1
Dresser 1
Dresser mirror 1
Dresser lamp 1
Chair 1
Window treatments 1 set
Artwork
Television/remote control 1
Clock radio 1
Mini fridge 1
MASTER BEDROOM LINENS
Item No.
Pillows 4
Flat sheets 1 set
Pillow cases 1 set
Mattress cover 1
C-3
<PAGE>
HOUSEWARES
THREE-BEDROOM UNITS
BATHROOMS
Item No.
Shower curtain 1
Waste basket 1
COOKWARE
Item No.
---- ---
1 qt. saucepan/lid 1
2 qt. saucepan/lid 1
Dutch oven/lid 1
Skillet 1
1 1/2qt. mixing bowl 1
3 qt. mixing bowl 1
Baking dish 1
Cookie sheet 1
Broiler pan 1
MISCELLANEOUS
Item No.
---- ---
Tea kettle 1
Cutting board 1
Measuring cup 1
Colander 1
Juice pitcher 1
Ice cube trays 2
Pot holders 2
Waste basket (kitchen) 1
Place mats 8
Measuring spoons 1 set
Iron 1
Ironing board 1
C-4
<PAGE>
MISCELLANEOUS
Item No.
---- ---
Mop 1
Broom 1
Paper towel holder 1
Hangers [#?]
Ice buckets/lids 2
Plastic drink tray 2
SMALL APPLIANCES
Item No.
Toaster 1
Coffee maker (kitchen) 1
Coffee maker (2nd bedroom/ 1
lock-out hotel room)
AM/FM clock radio 1
KNIVES/UTENSILS
Item No.
---- ---
Corkscrew 1
Vegetable peeler 1
Basting spoon 1
Slotted spoon 1
Turner 1
Cooking fork 1
Carving knife 1
Paring knife 1
Ladle 1
Bottle opener 1
Can opener 1
Bread knife 1
DINNERWARE
Item No.
Dinner plates 8
C-5
<PAGE>
DINNERWARE
Item No.
---- ---
Salad plates 8
Cereal/soup bowls 8
Cups 8
Saucers 8
Platter 1
Vegetable bowls 2
Salt and pepper shakers 1 set
Creamer 1
Sugar bowl 1
FLATWARE
Item No.
---- ---
Flatware box 1
Teaspoons 8
Soup spoons 8
Dinner forks 8
Salad forks 8
Dinner knives 8
Steak knives 8
GLASSWARE
Item No.
8 1/2 oz. wine glasses 8
14 oz. beverage glasses 8
7 oz. juice glasses 8
OTHER FEATURES
Item No.
Ceiling fan (Lanai)[other rooms?] [#?]
Carpet [room(s)?] N/A
Ceramic tile [rooms?] N/A
Light fixtures [#?]sets
C-6
<PAGE>
OTHER FEATURES
Item No.
---- ---
Dishwasher 1
Clothes washer 1
Dryer 1
Luggage racks [room?] N/A
Full length mirrors [room?] N/A
Bathroom wall vinyl [?] N/A
C-7
<PAGE>
LINENS
THREE-BEDROOM UNITS
TOWELS (per bathroom)
Item No.
Bath towels 4
Hand towels 4
Wash cloths 4
MASTER BEDROOM LINENS
Item No.
Pillows 2
King flat sheets 1 set
Pillow cases 1 set
Mattress cover 1
BEDROOM NO. 2 LINENS
Item No.
Pillows 4
King flat sheets 2 sets
King pillow cases 2 sets
Mattress cover 1
DEN LINENS
Item No.
Pillows 2
Queen flat sheets 1 set
Queen pillow cases 1 set
Mattress cover 1
C-8
<PAGE>
FURNITURE & FIXTURES
TWO-BEDROOM UNITS
LIVING/DINING ROOM
Item No.
---- ---
Bar stools 3
Dining table 1
Dining chairs 4
Chandelier 1
Sofa 1
Coffee table 1
End table 1
End table lamp 1
Floor lamp 1
Armoire/TV cabinet 1
Window treatments 1 set
Artwork 1
Silk plant 1
Television/remote control [size?] 1
LANAI
Item No.
Patio table 1
Chairs 4
Silk plant 1
MASTER BEDROOM
Item No.
---- ---
King bed 1
King headboard 1
Nightstands 2
Nightstand lamps 2
TV cabinet/armoire 1
King coverlet and dust ruffle 1 set
C-9
<PAGE>
MASTER BEDROOM
Item No.
Window treatments 1 set
Artwork 1
Television/remote control [size?] 1
Silk plant 1
BEDROOM NO. 2
Item No.
---- ---
Twin beds 2
Twin headboards 2
Nightstand 1
Nightstand lamp 1
Dresser/mirror 1
Dresser lamp 1
Chair 1
Coverlets and dust ruffles 2 sets
Window treatments 1 set
Artwork 1
Floor lamp 1
Clock radio 1
Television/remote control [size?] 1
C-10
<PAGE>
HOUSEWARES
TWO-BEDROOM UNITS
BATHROOMS
Item No.
Shower curtain 1
Waste basket 1
COOKWARE
Item No.
---- ---
1 qt. saucepan/lid 1
2 qt. saucepan/lid 1
Dutch oven/lid 1
Skillet 1
1 1/2qt. mixing bowl 1
3 qt. mixing bowl 1
Baking dish 1
Cookie sheet 1
Broiler pan 1
MISCELLANEOUS
Item No.
---- ---
Tea kettle 1
Cutting board 1
Measuring cup 1
Colander 1
Juice pitcher 1
Ice cube trays 2
Pot holders 2
Waste basket (kitchen) 1
Place mats 8
Measuring spoons 1 set
Iron 1
Ironing board 1
C-11
<PAGE>
MISCELLANEOUS
Item No.
---- ---
Mop 1
Broom 1
Paper towel holder 1
Hangers [#?]
Ice bucket/lid 1
Plastic drink tray 1
SMALL APPLIANCES
Item No.
Toaster 1
Coffee maker (kitchen) 1
KNIVES/UTENSILS
Item No.
---- ---
Corkscrew 1
Vegetable peeler 1
Basting spoon 1
Slotted spoon 1
Turner 1
Cooking fork 1
Carving knife 1
Paring knife 1
Ladle 1
Bottle opener 1
Can opener 1
DINNERWARE
Item No.
Dinner plates 8
Salad plates 8
Cereal/soup bowls 8
Cups 8
C-12
<PAGE>
DINNERWARE
Item No.
---- ---
Saucers 8
Platter 1
Vegetable bowls 2
Salt and pepper shakers 1 set
Creamer 1
Sugar bowl 1
FLATWARE
Item No.
---- ---
Flatware box 1
Teaspoons 8
Soup spoons 8
Dinner forks 8
Salad forks 8
Dinner knives 8
Steak knives 8
GLASSWARE
Item No.
8 1/2 oz. wine glasses 8
14 oz. beverage glasses 8
7 oz. juice glasses 8
C-13
<PAGE>
OTHER FEATURES
Item No.
---- ---
Ceiling fan (Lanai)[other rooms?] [#?]
Carpet [room(s)?] N/A
Ceramic tile [rooms?] N/A
Light fixtures [#?]sets
Dishwasher 1
Clothes washer 1
Dryer 1
Luggage racks [room?] N/A
Full length mirrors [room?] N/A
Bathroom wall vinyl [?] N/A
C-14
<PAGE>
LINENS
TWO-BEDROOM UNITS
TOWELS (per bathroom)
Item No.
Bath towels 4
Hand towels 4
Wash cloths 4
MASTER BEDROOM LINENS
Item No.
King pillows 2
King flat sheets 1 set
Pillow cases 1 set
Mattress cover 1
BEDROOM NO. 2 LINENS
Item No.
---- ---
Twin pillows 2
Twin flat sheets 2 sets
Twin pillow cases 2 sets
Twin Mattress covers 2
C-15
</TABLE>
<PAGE>
ANNEX D
FLOOR PLANS
Page 1
Phase 1 and Phase 17 (Building 1 and Building 17)
- -------------------------------------------------
Typical 10 Unit Building
Depiction of Front Elevation
Page 2
First Floor Plan
Depicts two Typical Unit As and four Typical Unit Bs (two typical and two
reversed)
Depiction shows 6 entrance ways off two stairways, including shared entranceway
with private entry for hotel room included with Typical Unit A and four sets of
air conditioner pads comprising limited common elements at either ends of
building. Depiction also shows lanai comprising a limited common element that is
included at the rear of each unit.
Page 3
Second Floor Plan
Depicts four Typical Unit Bs (two typical and two reversed)
Depiction shows 4 entranceways off two stairways. Depiction also shows lanai
comprising a limited common element that is included at the rear of each unit.
Page 4
Depicts detail of Unit Type A Typical
Detail includes Master Bedroom with walk-in closet and linear closet, Master
Bath, Living/Dining area, Second Bedroom with walk-in closet, Kitchen and
adjacent laundry area, including appliances, Third Bedroom (private hotel room)
and connecting Bath and independent Bath adjacent to Second Bedroom. Depicts
HVAC unit space opposite kitchen. Lanai is shown as accessible from Master
Bedroom and Living/Dining area. Entrances through Kitchen and Third Bedroom
(separate private hotel room).
D-1
<PAGE>
Page 5
Depicts detail of Unit Type B Typical
Detail includes Master Bedroom with walk-in closet and linear closet, Master
Bath, Living/Dining area, Second Bedroom with linear closet, Kitchen and
adjacent laundry area, including appliances and Bath adjacent to Second Bedroom.
Depicts HVAC unit space opposite kitchen. Lanai is shown as accessible from
Master Bedroom and Living/Dining area. Entrance through kitchen.
Page 6
Phase 2 through Phase 17 (Buildings 2 through Building 16)
- ----------------------------------------------------------
Typical 12 Unit Building
Depiction of Front Elevation
Page 7
First Floor Plan
Depicts two Typical Unit As and four Typical Unit Bs (three typical and three
reversed)
Depiction shows 6 entranceways off two stairways, including shared entranceway
with private entry for hotel room included with Typical Unit A and four sets of
air conditioner pads comprising a limited common elements at either ends of
building. Depiction also shows lanai comprising a limited common element that is
included at the rear of each unit.
Page 8
Second Floor Plan
Depicts two Typical Unit As and four Typical Unit Bs (three typical and three
reversed)
Depiction shows 6 entranceways off two stairways, including shared entranceway
with private entry for hotel room included with Typical Unit A. Depiction also
shows lanai comprising a limited common element that is included at the rear of
each unit.
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Page 9
Depicts detail of Unit Type A Typical
Detail includes Master Bedroom with walk-in closet and linear closet, Master
Bath, Living/Dining area, Second Bedroom with walk-in closet, Kitchen and
adjacent laundry area, including appliances, Third Bedroom (private hotel room)
and connecting Bath and independent Bath adjacent to Second Bedroom. Depicts
HVAC unit space opposite kitchen. Lanai is shown as accessible from Master
Bedroom and Living/Dining area. Entrances through Kitchen and Third Bedroom
(separate private hotel room).
Page 10
Depicts detail of Unit Type B Typical
Detail includes Master Bedroom with walk-in closet and linear closet, Master
Bath, Living/Dining area, Second Bedroom with walk-in closet, Kitchen and
adjacent laundry area, including appliances and Bath adjacent to Second Bedroom.
Depicts HVAC unit space opposite kitchen. Lanai is shown as accessible from
Master Bedroom and Living/Dining area. Entrance through Kitchen.
Pages 11 through 28
Depicts unit identification detail, including unit numbers.
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ANNEX E-1
FALA BELLA RESORT AND GOLF CLUB OF NAPLES
RENTAL PROGRAM AGREEMENT
THIS AGREEMENT is made on the day of , 199__, between LELY GOLF VILLAS
II LIMITED PARTNERSHIP, a Delaware limited partnership (hereinafter referred to
as "Rental Manager"), and *
(hereinafter referred to as "Owner").[* If jointly owned, one individual
is to be named primary contact.] In consideration of the terms, covenants and
conditions of this Rental Program Agreement, it is agreed as follows:
I. NATURE AND DURATION OF AGREEMENT
A. Owner agrees to make available for rental the property known as
Resort Unit of Fala Bella Resort and Golf Club of Naples, a Condominium (the
"Condominium"), located within a project generally known as the "Fala Bella
Resort and Golf Club of Naples", in Collier County, in the State of Florida
(hereinafter referred to as the "Resort Unit" or "Unit"). Owner contracts with
Rental Manager to serve as exclusive rental agent for the Resort Unit. It is
understood that the Resort Unit, and Rental Manager's rights hereto, include the
right to use of the limited common elements that may be reserved for the Unit
and a right to use of an undivided share in common elements appurtenant to the
Unit as defined by the Declaration of Condominium of Fala Bella Resort and Golf
Club of Naples, recorded in the Public Records of Collier County, Florida at
Official Records Book , Page and all amendments thereto, if any (the
"Declaration"). The Declaration, together with the Articles of Incorporation and
Bylaws of Fala Bella Resort and Golf Club of Naples Condominium Association,
Inc. (the "Condominium Association"), and any rules and regulations that may be
issued by the Condominium Association, are hereinafter referred to as the
"Condominium Documents".
B. Rental Manager will use the Resort Unit as a resort rental
accommodation unit and will rent it to guests who will occupy the Resort Unit.
It is agreed that Rental Manager will give its best efforts to securing suitable
renters, but that Rental Manager does not guarantee a specific rental occupancy
rate or a specific level of rental income. Rental Manager will set all rental
rates, and any other charges that may be assessed to guests, and will determine
all conditions under which the Resort Unit is rented. In doing so, it is
understood that a primary objective of Rental Manager will be to maintain the
goodwill of all rental guests and prospective guests, exclusive of those
destructive of property or in violation of the terms and conditions of this
Rental Program Agreement. It is specifically agreed that Rental Manager will
take whatever action it deems necessary to ensure the goodwill of guests, the
long-term benefits to owners of property within the Condominium, and the
integrity of this Rental Program Agreement.
C. Owner acknowledges that the services to be performed hereunder by
the Rental Manager shall relate only to the management and rental of the Unit,
and this Rental Program Agreement does not create any responsibility of the
Rental Manager with respect to the Common Elements of the Condominium or to
other properties or facilities in the Fala Bella Resort and Golf Club of Naples.
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D. Owner hereby specifically authorizes the Rental Manager to enter
into such agreements as the Rental Manager shall deem in its discretion
appropriate for Rental Manager's operation of the resort and the Resort Unit.
E. This Rental Program Agreement will continue in force and will govern
all transactions between Owner and Rental Manager for the duration and term of
the Use and Access Agreement (as such term is hereinafter defined), the initial
term of which, subject to extension, expires at 11:59 P.M. on June 30, 2034.
II. EXCLUSIVE SERVICE CONTRACT
A. It is understood that this Rental Program Agreement is an exclusive
service contract and that Rental Manager will have sole responsibility for
renting the Resort Unit. It is agreed that the Resort Unit will not be enrolled
in any other rental service program or any organized effort by the Owner to rent
the Resort Unit without the participation of Rental Manager through this Rental
Program Agreement. The Owner may not utilize a third party to assist in renting
the Resort Unit, including but not limited to travel agents, real estate brokers
or other rental agents. The Owner may not advertise for rentals or, otherwise,
solicit rentals of the Resort Unit. Any rental of the Resort Unit by the Owner,
or any other party(ies), without the express written consent of Rental Manager,
will be a violation of this Rental Program Agreement. If such violation occurs,
Rental Manager and Owner agree that in addition to all injunctive relief that
Rental Manager will be paid, by Owner, liquidated damages for each such
violation; said liquidated damages to be equal to sixty-six percent (66%) of the
highest daily rate then in effect for similar type units times the number of
days the Resort Unit was rented.
B. In the event, however, that a prospective renter is directed to the
Rental Manager by Owner, Rental Manager agrees to make reasonable efforts to
place such renter in Owner's Unit, should the Unit be available for the
requested duration of stay.
III. RENTAL REVENUE
A. Rental Manager will collect from its guests all applicable rental
revenue resulting from rental of the Resort Unit. It is agreed that such rental
revenue will be solely determined by Rental Manager and will be subject to
change from time to time at the sole discretion of Rental Manager. Rental
revenue does not include any funds collected for taxes or other governmental
payment requirements, including but not limited to sales tax and tourist tax .
B. After payment of any and all applicable travel agent fees, airline
booking fees, credit card and check collection fees, and any other applicable
collection or booking costs, from the monthly gross rental revenue earned by the
Resort Unit, Rental Manager will transfer three percent (3%) of the remaining
adjusted gross rental revenue to the Interior Maintenance Fund (hereinafter
referred to as "IMF") established for the Resort Unit. Rental Manager will
retain fifty percent (50%) of the adjusted gross rental revenue of each calendar
year as its commission for securing and servicing the rentals. The balance will
be paid to the Owner, subject to Rental Manager's right to deduct from Owner's
portion of the adjusted gross rental revenue any costs incurred by Rental
Manager with respect to the Resort Unit, as set forth in Section D below.
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C. Rental Manager will pay to Owner by check all amounts due for the
preceding month on or about the 20th day of each month.
D. Rental Manager reserves the right, in all instances, whether or not
specifically set forth elsewhere in this Rental Program Agreement, to deduct
from Owner's portion of the adjusted gross rental revenue, any costs incurred by
Rental Manager with respect to the Resort Unit. Such costs may include, at
Rental Manager's discretion, without limitation, unpaid taxes, assessments,
liens, judgments, IMF deficiencies, golf fees and Annual License Fees due under
the Use and Access Agreement, costs for any insurance purchased for the Resort
Unit by Rental Manager pursuant to Section XI.D, and any additional fees or
costs provided for in this Rental Program Agreement. In no event shall Rental
Manager's decision to incur such costs be deemed to make Rental Manager liable
for any costs other than those set forth as Rental Manager's in this Rental
Program Agreement.
E. Deposit funds for prospective guests are the property of the Rental
Manager until such time as the guest completes the applicable stay, and the
Rental Manager reserves the right to retain any forfeited deposit funds.
Interest on deposit funds shall run to the benefit of the Rental Manager.
IV. INTERIOR MAINTENANCE FUND
A. Rental Manager will establish for the Resort Unit an Interior
Maintenance Fund ("IMF") which will be funded, each month, at a rate equal to
three percent (3%) of the adjusted gross rental revenue credited to the Resort
Unit during the preceding month. Interest earned on monies held in the IMF will
be credited to the IMF. The IMF funds may be commingled with other Resort Unit
IMF funds, provided separate accountings are maintained.
B. Monies in the IMF will be used by Rental Manager, at its sole
discretion, to repair or replace furnishings, linens, decorative items,
accessories, floor and wall coverings, equipment and appliances as it deems
necessary. In making such repairs or replacements, Rental Manager agrees to
consult with Owner to the extent practicable. The Rental Manager has the
authority, but no obligation, to in its discretion advance funds to the IMF, and
to on its own authority recoup any such advanced funds from future revenues,
unless otherwise reimbursed by Owner.
C. Owner understands that Rental Manager makes no warranty as to the
sufficiency of monies held in the IMF to pay the cost of all required repairs
and replacements. Owner agrees that if there are insufficient funds in the IMF
at the time repairs or replacements are necessary, the Owner will be responsible
for providing funds to the Rental Manager for such repairs or replacements.
Owner further understands and agrees that Rental Manager has no obligation to
advance funds against anticipated future rental income to the Owner for purposes
of meeting such expenses.
D. Owner understands and agrees that monies held in the IMF will be the
property of Rental Manager, and Owner will have no claim therein. Rental Manager
agrees that monies in the IMF will be spent only for repairs and replacements to
the Resort Unit and will not be used for any other purpose. Rental Manager
agrees to provide Owner, annually, a complete and detailed accounting of all
income and expense charged to the IMF.
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V. INTERIOR SUPPLY, MAINTENANCE AND REPAIR
A. The Resort Unit as purchased by Owner includes the initial items of
the then standard "Furnishings Package" and "Housewares Package" (hereinafter
jointly the "Initial Packages"). The respective contents of such Initial
Packages as currently contemplated are listed in Appendix B and Appendix C
hereto. Rental Manager retains the right in its sole discretion to modify from
time to time the contents of the Initial Packages, and replacements thereto.
B. Rental Manager will, at its expense, make minor repairs to the
Resort Unit as listed in Appendix A. Any other repairs to the Resort Unit shall
be done at Owner's expense.
C. Rental Manager will, at its expense, maintain the Housewares
Package, replacing items which are lost or damaged as needed. Maintenance and
replacement of the Furnishings Package shall be done at Owner's expense.
D. Rental Manager will, at its expense, regularly "deep clean" the
Resort Unit, including the cleaning of carpets, upholstery, draperies and
bedspreads, as required.
E. As described in the section titled, "Interior Maintenance Fund,"
Rental Manager will arrange, at its sole discretion, at Owner's expense, to
repair or replace any and all furnishings, linens, decorative items,
accessories, floor and wall coverings, equipment and appliances as it deems
necessary and for which adequate funds are available in the Resort Unit's IMF.
Services provided by Rental Manager maintenance personnel will be charged at the
then-current labor rates.
F. Rental Manager will advise Owner, in advance, if possible, of any
repairs to the Resort Unit for which Owner is responsible and the cost of which
is expected to exceed the balance in the Resort Unit's IMF. In the event of
emergency conditions, as determined by Rental Manager, arrangements will be made
for repairs to be performed without notice to Owner if Owner cannot be
immediately contacted. Rental Manager will forward to Owner the bill for actual
costs. Bills not paid by Owner within thirty (30) days may, at Rental Manager's
discretion, be paid by Rental Manager. In such instance, Rental Manager will
deduct the amount paid, plus a ten percent (10%) surcharge, from Owner's rental
payment(s). Owner will be liable for any amounts unpaid.
G. The Rental Manager will make periodic walk-through inspections of
the Unit to check for any apparent damage, and to make sure the appliances,
plumbing and electrical systems are in working order. The Rental Manager will
also make any mutually agreed upon special observations an Owner might request,
within reason. This shall not be interpreted as a guarantee by the Rental
Manager against loss resulting from theft, casualty, or similar loss, nor shall
the Rental Manager accept any liability for same unless otherwise provided in
this Rental Program Agreement.
VI. SECURITY AGREEMENT
A. Owner hereby grants to Rental Manager a security interest in any and
all personal property included within the Unit, including but not limited to the
Initial Packages, located on or at the premises where the Unit is located,
including without limitation any and all property of similar type or kind
hereafter located on or at such premises for the purpose of securing all
obligations of Owner set forth in this Rental Program Agreement. This instrument
is a self-operative security
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agreement with respect to the above described property (the "Personal
Property"), but Owner agrees to execute and deliver on demand such other
security agreements, financing statements and other instruments as Rental
Manager may request.
B. Owner shall not lease, sell, convey or in any manner transfer the
Personal Property without the prior written consent of Rental Manager, except as
part of the sale of the Resort Unit.
C. The Personal Property shall be kept at the Unit and Owner will not
remove the Personal Property from the Unit without the prior written consent of
Rental Manager.
D. All covenants and obligations of Owner contained herein relating to
the Unit shall be deemed to apply to the Personal Property whether or not
expressly referred to herein.
E. This Rental Program Agreement constitutes a Security Agreement as
that term is used in the Uniform Commercial Code of Florida.
VII. ONE-TIME ADMINISTRATIVE EXPENSE
Concurrent with the execution of this Rental Program Agreement, Owner
agrees to pay to the Rental Manager the sum of Five Hundred Dollars ($500.00) as
an initial one-time administrative expense to defray the costs of the
computerized rental and income tax reporting systems, administrative expenses
related to initial set-up and management of the computer system, and set-up of
telephone systems. This fee is non-refundable. This expense is neither connected
with nor to be applied or credited to the Owner's account in regard to the
division of rental revenue.
VIII. OWNER OCCUPANCY
A. (i) Owner occupancy of the Unit is subject to the limitations
contained in the Declaration. During the period of December 16 of each calendar
year through April 15th in the next calendar year ("Limited Use Season"), the
Owner may occupy the Resort Unit a maximum of seven (7) days during any one
30-day period. Once all seven (7) days have been used, the Owner must wait 10
more days before being eligible to occupy the Resort Unit, with the exception
that there may be one period of up to fourteen (14) days of Owner occupancy of
the Resort Unit within a particular 30-day period, in which case the Owner may
not occupy the Resort Unit for a period of 10 days before and after the first
and last day of such use. Notwithstanding any other provision of the
Declaration, this Rental Program Agreement, or otherwise, the Owner may not
occupy the Resort Unit for more than a total of four (4) cumulative weeks during
each Limited Use Season throughout the term of this Rental Program Agreement.
During any use by Owner in excess of this four (4) week cumulative total, Owner
shall be responsible for costs and fees of such use as would any other rental
guest. Other than availability, there are no limitations on Owner's occupancy of
the Resort Unit other than during the Limited Use Season.
(ii) The references herein to some provisions of the
Declaration are for convenience of reference only, and shall not affect the
construction of the provisions of the entire Declaration.
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B. In order to minimize the chances of your Resort Unit being
unavailable, the Rental Manager encourages Owner to provide Rental Manager with
written notice at least six months in advance of the dates during which Owner
wishes to use the Resort Unit. Owner understands that Rental Manager will use
its best efforts to accommodate Owner but that Rental Manager makes no guarantee
that it will be able to do so. In the event Owner's Resort Unit is unavailable,
and Owner elects to use another Resort Unit, Owner understands that he or she
will be responsible for costs and fees of such use as would any other rental
guest.
C. Owner agrees not to enter the Resort Unit or to permit any person,
whether family member, repairperson, guest or other, to enter the Resort Unit,
other than during confirmed periods of occupancy by Owner, without prior
notification to, approval of and coordination by Rental Manager.
D. Owner understands and agrees that in all cases, where the Resort
Unit is occupied by or has been reserved for a rental guest, Owner has no right
to occupy the Resort Unit during that period.
E. Owner agrees to abide by the then-current Rental Manager check-in
and check-out times during periods of occupancy by Owner and Owner's guests.
F. Owner understands and agrees that standard Rental Manager
housekeeping services will not be provided while the Resort Unit is occupied by
Owner and Owner's guests. Owners in residence may request periodic housekeeping
services, subject to availability and at rates then in effect.
G. Owner understands and agrees that in all cases, periods of occupancy
by Owner and/or Owner's guests shall be only as permitted by applicable law and
the Declaration.
H. Owner and Owner's guests are required by Florida Statutes to
register at the check-in facility before entering the Resort Unit. Please abide
by the standard check-in and check-out times. Failure to check out on time could
result in a late departure fee, as it might conflict with an arriving rental
guest. All keys (except for private storage lockers) must be returned to the
registration desk upon check-out.
I. Owner agrees to properly secure any personal belongings such as golf
clubs, personal items, and mementos in a locked area to be specified by the
Rental Manager when the Owner is not using the Resort Unit.
IX. GOLF RIGHTS
A. Owner understands and agrees that the use of the Golf Facilities (as
defined in the Use and Access Agreement defined hereinbelow) by Owner are
subject to all provisions of that certain Use and Access Agreement for Lely Golf
Villas recorded on March 13, 1998, in Official Records Book 2398, at Page 521,
Public Records of Collier County, Florida, as amended (the "Use and Access
Agreement"), to all provisions of the Declaration, to all provisions of this
Rental Program Agreement, and to all provisions of that certain Assignment and
Assumption from Lely Golf Villas I Limited Partnership, a Delaware limited
partnership, to Rental Manager which is recorded in
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Official Records Book at Page , of the Public Records of Collier County, Florida
(the "Assignment and Assumption").
B. Notwithstanding any other provision of this Rental Program
Agreement, the Use and Access Agreement, the Assignment and Assumption, the
Declaration, or otherwise, the rights of Owner to play golf are at all times
subject to availability. The rights of Owner to play golf are also subject to
the limitations contained in the Use and Access Agreement, the Assignment and
Assumption, this Rental Program Agreement, and the Declaration, which
limitations and rights include, without being limited to, the right to play one
18-hole round of golf at the Golf Facilities for a maximum of one hundred (100)
rounds per year (year means the period from November 1 through October 31 of
following calendar year), provided that no one individual shall be entitled to
play more than forty-two (42) times per year (year means the period from
November 1 through October 31 of following calendar year), under the following
conditions:
(1) If his or her Unit is not occupied by a Designated User (as defined
in the Use and Access Agreement) renting the Unit through the rental program,
any person classified as a Unit Owner or having the rights of a Unit Owner, may
make an advance reservation up to one (1) year in advance, and will not be
required to pay a greens fee. Such reservation will be canceled if the Unit is
subsequently rented.
(2) If the Unit is occupied by a Designated User renting the Unit
through the rental program, the Unit Owner shall have no advance reservation
rights to play golf, but shall be eligible to play on a stand-by space available
basis (i.e., no reservation under this Agreement, even after tee time is open to
public) without payment of a greens fee. This play will count toward the one
hundred (100) play times and toward the maximum of forty-two (42) per person.
(3) If the Unit Owner is scheduled to play one (1) eighteen (18) hole
round of golf at the Golf Facilities the Unit Owner may play a second eighteen
(18) hole round if there is space available at the actual tee-off time without
any reservation, without payment of a greens fee. The play will count toward the
one hundred (100) play times and towards the maximum of forty-two (42) per
person.
(4) Use of the Golf Facilities by the Unit Owner under these provisions
is limited during each Limited Use Season (as defined in Article VIII
hereinabove), during which time Unit Owner(s) will be able to use the Golf
Facilities a maximum of seven (7) days during any one (1) thirty (30) day period
and once all seven (7) days have been used, the Unit Owner(s) must wait ten (10)
more days for before being eligible for additional golf privileges, with the
exception that there may be one (1) period of up to fourteen (14) days of use
per year within a particular thirty (30) day period (in which case the Unit
Owner may not use the Golf Facilities for a period of ten (10) days before and
after the first and last day of such use). If such Unit Owner(s) desires to play
golf at the Golf Facilities more than one hundred (100) times for all of those
falling in the category of Unit Owner, and more than forty-two (42) times for
any individual per year, the Unit Owner(s) may do so, subject to the same
reservation privileges, as are applicable to the general public. The published
resort greens fee will be paid for such use in excess of one hundred (100)
rounds per all Owner(s) or those classified as having the use rights of Owner(s)
and in excess of forty-two (42) per individual as classified as an Owner from
November to April. During the months of May through October, from 1999 through
2004, no greens fee will be paid for such excess rounds. Commencing in May of
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2005, one-half (1/2) of the published resort greens fee will be paid for such
excess use during the months of May through October. Owner understands and
agrees that the 42-round maximum is an annual total per Unit.
(5) The recitation of some provisions of the Use and Access Agreement,
the Assignment and Assumption, and/or the Declaration herein is for convenience
of reference only, and shall not affect the construction of the provisions of
the entire Use and Access Agreement, the Assignment and Assumption and the
Declaration.
C. Owner further specifically acknowledges, agrees, and accepts that
Designated User golf rights as set forth in the Use and Access Agreement have
been previously conveyed to Rental Manager in the Assignment and Assumption, and
not passed on to Owner through purchase of the Resort Unit, execution of the
Rental Program Agreement, or otherwise. Owner specifically waives any objection,
standing, or right to challenge or question same, or to make any claim
whatsoever against any monies, proceeds, royalties or rights that may arise or
flow therefrom.
D. Owner specifically waives any objection, standing, or right to
challenge or question the golf rights as accepted by Owner under the
Declaration; hereby accepts the limited golf rights as a Unit Owner granted by
the Declaration pursuant to portions of the Use and Access Agreement; and
acknowledges adequate and full consideration therefor.
X. RIGHTS AND REMEDIES
A. If for any reason Rental Manager violates the terms of this Rental
Program Agreement, including but not limited to, gross negligence or failure to
pay rent for more than forty-five (45) days, Owner has the right to pursue
specific performance of this Rental Program Agreement, and all other legal and
equitable remedies available to Owner. Owner will give Rental Manager at least
fifteen (15) days written notice of Owner's intention to invoke the remedies
allowed under this section either by hand delivery, in person or by registered
or certified mail. Notice will be deemed given upon receipt.
B. If, for any reason, Owner violates any of the terms of this Rental
Program Agreement, including but not limited to, abuse of the Resort Unit by
Owner or his or her guests, Owner's failure to pay taxes and assessments or
utility bills, or failure to maintain the Resort Unit and its contents in good
order and repair, Rental Manager has the right to pursue specific performance of
this Rental Program Agreement, and all other legal and equitable remedies
available to Rental Manager. Rental Manager will give Owner written notice of
Rental Manager's intention to invoke the remedies allowed under this section
either by hand delivery, in person or by registered or certified mail. Notice
will be deemed given upon receipt. All remedies available to Rental Manager with
respect to this Rental Program Agreement shall be cumulative and may be pursued
concurrently or successively. No delay by Rental Manager in exercising any such
remedy shall operate as a waiver thereof or preclude the exercise thereof during
the continuance of that or any subsequent default.
C. In any court proceeding where it is determined that a party failed
to perform under the terms of this Rental Program Agreement, the aggrieved party
will be entitled to an award of reasonable fees for attorney and paralegal
services incurred in negotiation and preparation for litigation, whether or not
an action is actually begun, through and including all trial and appellate
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levels and post-judgment proceedings; and court costs through and including all
trial and appellate levels and post-judgment proceedings ("Attorneys' Fees").
D. Rental Manager reserves the right to collect from the Owner, through
rental revenue or otherwise, interest on any late or outstanding obligations of
Owner to Rental Manager at a rate of interest defined herein as the "Default
Rate". Rental Manager further reserves the right to collect from the Owner,
through rental revenue or otherwise, late and/or service charges on any returned
checks or unpaid amounts due to Rental Manager from Owner in the amount of 10%
of the amount in question. The Default Rate shall be the highest rate allowable
by law at the time of default, provided, however, that at no time shall any
interest or charges in the nature of interest be taken, exacted, received or
collected which would exceed the maximum rate permitted by law.
E. Any and all payments due from the Owner in accordance with the
provisions of this Rental Program Agreement, with interest thereon at the
Default Rate and costs of collection, including, but not limited to, Attorney's
Fees, are hereby declared to be a charge and continuing lien upon each Unit of
such Owner. Any and all such payments, together with interest thereon at the
Default Rate, and other costs of collection including, but not limited to,
Attorney's Fees, shall be the personal obligation of the Owner of such Unit.
Said lien shall be effective only from and after the time of the recordation
amongst the Public Records of a written, acknowledged statement by the Rental
Manager setting forth the amount due to the Rental Manager as of the date the
statement is signed. Upon full payment of all sums secured by that lien, the
party making payment shall be entitled to a satisfaction of the statement of
lien in recordable form. Notwithstanding anything to the contrary herein
contained, where an institutional mortgagee of record obtains title to a Unit as
a result of foreclosure of its first mortgage or deed in lieu of foreclosure,
such acquirer of title, its successors or assigns, shall not be liable for the
amount of liens, if any, pertaining to such Unit or chargeable to the former
Owner thereof which became due prior to the acquisition of title as a result of
the foreclosure or deed in lieu thereof, unless the lien(s) against the Unit in
question is secured by a claim of lien that is recorded prior to the recordation
of the mortgage which was foreclosed or with respect to which a deed in lieu of
foreclosure was given.
F. Unless a different method is required by Florida law, as amended
from time to time, the Rental Manager's lien for unpaid charges or costs may be
foreclosed by the procedures and in the manner provided in Section 718.116 of
the Florida Condominium Act, as it may be amended from time to time, for the
foreclosure of a lien upon a condominium parcel for unpaid assessment. If final
judgment is obtained, it shall include interest on the unpaid amounts at the
Default Rate, and Attorney's Fees to be fixed by the court, together with the
costs of the action, and the prevailing party shall be entitled to recover
Attorney's Fees in connection with any appeal of such action.
XI. INSURANCE
A. Owner will, at his or her expense, maintain in effect throughout the
term of this Rental Program Agreement, both property damage liability insurance
and bodily injury liability insurance in the minimum amount of Three Hundred
Thousand Dollars ($300,000.00) for each occurrence. All policies will be with
financially sound and reputable insurers deemed acceptable by Rental Manager and
will list LELY GOLF VILLAS II LIMITED PARTNERSHIP and "Rental Operator" (as that
term is hereinafter defined) as additional insureds on all liability policies.
Owner will notify Rental Manager immediately of any incident which might give
rise to a liability claim.
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Rental Manager will notify Owner immediately of any incident which might give
rise to a liability claim. Rental Manager will not be liable for any damage to
or destruction of Owner's property, including but not limited to goods,
equipment, fixtures, inventory or any other property used or retained by Owner,
except as provided in this Rental Program Agreement.
B. Owner expressly understands that Owner is solely responsible for
insuring Owner's personal property and contents within the Resort Unit and shall
carry insurance sufficient to replace all personal property and other items
contained within the Unit which are not insured by the Condominium Association
or the Rental Manager.
C. Owner will deliver to Rental Manager a Certificate of Insurance
evidencing that the abovementioned insurance is in full force and effect; that
Rental Manager will receive ten (10) days written notification from each and
every insurance company BEFORE an insurance policy is canceled for any reason,
including but not limited to failure by Owner to pay any premium or to renew any
insurance policy provided for by this Rental Program Agreement; and that LELY
GOLF VILLAS II LIMITED PARTNERSHIP and Rental Operator have been added as
additional insured to such policy. The above mentioned Certificate(s) of
Insurance will be mailed, upon commencement of the Rental Program Agreement and
prior to the renewal of policies each year, to:
Lely Golf Villas II Limited Partnership
3185 Horseshoe Drive South
Naples, Florida 34104
Attention: A. Jack Solomon
or such other address as the parties shall be notified of in writing.
D. Failure to do any of the above will be considered a material breach
of this Rental Program Agreement, and Rental Manager may purchase property
damage liability insurance and bodily injury liability insurance for the Resort
Unit; such policies to name Rental Manager and Owner as insured. The cost of
such insurance will be deducted from the rental payments due Owner.
E. Owner agrees that the policy of insurance referred to above will be
primary insurance for any liability, loss and/or damage, including but not
limited to, bodily injury or death arising from acts or occurrences within the
interior portions of the Resort Unit.
XII. OWNER PRIVILEGES
A. Owner understands that Rental Manager owns, operates, or has access
to certain amenities which enhance the attractiveness and value of the property
(i.e. Golf Facilities, the check-in facility, bar and grill, etc.). Rental
Manager operates these amenities for a fee, and access to them is restricted to
Owners, rental guests and others, as designated by Rental Manager. Rental
Manager reserves the right to add other amenities or facilities for use for a
fee or otherwise, in Rental Manager's sole discretion.
B. Rental Manager will provide for Owner during the period this Rental
Program Agreement is in effect access to the meeting rooms, sundry shop, and
other amenities offered in the check-in facility, subject to reasonable
limitations as may be imposed by the Rental Manager.
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C. Upon posting of adequate credit, the Owner will be allowed to
maintain a sundries account with the Rental Manager for all incidental purchases
of services, valet, food and beverages, or other miscellaneous personal
services. Said account will be billed by the Rental Manager at regular intervals
at Operator's discretion. Among other charges, the Owner and Owner's guests
shall pay for any and all local and long distance telephone customary charges
from the Unit during their stay. If the Owner shall desire that a designated
guest of the Owner staying in the Unit shall pay his or her own incidentals,
then the Owner must inform the Rental Manager in writing of that fact prior to
the guest's check-in and the guest must establish his or her own incidental
account and credit in the ordinary and customary manner, otherwise the Owner
will be responsible for such incidental charges.
D. The Rental Manager shall accept mail and packages for the Owner and
the Owner's guests only, but shall have no liability for proper delivery of
same.
XIII. WRITTEN COMMUNICATIONS/CORRESPONDENCE
Owner understands that he or she cannot rely on verbal or telephone
instructions to Rental Manager regarding reservations, maintenance or any other
matter. All such communications must be confirmed in writing.
XIV. OWNER PAYMENT OF OBLIGATIONS
A. Owner will fully and promptly pay any utility charges assessed to
the Resort Unit not otherwise handled through the Condominium. Owner agrees that
Rental Manager may pay delinquent utility bills to avoid interruption of
service.
B. Owner agrees to pay and discharge as they become due, promptly and
before delinquency, all taxes, condominium fees, assessments, golf fees, liens,
mortgage payments, and all other costs and expenses levied in connection with
the ownership, use and maintenance of the Resort Unit.
C. Owner agrees to pay during the terms of this Rental Program
Agreement on the first of each month or, if not paid, in the period from
November through August one/tenth of the Annual License Fee (as defined in the
Use and Access Agreement) attributable to the Resort Unit under the Use and
Access Agreement, and fully acknowledges that such amount will increase during
the term of this Rental Program Agreement which amount shall be deducted from
the amount otherwise payable to Owner under this Rental Program Agreement. The
Annual License Fee for the Resort Unit is due from the Rental Manager to GEI (as
defined in the Use and Access Agreement) on or before November 1 of each year;
however, the full amount of the Annual License Fee for the Resort Unit subject
to this Agreement is due from the Owner to the Rental Manager on or before
August 20th of each year. In the event that all golf fees are not paid in full
for the applicable year (such fees being due on or before August 20th for the
subsequent November through October period), Rental Manager is authorized to
deduct such unpaid amounts from Owner's rental revenue account as funds become
available. The Rental Manager shall establish for the Resort Unit an "Annual
License Fee Account" to be funded by the Owner's payments towards the applicable
Annual License Fee. Interest earned on the Annual License Fee Account will be
credited to the
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benefit of the Owner. The Annual License Fee Account funds may be commingled,
provided separate accountings are maintained.
D. The Rental Manager reserves the right to a receiver, and may, at any
time while a suit is pending to foreclose any mortgage against the Resort Unit
or to enforce any claims arising hereunder, apply to the court having
jurisdiction thereof for the appointment of a receiver, and such court shall
forthwith appoint a receiver of the Resort Unit. Rental Manager may elect to
accept payments from such receiver, trustee, or other judicial officer during
the term of their occupancy of their fiduciary capacity without affecting Rental
Manager's rights as contained in this Rental Program Agreement.
E. Nothing contained in this Rental Program Agreement nor any
transaction related hereto shall be construed or so operate as to require the
Owner to pay interest at a rate greater than it is now lawful in such case to
contract for, or to make any payment or to do any act contrary to law. The
Rental Manager shall reimburse the Owner for any interest paid in excess of the
highest rate allowed by law or any other payment which may inadvertently be
required to be paid contrary to law.
XV. ELECTRONIC SERVICES
Rental Manager may furnish in-unit television programming services and
private branch exchange (PBX) telephone services at Rental Manager's expense.
Owner will permit Rental Manager to install and maintain in the Resort Unit one
or more telephones connected to Rental Manager's switchboard. Owner agrees that
Rental Manager's PBX service will be the sole source of telephone service for
the Resort Unit. Long-distance and local telephone call service may be charged
to the registered occupant of the Resort Unit and will be collected upon
check-out. Owner agrees to accept responsibility for all charges resulting from
such calls made by Owner and Owner's guests.
XVI. PEST CONTROL
Pest control services, at the Owner's expense, will be arranged for by
the Rental Manager on a monthly basis, unless service adequate in the Rental
Manager's opinion is provided through the Condominium Association. If the Rental
Manager arranges for basic or supplemental pest control service, the Rental
Manager will charge the Owner's account a reasonable amount.
XVII. ASSIGNMENT/BINDING EFFECT
A. Rental Manager may assign its rights and duties under this Rental
Program Agreement to any other entity as long as the Assignee agrees, in
writing, to assume and perform the terms and covenants of this Rental Program
Agreement. Upon such assumption, Rental Manager shall be released from any and
all obligations hereunder.
B. Notwithstanding any other provision of this Rental Program
Agreement, Rental Manager has the right without limitation to contract with, or
delegate its duties to, an independent operator ("Rental Operator"), at Rental
Manager's discretion. Rental Operator shall have the protections and rights to
exercise, on behalf of Rental Manager, all of the rights and benefits
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accorded to the Rental Manager hereunder during the term of any such contract
with Rental Operator, including, but not limited to, the indemnifications
accorded Rental Manager under Article XVIII.
C. The Owner shall advise the Rental Manager in writing within five (5)
days of the Unit being offered for sale. Sales personnel must apply for and sign
for keys to the Unit for sale at the check-in facility. In order to ensure guest
privacy, keys will not be issued to sales personnel during the period of a
guest's occupancy, without the guest's consent. All keys must be returned on the
date of issuance. A monetary or other deposit, which may be posted by the Owner,
will be required of sales personnel as security for any key issued. The Rental
Manager hereby specifically denies, and the Owner hereby specifically releases
the Rental Manager from, all responsibilities for any loss or damage suffered by
the Owner as a result of or arising in any way out of the Rental Manager's
issuance of Unit keys to sales personnel. The Owner shall inform the Rental
Manager in writing ten (10) days prior to any proposed transfer of title to the
Resort Unit, and within twenty-four (24) hours of any actual transfer of title
to the Unit.
D. Upon sale and/or deeding of the Resort Unit by Owner to other
parties, all rights and duties of the owner under this Rental Program Agreement
shall automatically be assigned to the subsequent title holder(s) for the
duration of this Rental Program Agreement. The Rental Manager shall advise the
Owner of such Owner's IMF balance and Annual License Fee Account balance in the
event of a transfer of the Resort Unit to other parties. Although such
assignment shall be binding with no further action, by acceptance of a deed or
other manner of conveyance of the Resort Unit, the subsequent owner(s) agree to
execute promptly upon request from the Rental Manager such written documentation
of the assumption of this Rental Program Agreement as Rental Manager shall
reasonably deem appropriate. Assignment of this Rental Program Agreement shall
NOT relieve the prior owner of any obligations outstanding under this Rental
Program Agreement prior to such assignment. Rental Manager reserves the right to
hold responsible for any such obligations either the prior owner or the
subsequent owner, as the Rental Manager shall elect.
E. This Rental Program Agreement may, at Rental Manager's discretion,
be recorded, in full or in part through a memorandum of its terms, in the Public
Records of Collier County, Florida.
XVIII. INDEMNIFICATION AND HOLD HARMLESS
A. Rental Manager agrees to indemnify and hold Owner harmless from any
and all claims, demands, costs (including Attorney's Fees), damages (including,
without limitation, death) or judgments against Owner arising out of this Rental
Program Agreement and/or the activities contemplated by this Rental Program
Agreement. Rental Manager's duty to indemnify Owner will extend to all
liability, loss, damage, cost or expense to Owner arising from or in relation to
any event or occurrence taking place during the term of this Rental Program
Agreement, and Rental Manager's duty to indemnify Owner will be binding on all
successors and assigns of Rental Manager.
B. At Rental Manager's option, Owner agrees to allow Rental Manager to
participate in the defense against any claims brought or action filed against
Owner with respect to the indemnity contained herein.
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C. Notwithstanding the foregoing, Owner agrees to indemnify and hold
Rental Manager harmless from any and all claims, demands, costs (including
Attorney's Fees), damages (including but not limited to property damage,
personal injury and wrongful death) or judgments against Rental Manager arising
out of neglect or misconduct by the Owner and/or Owner's guests. Owner agrees to
indemnify and holds Rental Manager harmless from any and all claims, demands,
costs (including Attorney's Fees), damages (including but not limited to
property damage, personal injury and wrongful death) or judgments against Rental
Manager arising out of this Rental Program Agreement and/or the activities
contemplated by this Rental Program Agreement, due to neglect or misconduct by
the Owner and/or Owner's guests. Owner's duty to indemnify Rental Manager shall
extend to all liability, loss, damage, cost or expense to Rental Manager, and
the Owner's duty to indemnify Rental Manager shall be binding on all successors
and assigns of Owner.
D. At Rental Manager's option, Owner agrees to defend against any
claims brought or action filed against Rental Manager with respect to the
Owner's indemnity contained herein.
E. The Owner acknowledges and agrees that the Rental Manager shall not
be liable for any loss or damage to any person, furnishings or appurtenances
thereto, or to property of any nature brought thereon resulting from any source,
including but not limited to claims for damage resulting from (1) actions or
omissions of renters or their guests; (2) injury done or occasioned by wind,
rain or other elements; and/or (3) theft, vandalism, fire or acts of God. The
Rental Manager assumes no financial or other responsibility for lost, stolen or
damaged property owned by the Owner other than to notify the Owner of any such
loss, theft, or damages promptly after the same may actually become known to the
Rental Manager, and replacement of same at Owner's expense pursuant to Article V
of this Rental Program Agreement.
F. The Owner and the Rental Manager hereby waive any and all rights
against each other and any of their guests, agents and employees, each of the
other, for damages and claims caused by fire or other perils, and of subrogation
against the Rental Manager, the Condominium Association, and/or other Owners.
Owner shall ensure that any insurance policies purchased by the Owner or the
Condominium Association insuring property within Fala Bella Resort and Golf Club
of Naples shall provide for full waiver of any rights of subrogation, which
would preclude the insurer from denying the claim of Owner because of negligent
acts of the Rental Manager, or vice versa. In the absence of such provision, the
waivers by Owner and Rental Manager stated herein shall nonetheless be binding.
XIX. CONDOMINIUM DOCUMENTS AND OPERATIONS
A. During the term of this Rental Program Agreement, Owner will not
vote to amend or otherwise alter the Condominium Documents of the Condominium
Association or support any action by the Condominium Association Board on behalf
of its members that would prevent or restrict the use of the Resort Unit by
Rental Manager as a resort rental accommodation unit; and if said Condominium
Documents are amended or action taken that in any way prevent or restrict Rental
Manager's use of the Resort Unit as a resort rental accommodation Unit (whether
Owner votes for such amendment or action or not), Rental Manager may thereafter,
at its option, without limiting any other rights or remedies which may be
available to Rental Manager, at any time, cancel this Rental Program Agreement.
This Rental Program Agreement shall remain of full effect for the entire term
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hereof even in the event of termination of the Condominium pursuant to the
Condominium Documents or otherwise.
B. The Owner acknowledges and agrees that this Rental Program Agreement
is not intended to be and shall in no event be construed or interpreted to be an
agreement entered into by a condominium association or a condominium management
contract pursuant to the provisions of F.S. 718.302, an agreement for operation,
maintenance, or management of a condominium pursuant to F.S. 718.3025, a
contract for products and services pursuant to F.S. 718.3026, a management
contract, maintenance contract, or other contract pursuant to F.S.
718.503(1)(b)(5), or a management contract pursuant to F.S. 718.504(11) or F.S.
718.504 (23[e]).
XX. NOTICES
All notices, demands and requests given by either party hereto to the
other party shall be in writing. All notices, demands and requests by the Owner
to the Rental Manager shall be deemed to have been properly given if sent by
United States registered or certified mail, postage prepaid, addressed to the
Rental Manager at the address as the Rental Manager may from time to time
designate by written notice to the Owner, given as herein required. All notices,
demands and requests by the Rental Manager to the Owner shall be deemed to have
been properly given if sent by United States registered or certified mail,
postage prepaid, addressed to the Owner, or to such other address as the Owner
may from time to time designate by written notice to the Rental Manager given as
herein required. Notices, demands and requests given in the manner aforesaid
shall be deemed sufficiently served or given for all purposes hereunder at the
time such notice, demand or request shall be deposited in any post office or
branch post office regularly maintained by the United States Government. Initial
addresses for notices hereunder are as follows:
For Owner to:
For Rental Manager to: Lely Golf Villas II Limited Partnership
Attention: A. Jack Solomon
3185 Horseshoe Drive South
Naples, Florida 34104
XXI. PROMOTIONAL USE AND SIGNAGE
A. The Owner, in an effort to assist in promoting rental business,
hereby authorizes the Rental Manager to use the Resort Unit to house advance
conference planners, tour planners, travel writers, representatives of Rental
Manager visiting the resort in connection with the performing Rental Manager's
services, airline representatives and other persons on a complimentary or
discounted basis. Owner understands and agrees that he or she will not be
entitled to any rental income payment for such complimentary use.
B. Rental Manager will have the right to install, display and maintain
signs and other advertising material or notices on, in, and about the Resort
Units and the Condominium Property in connection with the marketing and
operation of its rental activities. The Owner hereby waives any
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objection he or she might have against these rights to install, display and
maintain such signs and other advertising material or notices.
XXII. COSTS OF COLLECTION AND VENUE
A. In the event this Rental Program Agreement is placed by the Rental
Manager in the hands of an attorney for the collection of any sum payable
hereunder, the Owner agrees to pay all costs of collection, including Attorney's
Fees, incurred by the Rental Manager, either with or without the institution of
any action or proceeding, and in addition to all costs, disbursements and
allowances provided by law. All such costs so incurred shall be deemed to be
secured by this Rental Program Agreement.
B. Both parties further agree that venue for any such action will be
Collier County, Florida. This Rental Program Agreement will be recorded in the
public records of Collier County and will be construed in accordance with the
laws of the State of Florida.
C. OWNER AND RENTAL MANAGER HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION (INCLUDING BUT NOT LIMITED TO ANY CLAIMS, CROSS-CLAIMS, OR THIRD
PARTY CLAIMS) ARISING OUT OF, UNDER, OR IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED HEREIN. OWNER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF
THE RENTAL MANAGER NOR THE RENTAL MANAGER'S COUNSEL HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT THE RENTAL MANAGER WOULD NOT, IN THE EVENT OF SUCH
LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. OWNER
ACKNOWLEDGES THAT THE RENTAL MANAGER HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, BY, INTER ALIA, THE PROVISIONS OF THIS PARAGRAPH.
XXIII. OWNER WARRANTS
A. Owner warrants that he or she has read this Rental Program Agreement
and that he or she understands that by entering into this Rental Program
Agreement he or she restricts his or her personal use of the Resort Unit.
B. Owner further warrants that this Rental Program Agreement is a
covenant running with the property, including resale, subsequent deeding to
other parties, or any form of conveyance of the Resort Unit or any interest
therein, including but not limited to foreclosure, tax sale, bankruptcy, and/or
mortgage(s) and other security arrangements, and termination of the Condominium.
XXIV. ENTIRE AGREEMENT AND SUCCESSORS IN INTEREST
This Rental Program Agreement contains the entire and only agreement
between the parties concerning the Resort Unit and will be binding on the heirs,
personal representatives, successors and assigns, respectively, of each party.
The declaration of any provision of this Rental Program
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Agreement to be invalid will not affect the validity of any other provision or
of the Rental Program Agreement itself.
XXV. RADON GAS DISCLOSURE
Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been found in buildings in Florida. Additional information
regarding radon and radon testing may be obtained from your county public health
Unit.
XXVI. COMPLIANCE WITH REGULATIONS
The Owner hereby acknowledges and requests the Rental Manager to take
responsibility for the filing, collection and reporting of all related sales and
rental taxes earned in the operation of the Unit. Further the Owner and the
Rental Manager agree to abide by all rules, orders, determinations, ordinances
and any other legislation of any federal, state, municipal, or other
governmental authority that would pertain to the operation of the Unit.
XXVII. INSURANCE
The Rental Manager shall maintain such insurance as will protect it
from any claims under the Worker's Compensation act and other employee claims or
damages because of bodily injury or death to its employees or subcontractors,
agents, or their employees. Certificates of such insurance shall be available
for review by the Owner upon request.
XXVIII. RENTAL MANAGER - OWNER RELATIONSHIP
This Rental Program Agreement shall not be deemed to create any
relationship of employer and employee or of principal and agent as between the
Owner and the Rental Manager, and it is specifically agreed that the Rental
Manager is an independent contractor. The Rental Manager shall not be liable for
or responsible for any damage to the Unit or its contents caused by any person,
including any tenant of the Unit.
XXIX. TITLES
Titles or captions to the various sections hereof are used for
convenience of reference only and shall be considered of no effect in the
construction of any provisions of this Rental Program Agreement.
XXX. HEIRS AND/OR ASSIGNS
This Rental Program Agreement shall be binding upon the heirs,
executors, administrators, grantees, successors and/or assigns of the Owner and
on the successors and assigns of the Rental Manager.
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XXXI. ADDITIONAL DOCUMENTATION
Owner hereby agrees to execute and deliver any and all documents as may
be reasonably required by Rental Manager at any time in order to carry out the
terms of this Rental Program Agreement and give effect hereto.
XXXII. MODIFICATIONS IN WRITING
This Rental Program Agreement may not be changed, terminated or
modified orally or in any other manner than by an instrument in writing signed
by the party against whom enforcement is sought. This requirement for
modifications shall not apply to items contemplated to be modified on a regular
basis under the terms of this Rental Program Agreement, including without
limitation, changes to the Initial Packages, and to the rates and fees of the
rental program.
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In Witness hereof, the said parties have signed and sealed this
instrument on the aforesaid date.
AS TO RENTAL MANAGER :
Signed and sealed in the
presence of: LELY GOLF VILLAS II LIMITED PARTNERSHIP
a Delaware limited partnership
By: RONTO GOLF MANAGEMENT, INC.
a Florida corporation
a General Partner
Witness By:
Printed Name Printed Name:
Witness Its:
Printed Name (CORPORATE SEAL)
AS TO OWNER:
Witness OWNER OF RECORD
Printed name Social Security Number: *
Witness
Printed Name
Witness OWNER OF RECORD
Printed Name Social Security Number: *
Witness
Printed Name
*Must correspond with name of Owner appearing on lease payment checks
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<PAGE>
STATE OF FLORIDA )
) SS:
COUNTY OF __________ )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State aforesaid and in the County aforesaid to take
acknowledgments, the foregoing instrument was acknowledged before me by , as of
RONTO GOLF MANAGEMENT, INC., a Florida corporation, as a general partner of LELY
GOLF VILLAS II LIMITED PARTNERSHIP, a Delaware limited partnership. He/She is
personally known to me or who has produced as identification.
WITNESS my hand and official seal in the County and State last
aforesaid this ____ day of ________________, 19___.
My Commission Expires:
Notary Public
Typed, printed or stamped name of Notary Public
STATE OF FLORIDA )
) SS:
COUNTY OF __________ )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State aforesaid and in the County aforesaid to take
acknowledgments, the foregoing instrument was acknowledged before me by
_________________________________________, who is personally known to me or who
has produced ________________________ as identification.
WITNESS my hand and official seal in the County and State last
aforesaid this ____ day of ___________________, 19___.
My Commission Expires:
Notary Public
Typed, printed or stamped name of Notary Public
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STATE OF FLORIDA )
) SS:
COUNTY OF __________ )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State aforesaid and in the County aforesaid to take
acknowledgments, the foregoing instrument was acknowledged before me by
_________________________________________, who is personally known to me or who
has produced ________________________ as identification.
WITNESS my hand and official seal in the County and State last
aforesaid this ____ day of ___________________, 19___.
My Commission Expires:
Notary Public
Typed, printed or stamped name of Notary Public
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APPENDIX A
MINOR REPAIR SERVICES
Rental Manager will provide the following services at no charge:
Respond to all calls for maintenance, inspect and diagnose problem,
take action to stop cause of problem, and requisition services as
required.
Replace light bulbs.
Unstop toilets, sinks or tubs by use of a plunger.
Replace fastener caps on toilets.
Unclog and reset garbage disposals.
Replace batteries in smoke detectors, remote controls and clocks.
Reconnect or replace drapery pull rods.
Replace drapery and shower curtain hooks, glides and wands.
Change A/C filters and add algae tablets as needed.
Make adjustments to and/or lubricate screens, cabinet doors and
drawers, sliding glass doors and closet doors.
Inspect, adjust and lubricate locks on doors, glass sliders and
screens.
Tighten sliding glass door handles, closet door and cabinet drawer
pulls.
Replace flapper balls and fluid masters.
Replace standard plastic electrical wall plate covers.
Replace halos, finials and lamp sockets.
Secure and replace towel racks and tissue roll holders.
Reset electrical service breakers.
Reset Ground Fault Indicators.
Clean out traps in dishwashers.
Caulk around bathtubs, vanities and sinks.
<PAGE>
ANNEX E-2
RESORT MANAGEMENT AGREEMENT
RESORT MANAGEMENT AGREEMENT (this "Agreement") made as of the ___ day
of May, 1999 between LELY GOLF VILLAS II LIMITED PARTNERSHIP, a Delaware limited
partnership ("Rental Manager") and MERISTAR MANAGEMENT COMPANY, L.L.C., a
Delaware limited liability company ("Rental Operator").
RECITALS
A. Rental Manager has, or shall acquire, the right to manage
approximately 200 fully furnished residential condominium units (the "Rental
Units"), and four commercial units and a management building (such commercial
units and management building being collectively the "Resort Facilities" and the
Rental Units, the Resort Facilities and certain other facilities all as more
specifically set forth in Section 1.1 below being hereinafter collectively
referred to as the "Managed Facilities"), which management building will be
located adjacent to but not on the property constituting the condominium (the
"Condominium") of which the Rental Units and the four commercial units are a
part, all as more particularly described herein and to be constructed on a site
located at Lely Resort, Naples, Florida (the Managed Facilities, together with
certain other facilities of the Condominium more particularly identified herein
not being managed by Rental Manager, being hereinafter referred to as the
"Resort"). The Resort will be known as the "Fala Bella Resort and Golf Club of
Naples" (or such other name as may be designated by Rental Manager);
B. Each of the Rental Units shall be subject to a Rental Program
Agreement (individually and collectively, the "Rental Program Agreement")
pursuant to which Rental Manager shall, among other things, undertake to operate
such units as a vacation rental property on behalf of the owners thereof;
C. Lely Golf Villas I Limited Partnership ("Lely I") has entered into a
certain Use and Access Agreement (as amended and as partially assigned to Rental
Manager, the "Use and Access Agreement"), pursuant to which owners and certain
other users of the Rental Units shall have the right to use the Flamingo Island
and Mustang Golf courses at Lely Resort (the "Golf Course") subleased and
operated by Golf Enterprises, Inc. (the "Golf Course Rental Manager") on a
preferred basis as more particularly set forth in the Use and Access Agreement;
D. The rights of Lely I under the Use and Access Agreement have been
partially assigned to, and the obligations of Lely I under the Use and Access
Agreement have been partially assumed by, Rental Manager prior to the date
hereof pursuant to a certain Assignment and Assumption Agreement between Lely I
and Rental Manager;
E. Rental Manager desires to engage Rental Operator to manage the
Managed Facilities and to perform Rental Manager's obligations under the Rental
Program Agreement and the Use and Access Agreement on behalf of Rental Manager;
and
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F. Rental Manager and Rental Operator desire to evidence their
agreement with respect to the operation, direction, management and supervision
of certain aspects of the Resort as more particularly set forth below.
NOW, THEREFORE, for and in consideration of the premises, and other
good and valuable consideration, Rental Manager and Rental Operator agree as
follows:
ARTICLE I
THE MANAGED FACILITIES
1.1. Rental Manager and Rental Operator acknowledge that the Managed
Facilities consist of and contain:
A. Rental Manager's rights and obligations under the Rental Program
Agreement with respect to the operation of 200 Rental Units (64 of which are
three-bedroom, three-bath units which can function as 64 two-bedroom, two-bath
units and 64 hotel rooms) owned by third parties or affiliates of the Rental
Manager, each of which Rental Units are or shall be subject to the Rental
Program Agreement. Each of the Rental Units shall be stocked with a "Furnishings
Package" and a "Housewares Package" (as such terms are used in the Rental
Program Agreement) consisting of (i) all furniture, furnishings, wall coverings,
floor coverings, window treatments, fixtures and other equipment and (ii) all
dishware, glassware, silverware, linens, and other items of a similar nature,
necessary or desirable to operate each Rental Unit as a mid-tier vacation resort
rental property (collectively, the "Initial Package"). The Initial Package with
respect to each Rental Unit shall be provided at the expense of and owned by the
owner of each such Rental Unit, and shall be replaced from time to time from an
interior maintenance fund of 3% of gross revenues from such unit (the "IMF") or
by the unit owner if the IMF with respect to such owner does not have sufficient
funds.
B. The Resort Facilities, including a (i) management building
containing a reception area, sundry shop, arcade and meeting room(s) and (ii)
four commercial units, one of which is the resort center (the "Resort Center")
with a bar and grill type restaurant (the "Restaurant"), a gym, his and her
sauna and massage room, and three of which are for storage and vending;
C. Mechanical systems and built-in installations (the "Installations")
with respect to the Resort Facilities including, but not limited to, heating,
ventilation, air conditioning, electrical and plumbing systems, elevators and
escalators, and built-in laundry, refrigeration and kitchen equipment;
D. Furniture, furnishings, wall coverings, floor coverings, window
treatments, fixtures, equipment and vehicles, if any, incorporated into or used
in connection with the Resort Facilities (the "FF&E");
E. Chinaware, glassware, silverware, linens, and other items of a
similar nature used in connection with the Resort Facilities (the "Operating
Equipment");
F. Stock and inventories of paper supplies, cleaning materials and
similar consumable items and food and beverage used in connection with the
Resort Facilities and Rental Units (the "Operating Supplies"); and
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F. The rights and obligations of the Rental Manager under the Use and
Access Agreement.
The Managed Facilities do not include the common elements of the Condominium
(the "Common Elements") including without limitation the golf practice area,
swimming pool, spas and tennis courts comprising a portion of the Condominium
(the "Recreational Facilities").
ARTICLE II
OPERATING TERM
2.1. This Agreement shall have a term (the "Term") commencing on the
date hereof (the "Commencement Date") and expiring on the fifth (5th)
anniversary of the Commencement Date, unless sooner terminated in accordance
with the provisions of this Agreement or unless extended by the written
agreement of Rental Manager and Rental Operator.
ARTICLE III
GENERAL SERVICES BY RENTAL OPERATOR; MARCO ISLAND BEACH ACCESS
3.1. During the Operating Term, Rental Operator, as agent and for the
account of Rental Manager, shall in accordance with the Budgets (as defined in
Section 9.4) and the other applicable provisions of this Agreement and the
Rental Program Agreement, and subject to the availability of funds (including
without limitation funds from the IMF):
A. Recruit, train, direct, supervise, employ and dismiss on-site staff
("Resort Employees") for the operation of the Managed Facilities;
B. Develop and implement advertising, marketing, promotion, publicity
and other similar programs for the Resort;
C. (i) Negotiate and enter into leases, licenses and concession
agreements (collectively, "Leases") for stores, office space and lobby space
within the Resort Facilities, if any, collect the rent under such Leases and
otherwise administer the Leases and (ii) negotiate and enter into contracts for
the provision of services to the Managed Facilities; provided, however, that
without the Rental Manager's prior written consent Rental Operator shall not
enter into any Leases for a term in excess of one (1) year or any contracts
which are not terminable on 30 days notice or less without the payment of
penalty or premium;
D. Apply for, process and take all necessary steps to procure and keep
in effect in Rental Manager's name (or, if required by the licensing authority,
in Rental Operator's name or both) all licenses and permits required for the
operation of the Managed Facilities;
E. Maintain and replace on an as required basis all Initial Packages
with respect to each Rental Unit from such Rental Unit's IMF or from other funds
provided by provided by the owners of the respective Rental Units (the "Rental
Unit Owners");
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F. Purchase all FF&E, Operating Equipment and Operating Supplies
necessary for the operation of the Resort Facilities;
G. Provide routine accounting and purchasing services as required in
the ordinary course of business;
H. Maintain the Resort Facilities in a good state of repair and in
accordance with all applicable laws, ordinances, regulations, rulings and orders
of governmental authorities;
I. Maintain the Rental Units as required under the Rental Program
Agreement;
J. Represent Rental Manager in connection with the making of any
capital improvements to the Resort Facilities or the renovation and
refurbishment of the Resort Facilities and to that end negotiate and enter into
agreements for architectural, engineering, testing, consulting and construction
services;
K. Provide all other services required of Rental Manager under the
Rental Program Agreement, including without limitation the payments to the
Rental Unit Owners pursuant to Article III of the Rental Program Agreement, and
exercise all rights of Rental Manager under the Rental Program Agreement;
L. Provide technical services in connection with the initial training
of Resort Employees, marketing of the resort, implementation of standard
operating procedures and installation of central reservation services and
centralized accounting databases and interfaces at the Resort (collectively,
"Start-Up Technical Services");
M. Provide the services of its Vacation Planning Center in Ft. Myers,
Florida, including handling direct inquiries, taking reservations, providing
confirmations either electronically or by mail, and fulfilling brochure
requests; and
N. Provide such other services as are required under the terms of this
Agreement or as are customarily performed by management companies of similar
properties in the area of the Resort.
3.2 In consideration of the privileges extended to Rental Manager
pursuant to Section 3.3 below, Rental Manager shall offer, or shall cause to be
offered, to Rental Operator, the opportunity to purchase up to twelve (12) full
golf memberships at its [Forest Glen] golf course facility (the "Forest Glen
Course"), at a purchase price of $3,500 per membership, each of which
memberships shall entitle Rental Operator to reserve two (2) tee times per day
at the Forest Glen Course in advance on an unrestricted basis, which tee times
may be used by Rental Operator for itself or for guests at other hospitality
facilities owned or operated by Rental Operator or its affiliates. If Operator
elects to purchase such memberships, it shall purchase such memberships no later
than the later to occur of (i) November 1, 1999 or (ii) the date on which the
Forest Len Course is opened for business with the public as set forth in a
written notice from Rental Manager to Rental Operator, such notice to be
delivered not later than thirty (30) days prior to such opening date. Operator
shall pay the then full published greens fee rate for each tee time reserved;
provided, however, that (i) the aggregate purchase price paid for such
memberships shall be credited against such greens fees until such time as such
aggregate greens fees equal the aggregate greens fees for tee times reserved by
Rental Operator (the "Transition Point") and (ii) from and after the Transition
Point Operator shall only pay seventy-five percent (75%) of the full published
rate for each tee time reserved. If at any time during the Term Rental Operator
is or becomes unable to obtain the benefits as set forth herein of the
memberships acquired by
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Rental Operator pursuant to the terms of this Section, then from and after such
date and for so long as Rental Operator is unable to obtain such benefits Rental
Manager shall either (i) provide Rental Operator with alternative golf access
which in the opinion of Rental Operator delivers substantially the same benefits
to Rental Operator as set forth in this Section at no additional cost to Rental
Operator or (ii) pay to Rental Operator in consideration of Rental Manager's
rights under Section 3.3 below an amount equal to $2,500 per month, pro-rated
for any partial month, payable at the times and in the manner provided with
respect to the Basic Fee.
3.3 During the Term and for so long as Rental Manager is in compliance
with the requirements and provisions of Section 3.2 and is not otherwise in
default of its obligations under this Agreement, Rental Operator shall allow
Rental Unit Owners and other occupants (each, a "Patron") of the Rental Units
(but only, with respect to each such Patron, during such periods as such Patron
is actually occupying a Rental Unit) of the Managed Facilities use of the beach
at its Radisson - Marco Island resort without charge therefor and on such other
terms and conditions as Rental Operator shall designate provided the same shall
not discriminate against said Patrons of the Managed Facilities All costs of
such operation, including without limitation any transportation to and from such
beach provided to the patrons of the Managed Facilities, shall be an Operating
Expense.
ARTICLE IV
GENERAL OPERATION OF THE MANAGED FACILITIES
4.1. Rental Manager hereby engages Rental Operator as the exclusive
Rental Operator of the Managed Facilities during the Term and Rental Operator
hereby accepts such engagement. Subject to the terms of this Agreement, the
Rental Program Agreement and the applicable Budgets, Rental Operator shall have
control and discretion in the operation, direction, management and supervision
of the Managed Facilities. Such control and discretion of Rental Operator shall
include, without limitation, the determination of credit policies (including
entering into agreements with credit card organizations), terms of admittance,
charges for rooms, food and beverage policies, entertainment and amusement
policies, leasing, licensing and granting of concessions for commercial space at
the Managed Facilities, exercise and performance of all rights and obligations
under the Rental Program Agreement and all phases of advertising, promotion and
publicity relating to the Managed Facilities.
4.2. Rental Operator shall operate the Managed Facilities and all of
its facilities and activities in the same manner as is customary and usual in
the operation of similar resorts in the area of the Resort to the extent
consistent with the Managed Facilities's facilities.
4.3 Rental Operator will be available to consult with and advise Rental
Manager, at Rental Manager's reasonable request, concerning all policies and
procedures affecting all phases of the conduct of business at the Managed
Facilities. Rental Operator shall in all events consult with Rental Manager
before implementing any material changes in policies and procedures relating to
the Managed Facilities.
4.4 Intentionally deleted.
4.5 A copy of the Rental Program Agreement is attached hereto as
Exhibit B. Rental Manager shall not amend the Rental Program Agreement with
respect to any Rental Unit or the Use and Access
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Agreement without first consulting with Rental Operator with respect thereto and
providing Rental Operator a written copy thereof. Rental Manager shall not amend
or revise the Rental Program Agreement Unit or the Use and Access Agreement in
any manner which would materially reduce the rights of Rental Operator under
this Agreement or which would materially increase the obligations of Rental
Operator under this Agreement without the prior written consent of Rental
Operator, which consent may be granted or withheld in Rental Operator's sole
discretion; provided, however, that Rental Manager may so amend or revise the
Rental Program Agreement or the Use and Access Agreement without the consent of
Rental Operator if such amendment or revision is required by the application of
the Condominium Act (as hereinafter defined) or other applicable law on the
condition that if such amendment or revision either materially increases the
obligations or liabilities of, or decreases the fees to be received by, Rental
Operator under this Agreement, then Rental Operator shall have the right to
terminate this Agreement upon sixty (60) days' prior written notice to Rental
Manager delivered no later than sixty (60) days after delivery to Rental
Operator of a copy of such amendment or revision.
ARTICLE V
AGENCY; MANAGED FACILITY EMPLOYEES
5.1. In the performance of its duties as Rental Operator of the Managed
Facilities, Rental Operator shall act solely as agent of Rental Manager. Nothing
in this Agreement shall constitute or be construed to be or create a partnership
or joint venture between Rental Manager and Rental Operator. Except as otherwise
provided in this Agreement, (a) all debts and liabilities to third persons
incurred by Rental Operator in the course of its operation and management of the
Managed Facilities in accordance with the provisions of this Agreement shall be
the debts and liabilities of Rental Manager only and (b) Rental Operator shall
not be liable for any such obligations by reason of its management, supervision,
direction and operation of the Managed Facilities as agent for Rental Manager.
Rental Operator may so inform third parties with whom it deals on behalf of
Rental Manager and may take any other reasonable steps to carry out the intent
of this paragraph.
5.2. Notwithstanding the provisions of Section 5.1, all Managed
Facility Employees shall be employees of Rental Operator. All compensation of
the Managed Facility Employees shall be an Operating Expense (as defined in
Section 11.2).
5.3. Rental Operator, with Rental Manager's prior approval, may enroll
the Managed Facility Employees in pension, medical and health, life insurance
and similar employee benefit plans substantially similar to corresponding plans
implemented in first-class, full-service Resorts in the area of the Resort. Such
plans may, with Rental Manager's prior approval, be joint plans for the benefit
of employees at more than one resort, motel or other hospitality facility owned,
leased or managed by Rental Operator or its affiliates. Employer contributions
to such plans (including any withdrawal liability incurred upon termination of
this Agreement) and reasonable administrative fees which Rental Operator may
expend in connection therewith shall be the responsibility of Rental Manager and
shall be an Operating Expense. The administrative expenses of any joint plans
will be equitably apportioned by Rental Operator among properties covered by
such plan.
5.4. Rental Operator, in its discretion and on an "as available" basis
only, may provide temporary lodging for Rental Operator's executive employees
visiting the Managed Facilities in connection with the
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performance of Rental Operator's services and allow them the use of Managed
Facilities, in either case at a discounted price or without charge as the case
may be.
5.5. Rental Operator shall not be liable for any failure of the Managed
Facilities to comply prior to the Commencement Date with all federal, state,
local and foreign statutes, laws, ordinances, regulations, rules, permits,
judgments, orders and decrees affecting labor union activities, civil rights or
employment in the United States, including, without limitation, the Civil Rights
Act of 1870, 42 U.S.C. ss. 1981, the Civil Rights Acts of 1871, 42 U.S.C. ss.
1983 the Fair Labor Standards Act, 29 U.S.C. ss. 201, et seq., the Civil Rights
Act of 1964, 42 U.S.C. ss. 2000e, et seq., as amended, the Age Discrimination in
Employment Act of 1967, 29 U.S.C. ss. 621, et seq.,the Rehabilitation Act, 29
U.S.C. ss. 701, et seq., the Americans With Disabilities Act of 1990, 29 U.S.C.
ss. 706, 42 U.S.C. ss. 12101, et seq., the Employee Retirement Income Security
Act of 1974, 29 U.S.C. ss. 301, et seq., the Equal Pay Act, 29 U.S.C. ss. 201,
et seq., the National Labor Relations Act, 29 U.S.C. ss. 151, et seq., and any
regulations promulgated pursuant to such statutes (collectively, as amended from
time to time, and together with any similar laws now or hereafter enacted, the
"Employment Laws").
5.6. Rental Operator shall from time to time develop and implement
policies, procedures and programs for the Managed Facilities (collectively, the
"Employment Policies") reasonably designed to effect compliance with the
Employment Laws. The Employment Policies shall be consistent with industry
standards from time to time for reputable resort management companies.
5.7. At Rental Manager's request, Rental Operator shall periodically
make recommendations to Rental Manager with respect to the desirability of
maintaining Employment Practices Liability Insurance ("Employment Insurance")
for the benefit of the Rental Unit Owners and the owner(s) of the Resort
Facilities, the Rental Manager and Rental Operator. If Rental Manager shall
approve the purchase of Employment Insurance, the premium for such insurance (or
an allocable amount in the event that more than one property is covered by such
policy) shall be an Operating Expense.
ARTICLE VI
PROVISION OF FUNDS
6.1. In performing its services under this Agreement, Rental Operator
shall act solely as agent and for the account of Rental Manager. Rental Operator
shall not be deemed to be in default of its obligations under this Agreement to
the extent it is unable to perform any obligation due to the lack of available
funds from the operation of the Managed Facilities, from the IMF or as otherwise
provided by Rental Manager.
6.2. Rental Operator shall in no event be required to advance any of
its funds (whether by waiver or deferral of its management fees or otherwise)
for the operation of the Managed Facilities.
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ARTICLE VII
CENTRALIZED SERVICES
7.1. Rental Operator may, with Rental Manager's prior approval in each
instance, provide or cause its affiliated companies to provide for the Managed
Facilities and its guests the full benefit of any reservations system hereafter
established by Rental Operator or its affiliates and provide, or cause its
affiliated companies to provide, such aspects of any accounting or purchasing
services or other group benefits and services as are made available generally to
properties managed by Rental Operator, all of which are collectively referred to
as "Centralized Services."
7.2. Subject to the provisions of the applicable Budget and Rental
Manager's prior approval, Rental Operator or such of Rental Operator's
affiliated companies as provide Centralized Services shall be entitled to be
reimbursed for the Managed Facilities' share of the total costs that are
reasonably incurred in providing such Centralized Services on a system-wide
basis to hospitality facilities managed by Rental Operator or its affiliates
which costs may include, without limitation, salaries (including payroll taxes
and employee benefits) of employees and officers of Rental Operator and its
affiliates, costs of all equipment employed in the provision of such services
and a reasonable charge for overhead. The Managed Facilities' share of such
costs shall be determined in an equitable manner by Rental Operator (which shall
be reasonably satisfactory to Rental Manager) and substantiated to Rental
Manager after each fiscal year end and shall be an Operating Expense of the
Managed Facilities. Notwithstanding the foregoing, Rental Operator's fee for
providing centralized accounting services shall be the amount set forth in
Article X.
ARTICLE VIII
WORKING CAPITAL AND BANK ACCOUNTS
8.1. Rental Manager will provide Rental Operator with initial working
capital for the Managed Facilities in the amount of Fifty Thousand Dollars
($50,000). Thereafter, funds sufficient in amount to constitute normal working
capital for the uninterrupted and efficient operation of the Managed Facilities
shall be maintained from Total Revenues (as defined in Article XI), from each
Rental Unit's IMF or from the Rental Unit Owner of each such Rental Unit as
required by the Rental Program Agreement, or with respect to the Resort
Facilities otherwise provided by Rental Manager in an amount at least equal to
the working capital specified in the most recent Cash Flow Forecast (as defined
in Section 9.4).
8.2. All funds received by Rental Operator in the operation of the
Managed Facilities, including working capital furnished by Rental Manager, shall
be deposited in a special account or accounts bearing the name of the Managed
Facilities (the "Agency Account") in such federally insured bank, savings and
loan or trust company as may be selected by Rental Operator and reasonably
approved by Rental Manager. Any successor or substitute bank, savings and loan
or trust company shall be selected in the same manner. From the Agency Account,
Rental Operator shall pay all Operating Expenses, Fixed Charges, debt service,
ground rent (if any), capital costs and other amounts required to be paid by
Rental Operator on Rental Manager's behalf under this Agreement. In addition to
the Agency Account, an account shall be established at the same institution for
a reserve for replacements, substitutions and additions to the FF&E (the "FF&E
Reserve Account"). IMF accounts shall be established in the name of Rental
Operator and maintained, operated and used in accordance with the Rental Program
Agreement.
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8.3. The Agency Account and the FF&E Reserve Account shall be in the
name of Managed Facilities and shall be under the control of Rental Operator.
Checks or other documents of withdrawal shall be signed only by representatives
of Rental Operator, provided that such representatives shall be bonded or
otherwise insured in a manner reasonably satisfactory to Rental Manager. The
premiums for bonding or other insurance shall be an Operating Expense except for
premiums for bonding off-site executive employees of Rental Operator. Upon the
expiration or termination of this Agreement all remaining amounts in the Agency
Account and the FF&E Reserve Account shall be transferred to Rental Manager.
ARTICLE IX
BOOKS, RECORDS AND STATEMENTS; BUDGETS
9.1. Rental Operator shall keep full and accurate books of account and
other records reflecting the results of the operation of the Managed Facilities
in accordance with the "Uniform System of Accounts" (Ninth Revised Edition 1996,
as further revised from time to time) as adopted by the American Hotel and Motel
Association of the United States and Canada ("Uniform System") with such
exceptions as may be required by the provisions of this Agreement; provided,
however, that Rental Operator may, with prior notice to Rental Manager, make
such modifications to the methodology in the Uniform System as are consistent
with Rental Operator's standard practice in accounting for its operations under
management contracts gen erally, so long as such modifications do not affect the
determination of Total Revenues, Operating Expenses or Fixed Charges under
Article XI. Except for the books and records which may be kept in Rental
Operator's home office or other suitable location pursuant to the adoption of a
central billing system or other centralized service (copies of which such books
and records with respect to the Managed Facilities shall be available for
inspection by Rental Manager upon reasonable prior written notice), the books of
account and all other records relating to or reflecting the operation of the
Managed Facilities shall be kept at the Managed Facilities and shall be
available to Rental Manager and its representatives at all reasonable times for
examination, audit, inspection and transcription. All of such books and records
including, without limitation, books of account, guest records and front office
records, shall be the property of Rental Manager. Upon any termination of this
Agreement, all of such books and records (including without limitation off-site
books and records with respect to centralized services provided to the Managed
Facilities), shall thereafter be available to Rental Operator at all reasonable
times for inspection, audit, examination and transcription for a period of three
(3) years.
9.2. Rental Operator shall deliver to Rental Manager within twenty (20)
days after the end of each month, the following items (collectively, the
"Monthly Reports"):
A. An executive summary noting highlights of operations
for such month;
B. A balance sheet as of the last day of such month;
C. A source and use of funds statement for such month;
D. An income and expense statement for such month;
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E. A twelve-month summary and forecast of operations for
the current fiscal year utilizing (i) actual
year-to-date figures, (ii) forecasts for the next 30,
60 and 90 day periods and (iii) budgeted amounts for
the balance of the fiscal year;
F. A twelve-month summary and forecast of cash flow for
the current fiscal year utilizing (i) actual
year-to-date figures, (ii) forecasts for the next 30,
60 and 90 day periods and (iii) budgeted amounts for
the balance of the fiscal year;
G. A summary of year-to-date capital expenditures and
budgeted amounts for the balance of the year; and
H. Such other monthly reports as Rental Manager may
reasonably request and as are customarily provided by
Rental Managers of similar resorts in the area of the
Managed Facilities.
The Monthly Reports shall be prepared in accordance with the Uniform System to
the extent applicable and shall otherwise be prepared in accordance with Rental
Operator's standard financial reporting and budgeting practices.
9.3. Year-end financial statements for the Managed Facilities
(including a balance sheet, income statement and statement of sources and uses
of funds) shall be prepared and certified by an independent certified public
accountant selected by Rental Manager. Rental Operator shall cooperate in all
respects with such accountant in the preparation of such statements.
9.4. On or before each November 1 during the Term, Rental Operator
shall submit to Rental Manager for the next fiscal year the following items
(collectively, the "Budgets"):
A. An operating budget (the "Operating Budget") setting forth
in reasonable line-item detail the projected income from and expenses
of all aspects of the operations of the Managed Facilities;
B. A capital budget (the "Resort Facilities Capital Budget)
setting forth in reasonable line-item detail proposed capital projects
and expenditures for the Resort Facilities including but not limited to
FF&E expenditures;
C. A capital budget (the "Rental Units Capital Budget ")
setting forth in reasonable line-item detail proposed capital
expenditures for the Rental Units (the Resort Facilities Capital Budget
and the Rental Units Capital Budget being collectively referred to as
the "Capital Budget");
D. A cash flow forecast (the "Cash Flow Forecast") on a
monthly basis; and
E. Such other reports or projections as Rental Manager may
reasonably request and as are customarily provided by Rental Managers
of similar facilities in the area of the Resort.
The Budgets shall be prepared in accordance with the Uniform System to the
extent applicable and shall otherwise be prepared in accordance with Rental
Operator's standard financial reporting and budgeting practices.
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9.5. Upon approval of the Budgets by Rental Manager, Rental Operator
shall cause the Managed Facilities to be operated substantially in accordance
with the Budgets and the Rental Program Agreement.
Rental Operator shall not, without Rental Manager's prior approval:
A. Incur any expense for any line-item in the Operating Budget
which causes the aggregate expenditures for such line-item to exceed
the budgeted amount by the lesser of (i) 10% or (ii) $5,000 or more for
the applicable fiscal period set forth in the Operating Budget,
provided that Rental Operator may, without Rental Manager's approval,
(i) pay any expenses (the "Necessary Expenses") regardless of amount,
which are necessary for the continued operation of the Managed
Facilities and which are not within the reasonable control of Rental
Operator (including, but not limited to, those for taxes, utility
charges and debt service) and (ii) pay any expenses (the "Emergency
Expenses") regardless of amount which, in Rental Operator's good faith
judgment, are immediately necessary to protect the physical integrity
or lawful operation of Managed Facilities or the health or safety of
its occupants; or
B. Incur any expense for any line-item in the Resort
Facilities Capital Budget which causes the aggregate expenditures for
such line-item to exceed the budgeted amount by the lesser of (i) 10%
or (ii) $5,000 more provided that Rental Operator may, without Rental
Manager's approval, pay any Emergency Expenses which are capital in
nature.
C. Incur any expense for any line-item in the Rental Units
Capital Budget which either (i) causes the aggregate expenditures for
such line-item to exceed the budgeted amount by the lesser of (x) 10%
or (y) $5,000 (provided that Rental Operator may, without Rental
Manager's approval, pay any Emergency Expenses which are capital in
nature) or (ii) is not permitted of Rental Manager under the Rental
Program Agreement.
9.6. If the Budgets (or any component of the Budgets), have not been
approved by Rental Manager prior to any applicable fiscal year, then, until
approval of the Budgets (or such components) by Rental Manager, Rental Operator
shall cause the Managed Facilities to be operated substantially in accordance
with the such prior year's Budgets except for, or as modified by, (a) those
components of such Budgets for the applicable fiscal year approved by Rental
Manager, (b) the Necessary Expenses which shall be paid as required and (c) the
Emergency Expenses which shall be paid as required.
9.7 Rental Operator shall on a monthly basis prepare and distribute to
each Rental Unit Owner a summary of activity during the preceding calendar month
with respect to such Rental Unit Owner's Rental Unit, including a summary of all
charges to or disbursements to such owner with respect to such Rental Unit and
the IMF allocable to such Rental Unit Owner's Rental Unit, as well as any other
notices and reports to be delivered to such owner pursuant to the Rental Program
Agreement.
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ARTICLE X
MANAGEMENT FEES
AND PAYMENTS TO RENTAL OPERATOR AND RENTAL MANAGER
10.1. Rental Manager shall pay to Rental Operator, on a monthly basis,
for services rendered under this Agreement (including without limitation the
Start-Up Technical Services") a management fee (the "Basic Fee") equal to the
sum of (i) two and one-half percent ( 2.5%) of Total Non-Golf Revenues (as
hereinafter defined), plus (ii) one-half of one percent (0.5%) of Total Net Golf
Revenues (as hereinafter defined). Prior to the later to occur of (x) the first
anniversary of the Commencement Date and (y) the date on which all of the Rental
Units comprising the Resort have been completed, the aggregate Basic Fee shall
not be less than $7,500 per month.
10.2. In addition to the Basic Fee, Rental Manager shall pay to Rental
Operator, on a monthly basis, for its centralized accounting services a fee (the
"Accounting Fee") equal to $3,000 per month.
10.3. In addition to the Basic Fee and the Accounting Fee, Rental
Manager shall pay to Rental Operator on an annual basis an incentive management
fee (the "Incentive Fee") determined in accordance with Exhibit A to this
Agreement.
10.4. In each month during the Operating Term, Rental Operator shall be
paid out of the Agency Account the Basic Fee and the Accounting Fee for the
preceding month, as determined from the monthly income and expense statement,
such payment to be made upon delivery of the income and expense statement for
such month showing the computation of Total Non-Golf Revenues, Total Golf
Revenues and the Basic Fee for such month.
10.5. On or before the twentieth (20th) day following the last day of
each calendar month of each fiscal year during the Operating Term, Rental
Operator shall as agent for Rental Manager pay to the Rental Unit Owners from
the Agency Account all amounts required to be paid to the Rental Unit Owners
pursuant to Article III of the Rental Program Agreement.
10.6. On or before the twentieth (20th) day following the last day of
each calendar quarter (or such other fiscal period as Rental Manager and Rental
Operator may determine) of each fiscal year during the Operating Term, after (a)
payment of Operating Expenses and other amounts required to be paid under this
Agreement, (b) payment of applicable travel agent fees, airline booking fees,
credit card and check collection fees and any other applicable collection or
booking costs to be paid from gross rental receipts from Rental Units pursuant
to the first sentence of Section III(B) of the Rental Program Agreement (to the
extent not duplicative of payments under clause (a) above), (c) deposits to the
FF&E Reserve Account in accordance with the Budget, (d) deposits to the IMF for
each Rental Unit in accordance with the Rental Program Agreement, (e) payments
to Rental Unit Owners pursuant to Section III(B) of the Rental Program Agreement
(net of any amounts deducted pursuant to Section III(D) of the Rental Program
Agreement) and (e) retention of working capital sufficient to assure the
uninterrupted and efficient operation of the Managed Facilities, in accordance
with the most recently approved Cash Flow Forecast, all remaining funds in the
Agency Account shall be paid to Rental Manager.
10.7. At the end of each fiscal year and following receipt by Rental
Manager of the annual audit set forth in Section 9.3, an adjustment will be
made, if necessary, based on the audit so that Rental Operator
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shall have received the accurate Basic Fee and Incentive Fee for such fiscal
year. Within thirty (30) days of receipt by Rental Manager and Rental Operator
of such audit, Rental Operator shall either (a) place in the Agency Account or
remit to Rental Manager, as appropriate, any excess amounts Rental Operator may
have received for such fees during such calendar year or (b) be paid out of the
Agency Account or by Rental Manager, as appropriate, any deficiency in the
amounts due Rental Operator for the Basic Fee and the Incentive Fee.
10.8. In addition to the foregoing Rental Manager shall pay to Rental
Operator on a monthly basis an amount equal to $15 per confirmed room
reservation placed by the Rental Operator's Vacation Planning Center during the
preceding month (the "VPC Fee").
ARTICLE XI
CERTAIN DEFINITIONS
11.1. A. The term "Total Non-Golf Revenues" shall mean all income,
revenue and proceeds resulting from the operation of the Managed Facilities and
all of its facilities (net of refunds and credits to guests and other items
deemed "Allowances" under the Uniform System) which are properly attributable
under the Uniform System to the period in question, other than Total Golf
Revenues. Subject to Section 11.1B, Total Revenues shall include, without
limitation, all amounts derived from:
(i) All rentals of and other payments in connection with
Rental Units, banquet facilities and conference facilities;
(ii) The sale of food and beverage whether sold in the
Restaurant or other facility, delivered to a guest room, sold through
an in-room facility or vending machines, provided in meeting or banquet
rooms or sold through catering operations;
(iii) Charges for admittance to or the use of Resort
Facilities, other than the Golf Course, or any entertainment events at
the Managed Facilities;
(iv) Rentals paid under Leases;
(v) Charges for other Managed Facilities services or
amenities, including, but not limited to, telephone service, in-room
movies, and laundry services; and
(vi) The gross income amount on which the proceeds of business
interruption or similar insurance are determined.
B. Total Non-Golf Revenues shall not include:
(i) Sales or use taxes, resort and/or hotel taxes or similar
governmental impositions collected by Rental Manager or Rental
Operator;
(ii) Tips, service charges and other gratuities received by
Managed Facility Employees;
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(iii) Proceeds of insurance except as set forth in Section
11.01A;
(iv) Proceeds of the sale or condemnation of any condominium
unit in the Resort, any interest therein or any other asset, or the
proceeds of any loans or financings;
(v) Capital contributed to Rental Manager or the Managed
Facilities;
(vi) Capital contributed by Rental Unit Owners in excess of 3%
of adjusted gross rental revenues from each such Rental Unit Owners'
Rental Unit used to fund the IMF as provided in the Rental Program
Agreement;
(vii) The repayment of any loans or interest thereon made by
Rental Manager other than in the ordinary course of Managed Facilities
operations; and
(viii) The receipts of any tenant, licensee or concessionaire
under a Lease.
11.2 The term "Total Golf Revenues" shall mean all greens fees, golf
cart rental fees, equipment rental fees and other fees received by Rental
Operator or Rental Manager for the use of the Golf Course from patrons of the
Managed Facilities or otherwise (net of refunds and credits to guests and other
items deemed "Allowances" under the Uniform System) which are properly
attributable under the Uniform System to the period in question. The term "Total
Net Golf Revenues" shall mean Total Golf Revenues with respect to the period in
question, less any payments to the Golf Course Rental Manager owed with respect
to such Total Golf Revenues pursuant to the Use and Access Agreement with
respect to such period.
11.3. A. The term "Operating Expenses" shall mean all costs and
expenses of maintaining, conducting and supervising the operation of the Managed
Facilities and all of its facilities which are properly attributable under the
Uniform System to the period in question. Operating Expenses shall include,
without limitation:
(i) The cost of all Operating Equipment and Operating
Supplies;
(ii) Salaries and wages of Managed Facilities personnel,
including costs of payroll taxes and employee benefits. The salaries or
wages of off-site employees or executives of Rental Operator shall not
be Operating Expenses, provided that if it becomes necessary for an
off-site employee or executive of Rental Operator to temporarily
perform services at the Managed Facilities of a nature normally
performed by Managed Facility Employees, his salary (including payroll
taxes and employee benefits) for such period only as well as his
traveling expenses shall be Operating Expenses;
(iii) The cost of all other goods and services obtained in
connection with the operation of the Managed Facilities including,
without limitation, heat and utilities, laundry, landscaping and
exterminating services and office supplies;
(iv) The cost of all repairs to and maintenance of the Managed
Facilities;
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(v) Insurance premiums (or the allocable portion thereof in
the case of blanket policies) for all insurance maintained under
Article XIII (other than insurance against physical damage to the
Managed Facilities) and losses incurred on any self-insured risks
(including deductibles);
(vi) All taxes, assessments, permit fees, inspection fees, and
water and sewer charges and other charges (other than income or
franchise taxes) payable by or assessed against Rental Manager with
respect to the operation of the Managed Facilities, excluding Property
Taxes (as defined in Section 11.3);
(vii) Legal fees and fees of any independent certified public
accountant for services directly related to the operation of the
Managed Facilities;
(viii) All expenses for advertising the Managed Facilities and
all expenses of sales promotion and public relations activities;
(ix) All out-of-pocket expenses and disbursements reasonably
incurred by Rental Operator, pursuant to, in the course of, and
directly related to, the management and operation of the Managed
Facilities under this Agreement. Without limiting the generality of the
foregoing, such charges may include all reasonable travel, telephone,
telegram, facsimile, air express and other incidental expenses, but,
except as otherwise provided in this Agreement, shall not include any
of the regular expenses of the central offices maintained by Rental
Operator, other than offices maintained at the Managed Facilities for
the management of the Managed Facilities. Rental Operator shall
maintain and make available to Rental Manager invoices or other
evidence supporting such charges;
(x) The Basic Fee, the VPC Fee and the Accounting Fee;
(xi) Any other item specified as an Operating Expense in this
Agreement; and
(xii) Any other cost or charge classified as an Operating
Expense or an Administrative and General Expense under the Uniform
System unless specifically excluded under the provisions of this
Agreement.
B. Operating Expenses shall not include:
(i) Amortization and depreciation;
(ii) the making of or the repayment of any loans or any
interest thereon;
(iii) The costs of any alterations, additions or improvements
which for Federal income tax purposes must be capitalized and amortized
over the life of such alteration addition or improvement;
(iv) any payments to the Golf Course Rental Manager with
respect to Total Golf Revenues pursuant to the Use and Access
Agreement, to the extent such amounts are deducted in determining Total
Net Golf Revenues;
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(iv) Payments out of the FF&E Reserve Account or any IMF
account;
(v) Any amounts paid or payable by Rental Unit owners pursuant
to the Rental Program Agreement; or
(vi) Any item defined as a Fixed Charge in Section 11.4.
11.4 "Fixed Charges" shall mean the cost of the following items
relating to the Managed Facilities or its facilities which are properly
attributable under the Uniform System to the period in question:
(i) Only to the extent such amounts are paid from Total
Non-Golf Revenues, payments to or (to the extent not duplicative of any
other amounts deducted from Total Non-Golf Revenues) on behalf of
Owners of Rental Units pursuant to the Rental Program Agreement;
(ii) Real estate taxes, assessments, personal property taxes
and any other ad valorem taxes imposed on or levied in connection with
the Managed Facilities, excluding any such amounts owed by Rental Unit
owners under the Rental Program Agreement or otherwise with respect to
the Rental Units (collectively, "Property Taxes");
(iii) Insurance against physical damage to the Managed
Facilities;
(iv) Rental payments or payments for purchase options under
leases of equipment which are capital leases under the Uniform System;
and
(v) Payments into the FF&E Reserve Account or (only to the
extent such funds were included within Total Non-Golf Revenues) any IMF
account.
11.5. "Total Revenues" for any period shall mean the sum of Total
Non-Golf Revenues for such period plus Total Net Golf Revenues for such period.
11.5. "Net Operating Income" for any period shall mean the amount, if
any, by which Total Revenues for such period exceed the sum of (a) Operating
Expenses for such period and (b) Fixed Charges for such period.
11.6. "Fiscal year" shall mean each calendar year or partial calendar
year within the Operating Term unless Rental Manager and Rental Operator
otherwise agree.
ARTICLE XII
FF&E RESERVE
12.1. During each fiscal year there shall be allocated and paid on a
monthly basis to the FF&E Reserve Account from Total Revenues or other funds
provided by Rental Manager such amount as is reflected in the applicable Budget
for such fiscal year.
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12.2. All funds in the FF&E Reserve Account, together with any interest
earned thereon and the proceeds of any sale of FF&E (which proceeds shall be
deposited in the FF&E Reserve Account) shall be used solely for purposes of
replacing or refurbishing the FF&E in accordance with the applicable Capital
Budget.
ARTICLE XIII
INSURANCE
13.1. Provided that funds from Total Revenues or funds otherwise
provided by Rental Manager are available, Rental Operator shall arrange for and
maintain the following insurance in connection with the Managed Facilities:
A. Insurance covering the Resort Facilities (and the Rental
Units to the extent replacement of property therein is the
responsibility of Rental Manager under the Rental Program Agreement) on
an all-risk, broad form basis, against such risks as are customarily
covered by such insurance (including, without limitation, boiler and
machinery insurance, but excluding the Common Elements and damage
resulting from earthquake, war, and nuclear energy), in aggregate
amounts which shall be not less than the full replacement cost of the
Resort Facilities, the Installations and the FF&E (exclusive of
foundations and footings);
B. Commercial general liability insurance with respect to the
Resort (including broad form endorsement and coverage against liability
arising out of the ownership or operation of motor vehicles) with a
combined single limit of not less than $25,000,000 for each occurrence
for liability for (i) bodily injury, (ii) death, (iii) property damage,
(iv) assault and battery, (v) false arrest, detention or imprisonment
or malicious prosecution, (vi) libel, slander, defamation or violation
of the right of privacy, (vii) wrongful entry or eviction, or (viii)
liquor law or dram shop liability;
C. Worker's compensation insurance or insurance required by
similar employee benefit acts having a minimum per occurrence limit as
Rental Manager may deem advisable against all claims which may be
brought for personal injury or death of Managed Facility Employees, but
in any event not less than amounts prescribed by applicable state law;
D. Fidelity bonds, in such amounts and with such deductibles
as Rental Manager may require, covering Rental Operator's employees at
the Managed Facilities (other than executive employees of Rental
Operator) or in job classifications normally bonded in other resorts it
manages in the United States or otherwise required by law;
E. Business interruption insurance covering loss of income for
a minimum period of six (6) months resulting from interruption of
business caused by the occurrence of any of the risks insured against
under "all-risk" policy referred to in Section 15.1A;
F. If elected by Rental Manager pursuant to Section 5.5 of
this Agreement, Employment Insurance with reasonable limits and
deductibles to be determined by Rental Manager;
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G. If the Managed Facilities are located within an area
designated "flood prone" pursuant to the National Flood Insurance Act
of 1968 and the Flood Disaster Protection Act of 1973, as the same may
be amended from time to time, flood insurance in such amount as Rental
Manager may reasonably require; and
H. Such other or additional insurance as may be (i) required
under the provisions of any applicable mortgage, deed of trust, ground
lease or franchise agreement (collectively, "Major Agreements") or (ii)
customarily carried by prudent Rental Operators of mid-tier resorts in
the geographic area of the Resort.
13.2. All insurance policies shall name the owners of the Managed
Facilities and Rental Manager as the insured party and shall name as additional
insureds Rental Operator, each Rental Unit Owner as its interest may appear and
such other parties as may be required by the terms of the Major Agreements as
appropriate.
13.3. All insurance policies shall be in such form and with such
companies as shall be reasonably satisfactory to Rental Manager and shall comply
with the requirements of any Major Agreement. Insurance may (at Rental Manager's
election or with Rental Manager's prior approval) be provided under blanket or
master policies covering one or more other resorts operated by Rental Operator
or owned by Rental Manager. The portion of the premium for any blanket or master
policy which is allocated to the Managed Facilities as an Operating Expense or
Fixed Charge shall be determined in an equitable manner by Rental Operator and
reasonably approved by Rental Manager.
13.4. All insurance policies shall specify that they cannot be canceled
or modified on less than twenty (20) days prior written notice to both Rental
Manager and Rental Operator and any additional insureds (or such longer period
as may be required under a Major Agreement) and shall provide that claims shall
be paid notwithstanding any act or negligence of Rental Manager or Rental
Operator or their respective agents or employees.
13.5. All insurance policies shall provide, to the extent obtainable on
a commercially reasonable basis) that the insurance company will have no right
of subrogation against the owner(s) of the Resort Facilities, Rental Manager,
Rental Operator, the Rental Unit Owners, the Condominium Association (as
hereinafter defined), any party to a Major Agreement or any of their respective
agents, employees, partners, members, officers, directors or beneficial Rental
Managers.
13.6. Rental Manager and Rental Operator hereby release one another
from any and all liability associated with any damage, loss or liability with
respect to which property insurance coverage is provided pursuant to this
Article or otherwise.
13.7. The proceeds of any insurance claim (other than proceeds payable
to third parties under the terms of the applicable policy) shall be paid into
the Agency Account unless otherwise required by the terms of a Major Agreement.
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ARTICLE XIV
PROPERTY TAXES
14.1. Provided that funds from Total Revenues or funds otherwise
provided by Rental Manager are available, Rental Operator shall pay all Property
Taxes on behalf of Rental Manager not less than ten (10) days prior to the
applicable due dates. Upon Rental Manager's request, Rental Operator shall
promptly furnish Rental Manager with proof of payment of Property Taxes.
14.2. Upon Rental Manager's request, Rental Operator shall from time to
time advise Rental Manager of the desirability of contesting the validity or
amount of any Property Tax (a "Tax Contest"). Rental Manager may, whether or not
Rental Operator so recommends, pursue a Tax Contest, and Rental Operator agrees
to cooperate with Rental Manager in a Tax Contest and execute any documents or
pleadings required for such purpose, provided that the facts set forth in such
documents or pleadings are accurate and that such cooperation or execution does
not impose any liability on Rental Operator. All costs and expenses incurred by
Rental Manager and Rental Operator in connection with a Tax Contest shall be
Operating Expenses.
ARTICLE XV
DAMAGE OR DESTRUCTION; CONDEMNATION
15.1. If the Managed Facilities are damaged by fire or other casualty,
Rental Operator shall promptly notify Rental Manager. This Agreement shall
remain in full force and effect subsequent to such casualty provided that either
party may terminate this Agreement upon thirty days prior notice to the other
party if (a) Rental Manager shall elect to close the Managed Facilities as a
result of such casualty (except on a temporary basis for repairs or restoration)
or (b) Rental Manager shall determine in good faith not to proceed with the
restoration of the Managed Facilities and provided further that Rental Operator
may terminate this Agreement upon thirty days prior notice to Rental Manager if
25% or more of the Rental Units are unavailable for rental for a period of one
hundred twenty days or more as a result of such casualty.
15.2. If all or any portion of the Managed Facilities becomes the
subject of a condemnation proceeding or if Rental Operator learns that any such
proceeding may be commenced, Rental Operator shall promptly notify Rental
Manager. Either party may terminate this Agreement on thirty (30) days notice to
the other party if (a) all or substantially all of the Managed Facilities is
taken through condemnation or (b) less than all or substantially all of the
Managed Facilities is taken, but, in the reasonable judgment of the party giving
the termination notice, the Managed Facilities cannot, after giving effect to
any restoration as might be reasonably accomplished through available funds from
the condemnation award, be profitably operated as amid-tier resort.
15.3. Any condemnation award or similar compensation shall be the
property of Rental Manager or the Rental Unit Owners, as their interests appear,
provided that Rental Operator shall have the right to bring a separate
proceeding against the condemning authority for any damages and expenses
specifically incurred by Rental Operator as a result of such condemnation.
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ARTICLE XVI
EVENTS OF DEFAULT
16.1. The following shall constitute events of default:
A. If either party shall be in default in the payment of any
amount required to be paid under the terms of this Agreement, and such
default continues for a period of ten (10) after written notice from
the other party;
B. If either party shall be in material default in the
performance of its other obligations under this Agreement, and such
default continues for a period of thirty (30) days after written notice
from the other party, provided that if such default cannot by its
nature reasonably be cured within such thirty-day period, an event of
default shall not occur if and so long as the defaulting party promptly
commences and diligently pursues the curing of such default;
C. If either party shall (i) make an assignment for the
benefit of creditors, (ii) institute any proceeding seeking relief
under any federal or state bankruptcy or insolvency laws, (iii)
institute any proceeding seeking the appointment of a receiver,
trustee, custodian or similar official for its business or assets or
(iv) consent to the institution against it of any such proceeding by
any other person or entity (an "Involuntary Proceeding"); or
D. If an Involuntary Proceeding shall be commenced against
either party and shall remain undismissed for a period of sixty (60)
days.
16.2. If any event of default shall occur, the non-defaulting party may
terminate this Agreement on five (5) days prior notice to the defaulting party.
16.3. The right of termination set forth in Section 16.2 shall not be
in substitution for, but shall be in addition to, any and all rights and
remedies for breach of contract available in law or at equity.
16.4. Neither party shall be deemed to be in default of its obligations
under this Agreement if and to the extent that such party is unable to perform
such obligation as a result of fire or other casualty, act of God, strike or
other labor unrest, unavailability of materials, war, riot or other civil
commotion or any other cause beyond the control of such party (which shall not
include the inability of such party to meet its financial obligations).
ARTICLE XVII
TERMINATION RIGHTS
17.1. In addition to any other rights to terminate this Agreement
granted to Rental Manager hereunder, Rental Manager shall have the right to
terminate this Agreement upon sixty (60) days prior written notice to Rental
Operator upon the payment of a termination fee equal to (a) $100,000, if the
effective date of such termination shall occur during the period commencing on
the Commencement Date and ending on the day prior to the first anniversary of
the Commencement Date, (b) $66,000, if the effective
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date of such termination shall occur during the period commencing on the first
anniversary of the Commencement Date and ending on the day prior to the second
anniversary of the Commencement Date, and (c) $33,000, if the effective date of
such termination shall occur during the period commencing on the second
anniversary of the Commencement Date and ending on the day prior to the third
anniversary of the Commencement Date. From and after the third anniversary of
the Commencement Date through the expiration or earlier termination of this
Agreement Rental Manager shall have the right to terminate this Agreement upon
sixty (60) days prior written notice to Rental Operator without the payment of
any termination fee.
17.2 Rental Operator shall have the right to terminate this Agreement
upon sixty (60) days prior written notice to Rental Manager if (i) seventy-five
percent (75%) of the Rental Units comprising the Resort shall not have been
substantially completed on or before December 31, 2002 or (ii) the application
of the Condominium Act (as hereinafter defined) results in an amendment or
interpretation of this Agreement which either materially increases the
obligations or liabilities of, or decreases the fees to be received by, Rental
Operator under this Agreement, such notice to be delivered no later than (a)
February 28, 2003, with respect to any termination under clause (i) above or (b)
sixty days after Operator has received written notice of such amendment or
interpretation, together with supporting documentation, from Rental Manager.
ARTICLE XVIII
ASSIGNMENT
18.1. Rental Operator shall not assign, pledge or encumber this
Agreement or its interest in this Agreement without the prior consent of Rental
Manager, provided that Rental Operator may, without the consent of Rental
Manager, assign this Agreement to (a) any entity controlling, controlled by or
under common control with Rental Operator (control being deemed to mean the
ownership of 50% or more of the stock or other beneficial interest in such
entity and/or the power to direct the day-today operations of such entity); (b)
any entity which is the successor by merger, consolidation or reorganization of
Rental Operator or Rental Operator's general partner or parent corporation or
(c) the purchaser of all or substantially all of the resort management business
of Rental Operator or Rental Operator's general partner or parent corporation.
18.2. Rental Manager shall not assign this Agreement without the prior
consent of Rental Operator, provided that Rental Manager may assign this
Agreement without Rental Operator's consent to any person or entity acquiring
Rental Manager's interest in, and assuming Rental Manager's obligations under,
all of the Rental Program Agreements if such assignee shall agree in writing to
be bound by this Agreement and to assume all of Rental Manager's obligations
under this Agreement from and after the effective date of the assignment.
18.3. Upon any permitted assignment of this Agreement and the
assumption of this Agreement by the assignee, the assignor shall be relieved of
any obligation or liability under this Agreement arising after the effective
date of the assignment.
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ARTICLE XIX
NOTICES
19.1. Any notice, statement or demand required to be given under this
Agreement shall be in writing, sent by certified mail, postage prepaid, return
receipt requested, or by facsimile transmission, receipt electronically or
verbally confirmed, or by nationally-recognized overnight courier, receipt
confirmed, addressed if to:
Rental Manager: 3185 Horseshoe Drive South
Naples, Florida 34104
Attention: Mr. A. Jack Solomon
Facsimile No.: 941-649-8870
with a copy to: Ruden, McCloskey, Smith, Schuster & Russell, P.A.
Suite 1500, 200 E. Broward Blvd.
Ft. Lauderdale, Florida 33301
Attention: John L. Farquhar, Esq.
Facsimile No.: (954) 764-4996
and Rental Operator: 1010 Wisconsin Avenue, N.W.
Washington, D.C. 20007
Attention: Mr. David McCaslin
Facsimile No.: (202) 295-2188
or to such other addresses as Rental Operator and Rental Manager shall designate
in the manner provided in this Section 19.1. Any notice or other communication
shall be deemed given (a) on the date three (3) business days after it shall
have been mailed, if sent by certified mail, (b) on the business day it shall
have been sent by facsimile transmission (unless sent on a non-business day or
after business hours in which event it shall be deemed given on the following
business day), or (c) on the date received if it shall have been given to a
nationally-recognized overnight courier service.
ARTICLE XX
ESTOPPELS
20.1. Rental Manager and Rental Operator agree that from time to time
upon the request of the other party or a party to a Major Agreement, it shall
execute and deliver within ten (10) days after the request a certificate
confirming that this Agreement is in full force and effect, stating whether this
Agreement has been modified and supplying such other information as the
requesting party may reasonably require.
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ARTICLE XXI
INDEMNIFICATION
21.1. Rental Operator shall indemnify and hold the owner(s) of the
Resort Facilities, Rental Manager (and Rental Manager's and such owner's)
agents, principals, shareholders, partners, members, officers, directors and
employees) harmless from and against all liabilities, losses, claims, damages,
costs and expenses (including, but not limited to, reasonable attorneys' fees
and expenses) that may be incurred by or asserted against any such party and
that arise from (a) the fraud, wilful misconduct or negligence of the executive
or off-site employees of Rental Operator, (b) the breach by Rental Operator of
any provision of this Agreement or (c) any action taken by Rental Operator which
is beyond the scope of Rental Operator's authority under this Agreement. Rental
Manager shall promptly provide Rental Operator with written notice of any claim
or suit brought against it by a third party which might result in such
indemnification and Rental Operator shall have the option of defending any claim
or suit brought against the Rental Manager with counsel selected by Rental
Operator and reasonably approved by Rental Manager. Rental Manager shall
cooperate with the Rental Operator or its counsel in the preparation and conduct
of any defense to any such claim or suit.
21.2. Except as provided in Section 21.1, Rental Manager shall
indemnify and hold Rental Operator (and Rental Operator's agents, principals,
shareholders, partners, members, officers, directors and employees) harmless
from and against all liabilities, losses, claims, damages, costs and expenses
(including, but not limited to, reasonable attorneys' fees and expenses) that
may be incurred by or asserted against such party and that arise from or in
connection with (a) the performance of Rental Operator's services under this
Agreement, (b) any act or omission (whether or not wilful, tortious, or
negligent) of Rental Manager or any third party or (c) or any other occurrence
related to the Managed Facilities whether arising before, during or after the
Operating Term. Rental Operator shall promptly provide Rental Manager with
written notice of any claim or suit brought against it by a third party which
might result in such indemnification and Rental Manager shall have the option of
defending any claim or suit brought against Rental Operator with counsel
selected by Rental Manager and reasonably satisfactory to Rental Operator.
Rental Operator shall cooperate with the Rental Manager or its counsel in the
preparation and conduct of any defense to any such claim or suit.
21.3. Supplementing the provisions of Sections 21.1 and 21.2, if any
claim shall be made against Rental Manager and/or Rental Operator which is based
upon a violation or alleged violation of the Employment Laws (an "Employment
Claim"), the Employment Claim shall fall within Rental Operator's
indemnification obligations under Section 21.1 only if it is based upon (a) the
wilful misconduct or negligence of Rental Operator's executive employees
(including such wilful misconduct or negligence as may arise in the hiring,
supervision or dismissal of any Managed Facility Employee) or (b) Rental
Operator's breach of its obligations under Section 5.6 and shall otherwise fall
within Rental Manager's indemnification obligations under section 21.2.
21.4. The provisions of this Article shall survive the termination of
this Agreement with respect to acts, omissions and occurrences arising during
the Operating Term.
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ARTICLE XXII
CONDOMINIUM MANAGEMENT DISCLAIMER
RENTAL OPERATOR ACKNOWLEDGES AND AGREES THAT RENTAL MANAGER DOES NOT
HAVE THE RIGHT TO MANAGE THE FALLA BELLA RESORT AND GOLF CLUB OF NAPLES
CONDOMINIUM ASSOCIATION, INC. (THE "CONDOMINIUM ASSOCIATION") OR THE COMMON
ELEMENTS. RENTAL OPERATOR SHALL HAVE NO RIGHTS HEREUNDER TO MANAGE THE
CONDOMINIUM ASSOCIATION OR THE COMMON ELEMENTS OR TO PROVIDE MANAGEMENT OF THE
CONDOMINIUM BUT ONLY OF THE MANAGED FACILITIES. IT IS THE INTENT OF RENTAL
MANAGER AND RENTAL OPERATOR THAT THIS AGREEMENT IS NOT THE TYPE OF MANAGEMENT
AGREEMENT CONTEMPLATED BY CHAPTER 718 FLORIDA STATUTES AS BEING REGULATED BY
F.S. ss.718 (THE "CONDOMINIUM ACT"), AND THIS AGREEMENT IS TO BE INTERPRETED IN
SUCH A MANNER AS NOT TO BE A MANAGEMENT AGREEMENT CONTEMPLATED BY THE
CONDOMINIUM ACT. IF THERE ARE ANY PROVISIONS OF THIS AGREEMENT WHICH WOULD
RENDER THIS AGREEMENT SUBJECT TO THE CONDOMINIUM ACT, SUCH PROVISIONS SHALL BE
MODIFIED BY THE PARTIES HERETO TO THE LEAST AMOUNT NECESSARY SO THAT THIS
AGREEMENT WILL NOT BE INTERPRETED TO BE A MANAGEMENT AGREEMENT OR OTHER
AGREEMENT REGULATED BY THE CONDOMINIUM ACT.
ARTICLE XXIII
MISCELLANEOUS
23.1. Rental Manager and Rental Operator shall execute and deliver all
other appropriate supplemental agreements and other instruments, and take any
other action necessary to make this Agreement fully and legally effective,
binding, and enforceable as between them and as against third parties.
23.2. This Agreement constitutes the entire agreement between the
parties relating to the subject matter hereof, superseding all prior agreements
or undertakings, oral or written. Rental Manager acknowledges that in entering
into this Agreement Rental Manager has not relied on any projection of earnings,
statements as to the possibility of future success or other similar matter which
may have been prepared by Rental Operator.
23.3. The headings of the titles to the several articles of this
Agreement are inserted for convenience only and are not intended to affect the
meaning of any of the provisions hereof.
23.4. A waiver of any of the terms and conditions of this Agreement may
be made only in writing and shall not be deemed a waiver of such terms and
conditions on any future occasion.
23.5. This Agreement shall be binding upon and inure to the benefit of
Rental Manager and Rental Operator and their respective successors and permitted
assigns.
23.6. This Agreement shall be construed, both as to its validity and as
to the performance of the parties, in accordance with the laws of the state in
which the Resort is located. Venue for any litigation
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commenced in connection with or with respect to this Agreement shall be
exclusively Collier County, Florida.
IN WITNESS WHEREOF, Rental Operator and Rental Manager have duly
executed this Agreement the day and year first above written.
LELY GOLF VILLAS II LIMITED PARTNERSHIP, a
Delaware limited partnership
By: RONTO GOLF MANAGEMENT, INC., a Florida
corporation, a general partner
By: _____________________
Name: A. Jack Solomon
Title: President
MERISTAR MANAGEMENT COMPANY, L.L.C., a Delaware
limited liability company
By: MeriStar H & R Operating Company,
L.P., a Delaware
limited partnership, member
By: MeriStar Hotels & Resorts, Inc.,
a Delaware corporation, general
partner
By: _____________________
Name:
Title:
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<PAGE>
EXHIBIT A
INCENTIVE FEE PROVISIONS
1. Rental Manager shall pay to Rental Operator an incentive fee (the
"Incentive Fee") for each fiscal year equal to (x) fifteen percent (15%) of the
amount (the "Incentive Fee") by which Net Operating Income with respect to such
fiscal year exceeds $900,000 (prorated for any partial fiscal year); provided,
however, that in no event shall the aggregate amount of Basic Fee and Incentive
Fee with respect to any fiscal year exceed four percent (4%) of Total Revenues
with respect to such fiscal year.
2. The Incentive Fee for any fiscal year with respect to which it shall
be payable shall be paid to Rental Operator within thirty (30) days after the
end of each fiscal year and shall be subject to adjustment as provided in
Section 10.6.
P-26
<PAGE>
P-27
<PAGE>
ANNEX F
ESTIMATED CLOSING COSTS
At closing on your unit, you will be required to pay the following:
a) The balance of the purchase price, consisting of the agreed purchase
price less all deposits and any interest earned thereon;
b) An amount equal to 1.5% of the purchase price for closing costs (.7%
for documentary stamps on deed, .5% plus for title insurance and balance for
closing agent charges);
c) A $550 working fund contribution payable to the condominium
association;
d) A $500 administrative fee payable to the Rental Manager to defray
set-up costs for rental and tax reporting and computer and phone systems;
e) Initially, a sum of $3,500 which will be applied to the Annual
Licensing Fee due the golf course operator for golf privileges. The Annual
Licensing Fee is $3,500 (increasing 4 percent per year beginning November 1,
2002). You are responsible for the prorated sum due from the date of closing to
October 31 of the year of closing. The balance of the sum paid at closing will
be applied to the next year's Annual Licensing Fee, which will reduce the amount
otherwise withheld from rental revenues to fund this obligation in the following
year;
f) Pro-rated quarterly condominium assessments from the date of closing
to the end of the relevant quarter. This quarterly assessment is fixed at $729
per quarter for a 2-bedroom unit and $907 per quarter for a 3- bedroom unit
until December 31, 2001 or the Majority Election Date (as defined in the
association by-laws); and
g) At closing you will be credited or charged with pro-rata real estate
taxes and charged with CDD assessments for the year of closing. At the end of
the year, if you received a credit for real estate taxes, you will be
responsible for paying these taxes and assessments in full. The annual CDD
assessment for operating expenses is in addition to amounts payable by you to
amortize the principal and interest on CDD obligations incurred for existing
capital improvements of approximately $2,120. You may pay this amount at closing
or over a 12-year period at $296 per year.
In addition to the foregoing, you are responsible for your own attorney's fees,
if any. In the event you elect to finance a portion of the purchase price, you
are also responsible for any related loan fees and costs.
P-28
<PAGE>
SUMMARY OF CLOSING COSTS
Balance of the purchase price $
Closing costs at 1.5% of the purchase price
Condominium association working fund contribution $ 550
Rental Manager administration fee 500
Annual Licensing Fee 3,500
------
4,550
Pro-rated condominium association quarterly assessment
Utility deposits
Credit or charge for pro-rated real estate taxes
Pro-rated annual CDD assessment
Total $
Optional Prepayment
Prepayment of CDD Capital Improvement Debt $2,120
P-29
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 31. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemization of the anticipated cost to Lely Golf I
in connection with the issuance and distribution of the securities to be
registered. All amounts, other than the registration fee, are estimates.
Legal: $ *
Advertising, Printing & Promotion Expenses: $ *
Accounting: $ *
Registration Fees: $10,564
------
$ *
* To be added by amendment
ITEM 32. SALES TO SPECIAL PARTIES
There is no person or class of persons to whom any securities have been
sold within the past six months, or are to be sold, by the registrant or
security holder for whose account any of the securities being registered are to
be offered, at a price varying from that at which securities of the same class
are to be offered to the general public pursuant to this registration, except as
follows:
ITEM 33. RECENT SALES OF UNREGISTERED SECURITIES
No sales of unregistered securities have been made, other than the
issuance of limited partnership interests to certain affiliates of one of the
general partners of Lely Golf I at the time of organization of Lely Golf I,
which issuances are exempt from registration under Section 4(2) of the
Securities Act of 1933, as amended.
ITEM 34. INDEMNIFICATION OF EXECUTIVE COMMITTEE MEMBERS AND
ADMINISTRATIVE PARTNER
The governing provisions of Lely Golf I provide nonliability of and
indemnification to the Executive Committee members and Administrative Partner
except for (i) acts not reasonably believed by the acting partner to be in the
best interest of Lely Golf I and within the scope of authority conferred on such
partner; (ii) fraud, bad faith, willful misconduct or gross negligence; (iii)
the breach by Lely Golf I of any of its representations or warranties made under
any purchase, loan or other agreement entered into connection with the
acquisition of the partnership property, which breach was the result of
information or matters relating to such partner; or (iv) any liability imposed
II-1
<PAGE>
by Securities Act of 1933. Lely Golf I currently provides no insurance coverage
for the errors or omissions of Executive Committee members or the administrative
partner or the officers or directors of the corporate general partner of the
members of the general partner that is a limited liability company.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the company
pursuant to the foregoing provisions, Lely Golf I has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act, and is therefore
unenforceable.
ITEM 35. TREATMENT OF PROCEEDS FROM STOCK BEING REGISTERED
Assuming that the maximum number units offered hereby are sold at the
highest price in the proposed range of prices for each unit category, the gross
proceeds from the sale of units will be approximately $38,000,000 exclusive of
offering expenses estimated at $ . All of the net proceeds of this offering will
be paid to Lely Golf I except for amounts paid in addition to the purchase price
for closing costs that are payable to third parties. None of the net proceeds
representing the purchase price of the units will be available to fund
operations of Fala Bella. The total revenue less the total estimated costs of
$35,500 represent Lely Golf I's pre-tax profit and are available to pay
management fees to Ronto, distributions to the general partners and their
affiliated entities and income taxes. Lely Golf I will deliver the units and the
amenities comprising Fala Bella, free and clear of any and all liens.
ITEM 36. FINANCIAL STATEMENTS AND EXHIBITS
a) List of all financial statements filed as part of this registration statement
1. Financial Statements at and for the period from inception to
December 31, 1998, audited by Arthur Anderson, L.L.P.,
independent Certified Public Accountants and Interim Financial
Statements at and for the period ended March 31, 1999 of Lely
Golf Villas I Limited Partnership.
2. Projected Financial Performance of Two- and Three-Bedroom
Units in Year 5 of Operations
b) Exhibit Index
II-2
<PAGE>
Exhibit
Number Description
- ------ -----------
3.1 Agreement of Limited Partnership
3.2 Certificate of Limited Partnership
5.1 Opinion of Ruden, McClosky, Smith, Schuster & Russell, P.A.
10.1 Rental Program Agreement
10.2 Assignment and Assumption Agreement
10.3 Real Estate Sales Agreement
10.4 Leasehold Mortgage and Security Agreement
10.5 Mortgage and Security Agreement
10.6 License Agreement
10.7 Use and Access Agreement
10.8 Declaration of Condominium of Fala Bella Resort and Golf Club
of Naples
10.9 Articles of Incorporation of the Fala Bella Resort and Golf
Club of Naples
Condominium Association, Inc.
10.10 Bylaws of the Fala Bella Resort and Golf Club of Naples
Condominium
Association, Inc.
10.11 Development Agreement
10.12 Resort Management Agreement
10.13 First Amendment to Use and Access Agreement
10.14 Agreement for Purchase of Real Estate
10.15 Amendment to Agreement For Purchase of Real Estate
10.16 Articles of Incorporation for Lely Resort Master Property
Owners
Association, Inc.
10.17 By-Laws of Lely Resort Master Property Owners Association,
Inc.
23.1 Consent of Arthur Anderson, L.L.P.
23.2 Consent of Ruden, McClosky, Smith, Schuster & Russell, P.A.
(filed as part of Exhibit 5.1)
II-3
<PAGE>
Exhibit
Number Description
- ------ -----------
23.3 Consent of Horwath Landauer Consulting, Inc.
24.1 Power of Attorney (filed as part of Signature Page)
ITEM 37 UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the
plan distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing
II-4
<PAGE>
provisions, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) of (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-11 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Naples, State of Florida on May 28, 1999.
LELY GOLF VILLAS I LIMITED PARTNERSHIP
(Registrant)
RONTO GOLF DEVELOPMENTS,
INC., a general partner
By: /s/ A. Jack Solomon
-------------------
A. JACK SOLOMON
President and
Director of Ronto Golf Developments, Inc., a
General Partner, and member of registrant's
Executive Committee
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned hereby
constitutes and appoints A. Jack Solomon and Richard P. Hoch, acting together
but not singly, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, with full power to act alone, to sign any and
all documents (including both pre- and post-effective amendments in connection
with the registration statement), and to file the same, with all exhibits
thereto, and all documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agent, acting
together but not singly, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, acting together but not singly, or their or his substitutes or
substitute, may lawfully do or cause to be done by virtue thereof.
II-6
<PAGE>
<TABLE>
<CAPTION>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<S> <C> <C>
Signature Title Date
- --------- ----- ----
President and Director of Ronto May 28, 1999
Golf Developments, Inc., a
General Partner, and member of
/s/ A. Jack Solomon registrant's Executive Committee
A. JACK SOLOMON
Managing Member of Westbrook Lely May 28, 1999
Golf Villas I, L.L.C., a General Partner,
and member of registrant's
/s/ Richard P. Hoch Executive Committee
RICHARD P. HOCH
Managing Member of Westbrook Lely May 28, 1999
Golf Villas I, L.L.C., a General Partner,
and member of registrant's
/s/ Jonathan H. Paul Executive Committee
JONATHAN H. PAUL
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
Exhibit Index
-------------
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
3.1 Agreement of Limited Partnership +
3.2 Certificate of Limited Partnership
5.1 Opinion of Ruden, McClosky, Smith, Schuster & Russell, P.A.
10.1 Rental Program Agreement *
10.2 Assignment and Assumption Agreement *
10.3 Real Estate Sales Agreement *
10.4 Leasehold Mortgage and Security Agreement *
10.5 Mortgage and Security Agreement *
10.6 License Agreement *
10.7 Use and Access Agreement
10.8 Declaration of Condominium of Fala Bella Resort and Golf Club
of Naples
10.9 Articles of Incorporation of the Fala Bella Resort and Golf Club of
Naples Condominium Association, Inc.
10.10 Bylaws of the Fala Bella Resort and Golf Club of Naples
Condominium Association, Inc.
10.11 Development Agreement *
10.12 Resort Management Agreement *
10.13 First Amendment to Use and Access Agreement
10.14 Agreement for Purchase of Real Estate *
10.15 Amendment to Agreement for Purchase of Real Estate *
10.16 Articles of Incorporation for Lely Resort Master Property Owners
Association, Inc.
10.17 By-laws of Lely Resort Master Property Owners Association, Inc.
23.1 Consent of Arthur Anderson, L.L.P.
II-8
<PAGE>
Exhibit No. Description Page
- ----------- ----------- ----
23.2 Consent of Ruden, McClosky, Smith, Schuster & Russell, P.A.
(filed as part of Exhibit 5.1)
23.3 Consent of Horwath Landauer Consulting, Inc.
24.1 Power of Attorney (filed as part of Signature Page)
* To be filed by amendment.
+ Previously filed with the Form S-11 registration statement (no. 333-73415) filed with the Securities and Exchange
Commission on March 5, 1999.
* Included in Annexes to Prospectus.
</TABLE>
II-9
<PAGE>
Exhibit 3.2
CERTIFICATE OF LIMITED PARTNERSHIP
OF
LELY GOLF VILLAS I LIMITED PARTNERSHIP
--------------------------------------
This Certificate of Limited Partnership of LELY GOLF VILLAS I LIMITED
PARTNERSHIP is made pursuant to Sections 17-201 and 17-204 of the Delaware
Revised Uniform Limited Partnership Act (the "Act") and is hereby filed with the
Secretary of State of the State of Delaware pursuant to Section 17-206 of the
Act.
1. The name of the Limited Partnership is LELY GOLF VILLAS I LIMITED
PARTNERSHIP.
2. The address of the registered office of the limited partnership if
The Corporation Trust Company, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801, and the name of the limited partnership's registered
agent at such address is The Corporation Trust Company.
3. The names and business addresses of the general partners of the
limited partnership are:
Ronto Golf Developments, Inc.,
a Florida corporation
3185 Horseshoe Drive South
Naples, Florida 34104
and
Westbrook Lely Golf Villas I, L.L.C.,
a Delaware limited liability company
c/o Westbrook Real Estate Partners, L.L.C.
599 Lexington Avenue, Suite 3800
New York, New York 10022
<PAGE>
IN WITNESS WHEREOF, this Certificate of Limited Partnership of LELY
GOLF VILLAS I LIMITED PARTNERSHIP has been duly executed by all the general
partners thereof as of the 12th day of February, 1998
GENERAL PARTNERS:
RONTO GOLF DEVELOPMENTS, INC.,
a Florida corporation
By: /s/ A. JACK SOLOMON
Print name: A. Jack Solomon
Title: President
WESTBROOK LELY GOLF VILLAS I, L.L.C.,
a Delaware limited liability company
By: /s/ PATRICIA K. FOX
Print name: Patricia K. Fox
Title: Secretary
<PAGE>
Exhibit 5.1
[GRAPHIC OMITTED]
200 EAST BROWARD BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
--------------------
POST OFFICE BOX 1900
FORT LAUDERDALE, FLORIDA 33302
--------------------
(954) 764-6660
FAX: (954) 764-4996
WRITER'S DIRECT DIAL NUMBER: (954) 764-6660
May 28, 1999
Lely Golf Villas I Limited Partnership
3185 Horseshoe Drive South
Naples, Florida 34104
Re: Registration Statement on Form S-11 (No. 333-73415)
Ladies and Gentlemen:
In connection with the proposed registration by Lely Golf Villas I
Limited Partnership, a Florida limited partnership (the "Company"), of up to 200
resort condominium units coupled with a mandatory rental agreement (the "Units")
under the Securities Act of 1933, as amended (the "Act"), on a registration
statement on Form S-11 (no. 333- 73415) (the "Registration Statement"), we
advise you that the Units when sold by the Company in accordance with procedures
set forth in the Registration Statement, will be legally issued, fully paid and
non-assessable.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of the name of this law firm under the
caption "Legal Matters" in the Prospectus forming part of the Registration
Statement.
Very truly yours,
/s/ Ruden, McClosky, Smith,
Schuster & Russell, P.A.
RUDEN, McCLOSKY, SMITH,
SCHUSTER & RUSSELL, P.A.
Exhibit 10.7
Prepared by and return to:
Kimberly Krumholtz Lunsford
Gunster, Yoakley, Valdes-Fauli & Stewart, P.A.
777 South Flagler Drive, Suite 500 East
West Palm Beach, FL 33401
USE AND ACCESS AGREEMENT FOR LELY GOLF VILLAS
iv
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
STATEMENT OF BACKGROUND...........................................................................................1
1. ACCESS TO GOLF FACILITIES.......................................................................2
1.1 Unit Owner and Designated User Access..................................................4
1.2 Beach Hotel Guest Access..............................................................10
2. FEES AND CHARGES...............................................................................11
2.1 Initial License Fee...................................................................11
2.2 Annual License Fee. .................................................................12
2.3 Payment of Charges. .................................................................14
3. CONSTRUCTION AND OPERATION OF UNITS, CLUBHOUSE AND RENTAL
MANAGEMENT CENTER..............................................................................16
4. TERM...........................................................................................18
5. RESERVATIONS OF EXCLUSIVE RIGHTS OF GEI........................................................18
6. RECORDATION OF AGREEMENT.......................................................................19
7. ASSIGNMENT.....................................................................................20
7.1 GEI...................................................................................20
7.2 LGV...................................................................................21
7.3 Manager...............................................................................22
7.4 Assignment by Unit Owner..............................................................23
8. IDENTIFICATION CARDS...........................................................................23
9. MISCELLANEOUS..................................................................................24
9.1 Restrictions on Advertising...........................................................24
9.2 Notices...............................................................................24
9.3 Binding Effect........................................................................25
9.4 Governing Law.........................................................................25
9.5 Headings..............................................................................26
9.6 Attorney's Fees.......................................................................26
9.7 Integration...........................................................................26
9.8 Counterparts..........................................................................26
9.9 Waiver................................................................................27
9.10 Exhibits..............................................................................27
10. ARBITRATION....................................................................................27
11. MEMBERSHIP PROGRAM.............................................................................28
12. DEFAULT........................................................................................29
13. PROPERTY OWNER PAYMENTS........................................................................30
14. TEMPORARY CLUBHOUSE............................................................................31
15. AMENDMENT......................................................................................31
</TABLE>
Exhibit List
------------
Golf Course Legal Description A
Lely Development Corporation Estoppel Letter B
Clubhouse Legal Description C
Lely Golf Villas Legal Description D
v
<PAGE>
List of Mortgages and Liens E
Form of Leasehold Mortgage F
Form of Clubhouse Mortgage G
vi
<PAGE>
USE AND ACCESS AGREEMENT
FOR LELY GOLF VILLAS
THIS USE AND ACCESS AGREEMENT entered into as of this 4th day of March
1998, by and between GOLF ENTERPRISES, INC., a Kansas corporation (hereinafter
"GEI"); LELY GOLF VILLAS I LIMITED PARTNERSHIP, a Delaware limited partnership
(hereinafter "LGV").
STATEMENT OF BACKGROUND
GEI is the sub-lessee and operator of the Flamingo Island and Mustang
Golf courses at Lely Resort, in Naples, Florida more specifically described on
Exhibit "A" attached hereto (hereinafter referred to as the "Golf Courses"),
under those certain subleases between Lely Development Corporation and
Breckenridge Naples Development Corporation, with a term expiring on June 30,
2034, as amended, which were assigned to GEI by that certain Assignment of Lease
dated as of December 15, 1995 and recorded in O.R. Book 2136, Page 0001 of the
Public Records of Collier County, Florida (the "Leases"). An estoppel letter
relating to the leases is attached as Exhibit "B" hereto. GEI will also own
certain land in Lely Resort, more specifically described on Exhibit "C" attached
hereto ("Clubhouse Property") upon which it intends to construct a clubhouse
available to the public. The Golf Courses and the clubhouse are collectively
referred to herein as the "Golf Facilities."
LGV is the owner of that certain tract of land within Lely Resort known
as the Lely Golf Villas, in Naples, Florida, as described on Exhibit "D"
attached to this Agreement ("Lely Golf Villas") upon which LGV intends to
develop a total of 200 dwelling units to be sold as condominium units, placed in
a rental program and operated as a "condominium hotel" (collectively referred to
as the "Units," and individually as a "Unit").
1
<PAGE>
GEI has agreed to grant to LGV access to and use of the Golf
Facilities, upon the terms and conditions set forth herein, in order to enable
LGV to provide access to and use of the Golf Facilities, as provided in and
subject to this Agreement, to: (a) "Unit Owners" (as hereinafter defined), and
(b) "Designated Users" (as hereinafter defined) occupying the Units.
LGV has agreed to enter into a management agreement with a management
company as set forth in Section 7.2 hereof ("Manager") to undertake the
management duties of Lely Golf Villas. LGV and Manager shall be jointly and
severally responsible for the obligations hereunder.
NOW, THEREFORE, for and in consideration of the sum of Ten Dollars
($10.00), the mutual covenants, conditions and promises contained herein and for
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. ACCESS TO GOLF FACILITIES
GEI hereby grants to LGV access to and use of the Golf Facilities,
subject to all terms and conditions of this Agreement (specifically including
payment of all fees); subject to and subordinate to all mortgages existing of
record as of the date of this Agreement; and subject to such other rights,
easements and licenses as other persons may have in and to the Golf Facilities
as of the date of this Agreement or hereafter, in order to permit LGV to provide
access and use of the Golf Facilities to "Unit Owners" and "Designated Users"
(as such terms are herein defined). GEI is not aware of any such matters as of
the date of this Agreement except those set forth in the Title Policy #10 0061
107 00000067 issued by Chicago Title Insurance Company on April 15, 1997 and
agrees not to enter into any agreements, easements or licenses after the date
hereof which will have a material adverse effect on LGV's rights hereunder. To
the best of GEI's knowledge, there are no mortgages or liens of record except
those contained on Exhibit "E" attached hereto and GEI agrees not to enter into
any additional mortgage or other debt instrument encumbering the Golf Facilities
prior to the recordation of this Agreement. Simultaneously with the execution of
this Agreement GEI will execute a leasehold mortgage encumbering the Golf
Courses in favor of LGV in the form attached hereto as
2
<PAGE>
Exhibit "F" and a mortgage encumbering the Clubhouse Property in favor of LGV in
the form attached hereto as Exhibit "G." The use and enjoyment of the rights
granted hereby is intended exclusively for the benefit of the Unit Owners and
the Designated Users occupying the Unit, and to no other person or persons
(except as specifically set forth in Section 1.2 hereof), subject further to the
limitations set forth herein.
For each Unit, the term "Unit Owner" shall include (i) one person and
his or her immediate family, comprised of a husband, wife and their dependent
children under 25 years old, or (ii) two (2) adults who live together and hold
themselves out to the public as the equivalent of a married couple and their
dependent children under 25 years old, or (iii) two (2) joint tenants. If a Unit
is owned by a corporation or other entity, the entity may designate one person
and his or her immediate family or two individual persons to have the privileges
of a Unit Owner. Such designated individuals may be changed one time per year
upon payment of a nominal administrative fee. These entity rights are available
only to an entity operating an on-going bona fide commercial business. The
entity must provide to GEI its formative documents and any other documentation
required by GEI to confirm its compliance with the foregoing requirements.
For the purposes of this Agreement, "Designated Users" shall mean those
persons who satisfy each of the following four conditions:
A. who are designated to occupy the Unit pursuant to a rental
program arrangement between the Unit Owner (or the Unit Owner's agent) and
Manager or who are guests of a Unit Owner or of a Designated User;
B. who do not exceed two persons for each bedroom in the Unit
on any given day;
C. who are actually occupying the Unit on the day in question;
and
3
<PAGE>
D. who present an identification card (which may be
photographic) mutually agreed upon by GEI and LGV, in accordance with paragraph
8 herein, or such other form of identification as GEI may deem acceptable from
time to time.
1.1 Unit Owner and Designated User Access. Use of the Golf
Facilities shall be subject to the following:
A. All play is subject to the provisions of this Section 1.1
and to the availability of tee times as demand for tee times may exceed those
reserved pursuant to 1.1.E. GEI does not guarantee the availability of tee times
except as specifically set forth in Section 1.1E.
B. A maximum of two Unit Owners and/or Designated Users
collectively, per bedroom, per Unit, per day, shall be eligible to use the Golf
Facilities (as an example and not in limitation of the foregoing, the maximum in
the case of a one bedroom Unit would be two persons, and in the case of a two
bedroom Unit, the maximum number would be four persons).
C. In all cases, LGV and Manager will be jointly and severally
responsible for paying to GEI golf cart and equipment rental fees at published
rates for all Unit Owners and/or Designated Users. LGV or Manager will pay to
GEI the current published resort green fee for Designated Users who are
occupying the Unit simultaneous with the Unit Owner. LGV and Manager will be
jointly and severally responsible for paying to GEI one- half of the current
published resort green fee for Designated Users who are renting the Unit through
the rental program. The amount of published green fees and cart fees will be
reasonable in relation to comparable golf facilities in the Naples area but will
be priced at the "high end" of the market. The Golf Courses will be operated and
maintained as high-end daily fee courses.
D. A "cancellation" or "no show" fee (as said fee is
determined by GEI for other resort play but not to exceed the published resort
green fee) will be charged for each player for whom GEI does not receive a
cancellation prior to the lesser of the cancellation period designated by GEI or
three days prior the date of play. LGV and Manager will be jointly and severally
responsible for
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paying to GEI the lesser of (i) the cancellation or no show fee, or (ii) the
amount which GEI would have been entitled to if the play had occurred. If the
individual for whom a cancellation was not received is a Unit Owner whose Unit
is in the rental program, the tee time shall count against his or her allocation
of 42 times per year (discussed below).
E. GEI agrees to reserve starting times evenly throughout the
day (i.e., the applicable percentage will be reserved for each hour when play is
scheduled to be started) for Unit Owners and Designated Users based upon GEI's
receipt of Initial License Fees (as defined below) as follows:
(1) Until LGV has sold (or commenced occupancy under a
rental program of) 29 Units and GEI has received the Initial License Fees
therefor, GEI will reserve 10% of the total tee times on the two courses for
Unit Owners and Designated Users.
(2) After LGV has sold (or commenced occupancy under a
rental program of) 29 Units and until it has sold (or commenced occupancy under
a rental program of) 57 Units and GEI has received the Initial License Fees
therefor, 15% of the total tee times on the two courses will be reserved for
Unit Owners and Designated Users.
(3) After LGV has sold (or commenced occupancy under a
rental program of) 57 Units and until it has sold (or commenced occupancy under
a rental program of) 101 Units and GEI has received the License Fees therefor,
30% of the total tee times on the two courses will be reserved for Unit Owners
and Designated Users.
(4) After LGV has sold (or commenced occupancy under a
rental program of) 101 Units and until it has sold (or commenced occupancy under
a rental program of) 151 Units and GEI has received Initial License Fees
therefor, 42% of the total tee times on the two courses will be reserved for
Unit Owners and Designated Users.
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(5) After LGV has sold (or commenced occupancy under a
rental program of) 151 Units and GEI has received the Initial License Fees
therefor, 50% of the total tee times on the two courses will be reserved for
Unit Owners and Designated Users.
(6) GEI has no obligation to reserve tee times for any
Units which have not been either sold to retail buyers or for which occupancy
under a rental program has not been commenced.
(7) Unreserved tee times mentioned in this Section
1.1.E. will be released three days in advance of the day in question and made
available to the general public, Unit Owners, Designated Users or such other
persons as GEI may designate.
F. Prior to October 1 of each year during the term hereof,
each Unit Owner will elect whether to place his or her Unit in the rental
program for the one-year period commencing on November 1. LGV or Manager will
provide written notice by October 15 of each year to GEI of which Units are in
the rental program for the following year with the ability to update the list
through November 1. If a Unit is not in the rental program, the eligible Unit
Owners of such Unit (including all individuals defined in paragraph 1) will each
be eligible to play one 18-hole round of golf per day, during the entire year
without the payment of green fees. The Unit Owners may make reservations up to
one year in advance.
G. A Unit Owner whose Unit is in the rental program will be
eligible to play one 18-hole round of golf at the Golf Facilities a maximum of
42 times per year under the following conditions:
(1) If his or her Unit is not occupied by a Designated
User renting the Unit through the rental program, the Unit Owner may make an
advance reservation up to one year in advance and will not be required to pay a
green fee. Such reservation will be canceled if the Unit is subsequently rented.
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(2) If the Unit is occupied by a Designated User
renting the Unit through the rental program, the Unit Owner will have no advance
reservation rights to play golf, but shall be eligible to play on a stand-by
space available basis (i.e. no reservation under this Agreement even after tee
times open to public) without payment of a green fee. This play will count
toward the 42 play times.
(3) Use under this Section G is limited during the
months of November through April, during which a Unit Owner will be able to use
the Golf Facilities a maximum of seven days during any one 30-day period and
once all seven days have been used, the Unit Owner must wait ten more days
before being eligible for additional golf privileges, with the exception that
there may be one period of up to 14 days of use per year within a particular
30-day period (in which case the Unit Owner may not use the Golf Facilities for
a period of ten days before and after the first and last day of such use).
If a Unit Owner desires to play golf at the Golf Facilities more than
42 times per year, the Unit Owner may do so, subject to the same reservation
privileges, as are applicable to the general public. The published resort green
fee will be paid for such use in excess of 42 rounds during the months of
November through April. During the months of May through October from 1999
through 2004, no green fee will be paid for such excess rounds. Commencing in
May of 2004, one-half of the published resort green fee will be paid for such
excess use during the months of May through October.
H. The Designated Users who are occupying a Unit through the
rental program shall have the right to make reservations to play golf hereunder,
subject to the following:
(1) Reservations may be made up to one year in advance
if the Unit Owner or Designated User has a confirmed reservation for a Unit;
(2) Reservations shall be limited to two Designated
Users, per bedroom, per Unit, per day; and
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(3) Fifty percent (50%) of the published resort green
fee shall be paid by LGV or Manager to GEI.
I. Designated Users who are occupying the Unit
simultaneously with the Unit Owner shall have the right to reserve tee times,
subject to the following:
(1) Reservations may be made up to one year in advance
if the Designated User has a confirmed reservation for a Unit; subject to
cancellation if the Unit is subsequently rented;
(2) Reservations shall be limited to two Designated
Users or Unit Owners per bedroom, per Unit, per day;
(3) The full published resort green fee shall be paid
by LGV or Manager to GEI.
J. GEI is not hereby excluded in any way from providing the
same or similar rights to others, irrespective of their numbers, provided,
however, that GEI will provide the tee times set forth in Section 1.1.E and will
not enter into any similar agreement with a third party on terms more favorable
than those herein. All Unit Owners, Designated Users, and guests of any Unit
Owner or Designated User utilizing the Golf Facilities shall be subject to
reasonable rules and codes of conduct for the Golf Facilities, as established
from time to time by GEI, including dress codes, rules of play, and rules for
the operation of the golf courses and associated facilities.
K. It is specifically understood that in order to invoke the
access benefits as set forth herein, the names of all persons occupying each
Unit with reserved tee times and Unit Owners with reserved tee times shall be
provided in writing to GEI by LGV or Manager at least ten (10) days prior to the
reserved tee time. In addition, LGV or Manager shall have the right to book
Units and collect green fees after the ten-day notice has been given and through
the date of play. A second notice including the names of all persons with
reserved tee times will be provided in writing to GEI
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by the close of business four days prior to the date of play. Play not included
on these notices shall be on a space available basis only (i.e. competing with
all other play for tee times).
1.2 Beach Hotel Guest Access. LGV or Manager may assign some
of its tee times to hotels located on the beach in Collier County in order to
obtain beach access from such hotels for individuals occupying Units. Such
assignment will enable tee times to be reserved for beach hotel guests. Use of
any assigned tee times is subject to all terms of this Agreement (including
notice under Section 1.D) and payment to GEI by LGV or Manager of full green
fees and cart and equipment rental fees for all players. Such assignment shall
not relieve LGV or Manager of the obligation to pay all Annual License Fees. The
applicable green fee shall be the published resort green fee. In the event
another hotel owner or any other entity will pay more than 10% above the
published resort green fee on an on-going basis for the right to have the first
opportunity to purchase tee times not reserved by Unit Owners or Designated
Users within four (4) days of the date of play (i.e. tee times that would
otherwise be released to public), LGV or Manager must either (i) pay the higher
rate borne by the market, or (ii) forfeit the right to transfer access to a
hotel granted by this Section.
2. FEES AND CHARGES. As consideration for this Agreement, LGV agrees to
pay the following fees and charges:
2.1 Initial License Fee. LGV or Manager shall pay an initial
license fee of Seventeen Thousand Five Hundred and No/100 Dollars ($17,500.00)
per Unit for each of the first 100 Units and Twenty Thousand and No/100 Dollars
($20,000.00) for each of the second 100 Units (the "Initial License Fee"). The
Initial License Fee is non-refundable and is payable upon the earlier of (i)
closing on a Unit, or (ii) in accordance with the schedule in Section 2.1.A.
Commencing November 1, 2003, the Initial License Fee will be increased by 4% and
will increase by 4% annually thereafter.
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A. The Initial License Fee for each of the 200 Units
shall be due and payable in accordance with the following schedule if such fee
has not previously been paid as a result of the sale of the Unit:
a. Initial License Fees for 30 Units by
July 1, 1999.
b. Initial License Fees for an
additional 30 Units by July 1, 2000.
c. Initial License Fees for an
additional 30 Units by July 1, 2001.
d. Initial License Fees for an
additional 30 Units by July 1, 2002.
e. Initial License Fees for an
additional 30 Units by July 1, 2003.
f. Initial License Fees for an
additional 30 Units by July 1, 2004.
g. Initial License Fees for an
additional 20 Units by July 1, 2005.
B. The Initial License Fees shall be paid on the
aforementioned dates regardless of whether any Units have been constructed or
sold. Failure to timely make any such payments within 15 business days after GEI
has provided written notice of non-payment will result in termination of the
right to acquire any additional access rights. This right is independent of the
default provisions of Section 12.
2.2 Annual License Fee.
A. The Annual License Fee shall be paid by November
1st of each year for a "Dues Year" beginning November 1 and continuing through
October 31, provided, however, that it shall commence at the earlier of closing
of the Unit (or availability for occupancy through the rental program) and be
prorated for that year. LGV shall provide written notice to GEI upon the sale of
a Unit or the commencement of availability of a Unit for occupancy through the
rental program.
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B. For each Unit in the rental program as of November
1st of each year, LGV or Manager shall pay to GEI the total sum of Three
Thousand Five Hundred and No/100 Dollars ($3,500.00) (the "Annual License Fee")
per Unit, per year, during the Initial Term or any Extension Period.
C. For each Unit which has been sold but for which the
Unit Owner has elected not to be in the rental program as of November 1 of any
year during the term hereof, LGV or Manager shall pay to GEI the total sum of
Six Thousand and No/100 Dollars ($6,000.00) (the "Annual License Fee") per Unit,
per calendar year, during the Initial Term or any Extension Period.
D. A Unit Owner may elect to enter or reenter the
rental program at any time during a Dues Year. In this event, there will be no
refund by GEI of any portion of the difference between the Annual License Fee
paid for Units not in the rental program and those in the rental program. Unit
Owners, having elected to participate in the rental program must remain in the
rental program until the end of the Dues Year.
E. For the year in which the closing of a Unit occurs
(or the Unit is available for occupancy through the rental program, if earlier),
the Annual License Fee shall be prorated, based upon the number of days
remaining in the Dues Year on the date of closing (or the date the Unit is
available for occupancy through the rental program), and shall be payable on
such date. Effective for the Dues Year beginning November 1, 2001 and each year
thereafter, GEI will increase the Annual License Fee by four percent (4%).
F. The Annual License Fees for the final year of the
Initial Term or any Extension Period shall be paid in full by November 1st of
said year, as aforesaid. After the expiration of the Agreement GEI will refund a
pro rata portion of the Annual License Fees for the final Dues Year, based upon
the number of days remaining in such Year after the expiration of the Agreement.
2.3 Payment of Charges.
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A. Payments of all amounts payable under this
Agreement for use of the Golf Facilities (excluding only the Initial License
Fees and Annual License Fees) and specifically including but not limited to, all
green fees, cart fees and cancellation fees, will be billed under the same terms
and conditions as payments for lodging and paid to GEI by LGV or Manager as
provided herein. Fifty percent (50%) of deposits collected during a month which
are allocable to amounts owed hereunder will be paid to GEI within five days of
the last day of the month in which they are collected. As an example and not in
limitation of the foregoing, if a 20% deposit is required to reserve a Unit, 20%
of the green fee and cart fee will also be collected at the same time as the
deposit is collected, and, if GEI is entitled to 50% of the green fee, 10% of
that amount will be paid to GEI within five days of the last day of the month
payment is collected. Full payments (i.e. other than deposits which were
discussed above) will be paid to GEI within five days of the 15th of the month
and within five days of the last day of the month. Charges on this schedule will
be payable to GEI the earlier of when payment is actually billed (i.e. LGV and
Manager pay GEI upon billing player regardless of when or if payment is
received) or the date of golf play. LGV and Manager are jointly and severally
liable for the payment to GEI of all use charges, and assume the risk of
non-collection from the player. Billing or collection in this Section shall
include provision of charge card information. The pro-rata share of the credit
card expenses shall be deducted from payments to GEI.
B. The payment and reservation records of LGV and
Manager will be available for inspection by GEI at any time during regular
business hours. In addition, LGV or Manager shall furnish GEI an annual
certified review of (i) all golf reservations made through LGV or Manager, and
(ii) the amount and timing of all charges and receipts by LGV hereunder and
payment to GEI of amounts therefor. Such annual statement will be prepared by
LGV's auditor which will be a nationally recognized firm of independent
certified public accountants according to generally accepted accounting
principles, and shall be provided to GEI within ninety (90) days after the end
of the calendar year to which such statement relates.
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C. LGV and Manager shall permit GEI and/or its accountants and
attorneys to examine or audit their books, records, reports and other papers and
to make copies and memoranda of them and to discuss the affairs, finances and
accounts of each with the officers, employees and independent public accountants
of each (and by this provision those entities authorize their accountants to
discuss the finances and affairs of each). The scope of such inspection,
examination, audit or discussion by GEI shall be limited to reasonable times and
that reasonably necessary to verify the completeness and accuracy of the reports
and certifications provided to GEI. If an inspection, examination, audit or
discussion pursuant to this Section reveals any underpayment of any fees or
charges owed, then LGV, Manager and Association shall immediately pay GEI, upon
demand, all amounts due GEI plus interest at the maximum rate permitted by law
commencing from the day on which the unpaid fees or charges were due.
3. CONSTRUCTION AND OPERATION OF UNITS, CLUBHOUSE AND RENTAL MANAGEMENT
CENTER. LGV agrees to construct and operate Lely Golf Villas and the Units as
follows:
3.1 If construction is not commenced on any Units by July 1,
2008, GEI will be entitled to terminate this Agreement and will be released from
its obligations hereunder. This right is independent of the default provisions
of Section 12. Any Units which are not completed by July 1, 2010 will not be
eligible for use and access pursuant to this Agreement. GEI is entitled to
retain all amounts received hereunder as liquidated damages and not as a penalty
regardless of whether any or all of the Units are constructed.
3.2 LGV and Manager agree to maintain the following insurance
coverage during the term of this Agreement:
(i) full replacement cost for all improvements
at Lely Golf Villas, and
(ii) a minimum of $2,000,000 of aggregate limit
liability coverage.
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(iii) Such policy will name GEI as additional
named insured on the liability coverage.
3.3 LGV agrees to operate the Lely Golf Villas and the Units
as a "condominium hotel" managed by Manager, under which Units will be sold to
Unit Owners who will be encouraged to place their Units in a "rental program"
arrangement whereby Manager will make the Units available to occupants on a
transient basis. LGV and/or Manager will operate the Lely Golf Villas as a
quality mid-tier limited amenity facility such as the present operation of Park
Shore Resort in Naples, Florida. GEI and LGV acknowledge that the preceding
comparable facility may change and that its quality of operation as of the date
of this Agreement is controlling.
3.4 GEI agrees to commence construction of the clubhouse in
October of 1998 and, subject to force majeure delays, to complete construction
12 months thereafter. The clubhouse will have at least 12,000 square feet of
air-conditioned space and will include a golf pro shop and a restaurant. The
restaurant will remain open according to a schedule determined by GEI which will
permit restaurant operations to be profitable. GEI will endeavor in good faith
to maximize restaurant hours of operation. GEI agrees to maintain the following
insurance coverage during the term of this Agreement: (i) full replacement costs
for the clubhouse improvements and (ii) a minimum of $2,000,000 of aggregate
limit liability coverage. Such policy will name LGV as additional named insured
on the liability coverage. The clubhouse will be available to Unit Owners and
Designated Users at the times it is available to the general public without
regard to restrictions which are applicable to use of the Golf Courses.
3.5 LGV agrees to construct a temporary on-site rental
management center prior to completion of the first 50 Units. A permanent center
will be completed prior to the completion of 120 Units. Such management center
will be clearly marked with signage reasonably acceptable to GEI to ensure that
the rental nature of the Units is evident. The management center will be open
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a minimum of 8 hours per day, seven days per week in season. Off-season hours
may be reduced to accommodate low occupancy. On site shall be anywhere on the
Lely Golf Villas site.
4. TERM. The term of this Agreement shall commence on the date of
execution of this Agreement and all of the use rights granted hereunder shall
expire at 11:59 p.m. on June 30, 2034 (the "Initial Term"), unless earlier
terminated or revoked as provided herein. This Agreement will be automatically
extended for any additional periods which the Leases are extended (each an
"Extension Period"). GEI will endeavor to provide written notice to LGV pursuant
to paragraph 9.2 herein prior to or upon the expiration of the Initial Term (or
any Extension Period) notifying LGV of any lease extension. Failure to provide
notice shall not affect the extension on termination of this Agreement as set
forth in this Section. If GEI's lease is not extended, the Agreement shall
automatically terminate at the end of the applicable term or period. In the
event GEI acquires fee simple title to the Golf Courses, the term of this
Agreement will expire June 30, 2044.
5. RESERVATIONS OF EXCLUSIVE RIGHTS OF GEI. Nothing in this Agreement
shall be construed so as to prohibit GEI in its sole discretion, from closing
any or all of the Golf Facilities for maintenance, restoration, renovation or
reconstruction in accordance with sound business or golf course management
practices, or to establish such hours of operation of the Golf Facilities as it
shall determine to be reasonable. All reservations of golf tee times under this
Agreement shall be subject to weather conditions and to the percentage of tee
times reserved under Section 1.1E of this Agreement, and shall also be subject
to the terms and conditions of this Section 5. Notwithstanding anything else
contained in this Section, GEI shall have the sole right and discretion to hold
any tournaments or special events which do not reduce the percentage of tee
times reserved under Section 1.1.E. Further, GEI shall have the sole right and
discretion to schedule, 90 days in advance, one half-day tournament per month at
the Golf Facilities which may reduce allocated tee times. GEI will ensure that
tee times which were reserved prior to notification of scheduling of any such
tournament are honored at another course within Lely Resort with no
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additional cost. To the extent that the allocated percentage of tee times which
LGV would have actually used is reduced as a result of any such tournament
(based on immediately preceding history or historical demand if no preceding
history), LGV will be allocated tee times sufficient to replace those reduced by
any such tournament within 30 days of the tournament, at reasonably equal times
determined by GEI. Closing one golf course and accommodating the tee times
required under this Agreement on another course will not count as a tournament
hereunder.
6. RECORDATION OF AGREEMENT. This Agreement shall be recorded in the
Public Records of Collier County. This Agreement shall constitute a covenant
running with GEI's leasehold interest in the land so that all subleases,
assignees or other successors in interest to GEI shall be bound by the terms of
this Agreement until this Agreement is terminated. Further, the holders of all
mortgages on GEI's leasehold interest in the Golf Course Property and on the
Golf Facilities will be required to enter into a non-disturbance and attornment
agreement with LGV in form and content satisfactory to LGV which will be
recorded in the Public Records with respect to the property on which Golf
Facilities are located. Such non-disturbance and attornment agreement will
provide that in the event of foreclosure or a conveyance in lieu of foreclosure,
this Agreement shall continue in full force and effect between LGV and the party
acquiring GEI's interests in the Golf Facilities and associated property and
such party shall recognize LGV's rights pursuant to this Agreement, the
leasehold mortgage and the fee mortgage. Notwithstanding the above, GEI makes no
guarantee that Westin will be bound by this Agreement or that Westin will
execute such non-disturbance and attornment agreement; however, GEI shall use
diligent efforts to obtain such agreements. In addition, LGV shall include
either (i) a copy of this Agreement, or (ii) a memorandum of this Agreement in a
form agreed upon by GEI with any registration required for the sales of Units.
LGV shall also notify each Unit Owner of the terms and conditions of this
Agreement.
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7. ASSIGNMENT. This Agreement and the benefits and obligations applying
to each respective party hereunder may only be assigned by each respective party
as follows:
7.1 GEI. GEI shall not assign this Agreement without the prior
written consent of LGV, which consent shall not be unreasonably withheld or
delayed. GEI shall notify LGV of any proposed assignment at least thirty (30)
days prior to the proposed effective date of such assignment. LGV's consent
shall not be required for any assignment of all or any portion of GEI's interest
in this Agreement (i) to any corporation, partnership or other entity which
controls, is controlled by or is under common control with GEI or David G.
Price; (ii) to any individual, corporation, partnership or other entity
resulting from the merger of or consolidation with GEI; or (iii) in connection
with the sale of all or a substantial portion of GEI's assets or the stock of
GEI, provided that in each such instance the assignee shall employ a senior
management team with a demonstrable record of golf course operations experience
as of the effective date of the assignment (it being agreed that, if GEI's
senior management team remains substantially intact following the assignment,
this condition shall be deemed to have been satisfied); provided, however, that
in each such case, the assignee shall have a net worth of at least $5,000,000,
increased annually by the Consumer Price Index for all Urban Consumers, U.S.
City Average, All Items 1982-84 = 100, as published by the U.S. Bureau of Labor
Statistics ("CPI-U"). In the case of an assignment, the assignee shall assume in
writing all of GEI's obligations under this Agreement, and GEI shall be released
from liability under this Agreement. Notwithstanding the foregoing to the
contrary, GEI shall be permitted to enter into subleases or concession
agreements for the operation of the pro shop, food and beverage services and
other related activities at the Golf Facilities and such subleases and/or
concession agreements shall not be considered assignments for purposed of this
paragraph requiring LGV's consent.
7.2 LGV.
A. LGV shall not assign this Agreement without the
prior written consent of GEI, which consent shall not be unreasonably withheld
or delayed. LGV shall notify GEI of any
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proposed assignment at least thirty (30) days prior to the proposed effective
date of such assignment. Consent shall be deemed reasonably withheld if the
assignee will not employ a senior management team with a demonstrable record of
hotel/resort operations experience as of the effective date of the assignment;
or the assignee has a net worth of less than $5,000,000 (increased by CPI-U per
year from the date of this Agreement. In the case of an assignment, the assignee
shall assume in writing all of LGV's obligations under this Agreement and LGV
shall be released from liability under this Agreement. Any other assignment
shall be null and void as to GEI. Notwithstanding the above, LGV shall be
entitled to assign the management obligations of this Agreement one time prior
to October, 1998 to an entity with substantially the same ultimate beneficial
owners as LGV ("Manager") without approval by GEI provided such Manager assumes
all obligations of LGV and Manager set forth in this Agreement. LGV shall not be
released from any obligations hereunder as a result of such assignment to
Manager.
B. LGV may at any time, without payment of a Transfer
Fee to GEI, transfer the rights applicable to a Unit hereunder to (i) the first
retail purchaser Unit Owner(s) of such Unit; or (ii) to a subsequent retail
purchaser Unit Owner of the Unit who purchased the Unit from LGV, provided that
LGV obtained ownership of the Unit in question as the result of the default by
the original Unit Owner under a mortgage or other security interest encumbering
the Unit.
7.3 Manager. Manager shall not assign this Agreement without
the prior written consent of GEI, which consent shall not be unreasonably
withheld or delayed. Manager shall notify GEI of any proposed assignment at
least thirty (30) days prior to the proposed effective date of such assignment.
Consent shall be deemed reasonably withheld if the assignee will not employ a
senior management team with a demonstrable record of hotel/resort operations
experience as of the effective date of the assignment; or the assignee has a net
worth of less than $5,000,000, increased by CPI-U per year from the date of this
Agreement. In the case of an assignment, the assignee shall
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assume in writing all of Manager's obligations under this Agreement and Manager
shall be released from liability under this Agreement. Any other assignment
shall be null and void as to GEI.
7.4 Assignment by Unit Owner. The owner(s) of each Unit
purchased directly from LGV shall have the right to assign, devise, transfer or
sell his or her rights hereunder, only to a transferee of the Unit, provided
that the transferee assumes the rights and obligations of the transferor Unit
Owner, and provided that the applicable transfer fee (as described below) is
paid. The Transfer Fee shall be Five Thousand and No/100 Dollars ($5,000.00),
which may be increased each year beginning on November 1, 1999 and annually
thereafter by four percent (4%). Other transfers by Unit Owners are not
permitted. A transfer (i) to either spouse on account of a divorce, (ii) to a
joint tenant; or (iii) to an immediate family member; shall not be considered as
a transfer for Transfer Fee payment purposes. Except in the cases set forth in
the preceding sentence, any other transfer (such as a transfer by bequest,
intestate succession or otherwise on account of the death of a Unit Owner) shall
be considered as a transfer for Transfer Fee purposes.
8. IDENTIFICATION CARDS. In order to control usage by Unit Owners and
the Designated Users, the Unit Owners and Designated Users will be required to
produce identification cards (which may be photographic) mutually agreed upon by
GEI and LGV. The identification cards shall be provided by the Association or
the Manager to the Unit Owners and Designated Users and shall be registered in a
computer registry mutually acceptable to GEI and LGV and operated by Manager or
Association.
9. MISCELLANEOUS.
9.1 Restrictions on Advertising. LGV covenants that it will
not mention any of the Golf Facilities in any promotion, advertisement or
marketing materials without the prior written approval of GEI of any such
promotion, advertisement or marketing materials, which approval will
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not be unreasonably withheld. All advertising and marketing materials, including
script and story board, shall be submitted to GEI, as provided in Section 9.2
below or such other individual designated by GEI, at least fifteen business days
in advance of the first proposed use of such material, and LGV shall be notified
of GEI's approval or disapproval of such material no later than five business
days after submission. In the event that an independent advertising agency under
contract with LGV uses advertising or marketing materials without following the
procedure mentioned in the previous sentence, such use will not be deemed a
breach of this Agreement provided that (i) such failure was inadvertent; and
(ii) upon receiving notice of such use, LGV causes the use to cease as soon as
is reasonably possible; and (iii) the materials are forthwith submitted to GEI
for GEI's approval as provided in the previous sentence.
9.2 Notices. All notices and all documents to be given or
delivered hereunder shall be sent to the respective parties at the address set
forth hereinbelow by registered or certified mail, return receipt requested, or
overnight courier or delivery service. Such notice shall be deemed received five
(5) days after sent by registered or certified mail or the first business day
after if sent by overnight courier or delivery service.
If to GEI: Golf Enterprises, Inc.
2951 28th Street
Santa Monica, CA 90405
Attention: Legal Department
Copy to: Bernard R. Baker, Esquire
Gunster, Yoakley & Stewart, P.A.
Phillips Point East
777 South Flagler Drive, Suite 500
West Palm Beach, Florida 33401
If to LGV: A. Jack Solomon
The Ronto Group
3185 Horseshoe Drive
Naples, FL 34104
Copy to: Richard P. Hoch
Westbrook Partners
599 Lexington Avenue, Suite 3800
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New York, NY 10022
Marjie C. Nealon
Bilzin, Sumberg, Dunn & Axelrod, L.L.P.
2500 First Union Financial Center
200 South Biscayne Boulevard
Miami, FL 33131-2336
John L. Farquhar
Ruden McClosky Smith Schuster & Russell, P.A.
200 East Broward Boulevard, Suite 1500
Fort Lauderdale, FL 33301
9.3 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
9.4 Governing Law. This Agreement shall be construed under the
laws of the State of Florida.
9.5 Headings. The headings of the paragraphs and subparagraphs
of this Agreement are for the purpose of convenience only and shall not add or
take away from the provisions hereof.
9.6 Attorney's Fees. Each party to this Agreement shall bear
its own costs and attorneys' fees associated with the preparation or execution
of this Agreement; however, if any legal action or other proceeding, including
but not limited to any trial proceeding or appellate proceeding, is brought for
the enforcement of this Agreement or because of any alleged dispute, breach,
default, or misrepresentation in connection with any provision of this Agreement
or any Exhibit hereto, the successful or prevailing party shall be entitled to
recover reasonable attorneys' fees (including paraprofessional fees) court
costs, and all other expenses even if not taxable as court costs, incurred in
that action or proceeding, in addition to any other relief to which such party
may be entitled.
9.7 Integration. This Agreement constitutes the entire
Agreement between the parties and there are no representations, agreements,
arrangements or understandings, oral or written,
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between the parties relating to the subject matter of this Agreement, which are
not fully expressed herein. This Agreement may not be changed or terminated
orally or in any manner other than by written agreement executed by both
parties.
9.8 Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original and all such counterparts shall together constitute but one
and the same Agreement. The Agreement shall become effective when the Agreement
or a counterpart has been executed by GEI, LGV and Manager, and the
Acknowledgment and Acceptance has been executed by the Association.
9.9 Waiver. The failure or delay of GEI or LGV at any time to
enforce its rights under this Agreement shall not effect the right of such party
to enforce its rights under any provision of this Agreement, and any waiver by
GEI or LGV of any breach of any provision of the Agreement will not be construed
as a waiver of any continuing or succeeding breach of such provision, a waiver
of the provision itself or a waiver of any right under this Agreement.
9.10 Exhibits. Exhibits are incorporated herein and made a
part hereof.
10. ARBITRATION. In the event there is a dispute concerning the rights,
obligations or remedies of LGV and GEI under this Agreement (other than a
dispute concerning a monetary default), the matter may be submitted to binding
arbitration by either LGV or GEI. The arbitration shall consist of three
arbitrators (unless the parties mutually agree to only one arbitrator) as
follows: LGV and GEI shall each select one arbitrator five (5) days after
receipt of notice by the other party invoking arbitration. The two arbitrators
then shall jointly select the third arbitrator within ten (10) days. All three
arbitrators shall be required to be partners or principals of legal firms with
experience in the country club or golf industry. The decision of two of the
three arbitrators shall be deemed to be the decision of the arbitrators and
shall be binding on both parties as hereinafter provided. GEI and LGV shall each
submit a proposal setting forth its proposed resolution of the issues(s)
submitted to arbitrators within ten (10) days of notice of the selection of the
third arbitrator by the first two
22
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arbitrators. The decision of the arbitrators, where appropriate, shall take into
account the operation of the Golf Facilities and the Units in comparison with
the operation of other similar golf facilities and rental units in Florida. The
arbitrators shall investigate the facts and shall hold hearings at which the
parties may present evidence and arguments, be represented by counsel, conduct
cross examination and have a court reporter present. The arbitrators shall only
select one of the resolutions proposed by the parties within thirty (30) days
after the date upon which the last party submitted its proposal to the
arbitrators which proposals must be submitted within thirty (30) days after the
completion of hearing of testimony or if no testimony, after the presentation of
all information. Judgment upon the decision rendered in such arbitration may be
entered and enforced by any court having jurisdiction thereof. The arbitration
proceeding shall be governed by the rules of the American Arbitration
Association then in force and shall take place in Collier County, Florida. The
prevailing party, as designated by the arbitrators, shall be entitled to recover
all costs and reasonable attorneys' fees and related costs, fees or expenses of
the arbitration.
In the event GEI is the prevailing party, LGV shall be required to pay
for all costs, fees and expenses incurred as a result of the arbitration.
In the event LGV is the prevailing party, GEI shall be required to pay
the costs, fees or expenses incurred as a result of the arbitration.
11. MEMBERSHIP PROGRAM. In the event GEI implements a membership
program for use of the Golf Facilities, Unit Owners will have the right to
acquire membership in the Club on the terms offered by GEI. Nothing in such
membership program will limit the rights provided under this Agreement.
12. DEFAULT. If any of the parties hereto shall default in the
performance of any of the covenants of this Agreement, the non-defaulting party
may, at any time thereafter (and subject to the other party's right to elect
arbitration for non-monetary defaults), elect any one or more of the following
remedies if such default is not cured within fifteen (15) business days of
receipt of written
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notice of such default: (i) institution of suit for damages, (ii) institution of
suit for injunctive relief, (iii) institution of suit for specific performance,
or (iv) exercise of its lien and collection rights under Section 13 hereof. In
addition to the above, in the case of a second "Material Monetary Default"
within a twelve-month period, which is not cured within fifteen (15) business
days of receipt of written notice of such default, GEI may, in its sole
discretion, suspend all use privileges granted under this Agreement, or
terminate the Agreement. A "Material Monetary Default" is a single monetary
default involving an amount of $50,000 or more. Also in addition to the above,
if the Annual License Fee is not paid within thirty (30) days after receipt of
written notice by LGV or Manager of LGV's or Manager's failure to timely pay the
Annual License Fee, GEI may suspend all use privileges hereunder. If the Annual
License Fee is not paid within six months after receipt of the aforementioned
notice of failure to timely pay the Annual License Fee, GEI may terminate this
Agreement without further notice.
No right or remedy conferred upon or reserved to GEI, LGV or Manager is
intended to be exclusive of any other right or remedy herein except that the
right of termination shall only be available as specified in Sections 2.1.B, 3.1
and 12. Termination and/or suspension of this Agreement shall not release LGV or
Manager from any payments or obligations due and payable or accrued to GEI or
rescind any payment made or paid by LGV or Manager to GEI hereunder prior to the
time such termination becomes effective nor release LGV or Manager from any
other obligation which survives termination.
13. PROPERTY OWNER PAYMENTS. LGV agrees to prepare and record a
Declaration of Condominium, acceptable to GEI, describing this Agreement and
setting forth the obligation of Unit Owners to pay, as common assessments, the
Annual License Fees required by this Agreement. LGV will form a condominium
Association to collect these common assessments and will use its best efforts to
require Association to pay those assessments to Manager or LGV for payment
hereunder. Such Declaration shall be a covenant running with the land and will
be recorded
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against the Lely Golf Villas property prior to the sale of the first Unit and in
no event later than July 1, 1999. Such Declaration shall also reference the lien
rights provided to GEI herein. GEI shall have a lien against all of the property
comprising Lely Golf Villas to satisfy all payments required by this Agreement.
Such payments together with interest thereon and the cost of collection thereof,
including attorney's fees, shall be a continuing lien against all property and
each and every Unit in Lely Golf Villas. If any payment shall not be paid within
thirty (30) days following the due date, GEI may, at any time thereafter, record
a Claim of Lien in the Public Records of the County, setting forth any
outstanding amount, the rate of interest due thereon, and the costs of
collection thereof and bring an action to foreclose the lien against the
property and Units in the manner in which mortgages on real property are
foreclosed. There shall be added to the amount of the outstanding obligation the
cost of such action, including attorney's fees incurred by GEI together with the
costs of the action.
14. TEMPORARY CLUBHOUSE. LGV agrees that GEI may use a portion of the
Lely Golf Villas property (to be mutually agreed upon) as a temporary clubhouse
during construction of the clubhouse.
15. AMENDMENT. The parties acknowledge that this Agreement may be
amended by a written instrument executed by both parties. It is anticipated that
an amendment will be executed to address the specific billing and payment
procedures developed after operations commence.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
WITNESSES: Golf Enterprises Inc., a Kansas corporation
__________________________ By: _____________________________
Print Name:________________ Name:___________________________
Title:_____________________________
_________________________ (CORPORATE SEAL)
Print Name:________________
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Lely Golf Villas I Limited Partnership
By: Ronto Golf Developments,
Inc, a general partner
__________________________ By: ________________________
Print Name:_________________ Name: A. Jack Solomon
Title: President
- --------------------------
Print Name:_________________
STATE OF )
-------------------------
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 1998,
by ------ -------------- , the of , a ------------------------------------------
- ------------------------------ ----------------------------------- corporation,
on behalf of the corporation. The above-named individual o is personally known
to me or o has produced the following identification which is current or has
been issued within the past five years and bears a serial or other identifying
number and did (did not) take an oath:
o the sworn written statement of a credible witness (who is
presently known to the Notary) that the signer is personally
known to the witness;
o a driver's license or non-driver's ID issued by Florida or any
other U.S. state;
o a U.S. passport or a foreign passport stamped by the U.S.
Immigration and Naturalization Service;
o a U.S. military ID;
o a Canadian or Mexican driver's license issued by an official
agency;
o for an inmate in custody, an ID issued by the Florida
Department of Corrections;
Print Name:
NOTARY PUBLIC - STATE OF
Commission Number:
My commission expires:
(Notarial Seal)
26
<PAGE>
STATE OF )
-------------------------
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this day of , 1998,
by A. Jack Solomon, president of Ronto Golf Developments, Inc., a general
partner of Lely Golf Villas I Limited Partnership, a general partnership, on
behalf of the partnership. The above-named individual o is personally known to
me or o has produced the following identification which is current or has been
issued within the past five years and bears a serial or other identifying number
and did (did not) take an oath:
o the sworn written statement of a credible witness (who is
presently known to the Notary) that the signer is personally
known to the witness;
o a driver's license or non-driver's ID issued by Florida or any
other U.S. state;
o a U.S. passport or a foreign passport stamped by the U.S.
Immigration and Naturalization Service;
o a U.S. military ID;
o a Canadian or Mexican driver's license issued by an official
agency;
o for an inmate in custody, an ID issued by the Florida
Department of Corrections;
Print Name:
NOTARY PUBLIC - STATE OF
Commission Number:
My commission expires:
(Notarial Seal)
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EXHIBITS "A" - "G"
28
Exhibit 10.8
Return to: (enclose self-addressed stamped envelope)
Name:
Address:
This Instrument Prepared by:
Ruden, McClosky, Smith,
Schuster & Russell, P.A.
5150 No. Tamiami Trail
Newgate Tower, Suite 602
Naples, FL 34103
SPACE ABOVE THIS LINE FOR PROCESSING DATA
SPACE ABOVE THIS LINE FOR PROCESSING DATA
DECLARATION OF CONDOMINIUM
OF FALA BELLA RESORT AND GOLF CLUB OF NAPLES, A CONDOMINIUM
LELY GOLF VILLAS I LIMITED PARTNERSHIP, a Delaware limited partnership,
("Developer"), hereby makes this Declaration of Condominium of Fala Bella Resort
and Golf Club of Naples, a Condominium ("Declaration") to be recorded amongst
the Public Records of Collier County, Florida ("County"), where the "Land" (as
hereinafter defined) is located, and states and declares:
1. SUBMISSION STATEMENT
Developer is the owner of record of the "Condominium Property" (as
hereinafter defined) and does hereby submit "Phase 1" (as hereinafter defined)
and the "Roadway, Parking and Lakes Tract 1" (as hereinafter defined) to
condominium ownership pursuant to the Condominium Act, Chapter 718, Florida
Statutes, as amended through the date of recording this Declaration amongst the
Public Records of the County ("Act").
2. NAME AND ADDRESS
The name of this condominium is Fala Bella Resort and Golf Club of
Naples, a Condominium ("Condominium"). The street address of the Condominium is
100 Mahogany Run Lane, Naples, Florida 34114.
3. PHASE CONDOMINIUM - LAND
The land which will have become part of the Condominium Property when,
as and if all of the "Phases", "Commercial Phases", "Initial Association
Property", and "Subsequent Association Property" (all as hereinafter defined)
are added to the Condominium Property is described in Exhibit
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A ("Land") attached hereto and made a part hereof. The legal description of the
portion of the Land ("Initial Phase Land") constituting "Phase 1" of the
Condominium Property (as hereinafter defined) is set forth on Exhibit B attached
hereto and made a part hereof, and the legal description of the portion of the
Land ("Initial Association Property") constituting "Roadway, Parking and Lakes
Tract 1" of the Condominium Property is also set forth on said Exhibit B. The
legal descriptions of the portions of the Land constituting each "Subsequent
Phase" (Phases 2 through 17, and Commercial Phases 1 through 4) (all as
hereinafter defined) of the Condominium Property, are also set forth on said
Exhibit B. All of said Exhibit B is subject to the terms and provisions set
forth in the Survey Notes contained in said Exhibit B.
4. DEFINITIONS
The terms contained in this Declaration shall have the meanings given
in the Act and, for clarification, the following terms have the following
meanings:
4.1. "Act" means the Condominium Act, Chapter 718, Florida Statutes, as
amended through the date of recording this Declaration amongst the Public
Records of the County.
4.2. "Articles" mean the Articles of Incorporation of the Condominium
Association, attached as Exhibit C and incorporated herein by reference, and any
amendments thereto.
4.3. "Assessments" mean the assessments for which all Condominium Unit
Owners are obligated to the Condominium Association and include:
4.3.1. "Annual Assessment", which includes, but is not limited
to, each Condominium Unit Owner's annual share of funds required for the payment
of Common Expenses as determined in accordance with this Declaration; and
4.3.2. "Special Assessments" which include any Assessments
levied by the Board in addition to the Annual Assessment and are more
particularly described in Paragraph 21.3 herein.
4.4. "Assignment and Assumption" means that certain Assignment and
Assumption between Developer and Lely Golf Villas II Limited Partnership, a
Delaware limited partnership, recorded in Official Records Book , Page , of the
Public Records of the County, and all amendments thereto.
4.5. "Association Property" means the Initial Association Property (as
hereinafter defined) collectively with the Subsequent Association Property (as
hereinafter defined), all of which are Common Elements of the Condominium.
4.6. "Board" means Board of Directors of the Condominium Association.
4.7. "Building" means a structure artificially built up or composed of
parts joined together in some definite manner, the use of which requires a more
or less permanent location on the ground, or which is attached to something
having a permanent location on the ground. The term shall be construed as if
followed by the words "or part thereof." The term includes, without limitation,
all structures containing Commercial and/or Residential Units.
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4.8. "Bylaws" means the Bylaws of the Condominium Association, attached
hereto as Exhibit D and incorporated herein by reference, and any amendments
thereto.
4.9. "CDD" means the uniform community development district known as
Lely Community Development District, which has the power to impose taxes or
assessments, or both taxes and assessments, on this property through a special
taxing district. These taxes and assessments pay the construction, operation,
and maintenance costs of certain public facilities of the district and are set
annually by the governing board of the district. These taxes and assessments are
in addition to county and all other taxes and assessments provided for by law.
4.10. a. "Commercial Phase" means a Subsequent Phase which is permitted
by the terms of this Declaration to be utilized for commercial, non-residential
purposes, which may become part of the Condominium Property by recording this
Declaration or an amendment hereto.
b. "Commercial Unit" means a Condominium Unit which is
permitted by the terms of this Declaration to be utilized for commercial,
non-residential purposes.
4.11. "Common Elements" mean:
4.11.1. The Condominium Property, other than the Condominium
Units;
4.11.2. Easements through the Condominium Units for conduit
ducts, plumbing, wiring and other facilities for furnishing of utility services
to Condominium Units and the Common Elements;
4.11.3. An easement of support in every portion of a
Condominium Unit which contributes to the support of a "Building" (as defined
herein) submitted to condominium ownership;
4.11.4. Property and installations required for the furnishing
of utility services and other services for more than one Condominium Unit, the
Common Elements, or a Condominium Unit other than the Condominium Unit
containing the installation; and
4.11.5. Such portion or portions of the Land, when, as and if
same are submitted to condominium ownership, as Association Property, or
otherwise.
4.12. "Common Expenses" mean common expenses for which the
Condominium Unit Owners are liable to the Condominium Association as defined in
the Act and as described in the Neighborhood Documents, and include:
4.12.1. The expenses for the operation, maintenance, repair or
replacement of the Common Elements, costs of carrying out the powers and duties
of the Condominium Association, cost of fire and extended coverage insurance;
and
4.12.2. Any other expenses designated, not inconsistent with
the Act or this Declaration, as Common Expenses from time to time by the Board.
4.13. "Community Association" means the Lely Resort Master
Property Owners Association, Inc., a Florida corporation not for profit,
organized to administer the Community Declaration and having among its members,
all owners of fee simple title to a "Plot", which includes
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condominium units together with the undivided share of the common elements which
is appurtenant to the unit, and which is subject to assessment by the Community
Association (as such terms are defined in the Community Declaration), including
the Condominium Unit Owners.
4.14. "Community Declaration" means the Declaration of General
Covenants, Conditions and Restrictions for Lely Resort recorded in Official
Records Book 1513, Page 835, of the Public Records of the County and all
amendments thereto, whereby portions of the real property at Lely Resort are set
aside from time to time by the declarant of the Community Declaration in
accordance with the plan for development set forth therein and whereby the
maintenance of the land areas designated therein as "Common Areas", and other
responsibilities of the Community Association, are made specifically applicable
to Condominium Unit Owners, to be collected by the Community Association from
either the Condominium Unit Owner or the applicable Neighborhood Association via
dues and initial, annual or special assessments, as provided therein. The
Declaration of Neighborhood Covenants for Fala Bella Resort and Golf Club of
Naples and Accompanying Check- In Facility recorded in Official Records Book * ,
Page * , of the Public Records of the County ("Neighborhood Declaration") is the
document which designates Fala Bella Resort and Golf Club as a "Neighborhood"
under the provisions of the Community Declaration.
4.15. "Community Documents" mean the Community Declaration, the
Neighborhood Declaration, the Articles of Incorporation and Bylaws of the
Community Association, any rules and regulations promulgated by the Community
Association and all of the documents and instruments referred to therein, and
any amendments to any of the documents thereto.
4.16. "Condominium" means that portion of the Land in Fala Bella Resort
and Golf Club described in Exhibit A attached hereto and the improvements
thereon which may be submitted to condominium ownership pursuant to this
Declaration, as the same may be amended from time to time.
4.17. "Condominium Association" means Fala Bella Resort and Golf Club
of Naples Condominium Association, Inc., a Florida corporation not for profit,
organized to administer Fala Bella Resort and Golf Club (other than the rental
management of Resort Units and the operation of the Commercial Units), including
each Phase of this Condominium and having as its members the Condominium Unit
Owners and, subject to the other provisions of this Declaration, owners of any
other condominium created within Fala Bella Resort and Golf Club. The
Condominium Association is a "Neighborhood Association" (as defined in the
Community Documents).
4.18. "Condominium Property" means the real property submitted to
condominium ownership as part of the Condominium and all improvements thereon,
including, but not limited to, the Condominium Units, the Association Property,
and all Common Elements. All easements within the Condominium Property described
and set forth in this Declaration are intended to comply with Section
718.104(4)(m) of the Act. Notwithstanding anything contained herein to the
contrary, however, the term "Condominium Property" shall not include any
telecommunications lines and equipment owned by a utility and/or
telecommunication firm(s) and/or other legal entity(ies) which have contracted
with or have imposed other legal requirements upon Developer, the Community
Association and/or the Condominium Association to provide a utility or
telecommunications service and/or equipment nor shall Condominium Property
include telecommunications equipment, if any, owned by Developer, the title to
which is hereby specifically reserved unto Developer, and its successors and/or
assigns. No portion of the land within any Subsequent Phase or any Subsequent
Association Property (as hereinafter defined) shall be included in the term
"Condominium Property"
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until and unless such Subsequent Phase or Subsequent Association Property is
submitted to condominium ownership by amendment to this Declaration.
4.19. "Condominium Unit" means "unit" as described in the Act and is
that portion of the Condominium Property within the Condominium which is subject
to exclusive ownership. Condominium Units include both Resort Units and
Commercial Units.
4.20. "Condominium Unit Owner" or "Owner" means "unit owner," as
defined in the Act, and is the owner of a Condominium Unit.
4.21. "County" means Collier County, Florida.
4.22. "Developer" means Lely Golf Villas I Limited Partnership, a
Delaware limited partnership, its grantees, successors and assigns. Developer
shall have the right to assign any and all of the rights and privileges reserved
for Developer under this Declaration and the other Neighborhood Documents. A
Condominium Unit Owner shall not, solely by the purchase of a Condominium Unit,
be deemed a successor or assign of Developer or of the rights of Developer under
the Neighborhood Documents unless such Condominium Unit Owner is specifically so
designated as a successor or assign of such rights in the instrument of
conveyance or any other instrument executed by Developer. Developer is the
developer of the Condominium, and not the master developer of Lely Resort.
4.23. "Declaration" means this document and any amendments or
supplements hereto.
4.24. "Fala Bella Resort and Golf Club " means a portion of the real
property within Lely Resort, more particularly described on Exhibit A hereto,
upon which Developer intends to develop the Condominium. Fala Bella Resort and
Golf Club is one of the "Neighborhoods" (as defined in the Community
Declaration) within Lely Resort. The Initial Phase and the Initial Association
Property shall initially be the portions of Fala Bella Resort and Golf Club upon
which the Developer shall develop the Condominium; however, Developer has
reserved the right to develop additional condominium developments and/or
non-condominium developments in the overall proposed Fala Bella Resort and Golf
Club.
4.25. "Fala Bella Resort and Golf Club Condominium(s)" means the
condominium or condominiums in Fala Bella Resort and Golf Club which are the
subject of a Declaration, including, but not limited to, Fala Bella Resort and
Golf Club Naples, a Condominium.
4.26. "Fala Bella Resort and Golf Club of Naples, a Condominium" means
the initial condominium in Fala Bella Resort and Golf Club which is the subject
of this Declaration.
4.27. "Institutional Mortgagee" means any lending institution having a
mortgage lien upon a Condominium Unit, including, but not limited to, any of the
following institutions or entities: (i) a federal or state savings and loan
association or bank doing business in the State of Florida or a life insurance
company doing business in Florida which is approved by the Commissioner of
Insurance of the State of Florida, or bank or real estate investment trust, or a
mortgage banking company licensed to do business in the State of Florida, or any
subsidiary thereof licensed or qualified to make mortgage loans in the State of
Florida or a New York State banking corporation or a national banking
association chartered under the laws of the United States of America; or (ii)
any and all investing or lending institutions ("Lender") which have loaned money
to Developer in order to
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enable Developer to acquire, or construct improvements upon, any portion of Fala
Bella Resort and Golf Club and which holds a first mortgage upon such portion of
Fala Bella Resort and Golf Club as security for such loan; or (iii) any pension
or profit sharing funds qualified under the Internal Revenue Code; or (iv) the
Veterans Administration or the Federal Housing Administration or the Department
of Urban Development or other lenders generally recognized in the community as
institutional lenders; or (v) such other Lenders as the Board shall hereafter
designate as such in writing which have acquired a mortgage upon a Condominium
Unit; or (vi) any "Secondary Mortgage Market Institution", including Federal
National Mortgage Association or the Federal Home Loan Mortgage Corporation, and
such other Secondary Mortgage Market Institution as the Board shall hereafter
designate as such in writing which has acquired a mortgage upon a Condominium
Unit; or (vii) Developer, its successors and assigns.
4.28. "Interest" means the maximum nonusurious interest rate allowed by
law on the subject debt or obligation and, if no such rate is designated by law,
then eighteen percent (18%) per annum.
4.29. "Legal Fees" mean: (i) reasonable fees for attorney and paralegal
services incurred in negotiation and preparation for litigation, whether or not
an action is actually begun, through and including all trial and appellate
levels and post-judgment proceedings; and (ii) court costs through and including
all trial and appellate levels and post-judgment proceedings.
4.30. "Lely Resort" means the name given to the planned development
being developed by the declarant of the Community Association in the County in
accordance with the Community Declaration.
4.31. "Limited Common Element" means those Common Elements which are
reserved for the use of certain Condominium Units to the exclusion of other
Condominium Units as more particularly described in Paragraph 6.2 hereof.
4.32. "Listed Mortgagee" means the holder, insurer, or guarantor of a
mortgage encumbering a Condominium Unit of which the Condominium Association has
been notified pursuant to Paragraph 30.3 herein.
4.33. "Neighborhood Documents" mean in the aggregate this Declaration,
the Articles, Bylaws, any rules and regulations promulgated by the Condominium
Association, all of the instruments and documents referred to therein and
executed in connection with this Condominium, and all amendments to the
foregoing.
4.34. "Phase" or "Phases" mean that portion of the Land and
improvements thereon, as contemplated by Section 718.403 of the Act, which may
become part of the Condominium Property by recording this Declaration or an
amendment hereto.
4.35. "Public Records" mean the Public Records of the County.
4.36 "Rental Program Agreement" means those certain Rental Program
Agreements between Lely Golf Villas II, a Delaware limited partnership, and
individual Resort Unit Owners, in such form as adopted by Lely Golf Villas II
pursuant to its right under the Assignment and Assumption, and all amendments
thereto, whereby each Resort Unit is made available for transient lodging in
accordance with the plan for use set forth therein.
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4.37 "Resort Unit" means a Condominium Unit which is permitted by the
terms of this Declaration to be utilized only for residential or transient
lodging purposes.
4.38. "Subsequent Phases" mean those portions of the Land and
improvements thereon, which Developer may, but shall not be obligated to, submit
to the Condominium Property, in whole or in part, and shall consist of Phases 2
through 17, and Commercial Phases 1 through 4.
4.39. "Use and Access Agreement" means that certain Use and Access
Agreement for Lely Golf Villas between Golf Enterprises, Inc., a Kansas
corporation, and the Developer, recorded in Official Records Book 2398, Page 521
et seq., of the Public Records of the County, and all amendments thereto.
5. DESCRIPTION OF IMPROVEMENTS -
INITIAL PHASE AND INITIAL ASSOCIATION PROPERTY
5.1. Description of Improvements-Initial Phase - Resort Unit Numbering
System
A portion of the Land and improvements (collectively "Initial
Phase") being submitted to condominium ownership pursuant to this Declaration
are described on the "Initial Phase Survey" (as hereinafter defined). The
improvements in the Initial Phase include one (1) two (2)-story residential
Building which contains ten (10) Resort Units, each of which is designated by a
three or more digit number representing the following: the building number (one
or two digits as is appropriate), followed by the floor number (a '1' for
first-floor units, and a '2' for second-floor units), and finally the unit
location number. The unit location number is determined by assigning a '1' to
the Resort Units on the far left of each Resort Unit Building when facing such
Building, and counting off sequentially (i.e., 1, 2, 3, etc.) to the right until
the last Resort Unit has been assigned a unit location number. Unit location
numbers start back at '1' on the same system when determining unit location
numbers for second-floor Resort Units. For example, Resort Unit 113 is located
in Building 1, is on the first floor, and is at unit location number 3 (the
center first-floor Resort Unit in a 10 Resort Unit Building); as another
example, Resort Unit 1621 is located in Building 16, is on the second floor, and
is the Resort Unit farthest to the left as determined when facing the Building.
Resort Units are so referred to herein and in the Exhibits hereto. No
Condominium Unit bears the same designation as any other Condominium Unit in the
Condominium.
5.2. Initial Phase Survey
Annexed hereto as part of Exhibit B and made a part hereof is
the Survey, Plot Plan and Graphic Description of Improvements for the Initial
Phase which includes a survey of the land in the Initial Phase, a graphic
description of the improvements in which the Condominium Unit and the Common
Elements are located and a plot plan thereof (all of which are herein
collectively referred to as the "Initial Phase Survey"). The Initial Phase
Survey shows and identifies thereon the Common Elements and every Condominium
Unit, its relative location and its approximate dimensions. There is attached to
the Initial Phase Survey and made a part of this Declaration a certificate of a
surveyor prepared, signed and conforming with the requirements of Section
718.104(4)(e) of the Act.
5.3. Description of Improvements-Initial Association Property
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A portion of the Land and improvements (collectively "Initial
Association Property") being submitted to condominium ownership pursuant to this
Declaration are described on the "Initial Association Property Description" (as
hereinafter defined). The improvements in the Initial Association Property
include but are not limited to roadways, parking facilities, and lakes.
5.4. Initial Association Property Description
A part of Exhibit B attached hereto is the legal description
for the Initial Association Property, an accompanying sketch which provides a
graphic description of the improvements on the Initial Association Property, and
a plot plan which includes a depiction of the Roadway, Parking and Lakes Tract 1
(the Initial Association Property) (all of which are herein collectively
referred to as the "Initial Association Property Description"). There is
attached to the Initial Association Property Description and made a part of this
Declaration a certificate of a surveyor prepared, signed and conforming with the
requirements of Section 718.104(4)(e) of the Act.
6. DESCRIPTION OF IMPROVEMENTS IN SUBSEQUENT PHASES
6.1. Subsequent Phases
6.1.1. Condominium Property. Developer is developing the
Condominium Property as a phase condominium as provided for by Section 718.403
of the Act. In addition to the portion of the Land and improvements described on
the Initial Phase Survey being submitted to condominium ownership pursuant to
this Declaration, Developer contemplates that all or a portion of the Subsequent
Phases may, by amendment or amendments hereto, be added to the Condominium
Property as an additional Phase or additional Phases. If, as and when Subsequent
Phases are added, the Condominium Property shall be enlarged and expanded so as
to encompass and include the real property, the improvements thereon, and the
easements and rights appurtenant thereto which are submitted to condominium
ownership as parts of such Subsequent Phase or Phases.
6.1.2. Subsequent Phase Surveys. Annexed hereto as part of
Exhibits B hereto are the surveys, plot plans and graphic descriptions of
improvements for Phases 2 through 17 and Commercial Phases 1 through 4 ("Phase 2
Survey," "Phase 3 Survey," "Commercial Phase 1 Survey," etc.) (collectively, the
"Subsequent Phase Surveys"). Notwithstanding any indications to the contrary
herein contained, Developer may make nonmaterial changes in the description(s)
of any Subsequent Phase.
6.1.3 Subsequent Association Property Descriptions. Annexed
hereto as part of Exhibits B hereto are the surveys, plot plans and graphic
descriptions of improvements for the following: Roadway and Parking Tract 2,
Common Recreational Tract 1, Common Recreational Tract 2, Spa Tract 1, Spa Tract
2, and the Tennis Court Parcel (collectively hereinafter these tracts and
parcels may be referred to as the "Subsequent Association Property";
collectively hereinafter the referenced portions of Exhibit B hereto may be
referred to as the "Subsequent Association Property Descriptions").
Notwithstanding any indications to the contrary herein contained, Developer may
make nonmaterial changes in the description(s) of any Subsequent Association
Property.
6.1.4. Resort Unit Minimums and Maximums. While at the time of
recordation of this Declaration Developer plans to include the number of Resort
Units in Subsequent Phases as set forth in the following chart, the Act requires
that the Declaration also set forth the minimum and
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maximum number of Condominium Units which Developer reserves the right to add in
each Subsequent Phase, which information with regard to Resort Units is set
forth in the following chart:
SUBSEQUENT PHASES NUMBER OF RESORT BUILDINGS NUMBER OF RESORT UNITS
- ----------------- -------------------------- ----------------------
Minimum Planned Maximum
------- ------- -------
17 1 8 10 12
2 - 16 15 10 12 14
While Developer plans that the general size for each Resort Unit which is a
two-bedroom unit will be approximately one thousand and sixty (1,060) air
conditioned square feet (excluding the lanai), and the general size for each
Resort Unit which is a three-bedroom unit will be approximately one thousand
three hundred and twenty (1,320) air conditioned square feet (excluding the
lanai), Developer reserves the right to include in the Condominium two-bedroom
Resort Units ranging in size from a minimum of eight hundred and fifty (850) air
conditioned square feet (excluding the lanai), to a maximum of one thousand two
hundred seventy (1,270) air conditioned square feet (excluding the lanai); and
three-bedroom Resort Units ranging in size from a minimum of one thousand and
sixty (1,060) air conditioned square feet (excluding the lanai), to a maximum of
one thousand five hundred and eighty (1,580) air conditioned square feet
(excluding the lanai). Square footage for the purposes of this paragraph was
computed from the perimetrical boundaries of the Resort Units.
6.1.5 Commercial Unit Minimums and Maximums. While at the time
of recordation of this Declaration Developer plans to include the number of
Commercial Units in Subsequent Phases as set forth in the following chart, the
Act requires that the Declaration also set forth the minimum and maximum number
of Condominium Units which Developer reserves the right to add in each
Subsequent Phase, which information with regard to Commercial Units is set forth
in the following chart:
COMMERCIAL
PHASE NUMBERS NUMBER OF BUILDINGS NUMBER OF COMMERCIAL UNITS
Minimum Planned Maximum
1 1 (Resort Center) 1 1 1
2-4 3 (Vending and Storage) 3 3 3
While Developer plans that the general size for each Commercial Unit which is
intended for the installation of vending equipment and the storage of linens and
other items by the Rental Manager, will be approximately four hundred (400)
square feet, and plans that the general size for the Commercial Unit which is
intended for use as a Resort Center will be approximately five thousand seven
hundred seventy six (5,776) square feet, Developer reserves the right to include
in the Condominium Commercial Units intended for vending and storage purposes
ranging in size from a minimum of three hundred twenty (320) square feet to a
maximum of four hundred eight (480) square feet; and the Commercial Unit
intended for a Resort Center ranging in size from a minimum of four thousand six
hundred twenty five (4,625) square feet to a maximum of six thousand nine
hundred thirty (6,930) square feet. Square footage for the purposes of this
paragraph was computed from the perimetrical boundaries of the Commercial Units.
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6.1.6. Identification of Condominium Unit. Each Resort Unit in
any Subsequent Phase, if any such Subsequent Phase is submitted to the
Condominium Property pursuant to the "Subsequent Phase Amendment" (as
hereinafter defined), shall be identified by an identifying number assigned
pursuant to the system set forth in Paragraph 5.1 hereinabove, and as shown on
Exhibit B attached hereto. Each Commercial Unit in any Subsequent Phase, if any
such Subsequent Phase is submitted to the Condominium Property, shall be
identified by a number from 1-4 following the words "Commercial Unit __", as
shown on Exhibit B attached hereto. Commercial Unit 1 is Commercial Phase 1, and
is identified on Exhibit B as "Resort Center". Commercial Units 2-4 are
Commercial Phases 2-4, and are identified on Exhibit B as "Vending Storage. No
Condominium Unit in any Subsequent Phase which is added to the Condominium
Property shall bear the same identifying number as any other Condominium Unit in
the Condominium.
6.2. Limited Common Elements
6.2.1. Lanais. Each area shown on the Initial Phase Survey or
the Subsequent Phase Surveys as a Lanai shall be a Limited Common Element
reserved for the exclusive use of the Resort Unit Owner(s) of the Resort Unit
adjacent thereto. The structural elements of such Lanais, and any screening of
the Lanai, shall be maintained by the Condominium Association. The interior
surfaces of the Lanai shall be maintained by the Resort Unit Owner.
6.2.1. A/C Land. The land in each Phase upon which is situated
all air conditioning equipment located outside a Condominium Unit, including the
compressors located adjacent to the Building in which the Condominium Unit is
located and the coolant lines between such compressors and the Condominium Unit
(the "A/C Land"), shall be a Limited Common Element for the exclusive use of the
Condominium Unit served thereby, which air conditioning equipment itself shall
be maintained by the Condominium Association.
6.4. Subsequent Phases Containing Ten Resort Units
Phase 17, if added to the Condominium Property pursuant to
this Declaration by an amendment hereto, is intended to consist of the real
property more particularly described in the Surveys attached hereto for such
Phase and made a part hereof, the improvements which are intended to include one
(1) two (2)-story residential Building containing, in addition to the Common
Elements therein, ten (10) Resort Units, and the Common Elements shown on the
applicable Survey. The Survey for a particular Phase (as revised prior to the
recordation of the Amendment adding such Phase) shall be attached to the
Amendment adding such Phase. Developer has not committed to provide any items of
personal property for the Common Elements within such Phases, but reserves the
right to do so. If such Phase is submitted to the Condominium Property pursuant
to an Amendment, such Phase will be completed and the Amendment will be recorded
amongst the Public Records no later than the later to occur of (i) seven (7)
years from the date of recordation hereof or (ii) the maximum time allowed by
law.
6.5. Subsequent Phases Containing Twelve Resort Units
Each of Phases 2 through 16, if added to the Condominium
Property pursuant to this Declaration by an amendment hereto, is intended to
consist of the real property more particularly described in the Surveys attached
hereto for each such Phase and made a part hereof, the improvements which are
intended to include one (1) two (2)-story residential Building containing, in
addition to the Common Elements therein, twelve (12) Resort Units, and the
Common Elements
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shown on the applicable Survey. The Survey for a particular Phase (as revised
prior to the recordation of the Amendment adding such Phase) shall be attached
to the Amendment adding such Phase. Developer has not committed to provide any
items of personal property for the Common Elements within such Phases, but
reserves the right to do so. If such Phase is submitted to the Condominium
Property pursuant to an Amendment, such Phase will be completed and the
Amendment will be recorded amongst the Public Records no later than the later to
occur of (i) seven (7) years from the date of recordation hereof or (ii) the
maximum time allowed by law.
6.6. Subsequent Commercial Phases for Vending and Storage
Each of Commercial Phases 2 through 4, if added to the
Condominium Property pursuant to this Declaration by an amendment hereto, is
intended to consist of the real property more particularly described in the
Surveys attached hereto for each such Phase and made a part hereof, the
improvements which are intended to include a four hundred (400) square feet
one-story building intended to be used for the installation of vending machines
and equipment and the storage by the Rental Manager of such items as linens,
room supplies, cleaning supplies, etc., and any other uses deemed appropriate by
the Rental Manager and not in conflict with the operation of the resort, in
addition to the Common Elements therein, and the Common Elements shown on the
applicable Survey. The Survey for a particular Phase (as revised prior to the
recordation of the Amendment adding such Phase) shall be attached to the
Amendment adding such Phase. Developer has not committed to provide any items of
personal property for the Common Elements within such Phases. If such Phase is
submitted to the Condominium Property pursuant to an Amendment, such Phase will
be completed and the Amendment will be recorded amongst the Public Records no
later than the later to occur of (i) seven (7) years from the date of
recordation hereof or (ii) the maximum time allowed by law.
6.7. Subsequent Commercial Phase for Resort Center
Commercial Phase 1, if added to the Condominium Property
pursuant to this Declaration by an amendment hereto, is intended to consist of
the real property more particularly described in the Survey attached hereto for
such Phase and made a part hereof, the improvements which are intended to
include a five thousand seven hundred seventy six (5,776) square feet Resort
Center containing a bar and grill and other facilities, in addition to the
Common Elements therein, and the Common Elements shown on the applicable Survey.
The Survey for this Phase (as revised prior to the recordation of the Amendment
adding such Phase) shall be attached to the Amendment adding such Phase.
Developer shall provide no items of personal property for the Common Elements
within such Phase. If such Phase is submitted to the Condominium Property
pursuant to an Amendment, such Phase will be completed and the Amendment will be
recorded amongst the Public Records no later than the later to occur of (i)
seven (7) years from the date of recordation hereof or (ii) the maximum time
allowed by law.
6.8. Subsequent Association Property
The following tracts and parcels are intended to consist of
the real property and improvements therein more particularly designated on the
Site Plan, attached as Exhibit E and made a part hereof ("Site Plan"): Roadway
and Parking Tract 2, Common Recreational Tract 1, Common Recreational Tract 2,
Spa Tract 1, Spa Tract 2, and the Tennis Court Parcel. The Subsequent
Association Property are Common Elements. The improvements on the Subsequent
Association Property are intended to include without limitation certain parking
areas, landscaped areas,
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recreational facilities, and the storm water management system within Fala Bella
Resort and Golf Club. If any such Subsequent Association Property is submitted
to the Condominium Property pursuant to an Amendment, any improvements
contemplated for such tract or parcel will be completed and the Amendment for
such tract or parcel of the Subsequent Association Property will be recorded
amongst the Public Records on or prior to the date when control of the
Association is turned over to Home Owners other than the Developer. The
Condominium Association shall maintain, repair and operate the Condominium
Association Property as Common Elements, and the costs and expenses associated
with such maintenance and repair shall be a Common Expense.
6.9. Changes in Subsequent Phases
Notwithstanding any indications to the contrary herein
contained, descriptions relating to Phases or Exhibits referred to in this
Article 6 or Articles 5 or 7 hereof, including, but not limited to, legal,
graphic, numerical, narrative and the like, are approximations. To the fullest
extent permitted by law, Developer reserves the right to change such
descriptions as to a Phase by recording an amendment hereto until such time as
such Phase is submitted to condominium ownership by recorded instrument in the
Public Records of the County. An amendment changing such descriptions shall not
require the execution thereof by the Condominium Association, Institutional
Mortgagees or any other person, persons or entity unless: (i) Developer changes
the proportion by which a Condominium Unit Owner, other than Developer, shares
the Common Expenses and the Common Surplus or owns the Common Elements, in which
event such Condominium Unit Owner whose share of Common Elements, Common
Expenses and Common Surplus is being so changed and the Institutional Mortgagees
of record holding mortgages on the affected Condominium Unit must consent in
writing thereto; or (ii) such change materially and adversely affects a
Condominium Unit Owner, in which event such Condominium Unit Owner and the
Institutional Mortgagee of record holding the mortgage on the affected
Condominium Unit must consent thereto in writing or such amendment must be
adopted in accordance with Article 28 hereof.
6.10. Addition of Subsequent Phases and Subsequent Association
Property - No Prescribed Order
Notwithstanding the numerical sequence of the Subsequent
Phases or any inference that can be drawn therefrom or from any other provision
of the Neighborhood Documents, Developer reserves the right to submit Subsequent
Phases to the Condominium Property in any sequence, provided, however, that
there shall be submitted as a portion of the Common Elements, if necessary, an
easement providing means of ingress and egress from and to any Subsequent Phase
which is submitted to the Condominium Property to and from public ways,
including dedicated streets.
7. PHASE DEVELOPMENT
7.1. Impact of Subsequent Phases and Subsequent Association
Property on Initial Phase and Initial Association Property
7.1.1. Common Elements of Initial Phase; Initial Association
Property. The Common Elements as shown on the Initial Phase Survey and included
in the Initial Phase will be owned by all Condominium Unit Owners in all Phases
submitted to the condominium form of ownership as a portion of the Condominium
Property pursuant to this Declaration and amendments hereto, if any. The Initial
Association Property is Common Elements by definition within this
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Declaration, and will be owned by all Condominium Unit Owners in all Phases
submitted to the condominium form of ownership as a portion of the Condominium
Property pursuant to this Declaration and amendments hereto, if any.
7.1.2. Subsequent Phase Not Added. If any Subsequent Phase
does not become part of the Condominium Property, no portion of such Subsequent
Phase (including, but not limited to, the portion which would have constituted
the Common Elements) shall become a part of the Condominium Property.
7.1.3. Common Elements of Subsequent Phases; Subsequent
Association Property. If any Subsequent Phase is added to and does become a part
of the Condominium Property, then all of the Common Elements constituting a
portion of such Subsequent Phase shall become a part of the Common Elements of
the Condominium Property, with such Common Elements being owned in undivided
shares by all Condominium Unit Owners in all Phases then and thereafter
constituting a portion of the Condominium. If any Subsequent Association
Property is added to and does become a part of the Condominium Property, then
all of such Subsequent Association Property shall become a part of the
Condominium Property as Common Elements, with such Common Elements being owned
in undivided shares by all Condominium Unit Owners in all Phases then and
thereafter constituting a portion of the Condominium
7.1.4. Share of Ownership Upon Submission of Only Initial
Phase. Each of the Owners in the Initial Phase shall own an undivided interest
in the Common Elements, and the undivided interest stated as a percentage of
such ownership in said Common Elements, as set forth in Exhibit F, which is
annexed to this Declaration and made a part hereof. Notwithstanding these shares
of ownership, each Unit shall have as an appurtenance thereto one (1) vote in
the Condominium Association.
7.1.5. Share of Ownership Upon Submission of Subsequent Phase.
If any Subsequent Phase, in addition to the Initial Phase, is submitted to the
Condominium Property, then each Owner in all Phases submitted to the Condominium
Property shall own an undivided interest in the Common Elements, and the
undivided interest stated as a percentage of such ownership in said Common
Elements, as set forth in Exhibit F, which is annexed to this Declaration and
made a part hereof. Notwithstanding these shares of ownership, each Unit shall
have as an appurtenance thereto one (1) vote in the Condominium Association. If
all Subsequent Phases are submitted, as planned, to condominium ownership as a
portion of Condominium Property pursuant to an amendment or amendments to this
Declaration, the total number of Condominium Units shall be two hundred and four
(204), consisting of two hundred (200) Resort Units and four (4) Commercial
Units. The number of Condominium Units planned to be included in each Subsequent
Phase if, as and when added to the Condominium, are set forth in Paragraphs
6.1.4 and 6.1.5 hereof.
7.2. Withdrawal Notice
Developer, in its absolute discretion, reserves the right to
add or not to add any or all of the Subsequent Phases as part of the Condominium
Property. Hence, notwithstanding anything contained in this Declaration to the
contrary, no portion of any Subsequent Phase shall be affected or encumbered by
this Declaration unless and until such Subsequent Phases are added to the
Condominium Property by amendment to this Declaration recorded amongst the
Public Records. Notwithstanding the fact that the foregoing portion of this
Paragraph 7.2 is self-operative, if Developer determines not to add any or all
Subsequent Phases to the Condominium Property,
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Developer may, in addition to any action otherwise required by the Act, record
amongst the Public Records a notice ("Withdrawal Notice") to the effect that
such Subsequent Phase or Subsequent Phases shall not be added to the Condominium
Property. Further, should Developer record amongst the Public Records a
Withdrawal Notice with respect to one (1) or more, but not all, of the
Subsequent Phases, Developer shall retain the right to record additional
Withdrawal Notices with respect to any or all of the Subsequent Phases, which
were not submitted to the Condominium Property and are not covered by any prior
Withdrawal Notice. Notwithstanding anything contained herein to the contrary, in
the event Developer records amongst the Public Records one (1) or more
Withdrawal Notices, then Developer shall have all rights permissible by law with
respect to ownership of the Subsequent Phases covered by any and all such
Withdrawal Notices, including, but not limited to, the right to develop such
Subsequent Phase and/or Subsequent Phases as one (1) or more separate
condominium or non-condominium projects, which may or may not be governed by the
Condominium Association.
8. UNDIVIDED SHARES IN COMMON ELEMENTS
8.1. Appurtenance
8.1.1. Ownership of the Common Elements and Membership in the
Condominium Association. Each Condominium Unit shall have as an appurtenance
thereto one (1) vote in the Condominium Association and an undivided share of
ownership in the Common Elements according to the "Schedule of Shares" attached
hereto as Exhibit F.
8.1.2. Right to Use Common Elements. Each Unit shall have as
an appurtenance thereto the right to use all of the Common Elements and
Condominium Property of this Condominium in accordance with the Neighborhood
Documents and subject to any limitations set forth in such Neighborhood
Documents.
8.2. Share of Common Expenses and Common Surplus
The Common Expenses shall be shared and the Common Surplus
shall be owned in proportion to each Condominium Unit Owner's share of ownership
of the Common Elements.
9. VOTING INTERESTS
9.1. Voting Interest
The Condominium Unit Owner or Condominium Unit Owners,
collectively, of the fee simple title of record for each Condominium Unit shall
have the right to one (1) vote per Condominium Unit ("Voting Interest") in the
Condominium Association, regardless of the number of Phases which have been
added to the Condominium Property or the number of Phases which have been
created within Fala Bella Resort and Golf Club, as to the matters on which a
vote by the Condominium Unit Owners is taken as provided in the Neighborhood
Documents and the Act.
9.2. Voting By Corporation or Multiple Condominium Unit Owners
The Voting Interest of the Condominium Unit Owners of any
Condominium Unit owned by more than one (1) person, a corporation or other
entity, or by one (1) person and a corporation and/or other entity, or by any
combination of the aforesaid, shall be cast by the person
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("Voting Member") named in a certificate signed by all of the Condominium Unit
Owners of such Condominium Unit or, if appropriate, by properly designated
officers, principals or general partners of the respective legal entity which
owns the Condominium Unit and filed with the Secretary of the Condominium
Association ("Voting Certificate"). In the alternative, a proxy as to a
particular meeting may be executed in the same manner as the Voting Certificate.
A proxy shall be effective only for the specific meeting for which originally
given and any lawfully adjourned meetings thereof; provided, in no event shall
any proxy be valid for a period longer than ninety (90) days unless a longer
period may be specified by amendment to the Act, in which event such longer
period shall apply. If neither a proxy nor a Voting Certificate is on file, the
Voting Interest associated with a Condominium Unit where the designation of a
Voting Member or execution of a proxy is required shall not be considered in
determining the requirement for a quorum or for any other purpose.
9.3. Ownership by Husband and Wife
Notwithstanding the provisions of Paragraph 9.2 above,
whenever any Condominium Unit is owned solely by a husband and wife they may,
but shall not be required to, designate a Voting Member. In the event a Voting
Certificate designating a Voting Member is not filed by the husband and wife,
the following provisions shall govern their right to vote:
(i) Where both husband and wife are present at a meeting,
each shall be regarded as the agent and proxy for the
other for purposes of casting the Voting Interest for
each Condominium Unit owned solely by them. In the
event they are unable to concur in their decision
upon any subject requiring a vote, they shall lose
their right to exercise their Voting Interest on that
subject at that meeting.
(ii) Where only one (1) spouse is present at a meeting,
the spouse present may exercise the Voting Interest
of the Condominium Unit without establishing the
concurrence of the other spouse, absent any prior
written notice to the contrary to the Condominium
Association by the other spouse. In the event of
prior written notice to the contrary to the
Condominium Association by the other spouse, the vote
of said Condominium Unit shall not be considered in
determining the requirement for a quorum or for any
other purpose unless such prior notice to the
contrary has been withdrawn by a subsequent written
notice executed by both husband and wife.
(iii) Where neither spouse is present, the person
designated in a proxy signed by either spouse may
exercise the Voting Interest of the Condominium Unit,
absent any prior written notice to the contrary to
the Condominium Association by the other spouse or
the designation of a different proxy by the other
spouse. In the event of prior written notice to the
contrary to the Condominium Association or the
designation of a different proxy by the other spouse,
the vote of said Condominium Unit shall not be
considered in determining the requirement for a
quorum or for any other purpose.
9.4. Voting by Proxy
Except as specifically otherwise provided in the Act,
Condominium Unit Owners may vote by general proxy, or by limited proxies.
Limited proxies and general proxies may be used to
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establish a quorum. Limited proxies and general proxies may also be used for
voting on the matters outlined in Section 718.111(11)(d) of the Act.
9.5. Elections
The members of the Board shall be elected by written ballot or
voting machine in accordance with the provisions of Section 718.112(2)(d)(3) of
the Act. Limited proxies may be used to fill vacancies caused by recall pursuant
to Rule 61B-23.002(3)(e)2, F.A.C.
10. PLAN FOR DEVELOPMENT
10.1 The plan for development of Fala Bella Resort and Golf Club of
Naples includes a maximum of two hundred (200) Resort Units, three (3)
Commercial Units intended for vending equipment and linen and associated items
storage purposes, and one (1) Commercial Unit designated for use as a Resort
Center containing a bar and grill and other facilities, for a maximum total of
two hundred and four (204) Condominium Units, together with the Initial
Association Property and the Subsequent Association Property.
10.2. Developer is the developer of Fala Bella Resort and Golf Club in
Lely Resort located in the County, and not the developer of Lely Resort. The
Community Declaration sets forth the plans for the overall development of Lely
Resort. Lely Resort is intended to be developed as a multi-phase planned
community comprising residential, institutional and commercial property in
accordance with the Community Declaration. Certain developments such as single
family, condominium or commercial may be grouped together as a Neighborhood (as
defined in the Community Declaration).
10.3. A uniform community development district known as the Lely
Community Development District (the "CDD") has been established pursuant to
Florida Statutes Chapter 190 to administer Lely Resort.
10.4. The Community Association is responsible for the maintenance of
community common areas (as described in the Community Declaration). Portions of
Lely Resort may be developed around and in conjunction with recreation-type
clubs. These clubs may be public, private, equity or non-equity which may own
and operate tennis, golf, swimming and social functions. Fala Bella Resort and
Golf Club is one of the Neighborhoods in Lely Resort as more particularly
described in the Community Declaration.
10.5. The Neighborhood Declaration which commits the Land to the terms
and provisions of the Community Declaration has been recorded.
10.6. The Community Documents provide for access easements, lake
maintenance, drainage and related easements, golf course retrieval easements,
utility installation and maintenance easements, wetland reserve access and
maintenance easements and landscape easements.
11. CONDOMINIUM ASSOCIATION
11.1. Purpose of Condominium Association
The Condominium Association shall be the condominium
association responsible for the operation of this Condominium and, subject to
the other provisions hereof, certain other
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condominiums created within Fala Bella Resort and Golf Club. Each Condominium
Unit Owner shall be a member of the Condominium Association as provided in the
Neighborhood Documents. A copy of the Articles are attached hereto as Exhibit C
and made a part hereof. A copy of the Bylaws are attached hereto as Exhibit D
and made a part hereof.
11.2. Member Approval of Certain Condominium Association Actions
Notwithstanding anything contained herein to the contrary, the
Condominium Association shall be required to obtain the approval of eighty
percent (80%) of all Condominium Unit Owners (at a duly called meeting of the
Condominium Unit Owners at which a quorum is present) prior to the payment of or
contracting for legal or other fees or expenses to persons or entities engaged
by the Condominium Association in contemplation of a lawsuit or for the purpose
of suing, or making, preparing or investigating any lawsuit, or commencing any
lawsuit other than for the following purposes:
(i) the collection of Assessments;
(ii) the collection of other charges which
Condominium Unit Owners are obligated to pay
pursuant to the Neighborhood Documents;
(iii) the enforcement of the use and occupancy
restrictions contained in the Neighborhood
Documents;
(iv) the enforcement of the restrictions of the
sale and other transfer of Condominium Units
contained in the Neighborhood Documents;
(v) in an emergency where waiting to obtain the
approval of the Condominium Unit Owners
creates a substantial risk of irreparable
injury to the Condominium Property or the
Condominium Unit Owners but in such event,
the aforesaid vote shall be taken with
respect to the continuation of the action at
the earliest practical date (the imminent
expiration of a statute of limitations shall
not be deemed an emergency obviating the
need for the requisite vote of ninety
percent [90%] of the Condominium Unit
Owners); or
(vi) filing a compulsory counterclaim.
11.3. Acquisition of Property
The Condominium Association has the power to acquire title to
property or otherwise hold, convey, lease and mortgage Condominium Association
Property for the use and benefit of the Members. The purchase and conveyance of
real property must be approved by the affirmative vote of sixty percent (60%) of
all Condominium Unit Owners (at a duly called meeting of the Condominium Unit
Owners at which a quorum is present.)
The Condominium Association shall have the right to make or
cause to be made structural changes and improvements ("Alterations") of the
Common Elements and Limited Common Elements and Condominium Association Property
which are approved by the Board and which do not prejudice the right of any
Condominium Unit Owner or Institutional Mortgagee. In
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the event such changes or improvements prejudice the rights of a Condominium
Unit Owner or Institutional Mortgagee, the consent of such Condominium Unit
Owner or Institutional Mortgagee so prejudiced shall be required before such
alterations can be made or caused. If the cost of the Alternations exceed Fifty
Thousand Dollars ($50,000), the affirmative vote of fifty-one percent (51%) of
the Condominium Unit Owners, in accordance with the Neighborhood Documents,
shall be required in addition to such Board approval, and the cost of such
Alterations shall be assessed against the Condominium Unit Owners in the manner
provided in the Neighborhood Documents.
11.4. Conveyance to Condominium Association
The Condominium Association is obligated to accept any and all
conveyances to it by Developer or the Community Association of a fee simple
title, easements or leases to all or portions of their property.
11.5. Conveyance by Condominium Association
The Condominium Association is empowered to delegate any of
its functions or convey any of its property to any governmental unit as may be
required or deemed necessary from time to time.
11.6. Community Association
The Condominium Unit Owners shall be "Members" of the
Community Association as described in the Articles of Incorporation of the
Community Association. The President of the Condominium Association shall be the
"Voting Member" and cast the votes for the Condominium Unit Owners with respect
to all Community Association matters requiring a membership vote of the
Community Association pursuant to the By-Laws of the Community Association and
the Bylaws of the Condominium Association. The Community Association has been
organized for the purpose of administering the covenants and obligations
relating to the "Common Areas" and Community Association property in Lely Resort
as set forth in the Community Declaration. All members of the Condominium
Association acquire the benefits to use of the Common Area as described in the
Community Declaration and the obligation to pay the "Common Expenses" as set
forth in the Community Declaration.
12. EASEMENTS
12.1. Perpetual Nonexclusive Easement to Public Ways, the
Condominium Property, the Association Property , and the
Neighborhood Common Areas
The walks and other rights-of-way, if any, in this Condominium
as shown on the Site Plan or hereafter located within this Condominium shall be,
and the same are hereby declared to be, subject to a perpetual nonexclusive
easement for ingress and egress and access to, over and across the same, to
public ways, including dedicated streets, the access areas, the Condominium
Property, the Association Property, and the Neighborhood Common Areas (as
defined in the Community Declaration), which easement is hereby created in favor
of all the Condominium Unit Owners in the Condominium now or hereafter existing,
and the Rental Manager (as defined in the Rental Program Agreement), for their
use and for the use of their family members, guests, lessees or invitees for all
proper and normal purposes and for the furnishing of services and facilities for
which the same are reasonably intended, including ingress and egress for the
furnishing of services by fire protection
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agencies, police and other authorities of the law, United States mail carriers,
representatives of public utilities, including, but not limited to, telephone,
electric power, telephone, sewer, water, gas, drainage, irrigation, lighting,
television transmission, cable television and communications systems
transmission, reception and monitoring, security, garbage and waste removal and
the like and for all purposes incidental thereto and other utilities or services
authorized by Developer, its successors or assigns to service Condominium
Property; and such other persons as Developer from time to time may designate
for performing their authorized services. Developer hereby reserves unto itself,
its successors, assigns, designees and nominees, and hereby grants to the
Condominium Association, the right to grant easements, permits and licenses over
the Common Elements and to impose upon the Common Elements henceforth and from
time to time such easements and cross-easements for any of the foregoing
purposes as it deems to be in the best interests of and necessary and proper for
the Condominium. The Condominium Association shall have the right to establish
the rules and regulations governing the use and enjoyment of the Common Elements
and all easements over and upon same.
12.2. Easements and Cross-Easements on Common Elements
Inasmuch as the Condominium constitutes a part of Lely Resort,
Developer hereby declares that the Common Elements of the Condominium are a
Neighborhood Common Area to the Condominium and shall be and the same are hereby
duly declared to be subject to perpetual nonexclusive easements in favor of the
Community Association, and such appropriate utility, telecommunication and other
service companies or the providers of the services hereinafter set forth as may
be from time to time designated by Developer to and from all portions of Lely
Resort for ingress and egress, and for the installation, maintenance,
construction and repair of facilities, including, but not limited to, electric
power, telephone, sewer, water, gas, drainage, irrigation, lighting, television
transmission, cable television and communications systems transmission,
reception and monitoring, security, pest control, garbage and waste removal and
the like and for all purposes incidental thereto. Developer hereby reserves unto
itself, its successors, assigns, designees and nominees, and hereby grants to
the Condominium Association, the right to grant easements, permits and licenses
over the Common Elements and to impose upon the Common Elements henceforth and
from time to time such easements and cross-easements for any of the foregoing
purposes as it deems to be in the best interests of and necessary and proper for
the Condominium. Developer also hereby reserves a blanket easement over, under,
upon and through the Condominium for any purpose whatsoever.
12.3. Condominium Association Property
Developer reserves the right for itself to grant such
easements over, under, in and upon the Association Property in favor of itself,
the Condominium Association, its designees and appropriate utility and other
service corporations or companies for ingress and egress for persons and
vehicles and to provide power, electric, sewer, water and other utility services
and lighting facilities, irrigation, television transmission and distribution
facilities, cable television facilities, telecommunications, security service
and facilities in connection therewith, pest control, and access to publicly
dedicated streets, and the like. In addition, upon the conveyance of any of the
Association Property to the Condominium Association, Developer shall be deemed
to have thereby granted to the Condominium Association the right to grant such
easements over, under, in and upon the Association Property in favor of
Developer, the Condominium Association, its designees, and others and
appropriate utility and other service corporations or companies for the
above-stated purposes. Either Developer or the Condominium Association shall
execute, deliver and impose,
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from time to time, such easements and cross-easements for any of the foregoing
purposes and at such location or locations as determined by either Developer or
the Condominium Association.
12.4. Easement for Encroachments
12.4.1. Settlement or Movement of Improvements. All the
Condominium Property shall be subject to easements for encroachments, which now
or hereafter exist, caused by settlement or movement of any improvements upon
such areas or improvements contiguous thereto or caused by minor inaccuracies in
the building or rebuilding of such improvements.
12.4.2. Air Space. Subject to Paragraph 7.2, all the Land and
improvements thereon, including, but not limited to, the Condominium Property,
shall be subject to perpetual easements for encroachments, for so long as such
encroachment exists, in favor of each Condominium Unit and the Condominium Unit
Owners thereof, their family members, guests, invitees and lessees for air space
for any balcony or terrace of any Condominium Unit, and the reasonable use,
maintenance and repair of same, which extends under, over or through any of the
Land and improvements thereon, including, but not limited to, the Condominium
Property, including, but not limited to, Common Elements. Such easements shall
be appurtenances to and a covenant running with the respective Condominium Unit
in whose favor such easements exist.
12.4.3. Term of Encroachment Easements. The above easements
for encroachments shall continue until such encroachments no longer exist.
12.5 Reservation for Periodic Inspections
Developer shall have the right, but not the obligation, to
conduct inspections of and tests on, from time to time, all or any parts of the
Common Elements and improvements thereon in order to ascertain the physical
condition of the Common Elements and improvements thereon and to determine
whether maintenance, repair or replacement of the Common Elements or
improvements thereon is indicated. If Developer conducts any such tests or
inspections, it shall pay all costs thereof, restore the affected portion of the
Condominium Property to its condition immediately prior to the inspections and
tests, and shall indemnify the Condominium Association and the Owner(s) of any
affected Condominium Unit(s) from any damages resulting therefrom. Developer
hereby reserves the right of entry on, over, under, across and through the
Condominium Property as may be reasonably necessary for the foregoing purposes.
13. LIABILITY INSURANCE PROVISIONS
13.1. Public Liability Insurance. The Board shall obtain liability
insurance in the form generally known as Public Liability and/or Owners,
Landlord and Tenant Policies, or alternatively, in the event Developer so
elects, the Condominium Association shall be covered under Developer's
insurance, in such amounts as it may determine from time to time for the purpose
of providing liability insurance coverage for all property and improvements in
Fala Bella Resort and Golf Club excluding the Condominium Units; provided,
however, that such policy or policies shall not have limits of less than One
Million Dollars ($1,000,000) covering all claims for personal injury and One
Million Dollars ($1,000,000) for property damage arising out of a single
occurrence. The Board shall collect and enforce the payment of a share of the
premium for such insurance from each Condominium Unit Owner as a part of the
Annual Assessment. Said insurance shall include, but not be limited to, legal
liability for property damage, bodily injuries and deaths of persons in
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connection with the operation, maintenance or use of any property or
improvements within Fala Bella Resort and Golf Club, legal liability arising out
of law suits related to employment contracts of the Condominium Association,
water damage, liability for hazards related to usage and liability for property
of others, hired automobile, non-owned automobile and off-premises employee
coverage and such other risks as are customarily covered with respect to
developments similar to Fala Bella Resort and Golf Club in construction,
location and use. All such policies shall name the Condominium Association (and
Developer so long as Developer shall own any of the Condominium Property, as
their respective interests may appear) as the insured(s) under such policy or
policies. The original or a true copy of each policy shall be held in the office
of the Condominium Association. The insurance purchased shall contain a
"severability of interest endorsement," and waiver of subrogation or equivalent
coverage, which would preclude the insurer from denying the claim of a
Condominium Unit Owner because of the negligent acts of either the Condominium
Association, Developer or any other Condominium Unit Owner or deny the claim of
either Developer or the Condominium Association because of the negligent acts of
the other or the negligent acts of a Condominium Unit Owner. All liability
insurance shall contain cross liability endorsements to cover liabilities of the
Condominium Unit Owners as a group to a Condominium Unit Owner. Each Condominium
Unit Owner shall be responsible for the purchasing of liability insurance for
accidents occurring in his or her own Condominium Unit and, if the Condominium
Unit Owner so determines, for supplementing any insurance purchased by the
Condominium Association. Notwithstanding the foregoing, in the event the Board
determines that the cost of public liability insurance is economically
unwarranted, the Board may determine to either reduce the amount of such
insurance, increase the deductible amount or discontinue coverage.
13.2. Fidelity Insurance
Adequate fidelity coverage to protect against dishonest acts
of the officers and employees of the Condominium Association and the Directors
and all others who handle and are responsible for handling funds of the
Condominium Association (whether or not they receive compensation), shall be
maintained. Such coverage shall be in the form of fidelity bonds which meet the
following requirements: (i) such bonds shall name the Condominium Association as
an obligee and premiums therefor shall be paid by the Condominium Association;
(ii) such bonds shall be written in such amounts as set forth in Section
718.111(11)(d) (in the event that the Act does not specify an amount then the
bonds shall be written in an amount equal to at least three (3) months aggregate
assessments for all Condominium Units plus reserve funds); and (iii) such bonds
shall contain waivers of any defense based upon the exclusion of persons who
serve without compensation from any definition of "employee" or similar
expression. Notwithstanding the foregoing, in the event the Condominium
Association determines that the insurance is not reasonably economically
obtainable, the Condominium Association may determine to either reduce the
amount of such insurance, increase the deductible amount or discontinue coverage
provided coverage is no less than required by the Act.
13.3. Cancellation Provision
All insurance policies or fidelity bonds purchased pursuant to
this Article 13 shall provide that they may not be canceled without at least ten
(10) days prior written notice to the Condominium Association and to Listed
Mortgagees.
14. PROVISIONS RELATING TO CASUALTY INSURANCE
AND DESTRUCTION OF IMPROVEMENTS
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14.1. Hazard Insurance
Each Condominium Unit Owner shall be responsible for the
purchase of casualty insurance for all of his or her personal property including
the following equipment, if any, located within his or her Condominium Unit,
electrical fixtures, appliances, air conditioning or heating equipment, water
heaters and built-in cabinets. The Condominium Association shall obtain casualty
insurance with such coverage and in such amounts as it may determine from time
to time for the purpose of providing casualty insurance coverage for all
insurable property and improvements within Fala Bella Resort and Golf Club,
including Fire and Extended Coverage, Vandalism and Malicious Mischief
Insurance, all of which insurance shall insure all of the insurable improvements
on or within Fala Bella Resort and Golf Club, including personal property owned
by the Condominium Association, in and for the interest of the Condominium
Association, all Condominium Unit Owners and their mortgagees, as their
interests may appear, with a company (or companies) acceptable to the standards
set by the Board. The Condominium Association shall purchase insurance for each
Building now located or which may hereafter be located, built or placed within
Fala Bella Resort and Golf Club in an amount equal to one hundred percent (100%)
of the "Replacement Value" thereof. The term "Building" as used in this Article
14 does not include Condominium Unit floor coverings, wall coverings or ceiling
coverings. The term "Replacement Value" shall mean one hundred percent (100%) of
the current replacement costs exclusive of land, foundation, excavation, items
of personal property and other items normally excluded from coverage as
determined annually by the Board. The Board may determine the kind of coverage
and proper and adequate amount of insurance. The casualty insurance shall
contain an "agreed amount endorsement" or its equivalent, "inflation guard
endorsement," and, if determined necessary, an "increased cost of construction
endorsement" or "contingent liability from operation of building laws
endorsement" or a "demolition endorsement" or the equivalent. The casualty
insurance shall insure the Buildings from loss or damage caused by or resulting
from at least the following: fire and other hazards covered by the standard
extended coverage endorsement and by sprinkler leakage, windstorm, vandalism,
malicious mischief, debris removal and demolition, and such other risks as shall
customarily be covered with respect to projects or developments similar to the
Buildings in construction, location and use.
14.2. Flood Insurance
If determined appropriate by the Board or if required by any
Institutional Mortgagee, the Condominium Association shall obtain a master or
blanket policy of flood insurance covering all property and improvements in Fala
Bella Resort and Golf Club, if available, under the National Flood Insurance
Program, which flood insurance shall be in the form of a standard policy issued
by a member of the National Flood Insurers Association, and the amount of the
coverage of such insurance shall be the lesser of the maximum amount of flood
insurance available under such program or one hundred percent (100%) of the
current replacement cost of all buildings and other insurable property located
in the flood hazard area.
14.3. Form of Policy and Insurance Trustee
The Condominium Association may, to the extent possible and
not inconsistent with the foregoing, obtain one (1) policy to insure all of the
insurable improvements within Fala Bella Resort and Golf Club operated by the
Condominium Association. The premiums for such coverage and other expenses in
connection with said insurance shall be paid by the Condominium Association and
assessed as part of the Annual Assessment. The company (or companies) with which
the
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Condominium Association shall place its insurance coverage, as provided in this
Declaration, must be a good and responsible company (or companies) authorized to
do business in the State of Florida. In addition, the insurance agent must be
located in the State of Florida. The Condominium Association shall have the
right to designate a trustee ("Insurance Trustee") and upon the request of the
Institutional Mortgagee holding the highest dollar indebtedness encumbering
Condominium Units within Fala Bella Resort and Golf Club ("Lead Mortgagee")
shall designate an Insurance Trustee. Thereafter the Condominium Association
from time to time shall have the right to change the Insurance Trustee to such
other trust company authorized to conduct business in the State of Florida or to
such other person, firm or corporation as Insurance Trustee as shall be
acceptable to the Board and the Lead Mortgagee. The Lead Mortgagee shall have
the right, for so long as it holds the highest dollar indebtedness encumbering
Condominium Units within Fala Bella Resort and Golf Club to approve: (i) the
form of the insurance policies; (ii) the amounts thereof; (iii) the company or
companies which shall be the insurers under such policies; (iv) the insurance
agent or agents; and (v) the designation of the Insurance Trustee if it deems
the use of an Insurance Trustee other than the Board to be necessary, which
approval(s) shall not be unreasonably withheld or delayed; provided, however,
for so long as Developer owns any Condominium Unit(s), Developer shall have the
right, but not the obligation, to require the Condominium Association to
designate an Insurance Trustee other than the Board. Notwithstanding anything in
this Declaration to the contrary, the Board may act as the Insurance Trustee
hereunder unless otherwise required by the Lead Mortgagee or Developer. The Lead
Mortgagee shall inform the Condominium Association by written notification if it
requires the use of an Insurance Trustee other than the Board. If the use of an
Insurance Trustee other than the Board is requested in writing, then the Lead
Mortgagee shall be deemed to have approved the Insurance Trustee unless the Lead
Mortgagee's written disapproval is received by the Condominium Association
within thirty (30) days after notice from the Condominium Association of the
identity of the proposed Insurance Trustee. If no Insurance Trustee is required,
the Board shall receive, hold and expend insurance proceeds in the manner
hereinafter provided as if it were the Insurance Trustee.
14.4. Required Policy Provisions
All such aforesaid policies shall provide that they may not be
canceled without at least ten (10) days' prior written notice to the Condominium
Association and Listed Mortgagees and shall be deposited with the Insurance
Trustee upon its written acknowledgment that the policies and any proceeds
thereof will be held in accordance with the terms hereof. Said policies shall
provide that all insurance proceeds payable on account of loss or damage shall
be payable to the Insurance Trustee. In the event of a casualty loss, the
Insurance Trustee may deduct from the insurance proceeds collected a reasonable
fee for its service as Insurance Trustee. The Condominium Association is hereby
irrevocably appointed agent for each Condominium Unit Owner to adjust all claims
arising under insurance policies purchased by the Condominium Association. The
Insurance Trustee shall not be liable for payment of premiums, for the renewal
or the sufficiency of the policies nor for the failure to collect any insurance
proceeds. The Condominium Association may determine to act as Insurance Trustee,
in which event references herein to Insurance Trustee shall refer to the Board.
14.5. Restrictions of Mortgagees
No mortgagee shall have any right to participate in the
determination of whether property is to be rebuilt, nor shall any mortgagee have
the right to apply insurance proceeds to
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repayment of its loan unless such proceeds are distributed to Condominium Unit
Owners and/or their respective mortgagees.
14.6. Distribution of Insurance Proceeds and Losses
The duty of the Insurance Trustee shall be to receive any and
all proceeds from the insurance policies held by it and to hold such proceeds in
trust for the Condominium Association, Condominium Unit Owners and mortgagees
under the following terms:
14.6.1. Loss to Condominium Unit Alone. In the event a loss,
insured under the policies held by the Insurance Trustee, occurs to any
improvements within any of the Condominium Units alone, without any loss to any
other improvements within Fala Bella Resort and Golf Club, the Insurance Trustee
shall immediately pay all proceeds received because of such loss directly to the
Condominium Unit Owners of the Condominium Units damaged and their mortgagees,
if any, as their interests may appear, and it shall be the duty of these
Condominium Unit Owners to use such proceeds to effect necessary repair to the
Condominium Units. The Insurance Trustee, where other than the Condominium
Association, may rely upon the written statement of the Condominium Association
as to whether or not there has been a loss to the Condominium Units alone, the
Common Elements or any combination thereof.
14.6.2. Loss of Fifty Thousand Dollars ($50,000) or Less to
Condominium Units and Common Elements. In the event that a loss of Fifty
Thousand Dollars ($50,000) or less occurs to improvements within one (1) or more
Condominium Units and to improvements within Common Elements contiguous thereto,
or to improvements within the Common Elements, the Insurance Trustee shall pay
the proceeds received as a result of such loss to the Condominium Association.
Upon receipt of such proceeds, the Condominium Association will cause the
necessary repairs to be made to the improvements within the Common Elements and
within the damaged Condominium Units. In such event, should the insurance
proceeds be sufficient to repair the improvements within the Common Elements but
insufficient to repair all of the damage within the Condominium Units, the
proceeds shall be applied first to completely repair the improvements within the
Common Elements and the balance of the funds ("Balance") shall be apportioned by
the Condominium Association to repair the damage to the improvements within
Condominium Units, which apportionment shall be made to each Condominium Unit in
accordance with the proportion of damage sustained to improvements within said
Condominium Units as estimated by the insurance company whose policy covers such
damage. Any deficiency between the Balance apportioned to a damaged Condominium
Unit and the cost of repair shall be paid by a Special Assessment.
14.6.3. Loss in Excess of Fifty Thousand Dollars ($50,000) to
Condominium Units and Common Elements. In the event the Insurance Trustee
receives proceeds in excess of the sum of Fifty Thousand Dollars ($50,000) as a
result of damages to the improvements within the Common Elements and/or
Condominium Units and Common Elements that are contiguous, then the Insurance
Trustee shall hold, in trust, all insurance proceeds received with respect to
such damage, together with any and all other funds paid as hereinafter provided,
and shall distribute the same as follows:
(a) The Board shall obtain or cause to be obtained
reliable and detailed estimates and/or bids for the cost of rebuilding and
reconstructing the damage and for the purpose of determining whether insurance
proceeds are sufficient to pay for the same.
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(b) In the event the insurance proceeds are
sufficient to rebuild and reconstruct all the damaged improvements, or upon the
collection of the necessary funds that are described in subparagraph 14.6.3 (c)
below, then the damaged improvements shall be completely repaired and restored.
In this event, all payees shall deliver paid bills and waivers of mechanics'
liens to the Insurance Trustee and execute affidavits required by law, by the
Condominium Association, by any Institutional Mortgagee named on a mortgage
endorsement or by the Insurance Trustee, and shall deliver the same to the
Insurance Trustee. Further, the Condominium Association shall negotiate and
obtain a contractor willing to do the work on a fixed price basis or some other
reasonable terms under the circumstances, which said contractor shall post a
performance and payment bond, and the Insurance Trustee shall disburse the
insurance proceeds and other funds held in trust in accordance with the progress
payments contained in the construction contract between the Condominium
Association and the contractor. Subject to the foregoing, the Board shall have
the right and obligation to negotiate and contract for the repair and
restoration of the premises.
(c) In the event the insurance proceeds are
insufficient to repair and replace all of the damaged improvements within the
Common Elements and Condominium Units contiguous to such damaged Common
Elements, the Board shall hold a special meeting to determine a Special
Assessment against all of the Condominium Unit Owners to obtain any necessary
funds to repair and to restore such damaged improvements. Upon the determination
by the Board of the amount of such Special Assessment, the Board shall
immediately levy such Special Assessment against the Condominium Units setting
forth the date or dates of payment of the same, and any and all funds received
from the Condominium Unit Owners pursuant to such Special Assessment shall be
delivered to the Insurance Trustee and disbursed as provided in subparagraph
14.6.3 (b) immediately preceding. In the event the deficiency between the
estimated cost of the repair and replacement of the damaged property and the
insurance proceeds exceeds the sum of One Hundred Thousand Dollars ($100,000),
and ninety percent (90%) of the Condominium Unit Owners advise the Board in
writing on or before the date for the first payment thereof that they are
opposed to a Special Assessment, then the Insurance Trustee shall divide the net
insurance proceeds into the shares described in Article 7 hereof and shall
promptly pay each share of such proceeds to the Condominium Unit Owners and
mortgagees of record as their interests may appear ("Insurance Proceeds
Distribution"). In making any such Insurance Proceeds Distribution to the
Condominium Unit Owners and mortgagees, the Insurance Trustee may rely upon a
certificate of an abstract company as to the names of the then Condominium Unit
Owners and their respective mortgagees. Any Insurance Proceeds Distribution
shall also require the approval of the Lead Mortgagee.
14.6.4. Distribution of Excess Funds. In the event that after
the completion of and payment for the repair and reconstruction of the damage to
the damaged property and after the payment of the Insurance Trustee's fee with
respect thereto any excess insurance proceeds remain in the hands of the
Insurance Trustee, then such excess shall be disbursed in the manner of the
Insurance Proceeds Distribution. However, in the event such repairs and
replacements were paid for by any Special Assessment as well as insurance
proceeds, then it shall be presumed that the monies disbursed in payment of any
repair, replacement and reconstruction were first disbursed from insurance
proceeds and any remaining funds held by the Insurance Trustee shall be
distributed to the Condominium Unit Owners in proportion to their contributions
by way of Special Assessment.
14.6.5. Institutional Mortgagees. In the event the Insurance
Trustee has on hand, within one hundred eighty (180) days after any casualty or
loss, insurance proceeds and, if necessary, funds from any Special Assessment
sufficient to pay fully any required restoration and repair with respect to such
casualty or loss, then no mortgagee shall have the right to require the
application of
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any insurance proceeds or Special Assessment to the payment of its loan. Any
provision contained herein for the benefit of any mortgagee may be enforced by a
mortgagee.
14.6.6. Repair of Damaged Property. Any repair, rebuilding or
reconstruction of damaged property shall be substantially in accordance with the
architectural plans and specifications for Fala Bella Resort and Golf Club, as:
(i) originally constructed; (ii) reconstructed; or (iii) new plans and
specifications approved by Developer in accordance with the Community
Declaration; provided, however, any material or substantial change in new plans
and specifications approved by Developer from the plans and specifications of
Fala Bella Resort and Golf Club as previously constructed shall require approval
by the Lead Mortgagee.
14.6.7. Determination of Damage. The Board shall determine, in
its sole and absolute discretion, whether damage or loss has occurred to
improvements within Condominium Units alone, Common Elements alone or to
improvements within any combination thereof.
14.6.8. Insurance Amounts. Notwithstanding anything in this
Article 14 to the contrary, the amounts set forth for the purchase of insurance
in this Article 14 are the minimum amounts to be purchased. Therefore,
Condominium Unit Owners or the Condominium Association, as the case may be, may
purchase insurance in excess of the amounts set forth herein. The amounts set
forth do not constitute a representation or warranty of any kind by Developer or
the Condominium Association as to the proper amount or kinds of insurance
required.
14.6.9. Miscellaneous Policy Requirements. Policies insuring
the property within Fala Bella Resort and Golf Club purchased pursuant to the
requirements of this Article 14 shall provide that any insurance trust agreement
shall be recognized; the right of subrogation against Condominium Unit Owners
will be waived; the insurance will not be prejudiced by any acts or omission of
individual Condominium Unit Owners who are not under the control of the
Condominium Association; and the policy will be primary, even if a Condominium
Unit Owner has other insurance that covers the same loss.
14.6.10. Master Form of Insurance. Nothing contained herein
shall prohibit the Condominium Association from obtaining a "Master" or
"Blanket" form of insurance to meet the requirements of this Article 14,
provided that the coverages required hereunder are fulfilled.
15. PROVISIONS RELATING TO CONDEMNATION OR EMINENT DOMAIN
PROCEEDINGS
15.1. Proceedings
The Condominium Association shall represent the Condominium
Unit Owners in the condemnation proceedings or in negotiations, settlements and
agreements with the condemning authority for acquisition of the Common Elements
or any parts thereof by the condemning authority.
15.2. Deposit of Awards With Insurance Trustee
The taking of any portion of the Condominium Property by
condemnation shall be deemed to be a casualty, and the awards for that taking
shall be deemed to be proceeds from insurance on account of the casualty and
shall be deposited with the Insurance Trustee. Although the awards may be
payable to Condominium Unit Owners, the Condominium Unit Owners shall
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deposit the awards with the Insurance Trustee; and in the event of failure to do
so, in the discretion of the Board, a special charge shall be made against a
defaulting Condominium Unit Owner in the amount of his or her award, or the
amount of that award shall be set off against the sums hereafter made payable to
that Condominium Unit Owner.
15.3. Disbursement of Funds
If the Condominium is terminated in accordance with the
provisions of this Declaration after condemnation, the proceeds of the awards
and Special Assessments, if any, shall be deemed to be Condominium Property and
shall be divided into the shares described in the Declaration and distributed to
the Condominium Unit Owners and mortgagees as their interests may appear. If the
Condominium is not terminated after condemnation, the size of the Condominium
will be reduced, the owners of the condemned Condominium Units will be made
whole and the Condominium Property damaged by the taking will be made usable in
the manner provided below.
15.4. Condominium Unit Reduced But Tenantable
If the taking reduces the size of a Condominium Unit
("Affected Condominium Unit") and the remaining portion of the Affected
Condominium Unit can be made tenantable, the award for the taking of a portion
of the Affected Condominium Unit shall be used for the following purposes in the
order stated and the following changes shall be effected in the Condominium:
15.4.1. Affected Condominium Unit Made Tenantable. The
Affected Condominium Unit shall be made tenantable. If the cost of the
restoration exceeds the amount of the award, the additional funds required shall
be collected as a special charge.
15.4.2. Excess Distributed to Condominium Unit Owner and
Institutional Mortgagee. The balance of the award, if any, shall be distributed
to the Condominium Unit Owner of the Affected Condominium Unit and to each
Institutional Mortgagee of the Affected Condominium Unit, the remittance being
made payable to the Condominium Unit Owner and Institutional Mortgagees as their
interests may appear.
15.4.3. Reduction in Percentage of Common Elements. If the
floor area of the Affected Condominium Unit is reduced by more than ten percent
(10%) by the taking, the number representing the share in the ownership of the
Common Elements appurtenant to the Affected Condominium Unit shall be reduced
("Reduction in Percentage of Common Elements") in the proportion by which the
floor area of the Affected Condominium Unit is reduced by the taking, and then
the shares of all Condominium Units in the ownership of the Common Elements
shall be restated with the Reduction in Percentage of Common Elements being
allocated to all the Condominium Units in proportion to their share of ownership
in the Common Elements.
15.5. Affected Condominium Unit Made Untenantable
If the taking is of the entire Affected Condominium Unit or so
reduces the size of an Affected Condominium Unit that it cannot be made
tenantable, the award for the taking of the Affected Condominium Unit shall be
used for the following purposes in the order stated and the following changes
shall be effected in the Condominium:
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15.5.1. Payment to Condominium Unit Owner and Institutional
Mortgagee. The market value of the Affected Condominium Unit immediately prior
to the taking shall be paid to the Condominium Unit Owner thereof and to each
Institutional Mortgagee thereof as their interests may appear.
15.5.2. Remaining Portion of Affected Condominium Unit. The
remaining portion of the Affected Condominium Unit, if any, shall be released by
the Institutional Mortgagee and conveyed by the Condominium Unit Owner to the
Condominium Association. Such remaining portion of the Affected Condominium Unit
shall become a part of the Common Elements and shall be placed in a condition
approved by the Board and the Neighborhood Documents shall be amended to reflect
the addition of such Common Elements; provided that if the cost of the work
shall exceed the balance of the fund from the award for the taking after the
payment set forth in subparagraph 15.5.1 above, the work shall be approved in
the manner required for further improvement of the Common Elements.
15.5.3. Adjustment in Shares of Common Elements. The shares in
the Common Elements appurtenant to the Condominium Units that continue as part
of the Condominium shall be adjusted to distribute the ownership of the Common
Elements from the Affected Condominium Units among the reduced number of
Condominium Units. The shares of the continuing Condominium Units in the
ownership of the Common Elements shall be restated with the percentage of
ownership in the Common Elements of the Affected Condominium Unit being
allocated to all the continuing Condominium Units in proportion to their
relative share of ownership in the Common Elements.
15.5.4. Insufficient Award. If the amount of the award for the
taking is not sufficient to pay the market value of the Affected Condominium
Unit to the Condominium Unit Owner and to condition the remaining portion of the
Affected Condominium Unit for use as a part of the Common Elements, the
additional funds required for those purposes shall be raised by Special
Assessments against all of the Condominium Unit Owners who will continue as
Condominium Unit Owners after the changes in the Condominium effected by the
taking. The Assessments shall be made in proportion to the shares of those
Condominium Unit Owners in the Common Elements after the changes effected by the
taking.
15.5.5. Determination of Market Value of Affected Condominium
Unit. If the market value of an Affected Condominium Unit prior to the taking
cannot be determined by agreement between the Condominium Unit Owner, the
Institutional Mortgagees of the Affected Condominium Unit and the Condominium
Association within thirty (30) days after notice by either party, the value
shall be determined by arbitration in accordance with the then existing rules of
the American Arbitration Association, except that the arbitrators shall be two
appraisers appointed by the American Arbitration Association who shall base
their determination upon an average of their appraisals of the Affected
Condominium Unit; and the determination of the arbitrators shall be conclusive
upon the parties and judgment upon the same may be entered in any court having
jurisdiction thereof. The cost of arbitration proceedings shall be assessed
against all Condominium Units in proportion to the shares of the Condominium
Units in the Common Elements as they exist prior to the changes effected by the
taking.
15.6. Taking of Common Elements
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Awards for taking of Common Elements shall be used to make the
remaining portion of the Common Elements usable in the manner approved by the
Board; provided, that if the cost of the work shall exceed the balance of the
funds from the awards for the taking, the work shall be approved in the manner
required for further improvement of the Common Elements. The balance of the
awards for the taking of Common Elements, if any, shall be distributed to the
Condominium Unit Owners in the shares in which they own the Common Elements
after adjustment of these shares on account of the condemnation and to
Institutional Mortgagees as their interests may appear.
15.7. Amendment of Declaration
The changes in Condominium Units, in the Common Elements and
in the ownership of the Common Elements that are affected by the condemnation
shall be evidenced by an amendment to the Declaration that need be approved only
by a majority of the Board unless written approvals from Developer and/or Listed
Mortgagees are also required pursuant to this Declaration. Such amendment shall
be evidenced by a certificate executed by the Condominium Association in
recordable form in accordance with the Act, and a true copy of such amendment
shall be mailed via first class mail by the Condominium Association to
Developer, all Condominium Unit Owners and Listed Mortgagees ("Interested
Parties"). The amendment shall become effective upon the recording of such
certificate amongst the Public Records of the County; provided, however, such
amendment shall not be recorded until thirty (30) days after the mailing of a
copy thereof to the Interested Parties unless such thirty (30)-day period is
waived in writing by the Interested Parties.
16. PROVISION FOR APPORTIONMENT OF TAX OR SPECIAL ASSESSMENT IF
LEVIED AND ASSESSED AGAINST THE CONDOMINIUM AS A WHOLE
16.1. New Total Tax
In the event that any taxing authority having jurisdiction
over the Condominium shall levy or assess any tax or special assessment against
the Condominium as a whole as opposed to levying and assessing such tax or
special assessment against each Condominium Unit and its appurtenant undivided
interest in Common Elements, as now provided by law ("New Total Tax"), then such
New Total Tax shall be paid as a Common Expense by the Condominium Association,
and any taxes or special assessments which are to be so levied shall be included
wherever possible in the estimated annual "Budget" (as hereinafter defined) of
the Condominium Association or shall be separately levied and collected as a
Special Assessment by the Condominium Association against all of the Condominium
Unit Owners of all Condominium Units. Each Condominium Unit Owner shall be
assessed by and shall pay to the Condominium Association a percentage of the New
Total Tax equal to that Condominium Unit Owner's percentage interest in the
Common Elements. In the event that any New Total Tax shall be levied, then the
assessment by the Condominium Association shall separately specify and identify
the portion of such assessment attributable to such New Total Tax and such
portion shall be and constitute a lien prior to all mortgages and encumbrances
upon any Condominium Unit and its appurtenant percentage interest in Common
Elements, regardless of the date of the attachment and/or recording of such
mortgage or encumbrances, to the same extent as though such portion of New Total
Tax had been separately levied by the taxing authority upon each Condominium
Unit and its appurtenant percentage interest in Common Elements.
16.2. Personal Property Taxes
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All personal property taxes levied or assessed against
personal property owned by the Condominium Association and all federal and state
income taxes levied and assessed against the Condominium Association shall be
paid by the Condominium Association and shall be included as a Common Expense in
the Budget of the Condominium Association.
17. OCCUPANCY AND USE RESTRICTIONS
In order to preserve the values and amenities of the Condominium, the
following provisions shall be applicable to the Condominium Property:
17.1. Resort Unit and Commercial Unit Use
17.1.1 Resort Unit Use
(i) The Resort Units shall be used for residential
purposes, including transient lodging facilities. No "time-share" is permitted.
A Resort Unit shall not be rented except in accordance with the terms of the
Rental Program Agreement. A Resort Unit owned by a corporation, partnership or
other legal entity, as the case may be, may be occupied by the person indicated
in the Voting Certificate on file with the Condominium Association and their
families.
(ii) Resort Unit Owner occupancy of the Resort Unit
is subject to the limitations contained in this Declaration. During the period
of December 16 of each calendar year through April 15th in the next calendar
year ("Limited Use Season"), the Owner may occupy the Resort Unit a maximum of
seven (7) days during any one 30-day period. Once all seven (7) days have been
used, the Owner must wait 10 more days before being eligible to occupy the
Resort Unit, with the exception that there may be one period of up to fourteen
(14) days of Owner occupancy of the Resort Unit within a particular 30-day
period, in which case the Owner may not occupy the Resort Unit for a period of
10 days before and after the first and last day of such use. Notwithstanding any
other provision of this Declaration, the Rental Program Agreement, or otherwise,
the Owner may not occupy the Resort Unit for more than a total of four (4)
cumulative weeks during each Limited Use Season throughout the term of this
Rental Program Agreement. During any use by Owner in excess of this four (4)
week cumulative total, Owner shall be responsible for costs and fees of such use
as would any other rental guest. Other than availability, there are no
limitations on Owner's occupancy of the Resort Unit other than during the
Limited Use Season.
17.1.2 Commercial Unit Use. The Commercial Units shall be used
only for commercial purposes not inconsistent with the operation of the
Condominium Property as a transient resort facility, which for Commercial Units
2, 3, and 4 are initially intended to encompass storage facilities for linens
and other items for use in the maintenance and use of the Condominium Property
in the Rental Program Agreement, as well as vending machines and related
accessories for general use; and which for Commercial Unit 1 is initially
intended to encompass a Resort Center containing a bar and grill and other
facilities and areas which may be open to the public, including but not limited
to possible sauna and exercise facilities, and restrooms. All Unit Owners shall
have a non-exclusive easement for ingress, egress and use of such restrooms. All
Commercial Units may be open to the public, at the discretion of the applicable
Commercial Unit Owner.
17.2 Conveyances, Transfer and Encumbrances of Units
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17.2.1 Conveyances. In order to insure a community of
congenial residents and thus protect the value of the Units, the sale or
exchange of Condominium Units by any Owner other than Developer shall be subject
to the following provisions so long as the Condominium exists:
(i) Any Owner who enters into an agreement to sell
his or her Condominium Unit (for purposes of this Section 17.2 "Seller"), shall
within ten (10) days after the execution of such agreement, furnish to the
Condominium Association written notice of the name or names and residence
addresses of the proposed purchaser or purchasers together with a copy of the
said purchase agreement. The Owner shall also furnish the Condominium
Association with such other information as the Condominium Association may
reasonably require. Notice shall not be deemed to be given if it is erroneous in
any material aspect.
(ii) Upon receipt by the Condominium Association of
that required in subparagraph (i) of this Section 17.2.1, the Condominium
Association shall have twenty (20) business days from receipt to approve or
disapprove the proposed purchaser. If the Condominium Association disapproves of
the proposed purchaser, the Condominium Association shall, within thirty (30)
days after the Condominium Association received notice from the Owner of the
proposed sale, furnish Seller with an approved purchaser who will accept the
terms of sale as favorable to Seller as those terms initially set forth in the
notice to the Condominium Association by Seller. In the event that the
Condominium Association does not furnish to Seller a substitute purchaser in the
manner provided above, Seller shall be free to sell his or her Condominium Unit
to the purchaser initially proposed by Owner, and the Condominium Association
shall provide said purchaser with a certificate of approval. Any approval by the
Condominium Association shall be in recordable form and delivered by the
Condominium Association to the purchaser, and except as otherwise provided
herein, no sale of any Condominium Unit shall be valid without such approval.
(iii) No Owner shall sell, transfer, or convey his or
her Condominium Unit unless and until all past due Assessments are paid, or
their payment provided for to the satisfaction of the Condominium Association.
(iv) Every purchaser or lessee, who acquires any
interest in a Unit, shall acquire the same subject to the Act.
(vi) The Board of Directors of the Condominium
Association shall have the right and power to establish and assess a reasonable
"transfer fee" as provided by Section 718.112(2)(j), Florida Statutes, to be
paid by the transferor (other than the Developer) of a Condominium Unit as a
condition precedent to the validity of the transfer.
(vii) All provisions of the Use and Access Agreement,
including without limitation, a Five Thousand Dollar ($5,000.00) Transfer Fee
(as defined therein) including applicable increases thereto.
17.2.2 Deceased Owners.
(i) If an Owner should die and the title to his or
her Condominium Unit shall pass to his or her surviving spouse or to any
immediate member of his family, such successor in title shall fully succeed to
the ownership, rights, duties and obligations of the Owner, the provisions of
subparagraph (i) of Section 17.1.2 hereinabove notwithstanding.
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(ii) If title to the Unit of each deceased Owner
shall pass to any person other than a person or persons designated in Paragraph
(i) above, then such person shall give the Association the notice required in
Section 17.2.1 of this Declaration, but shall not be subject to the provisions
of subparagraph (ii) of Section 17.2.1 hereinabove.
(iii) Nothing in this Article shall be deemed to
reduce, forgive or abate any amounts due the Association from the Owner at the
time of his or her death, nor the Assessments attributable to the Unit becoming
due after the Owner's death.
17.2.3 Liens.
(i) Protection of Property. All liens against a
Condominium Unit other than for mortgages, taxes or special assessments, shall
be satisfied or otherwise removed within thirty (30) days from the date the lien
attaches. All taxes and special assessments upon a Condominium Unit shall be
paid before they become delinquent.
(ii) Notice of Lien. An Owner shall give notice to
the Condominium Association of every lien against his or her Condominium Unit
other than mortgages, taxes, and special assessments within five (5) days after
the lien has attached.
(iii) Notice of Suit. Every Owner shall give notice
to the Condominium Association of every suit or other proceeding which may
affect the title to his or her Condominium Unit, such notice to be given within
five (5) days after the Owner receives actual notice thereof.
(iv) Failure of Compliance. Failure to comply with
this section concerning liens will not affect the validity of any judicial sale.
17.2.4 Rights of Institutional Mortgagees. The provisions of
this Section 17.2 shall in no way be construed as affecting the rights of an
Institutional Mortgagee owning a recorded institutional first mortgage on any
Condominium Unit and the rights hereinabove set shall remain subordinate to any
such institutional first mortgage. Further, the provisions of this Article shall
not be applicable to purchasers at foreclosure or other judicial sales of
Institutional Mortgagees, or to transfers to Institutional Mortgagees or to
Developer.
17.2.5. Unauthorized Transaction. Any sale which is not
authorized pursuant to the terms of this Declaration shall be voidable by the
Condominium Association unless subsequently approved by the Condominium
Association, which approval shall be in the form specified in subparagraph (ii)
of Section 17.2.1 hereinabove.
17.2.6. Remedies for Violation. Each Owner shall be governed
by and shall comply with the Act and all of the Condominium Documents as such
Condominium Documents may be amended and supplemented from time to time. Failure
to do so shall entitle the Condominium Association, any Owner or any
Institutional Mortgagee holding a mortgage on any portion of the Condominium
Property to either sue for injunctive relief, for damages or for both, and such
parties shall have all other rights and remedies which may be available at law
or in equity. The failure to enforce promptly any of the provisions of the
Condominium Documents shall not bar their subsequent enforcement. In any
proceeding arising because of an alleged failure of an Owner to comply with the
terms of the Condominium Documents, the prevailing party shall be entitled to
recover the costs of the proceeding and Legal Fees. The failure of the Board to
object to Owners'
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or other parties' failure to comply with covenants or restrictions contained
herein or in any of the other Condominium Documents (including the rules and
regulations promulgated by the Board) now or hereafter promulgated shall in no
event be deemed to be a waiver by the Board or of any other party having an
interest therein of its rights to object to same and to seek compliance
therewith in accordance with the provisions of the Condominium Documents.
17.3. Nuisance
A Condominium Unit Owner shall not permit or suffer anything
to be done or kept in his or her Condominium Unit which will: (i) increase the
insurance rates on his or her Condominium Unit, the Common Elements or any
portion of Fala Bella Resort and Golf Club ; (ii) obstruct or interfere with the
rights of other Condominium Unit Owners or the Condominium Association; or (iii)
annoy other Condominium Unit Owners by unreasonable noises or otherwise. A
Condominium Unit Owner shall not commit or permit any nuisance, immoral or
illegal act in his or her Condominium Unit, on the Common Elements or any
portion of Fala Bella Resort and Golf Club.
17.4. Signs
A Resort Unit Owner (with the exception of Developer, for so
long as Developer is a Condominium Unit Owner) shall show no sign, advertisement
or notice of any type on the Common Elements, other portions of Fala Bella
Resort and Golf Club or in or upon his or her Condominium Unit so as to be
visible from the Common Elements, or any public way, except as may be previously
and specifically approved in writing by Developer and the Board. Developer
specifically reserves the right to place and maintain identifying or
informational signs on any building located on the Condominium Property as well
as any signs in connection with its sales activities. Commercial Unit Owners
shall have the right to display signs and advertisements on the Common Elements,
other portions of Fala Bella Resort and Golf Club, and upon his or her
Commercial Unit, subject to reasonable regulation by the Developer and the
Board; however, there shall be presumption in favor of the Commercial Unit
Owners that the initial signage and advertisement as displayed in connection
with the Commercial Units is a minimum of what is to be considered to be
reasonable. The initial signage, advertisement(s), and notice(s) placed by
Developer while Developer holds Condominium Units for sale or lease in the
ordinary course of business shall in all cases be considered to be approved.
17.5. No Pets or Animals
A Condominium Unit Owner shall not keep, raise or breed any
pet or other animal, livestock or poultry upon any portion of the Condominium
Property. No Condominium Unit Owner is permitted to keep a domestic pet (i.e.
dogs, cats and birds) in his or her Condominium Unit either temporarily or
permanently. Any Condominium Unit Owner in violation of this restriction shall
be deemed to have agreed to indemnify the Condominium Association and hold it
harmless against any loss or liability of any kind or character whatsoever
arising from or growing out of having any animal in Fala Bella Resort and Golf
Club.
17.6. Clotheslines
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No clothesline or other similar device shall be allowed in any
portion of the Condominium Property, unless within a Condominium Unit and
concealed from view from all portions of Fala Bella Resort and Golf Club.
17.7. Window Decor
All window treatments shall consist only of those window
coverings included in the standard packages determined by Rental Manager under
the Rental Program Agreement. No temporary window treatments are permitted
except when permanent window treatments are being cleaned or repaired.
Reflective or foil window treatments are prohibited. Window tinting is permitted
provided that the type and method of tinting is first approved by Developer.
17.8. Removal of Sod and Shrubbery; Alteration of Drainage, etc.
Except for Developer's acts and activities with regard to the
development of the Condominium, no sod, top soil, muck, trees or shrubbery shall
be removed from the Condominium Property and no change in the condition of the
soil or the level of land of the Condominium Property shall be made which would
result in any permanent change in the flow or drainage of surface water within
the Condominium without prior written consent of the Board.
17.9. Antenna, Aerial and Satellite Dish
No outside television, radio, or other electronic towers,
aerials, antennae, satellite dishes or device of any type for the reception or
transmission of radio or television broadcasts or other means of communication
shall hereafter be erected, constructed, placed or permitted to remain on any
Condominium Property or upon any improvements thereon, unless expressly approved
in writing by the Board, except that this prohibition shall not apply to those
satellite dishes that are 18" in diameter or less, and specifically covered by
47 C.F.R. Part 1, Subpart S, Section 1.4000, as amended, promulgated under the
Telecommunications Act of 1996, as amended from time to time. The Board is
empowered to adopt rules governing the types of antennae, restrictions relating
to safety, location and maintenance of antennae. The Board may adopt and enforce
reasonable rules limiting installation of permissible dishes or antennae to
locations not visible from the street or neighboring properties, and integrated
with the Building and surrounding landscape, to the extent that reception of an
acceptable signal would not be unlawfully impaired by such rules. Antennae shall
be installed in compliance with all federal, state and local laws and
regulations, including zoning, land-use and building regulations. The provisions
of this section are intended to protect residents from unreasonable interference
with television reception, electronic devices, and the operation of home
appliances, which is sometimes caused by the operation of ham radios, CB base
stations or other high-powered broadcasting equipment This Section 17.9 shall
not apply to the Developer.
17.10. Litter
In order to preserve the beauty of the Condominium, no
garbage, trash, refuse or rubbish shall be deposited, dumped or kept upon any
part of the Condominium Property except in proper sized, closed plastic bags for
curbside pick up as required or in closed containers, dumpsters or other garbage
collection facilities deemed suitable by the Board. All containers, dumpsters
and other garbage collection facilities shall be screened from view and kept in
a clean condition with no noxious or offensive odors emanating therefrom.
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17.11. Radio Transmission
No ham radios or radio transmission equipment shall be
operated or permitted to be operated within the Condominium Property without the
prior written consent of the Board.
17.12. Vehicles
Motor homes, trailers, recreational vehicles, boats, campers,
motorcycles, trucks and vans or trucks used for commercial purposes shall not be
permitted to be parked or stored in or on Fala Bella Resort and Golf Club except
for trucks furnishing goods and services during the daylight hours and except as
the Condominium Association may designate for such use by appropriate rules and
regulations. The Condominium Association and the Community Association shall
have the right to authorize the towing away of any vehicles which violate this
Declaration or the rules and regulations of the Condominium Association, with
the costs to be borne by the Condominium Unit Owner or violator. In addition,
the Board shall adopt rules and regulations from time to time regulating and
limiting the size, weight, type and place and manner of operation of vehicles on
the Condominium Property.
17.13. Projections
No Condominium Unit Owner shall cause anything to project out
of any window or door except as may be approved in writing by the Condominium
Association.
17.14. Condition of Condominium Units
Each Condominium Unit Owner shall keep his or her Condominium
Unit in a good state of preservation and cleanliness and shall not sweep or
throw or permit to be swept or thrown therefrom or from the doors or windows
thereof any dirt or other substances.
17.15. Hurricane Season
The Condominium Association is responsible for monitoring each
Condominium Unit during the hurricane season, and making preparations at such
times as are appropriate and do not unduly interfere with the operation of Fala
Bella Resort and Golf Club as a transient resort facility. Such preparations may
include, but are not limited to, removing all furniture, potted plants and other
movable objects, if any, from the balcony or patio, if any, and designating a
responsible firm or individual to care for the Condominium Unit should the
Condominium Unit suffer hurricane damage. No hurricane shutters may be installed
without the prior written consent of the Condominium Association, which consent
may be unreasonably withheld. If the installation of hurricane shutters is made
which does not conform with the specifications approved by the Condominium
Association, then the hurricane shutters will be made to conform by the
Condominium Association at the Owner's expense or they shall be removed.
17.16. Structural Modifications
A Condominium Unit Owner may not make or cause to be made any
structural modifications to his or her Condominium Unit without the Board's and
Developer's prior written consent.
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17.17. Tree Removal
After the construction of the Condominium by Developer, no
trees shall be removed except for diseased or dead trees and trees needing to be
removed to promote the growth of other trees or for safety reasons, unless
approved by the Board. All costs associated with same shall be Common Expenses.
17.18. Board's Rule-Making Power
The Condominium Association, through its Board, may, from time
to time, promulgate such other rules and regulations with respect to the
Condominium as it determines to be in the best interests of the Condominium and
the Condominium Unit Owners. The Board may promulgate, modify, alter, amend or
rescind such rules and regulations provided such promulgation, modifications,
alterations and amendments: (i) are consistent with the use covenants set forth
in the Neighborhood Documents and Community Documents; (ii) apply equally to all
lawful Fala Bella Resort and Golf Club residents without discriminating on the
basis of whether a Condominium Unit is occupied by a Condominium Unit Owner or
his or her lessee; and (iii) in Developer's opinion, for so long as Developer
holds any Condominium Units for sale in the ordinary course of business, would
not be detrimental to the sales of Condominium Units by Developer. No rule or
regulation shall interfere with the operation of Fala Bella Resort and Golf Club
as a transient resort facility.
17.19. Limitations
Notwithstanding any other rule, regulation, or restriction to
the contrary herein contained, the Board shall make reasonable accommodations in
the rules, regulations or restrictions, if such accommodations may be necessary
to afford a handicapped person equal opportunity to use and enjoy the
Condominium Property.
17.20. Additional Restrictions
For additional restrictions which are applicable to the
Condominium Property and the Condominium Unit Owners, please refer to the
Community Declaration, the Neighborhood Declaration, the Use and Access
Agreement, the Assignment and Assumption, and the Rental Program Agreement. As
described in Article III of the Community Declaration, all structures of any
kind to be built in Lely Resort, including the Condominium, must be approved by
the declarant of the Community Declaration. The Community Declaration provides
the procedure and method of obtaining such approval. In the event of a conflict
between the provisions of this Declaration and the Use and Access Agreement, the
Use and Access Agreement shall control, except that the Declaration may contain
provisions which are stricter than those of the Use and Access Agreement. In the
event of a conflict between the provisions of this Declaration and the Rental
Program Agreement, the provisions of the Rental Program Agreement shall control.
In the event of a conflict between the provisions of this Declaration and the
Assignment and Assumption, the Assignment and Assumption shall control. In the
event of a conflict between the provisions of this Declaration and the
provisions of the Community Declaration or the Neighborhood Declaration, the
provisions of the Community Declaration or the Neighborhood Declaration, as the
case may be, shall control; provided, however, that this Declaration and the
other Neighborhood Documents may contain provisions more restrictive than
contained in the Community Declaration and the other Community Documents and the
Neighborhood Declaration, in which event such more restrictive provisions shall
control.
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17.21 Golf Rights
17.21.1. As part of the rights attached to their Resort Unit,
by means of this Declaration, Resort Unit Owners receive the use and enjoyment
rights of a Unit Owner, as such term is defined in the Use and Access Agreement,
subject to all provisions of the Use and Access Agreement, including the payment
of all fees, subordination to all mortgages of record as of the date of the Use
and Access Agreement, and subject to such other rights, easements, and licenses
as other persons may have in and to the Golf Facilities (as defined in the Use
and Access Agreement). The rights of Resort Unit Owners to play golf are at all
times subject to availability as those reserved may exceed those available.
Neither Developer nor GEI (as defined in the Use and Access Agreement) makes any
guarantee of availability.
17.21.2. The term "Unit Owner", as used in the Use and Access
Agreement, and referenced herein, shall include:
(i) one person and his or her immediate family, comprised of a
husband, wife and their dependent children under 25 years old, or
(ii) two (2) adults who live together and hold themselves out
to the public as the equivalent of a married couple and their dependent children
under 25 years old, or
(iii) two (2) joint tenants.
If a Unit is owned by a corporation or other entity, the entity may designate
one person and his or her immediate family or two (2) individual persons to have
the privileges of a Unit Owner. Such designated individuals may be changed one
time per year upon payment of a nominal administrative fee. These entity rights
are available only to an entity operating an on-going bona fide commercial
business. The entity must provide to GEI and the Condominium Association its
formative documents and any other documentation required by GEI to confirm its
compliance with the foregoing requirements.
17.21.3. The rights of Resort Unit Owners to play golf are:
(i) Each Resort Unit Owner understands and agrees that the use
of the Golf Facilities (as defined in the Use and Access Agreement) by each
Resort Unit Owner are subject to all provisions of the Use and Access Agreement,
to all provisions of the Declaration, to all provisions of the Rental Program
Agreement, and to all provisions of the Assignment and Assumption.
(ii) Notwithstanding any other provision of the Rental Program
Agreement, the Use and Access Agreement, the Assignment and Assumption, this
Declaration, or otherwise, the rights of each Resort Unit Owner to play golf are
at all times subject to availability. The rights of each Resort Unit Owner to
play golf are also subject to the limitations contained in the Use and Access
Agreement, the Assignment and Assumption, the Rental Program Agreement, and this
Declaration, which limitations and rights include, without being limited to, the
right to play one 18-hole round of golf at the Golf Facilities for a maximum of
one hundred (100) rounds per year (year means the period from November 1 through
October 31 of following calendar year), provided that no one individual shall be
entitled to play more than forty-two (42) times per year (year means
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the period from November 1 through October 31 of following calendar year), under
the following conditions:
(iii) If his or her Unit is not occupied by a Designated User
(as defined in the Use and Access Agreement) renting the Unit through the rental
program, any person classified as a Resort Unit Owner or having the rights of a
Resort Unit Owner, may make an advance reservation up to one (1) year in
advance, and will not be required to pay a greens fee. Such reservation will be
canceled if the Unit is subsequently rented.
(iv) If the Unit is occupied by a Designated User renting the
Unit through the rental program, the Resort Unit Owner shall have no advance
reservation rights to play golf, but shall be eligible to play on a stand-by
space available basis (i.e., no reservation under this Agreement, even after tee
time is open to public) without payment of a greens fee. This play will count
toward the one hundred (100) play times and toward the maximum of forty-two (42)
per person.
(v) If the Resort Unit Owner is scheduled to play one (1)
eighteen (18) hole round of golf at the Golf Facilities the Resort Unit Owner
may play a second eighteen (18) hole round if there is space available at the
actual tee-off time without any reservation, without payment of a greens fee.
The play will count toward the one hundred (100) rounds and towards the maximum
of forty-two (42) per person.
(vi) Use of the Golf Facilities by the Resort Unit Owner under
these provisions is limited during each Limited Use Season (as defined in
Article Section 17.1.1.(ii) hereinabove), during which time Resort Unit Owner(s)
will be able to use the Golf Facilities a maximum of seven (7) days during any
one (1) thirty (30) day period and once all seven (7) days have been used, the
Resort Unit Owner(s) must wait ten (10) more days before being eligible for
additional golf privileges, with the exception that there may be one (1) period
of up to fourteen (14) days of use per year within a particular thirty (30) day
period (in which case the Resort Unit Owner may not use the Golf Facilities for
a period of ten (10) days before and after the first and last day of such use).
If such Resort Unit Owner(s) desires to play golf at the Golf Facilities more
than one hundred (100) rounds for all of those falling in the category of Resort
Unit Owner, and more than forty-two (42) times for any individual per year, the
Resort Unit Owner(s) may do so, subject to the same reservation privileges, as
are applicable to the general public. The published resort greens fee will be
paid for such use in excess of one hundred (100) rounds per all Owner(s) or
those classified as having the use rights of Owner(s) and in excess of forty-two
(42) times per individual as classified as an Owner from November to April.
During the months of May through October, from 1999 through 2004, no greens fee
will be paid for such excess rounds. Commencing in May of 2005, one-half (1/2)
of the published resort greens fee on the day of play will be paid for such
excess use during the months of May through October.
17.21.4. Golf Fees
(i) Initial License Fees to GEI, as set forth in the Use and
Access Agreement, shall be paid by the Developer.
(ii) Resort Unit Owners are obligated to pay Annual License
Fees as set forth in the Use and Access Agreement. In the event a Resort Unit
Owner shall default on this obligation, the Association has the authority to
collect all delinquent amounts from the Unit Owners on a pro
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rata basis to their shares of ownership as a Special Assessment. The Annual
License Fees are intended to be paid through the procedures set forth in the
Rental Program Agreement; however, in any event, the Annual License Fee shall be
paid to GEI by November 1st of each year for a "Dues Year" beginning November 1
and continuing through October 31. During the year in which a Resort Unit is
first conveyed to a Resort Unit Owner other than Developer, the obligation for
payment of the Annual License Fee for such Resort Unit shall commence at the
closing of the Resort Unit and be prorated for that year. Initially, the Annual
License Fee for each Resort Unit shall be the sum of Three Thousand Five Hundred
Dollars ($3,500.00). Effective for the Dues Year beginning November 1, 2002, and
annually thereafter, GEI will increase Annual License Fees by four percent (4%).
(iii) In the event a reservation made by a Resort Unit Owner
is not utilized, and is not canceled prior to the greater of the cancellation
period designated by GEI or four days prior to the date of play, the unused tee
time(s) shall count against the reserving Resort Unit Owner's yearly allocation
of golf rights.
(iv) The Resort Unit Owner shall be responsible for paying to
GEI any deposits or advance fees required by GEI in connection with the use of
the Golf Facilities by a Resort Unit Owner.
17.21.5 GEI shall have a lien against the Condominium
Property, including such Owner's Resort Unit, to satisfy payment required under
the Use and Access Agreement of all Annual License Fees. GEI's lien rights are
set forth in more detail in Section 13 of the Use and Access Agreement. If
Annual License Fees are not otherwise paid, they shall become a Common Expense
of the Condominium, subject to Association Assessment.
17.21.6. The recitation of some provisions of the Use and
Access Agreement herein is for convenience of reference only, and shall not
limit the construction of the provisions of the entire Use and Access Agreement
against the Resort Unit, except in the case where the provisions of this
Declaration are stricter; however, no rights other than those specifically set
forth in this Declaration are being conveyed to Resort Unit Owners or others
hereunder. Designated User Rights, as defined in the Use and Access Agreement
and the Assignment and Assumption, and any rights, monies, or royalties flowing
therefrom, are specifically excluded from the rights conveyed to Resort Unit
Owners under this Declaration.
18. PARKING SPACES
Developer reserves the right to reserve one or more parking spaces for
the exclusive use of Developer and its agents, contractors and lessees for so
long as Developer owns one (1) or more Condominium Units. Other than any parking
spaces reserved by Developer, all spaces will be available for guests, Owners
and other users on an unassigned basis.
19. MAINTENANCE AND REPAIR PROVISIONS
19.1. By Condominium Unit Owners
19.1.1. Maintenance and Repair. Each Condominium Unit Owner
shall maintain in good condition, repair and replace at his or her expense all
portions of his or her Condominium Unit
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and Limited Common Elements, including the following equipment or fixtures if
located within his or her Condominium Unit or on the Limited Common Elements
assigned to his or her Condominium Unit, electrical fixtures, appliances, water
heaters or built-in cabinets, all window panes and all interior surfaces within
or surrounding his or her Condominium Unit and Lanai (such as the surfaces of
the walls, ceilings and floors) and all exterior doors, casings and hardware
therefor; and pay for any utilities which are separately metered to his or her
Condominium Unit. Every Condominium Unit Owner must perform promptly all
maintenance and repair work within his or her Condominium Unit, as aforesaid,
which if not performed would affect the Condominium Property, Fala Bella Resort
and Golf Club in its entirety or a Condominium Unit belonging to another
Condominium Unit Owner. Each Condominium Unit Owner shall be expressly
responsible for the damages and liabilities that his or her failure to perform
his or her above-mentioned responsibilities may engender. Said Condominium Unit
shall be maintained and repaired in accordance with the building plans and
specifications utilized by Developer, copies of which are to be on file in the
office of the Condominium Association, except for changes or alterations
approved by the Board and Developer as provided in this Declaration and the
Community Declaration.
19.1.2. Alterations. No Condominium Unit Owner shall make any
alterations in the Building or the Common Elements which are to be maintained by
the Condominium Association or remove any portion thereof or make any additions
thereto or do anything which would or might jeopardize or impair the safety or
soundness of the Building, the Common Elements, the Limited Common Elements or
which, in the sole opinion of the Board and Developer, would detrimentally
affect the architectural design of the Building without first obtaining the
written consent of the Board and Developer, if applicable.
19.1.3. Painting and Board Approval. No Resort Unit Owner
shall paint, refurbish, stain, alter, decorate, repair, replace or change the
Common Elements or any outside or exterior portion of the Building maintained by
the Condominium Association, including terraces, balconies, porches, doors or
window frames (except for replacing window panes), etc. No Resort Unit Owner
shall have any exterior lighting fixtures, mail boxes, window screens, screen
doors, awnings, hurricane shutters, hardware or similar items installed which
are not consistent with the general architecture of the Building maintained by
the Condominium Association without first obtaining specific written approval of
the Board and Developer. The Board shall not grant approval if, in its opinion,
the effect of any of the items mentioned herein will be unsightly as to the
portion of the Building maintained by the Condominium Association and unless
such items substantially conform to the architectural design of the Building and
the design of any such items which have previously been installed at the time
the Board approval is requested.
19.1.4. Duty to Report. Each Condominium Unit Owner shall
promptly report to the Condominium Association or its agents any defect or need
for repairs on the Condominium Property, the responsibility for the remedying of
which is that of the Condominium Association.
19.1.5. Use of Licensed Plumbers and Electricians. No
Condominium Unit Owner shall have repairs made to any plumbing or electrical
wiring within a Condominium Unit, except by licensed plumbers or electricians
authorized to do such work by the Board. The provisions as to the use of a
licensed plumber or electrician shall not be applicable to any Institutional
Mortgagee or to Developer. Plumbing and electrical repairs within a Condominium
Unit shall be paid for by and shall be the financial obligation of the
Condominium Unit Owner, unless such repairs are made in a Condominium Unit to
plumbing and electrical systems servicing more than one (1) Condominium Unit.
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19.1.6. Access by Condominium Association. The Condominium
Association has the irrevocable right of access to each Condominium Unit during
reasonable hours when necessary for the maintenance, repair or replacement of
any Common Elements or of any portion of a unit to be maintained by the
Condominium Association pursuant to this Declaration or as necessary to prevent
damage to the Common Elements or to another Condominium Unit.
19.1.7. Air-Conditioning. Air conditioning units and service
lines shall be maintained, replaced or repaired by the Condominium Association.
19.1.8. Liability for Actions. A Condominium Unit Owner shall
be liable for the expense of any maintenance, repair or replacement of any real
or personal property rendered necessary by his or her act, negligence or
carelessness, or by that of his or her lessee or any member of their families,
or their guests, employees or agents (normal wear and tear excepted) but only to
the extent that such expense is not met by the proceeds of insurance carried by
the Condominium Association. Such liability shall include the cost of repairing
broken windows. A Condominium Unit Owner shall also be liable for any personal
injuries caused by his or her negligent acts or those of his or her lessee or
any member of their families, or their guests, employees or agents. Nothing
herein contained, however, shall be construed so as to modify any waiver by
insurance companies of rights of subrogation.
19.2. By the Condominium Association
19.2.1. Improvements. The responsibility of the Condominium
Association is to repair, maintain and replace any and all improvements and
facilities located upon the Common Elements and the Association Property,
including the parking areas, landscaped areas, recreational facilities, streets
and the storm water management system, as otherwise provided herein. Maintenance
includes, but is not limited to, the following: cleanup, landscape care and
replacement, lawn care, services related to drainage areas, painting, structural
upkeep, maintenance of Lanai screening, air conditioning and heating equipment,
and maintenance of roads, sidewalks, parking areas, and streets. The Condominium
Association shall maintain and repair all exterior walls of the Buildings,
including the exterior walls of the Buildings contained within screened Lanais,
and including the screened enclosure itself.
19.2.2. Utilities. The Condominium Association shall maintain,
repair and replace all conduits, ducts, plumbing, wiring and other facilities
for the furnishing of any and all utility services including the operation of
the drainage and storm water management system and the maintenance of the
sanitary water and sewer service laterals leading to the Buildings if such water
and sewer lines are not maintained by the appropriate utility company, including
wiring, plumbing fixtures and other facilities within a Condominium Unit, but
excluding therefrom appliances within a Condominium Unit.
19.2.3. Lakes. Notwithstanding anything contained herein to
the contrary, the Association is responsible to maintain the lakes contained in
the Initial Association Property. "Maintain" as used in this subparagraph
consists of all services relating to the lake, including, spraying, if permitted
by the CDD and the Community Association and the appropriate governmental
agencies, chemically treating the water, if permitted by the CDD and the
Community Association and the appropriate governmental agencies, controlling
water levels, etc. However, the maintenance of the existing lake directly to the
east of Phase 15, as shown on the Site Plan, shall be the responsibility of the
neighboring property owner, and not of the Condominium Association, and
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non-exclusive easements for such purpose are hereby granted. However, in the
event the Association deems the maintenance of such lake and/or the banks of
such lake are inadequate or otherwise unacceptable, the Association has the
right to perform such maintenance itself with the cost of same being a Common
Expense.
19.2.4. Compliance With Regulations of Public Bodies. The
Condominium Association shall perform such acts and do such things as shall be
lawfully required by any public body having jurisdiction over the same in order
to comply with sanitary requirements, fire hazard requirements, zoning
requirements, setback requirements, drainage requirements and other similar
requirements designed to protect the public. The cost of the foregoing shall be
a Neighborhood Common Expense.
19.2.5. Maintenance of Property Adjacent to Condominium
Property. If the Condominium Association is permitted by the owner of property
adjacent to the Condominium Property or the governmental authority responsible
for maintaining same to provide additional maintenance for such adjacent
property, and the Board elects to do so in order to enhance the overall
appearance of the Condominium, then the expense thereof shall be a Neighborhood
Common Expense.
19.2.6 Quality of Care. In any part of the Condominium
Property that the Condominium Association has the designated responsibilities of
repair, maintenance and/or replacement, it shall exercise care such that its
responsibilities are executed in a first class manner consistent with the
operation of a quality resort. Such care shall comply with all applicable laws
and regulations, including those for rental programs, as well as, without
limitation, all requirements for compliance with the provisions of the Use and
Access Agreement, licensing as a transient lodging facility, and licensing as a
restaurant establishment.
19.3 Developer's Warranties
Notwithstanding anything contained in this Article 19 to the
contrary, each Condominium Unit Owner acknowledges and agrees that Developer
shall be irreparably harmed if a Condominium Unit Owner undertakes the repair or
replacement of any defective portion of a Condominium Unit, a Building, the
Common Elements or any other real or personal property constituting the
Condominium Property during the time in which Developer is liable under any
warranties in connection with the sale of any Condominium Unit. Accordingly,
each Condominium Unit Owner hereby agrees (i) to promptly, upon such Condominium
Unit Owner's knowledge of the existence of any such defective portion, provide
written notice to Developer specifying each such defective portion, upon the
receipt of which Developer shall have thirty (30) days ("Repair Period") to
commence the repair or replacement of such defective portion and diligently
pursue the completion thereof; and (ii) not to repair, replace or otherwise
adjust any such defective portion during the Repair Period; provided, however,
that if Developer fails to commence the repair or replacement of such defective
portion within the Repair Period, such Condominium Unit Owner may repair or
replace same. If any Condominium Unit Owner fails to comply with the provisions
of this Paragraph 19.3, such Condominium Unit Owner will be deemed to have
breached his or her obligation to mitigate damages and such Condominium Unit
Owner's conduct shall constitute an aggravation of damages.
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19.4. Conformity with Community Declaration
Notwithstanding anything contained in this Article 19 to the
contrary, alterations, improvements, repairs and maintenance of the Condominium
Property shall conform to the provisions of the Community Declaration and
Neighborhood Declaration and all other valid terms and provisions thereof.
20. ASSESSMENTS FOR COMMON EXPENSES; ESTABLISHMENT
AND ENFORCEMENT OF LIENS
20.1. Affirmative Covenant to Pay Common Expenses
In order to: (i) fulfill the covenants contained in this
Declaration; (ii) provide for maintenance and preservation of the Common
Elements for the recreation, safety, welfare, and benefit of Condominium Unit
Owners, their invitees, guests, family members and lessees, subject to the terms
of this Declaration; and (iii) provide for maintenance and preservation of the
services and amenities provided for herein, there is hereby imposed upon the
Condominium Units and the Condominium Unit Owners thereof the affirmative
covenant and obligation to pay the Assessments including, but not limited to,
the Annual Assessments. Each Condominium Unit Owner, by acceptance of a deed or
other instrument of conveyance for a Condominium Unit, whether or not it shall
be so expressed in any such deed or instrument, shall be so obligated and agrees
to pay to the Condominium Association all Assessments determined in accordance
with the provisions of this Declaration and all of the covenants set forth
herein shall run with the Condominium Property and each Condominium Unit
therein.
20.2. Lien
The Annual Assessment and Special Assessments, as determined
in accordance with Article 21 hereof, together with Interest thereon and costs
of collection thereof, including Legal Fees, are, pursuant to the Act, subject
to a lien right on behalf of the Condominium Association to secure payment
thereof and such Assessments are hereby declared to be a charge on each
Condominium Unit and shall be a continuing lien upon the Condominium Unit
against which each such Assessment is made. Each Assessment against a
Condominium Unit together with Interest thereon and costs of collection thereof,
including Legal Fees, shall be the personal obligation of the person, persons,
entity and/or entities owning the Condominium Unit so assessed. The Condominium
Association's statutory lien for Assessments shall be effective only from and
after the time of recordation amongst the Public Records of the County of a
written acknowledged statement by the Condominium Association setting forth the
amount due to the Condominium Association as of the date the statement is
signed. Upon full payment of all sums secured by such lien or liens, the party
making payment shall be entitled to a recordable satisfaction of the statement
of lien.
20.2.1. Personal Obligation. Each Assessment against a
Condominium Unit, together with Interest thereon and costs of collection
thereof, including Legal Fees, shall be the personal obligation of the person,
persons, entity and/or entities owning the Condominium Unit so assessed.
20.2.2. Institutional Mortgagees. To the extent permitted by
law, an Institutional Mortgagee or other person who obtains title to a
Condominium Unit by foreclosure of a first mortgage, or Institutional Mortgagee
who obtains title to a Condominium Unit by deed in lieu of foreclosure, shall
not be liable for the unpaid Assessments that became due prior to such
acquisition
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of title, unless the payment of Assessments was secured by a claim of lien
recorded by the Condominium Association prior to the recording of the first
mortgage. It is acknowledged that as of the date of recording this Declaration,
the Act provides that a first mortgagee who acquires title to a Condominium Unit
by foreclosure or by deed in lieu of foreclosure is liable for the unpaid
Assessment that became due prior to the mortgagee's receipt of the deed,
however, the mortgagee's liability is limited to a period not exceeding six (6)
months, or one percent (1%) of the original mortgage debt, whichever amount is
less. In the event the Act is amended to reduce the liability of a first
mortgagee or other person who acquires title to a Condominium Unit by
foreclosure or deed in lieu of foreclosure, the first mortgagee or person
acquiring title shall receive the benefit of such reduced liability. Assessments
which are not due from such Institutional Mortgagee shall become a Common
Expense collectible from all Condominium Unit Owners pursuant to Paragraph 22.9
hereof.
20.3. Enforcement
In the event that any Condominium Unit Owner shall fail to pay
any Annual Assessment, or installment thereof, or any Special Assessment, or
installment thereof, charged to his or her Condominium Unit within fifteen (15)
days after the same becomes due, then the Condominium Association, through its
Board, shall have the following remedies:
(i) To advance, on behalf of the Owner in
default, funds to accomplish the needs of
the Condominium Association; provided that:
(a) the amount or amounts of monies so
advanced, including Legal Fees and expenses
which have been reasonably incurred because
of or in connection with such payments,
together with Interest thereon, may
thereupon be collected by the Condominium
Association; and (b) such advance by the
Condominium Association shall not waive the
default of the Owner in failing to make its
payments;
(ii) To accelerate the entire amount of any
Assessments for the remainder of the
calendar year in accordance with the
provisions of the Act and rules set forth in
the Florida Administrative Code promulgated
by the Division of Florida Land Sales,
Condominiums and Mobile Homes;
(iii) To file an action in equity to foreclose its
lien at any time after the effective date
thereof or an action in the name of the
Condominium Association under any equitable
rights or remedies which may be available to
the Condominium Association, including, but
not limited to, the equitable rights
sometimes available in a foreclosure of a
mortgage on real property; and
(iv) To file an action at law to collect the
amount owing plus Interest and Legal Fees
without waiving its lien rights and its
right of foreclosure.
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21. METHOD OF DETERMINING, ASSESSING AND COLLECTING
ASSESSMENTS
The Assessments as hereinafter set forth and described shall be
assessed to and collected from Condominium Unit Owners on the following basis:
21.1. Determining Annual Assessment
21.1.1. Expenses. The total anticipated Common Expenses for
each calendar year shall be set forth in a schedule to the Budget of the
Condominium Association which shall be prepared by the Board as described in the
Articles and Bylaws. The total anticipated Common Expenses shall be that sum
necessary for the maintenance and operation of the Condominium and such expenses
shall be allocated to the Condominium Units based upon each Condominium Unit's
share of the Common Expenses, which allocated sum, together with each
Condominium Unit Owner's share of community common expenses as determined in
accordance with the Community Declaration, shall be assessed as the "Annual
Assessment." The Annual Assessment may be adjusted quarterly in the instance
where the Board determines that the estimated Common Expenses are insufficient
to meet the actual Common Expenses being incurred, in which event the
anticipated Common Expenses for the remaining quarters may be increased
accordingly in calculating the Annual Assessment.
21.1.2. Assessment Payment. The Annual Assessment shall be
payable quarterly in advance on the first day of each quarter of a calendar
year. The Condominium Association may at any time require the Condominium Unit
Owners to maintain a minimum balance on deposit with the Condominium Association
to cover future installments of Assessments. The amount of such deposit shall
not exceed one-quarter (1/4) of the then current Annual Assessment for the
Condominium Unit.
21.2. Developer's Guarantee
From the recording of this Declaration until December 31,
2001, Developer guarantees that assessments for Common Expenses of the
Condominium Association will not exceed the following: Seven Hundred Dollars
($700.00) per quarter, or Two Thousand Eight Hundred Dollars ($2,800.00) per
year, for two-bedroom Resort Units, Eight Hundred Seventy Five Dollars ($875.00)
per quarter, or Three Thousand Five Hundred Dollars ($3,500.00) per year, for
three- bedroom Resort Units, ($ ) per quarter, or ($ )
- ------------------------------- ------------ -------------------------
- -------------- per year, for the Vending and Storage Commercial Units, and ($ )
per ------------------------------- ------------ quarter, or ($ ) per year, for
the Resort Center. Developer will pay all -------------------------
- -------------- Common Expenses not paid for by assessments of Condominium Units
("Guarantee for Common Expenses"). Developer's guarantee is made in accordance
with the provisions of Section 718.116(9)(a)(2) of the Act. The expiration of
the guarantee period is December 31, 2001; provided, however, that the Guarantee
for Common Expenses shall terminate on the date when control of the Association
is turned over to Home Owners other than the Developer in the event the date
when control of the Association is turned over to Home Owners other than the
Developer occurs prior to December 31, 2001. Developer's Guarantee for Common
Expenses shall not apply to Special Assessments.
Developer reserves the right to extend the guarantee period
for one (1) year to December 31, 2002; provided, however, the guarantee shall
terminate on the date when control of
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the Association is turned over to Home Owners other than the Developer in the
event the date when control of the Association is turned over to Home Owners
other than the Developer occurs prior to December 31, 2002.
Assessments determined as provided in Paragraph 21.1 of this
Declaration or the Bylaws shall be determined and made commencing January 1,
2002, if Developer does not choose the option to extend the guarantee, or
January 1, 2003, if Developer chooses the option to extend the guarantee, or the
date when control of the Association is turned over to Home Owners other than
the Developer, whichever is the sooner to occur and Developer will pay any such
Assessments for any of the Condominium Units owned by Developer from and after
such date.
21.3. Special Assessments
In addition to the Annual Assessment, Condominium Unit Owners
shall be obligated to pay such Special Assessments as shall be levied by the
Board in accordance with the Bylaws against their Condominium Unit either as a
result of: (i) extraordinary items of expense; (ii) the failure or refusal of
other Condominium Unit Owners to pay their Annual Assessment or their Annual
License Fees; or (iii) such other reason or basis determined by the Board which
is not inconsistent with the terms of the Neighborhood Documents or the Act.
22. COMMON EXPENSES
The following expenses are declared to be Common Expenses of the
Condominium which each Condominium Unit Owner is obligated to pay to the
Condominium Association as provided in this Declaration, the Neighborhood
Documents and Community Documents.
22.1. Taxes
Any and all taxes levied or assessed at any and all times by
any and all taxing authorities including all taxes, charges, assessments and
impositions and liens for public improvements, special charges and assessments
and water drainage districts, and in general all taxes and tax liens which may
be assessed against the Common Elements, Condominium Association Property and
against any and all personal property and improvements, which are now or which
hereafter may be a portion thereof to be placed thereon, including any interest,
penalties and other charges which may accrue thereon shall, as appropriate, be
considered Common Expenses.
22.2. Utility Charges
All charges levied for utilities providing services for the
Condominium Property, including the Condominium Units, the Common Elements and
Condominium Association Property, whether they are supplied by a private or
public firm shall, as appropriate, be considered Common Expenses. It is
contemplated that this obligation will include all charges for water, gas,
electricity, telephone, sewer and any other type of utility or any other type of
service charge incurred in connection with the Condominium Property. It is
contemplated that there shall be one meter for water, sewer, and electric lines
to each Building or group of Buildings. All charges related to such lines and
services shall be Common Expenses.
22.3. Insurance
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The premiums on any policy or policies of insurance required
to be maintained under this Declaration and the premiums on any policy or
policies the Condominium Association determines to maintain on the Condominium
Property, Condominium Association Property, or specifically related to this
Condominium, even if not required to be maintained by the specific terms of this
Declaration, shall be Common Expenses, commencing with the recordation of this
Declaration and even before such property is owned by the Condominium
Association.
22.4. Destruction of Buildings or Improvements
Any sums necessary to repair or replace, construct or
reconstruct damages caused by the destruction of any building or structure upon
the Common Elements, or any property owned or to be owned by the Condominium
Association as contemplated by this Declaration, by fire, windstorm, flood or
other casualty regardless of whether or not the same is covered in whole or in
part by insurance, including all amounts required to be deducted from any
proceeds received by the Condominium Association from an insurer pursuant to a
deductible clause in the applicable insurance agreement, shall be Common
Expenses. In the event insurance money shall be payable, such insurance money
shall be paid to the Condominium Association who shall open an account with a
banking institution doing business in the County, for the purpose of providing a
fund for the repair and reconstruction of the damage. The Condominium
Association shall pay into such account, either in addition to the insurance
proceeds, or in the event there are no insurance proceeds, such sums as may be
necessary so that the funds on deposit will equal the costs of repair and
reconstruction of the damage or destruction. The sums necessary to pay for the
damage or destruction as herein contemplated shall be considered Common
Expenses, but shall be raised by the Condominium Association under the
provisions for Special Assessments as provided in Paragraph 21.3 of this
Declaration. The Condominium Association agrees that it will levy Special
Assessments to provide the funds for the cost of reconstruction or construction
within ninety (90) days from the date the destruction takes place and shall go
forward with all deliberate speed so that the construction or reconstruction,
repair or replacement, shall be completed, if possible, within nine (9) months
from the date of damage.
22.5. Maintenance, Repair and Replacements
Common Expenses shall include all expenses necessary to keep
and maintain, repair and replace any and all buildings, improvements, personal
property and furniture, fixtures and equipment of the Condominium Association
upon the Common Elements, or any property owned or to be owned by the
Condominium Association as contemplated by this Declaration, including
landscaping, streets, utility lines, lawn and sprinkler service, in a manner
consistent with the development of the Condominium and in accordance with the
covenants and restrictions contained herein, and in conformity with the
Community Declaration, the other Community Documents, and with all orders,
ordinances, rulings and regulations of any and all federal, state and city
governments having jurisdiction thereover including the statutes and laws of the
State of Florida and the United States. This shall include any expenses
attributable to the maintenance and repair and replacement of pumps or other
equipment, if any, located upon or servicing the Condominium Property, or any
property owned or to be owned by the Condominium Association as contemplated by
this Declaration, pursuant to agreements between the Condominium Association and
utility corporations. Any expenses for replacements which would not be in the
nature of normal repair and maintenance may be the subject of a Special
Assessment as provided in Paragraph 21.3 of this Declaration.
22.6. Administrative and Operational Expenses
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The costs of administration of the Condominium Association
including, but not limited to, any secretaries, bookkeepers and other employees
necessary to carry out the obligations and covenants of the Condominium
Association as to the Condominium shall be deemed to be Common Expenses. In
addition, it is contemplated that the Condominium Association may retain a
management company or companies or contractors (any of which management
companies or contractors may be, but are not required to be, a subsidiary,
affiliate or an otherwise related entity of Developer) to assist in the
operation of the Condominium Property, Condominium Association Property and
obligations of the Condominium Association hereunder. The fees or costs of this
or any other management company or contractors so retained shall be deemed to be
part of the Common Expenses hereunder as will fees which may be required to be
paid to the Division of Florida Land Sales, Condominiums and Mobile Homes from
time to time.
22.7. Indemnification
The Condominium Association covenants and agrees that it will
indemnify and hold harmless Developer and the members of the Board from and
against any and all claims, suits, actions, damages, and/or causes of action
arising from any personal injury, loss of life, and/or damage to property
sustained in or about the Condominium Property, Condominium Association Property
or the appurtenances thereto from and against all costs, Legal Fees, expenses
and liabilities incurred in and about any such claim, the investigation thereof
or the defense of any action or proceeding brought thereon, and from and against
any orders, judgments and/or decrees which may be entered therein. Included in
the foregoing provisions of indemnification are any expenses that Developer may
be compelled to incur in bringing suit for the purpose of compelling the
specific enforcement of the provisions, conditions and covenants contained in
this Declaration to be kept and performed by the Condominium Association.
22.8. Compliance with Laws
The Condominium Association shall take such action as it
determines necessary or appropriate in order for the Common Elements, and any
property owned or to be owned by the Condominium Association as contemplated by
this Declaration, to be in compliance with all applicable laws, statutes,
ordinances and regulations of any governmental authority, whether federal, state
or local, including, without limitation, any regulations regarding zoning
requirements, setback requirements, drainage requirements, sanitary conditions
and fire hazards, and the cost and expense of such action taken by the
Condominium Association shall be a Neighborhood Common Expense.
22.9. Failure or Refusal of Condominium Unit Owners to Pay Annual
Assessments
Funds needed for Common Expenses due to the failure or refusal
of Condominium Unit Owners to pay their Annual Assessments levied shall,
themselves, be deemed to be Common Expenses and properly the subject of an
Assessment.
22.10. Extraordinary Items
Extraordinary items of expense under this Declaration such as
expenses due to casualty losses and other extraordinary circumstances shall be
the subject of a Special Assessment.
22.11. Matters of Special Assessments Generally
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Amounts needed to supplement an already adopted budget of the
Condominium Association, for capital improvements, as hereinbefore set forth, or
for other purposes or reasons as determined by the Board to be the subject of a
Special Assessment which are not inconsistent with the terms of any of the
Neighborhood Documents or the Community Declaration, must also be approved by a
majority vote of the Condominium Unit Owners at any meeting of members of the
Condominium Association having a quorum, except that (i) no such approval need
be obtained for a Special Assessment for the replacement or repair of a
previously existing improvement on the Condominium Property, and/or any property
owned or to be owned by the Condominium Association as contemplated by this
Declaration, which was destroyed or damaged, it being recognized that the sums
needed for such capital expenditure shall be the subject of a Special
Assessment; and (ii) no such approval need be obtained for a Special Assessment
which is approved by the Board, and for which the cost does not exceed Fifty
Thousand Dollars ($50,000).
.
22.12. Costs of Reserves
The funds necessary to establish an adequate reserve fund
("Reserves") for periodic maintenance, repair and replacement of the Common
Elements, and any property owned or to be owned by the Condominium Association
as contemplated by this Declaration, and the facilities and improvements
thereupon in amounts determined sufficient and appropriate by the Board from
time to time shall be a Neighborhood Common Expense. Reserves shall be levied,
assessed and/or waived in accordance with the Act. The Reserves shall be
deposited in a separate account to provide such funds and reserves. The monies
collected by the Condominium Association on account of Reserves shall be and
shall remain the exclusive property of the Condominium Association and no
Condominium Unit Owner shall have any interest, claim or right to such Reserves
or any fund composed of same.
22.13. Miscellaneous Expenses
Common Expenses shall include the cost of all items of costs
or expense pertaining to or for the benefit of the Condominium Association or
the Common Elements and any property owned or to be owned by the Condominium
Association as contemplated by this Declaration, or any part thereof, not herein
specifically enumerated and which is determined to be an appropriate item of
Common Expense by the Board.
22.14. Property to be Owned or Maintained by the Condominium Association
Notwithstanding the current ownership of any real or personal
property by Developer, in the event it is contemplated that such property will
be owned or is to be maintained by the Condominium Association, then the costs
associated by the ownership or maintenance shall be a Common Expense commencing
with the recordation of this Declaration.
23. PROVISIONS RELATING TO PROHIBITION
OF FURTHER SUBDIVISION
23.1. Subdivision
Except regarding such rights as may be granted by Developer
hereunder, the space within any of the Condominium Units and Common Elements
shall not be further subdivided. No time share units may be created in any
portion of the Condominium Property. Any instrument,
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whether a conveyance, mortgage or otherwise, which describes only a portion of
the space within any Condominium Unit shall be deemed to describe the entire
Condominium Unit owned by the person executing such instrument and the interest
in the Common Elements appurtenant thereto.
23.2. Incorporation of Section 718.107
The provisions of Section 718.107 of the Act with regard to
restraint upon separation and partition of Common Elements are specifically
incorporated into this Declaration.
24. PROVISIONS RELATING TO SEVERABILITY
If any provision of this Declaration, any of the other Neighborhood
Documents or the Act is held invalid, the validity of the remainder of this
Declaration, the Neighborhood Documents or the Act shall not be affected.
25. PROVISIONS RELATING TO INTERPRETATION
25.1. Titles
Article, Paragraph and subparagraph titles in this Declaration
are intended only for convenience and for ease of reference, and in no way do
such titles define, limit or in any way affect this Declaration or the meaning
or contents of any material contained herein.
25.2. Gender
Whenever the context so requires, the use of any gender shall
be deemed to include all genders, the use of the plural shall include the
singular and the singular shall include the plural.
25.3. Member
As used herein, the term "member" means and refers to any
person, natural or corporate, who becomes a member of the Condominium
Association, whether or not that person actually participates in the Condominium
Association as a member.
25.4. Rule Against Perpetuities
In the event any court should hereafter determine any
provisions as originally drafted herein in violation of the rule of property
known as the "rule against perpetuities" or any other rule of law because of the
duration of the period involved, the period specified in this Declaration shall
not thereby become invalid, but instead shall be reduced to the maximum period
allowed under such rule of law, and for such purpose, "measuring lives" shall be
that of the last surviving member of the first Board of the Condominium
Association.
26. PROVISIONS CONTAINING REMEDIES FOR VIOLATION
Each Condominium Unit Owner shall be governed by and shall comply with
the Act and all of the Neighborhood Documents as such Neighborhood Documents may
be amended and supplemented from time to time. Failure to do so shall entitle
the Condominium Association, any Condominium Unit Owner or any Institutional
Mortgagee holding a mortgage on any portion of the
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Condominium Property to either sue for injunctive relief, for damages or for
both, and such parties shall have all other rights and remedies which may be
available at law or in equity. The failure to enforce promptly any of the
provisions of the Neighborhood Documents shall not bar their subsequent
enforcement. In any proceeding arising because of an alleged failure of a
Condominium Unit Owner to comply with the terms of the Neighborhood Documents,
the prevailing party shall be entitled to recover the costs of the proceeding
and Legal Fees. The failure of the Board to object to Condominium Unit Owners'
or other parties' failure to comply with covenants or restrictions contained
herein or in any of the other Neighborhood Documents (including the rules and
regulations promulgated by the Board) now or hereafter promulgated shall in no
event be deemed to be a waiver by the Board or of any other party having an
interest therein of its rights to object to same and to seek compliance
therewith in accordance with the provisions of the Neighborhood Documents.
27. PROVISIONS FOR ALTERATIONS OF CONDOMINIUM UNITS BY DEVELOPER
27.1. Developer's Reserved Right
Developer reserves the right to nonmaterially alter, change or
modify the interior design and arrangement of all Condominium Units and to alter
the boundaries between the Condominium Units as long as Developer owns the
Condominium Units so altered (which alterations in Developer's Condominium Units
are hereinafter referred to as the "Developer Alterations"). Any material
changes shall require the majority approval of the voting interests in the
Condominium.
27.2. Developer Alterations Amendment
Any Developer Alterations which will alter the boundaries of
existing Common Elements of this Condominium other than interior walls abutting
Condominium Units owned by Developer and the Common Elements therein and not
including proposed Common Elements of any Subsequent Phase not then submitted to
condominium ownership will first require an amendment to this Declaration in the
manner provided in Article 28 hereof.
In the event the Developer Alterations do not require an
amendment in accordance with the above provisions, then as long as Developer
owns the Condominium Units being affected, an amendment of this Declaration
shall be filed by Developer ("Developer's Amendment") in accordance with the
provisions of this Paragraph. Such Developer's Amendment need be signed and
acknowledged only by Developer and need not be approved by the Condominium
Association, Condominium Unit Owners or lienors or mortgagees of the Condominium
Units, whether or not such approvals are elsewhere required for an amendment of
this Declaration; provided, however, if the amendment is material, then the
approval of a majority of the voting interests in the Condominium is required.
28. PROVISIONS FOR AMENDMENTS TO DECLARATION
28.1. General Procedure
Except as to the Amendment described in Paragraph 27.2 hereof,
and the matters described in Paragraphs 28.2, 28.3, 28.4, 28.5 and 28.6 below
and except where a greater percentage vote is required by this Declaration for
certain action (in which case such greater percentage shall also be required to
effectuate an amendment) (e.g., Paragraph 11.2 herein), this Declaration may be
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amended at any regular or special meeting of the Condominium Unit Owners called
and held in accordance with the Bylaws, by the affirmative vote of not less than
ninety percent (90%) of the Condominium Unit Owners; provided that any amendment
shall be approved or ratified by a majority of the Board as a whole, and
provided that no amendment shall be of effect which interferes with the
operation of Fala Bella Resort and Golf Club as a transient resort facility. An
amendment to the Declaration shall be evidenced by a certificate executed by the
Condominium Association and recorded in accordance with the Act. A true copy of
such amendment shall be sent by certified mail by the Condominium Association to
Developer and to all Institutional Mortgagees ("Mailing"). The amendment shall
become effective upon the recording of the certificate amongst the Public
Records, but the certificate shall not be recorded until thirty (30) days after
the Mailing, unless such thirty (30)-day period is waived in writing by
Developer and all Institutional Mortgagees.
28.2. Material Alteration
Except as otherwise provided in this Declaration, no amendment
of the Declaration shall change the configuration or size of any Condominium
Unit in any material fashion, materially alter or modify the appurtenances to
such Condominium Unit, change the proportion or percentage by which the
Condominium Unit Owner shares the Common Expenses and owns the Common Surplus
and Common Elements or the Condominium Unit's voting rights in the Condominium
Association, unless: (i) the record owner of the Condominium Unit and all record
holders of liens on the Condominium Unit join in the execution of the amendment;
and (ii) all the record Condominium Unit Owners of all other Condominium Units
approve the amendment. Any such amendments shall be evidenced by a certificate
joined in and executed by all the Condominium Unit Owners and all Institutional
Mortgagees holding mortgages thereon and shall be recorded in the same manner as
provided in Paragraph 28.1; provided, however, no amendment to this Declaration
shall change the method of determining Annual Assessments unless approved in
writing by the Institutional Mortgagees holding mortgages encumbering two-thirds
(2/3) of the Condominium Units encumbered by mortgages held by Institutional
Mortgagees.
28.3. Defect, Error or Omission
Whenever it shall appear to the Board that there is a defect,
error or omission in the Declaration, or in other documentation required by law
to establish this Condominium, the Condominium Association, through its Board,
shall immediately call for a special meeting of the Condominium Unit Owners to
consider amending the Declaration or other Neighborhood Documents. Upon the
affirmative vote of one-third (1/3) of the Condominium Unit Owners, with there
being more positive votes than negative votes, the Condominium Association shall
amend the appropriate documents. A true copy of such amendment shall be sent
pursuant to the Mailing. The amendment shall become effective upon the recording
of the certificate amongst the Public Records, but the certificate shall not be
recorded until thirty (30) days after the Mailing, unless such thirty (30) day
period is waived in writing by Developer and all Institutional Mortgagees.
28.4. Rights of Developer, the Condominium Association, and
Institutional Mortgagees
No amendment shall be passed which shall materially impair or
prejudice the rights or priorities of Developer, the Condominium Association, or
any Institutional Mortgagee under this Declaration and the other Neighborhood
Documents without the specific written approval of Developer, the Condominium
Association, or any Institutional Mortgagees affected thereby. The consent of
such Institutional Mortgagee may not be unreasonably withheld. Furthermore, no
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amendment shall be passed which shall alter or affect the obligations to comply
with the covenants contained in Article 10 herein relative to the plan for
development for Fala Bella Resort and Golf Club. In addition, any amendment that
would affect the surface water management system, including the water management
portions of the Common Elements and Condominium Association Property, if any,
must have the prior approval of the South Florida Water Management District and
Developer.
28.5. Scrivener's Error
The Condominium Association may amend this Declaration and any
exhibits hereto, in order to correct a scrivener's error or other defect or
omission by the affirmative vote of two-thirds (2/3) of the Board without the
consent of the Condominium Unit Owners provided that such amendment does not
materially and adversely affect the rights of Condominium Unit Owners, lienors
or mortgagees. This amendment shall be signed by the President of the
Condominium Association and a copy of the amendment shall be furnished to the
Condominium Association and all Listed Mortgagees and sent pursuant to the
Mailing as soon after recording thereof amongst the Public Records, as is
practicable.
28.6. Amendments Required by Secondary Mortgage Market Institutions
Notwithstanding anything contained herein to the contrary,
Developer may, without the consent of the Condominium Unit Owners, file any
amendment which may be required by an Institutional Mortgagee for the purpose of
satisfying its Planned Unit Development criteria or such criteria as may be
established by such mortgagee's secondary mortgage market purchasers, including,
without limitation, the Federal National Mortgage Association and the Federal
Reserve Unit Loan Mortgage Corporation; provided, however, that any such
Developer filed amendments must be in accordance with any applicable rules,
regulations and other requirements promulgated by the United States Department
of Housing and Urban Development.
28.7. Neighborhood Documents and Community Documents
The Articles, Bylaws and other Neighborhood Documents shall be
amended as provided in such documents. The Community Declaration, Articles of
Incorporation of the Community Association and Bylaws of the Community
Association shall be amended as provided in the respective Community Documents.
28.8. Form of Amendment
To the extent required by the Act, no provision of this
Declaration shall be revised or amended by reference to its title or number only
and proposals to amend existing provisions of this Declaration shall contain the
full text of the provision to be amended; new words shall be inserted in the
text and underlined; and words to be deleted shall be lined through with
hyphens; provided, if however, the proposed change is so extensive that this
procedure would hinder rather than assist the understanding of the proposed
amendment, it is not necessary to use underlining and hyphens as indicated for
words added or deleted, but, instead a notation shall be inserted immediately
preceding the proposed amendment in substantially the following language:
"Substantial Rewording of Declaration. See provision ____ for present text."
Notwithstanding anything herein contained to the contrary, however, failure to
comply with the above format shall
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not be deemed a material error or omission in the amendment process and shall
not invalidate an otherwise properly promulgated amendment.
29. PROVISIONS SETTING FORTH THE RIGHTS OF DEVELOPER
29.1. Developer's Right to Transact Business
Developer reserves and shall have the right to enter into and
transact on the Condominium Property and other portions of Fala Bella Resort and
Golf Club any business necessary to consummate the sale, lease or encumbrance of
Condominium Units including the right to maintain models and a sales and/or
leasing office, place signs, employ sales personnel, hold promotional parties,
use the Common Elements, Condominium Association Property and show Condominium
Units and including the right to carry on construction activities of all types
necessary to construct all improvements in Fala Bella Resort and Golf Club
pursuant to the plan for development as set forth in Article 10 hereof. Any such
models, sales and/or leasing office, signs and any other items pertaining to
such sales and/or leasing efforts shall not be considered a part of the Common
Elements and shall remain the property of Developer. Developer reserves the
right for itself and any of its affiliates to utilize the models for other
communities located in Lely Resort, as Developer and/or any of Developer's
affiliates as developers of other communities in Lely Resort may so determine,
in their sole discretion.
29.2. Assignment
This Article 29 may not be suspended, superseded or modified
in any manner by any amendment to the Declaration, unless such amendment is
consented to in writing by Developer. This right of use and transaction of
business as set forth in Article 29 may be assigned in writing by Developer in
whole or in part.
30. GENERAL PROVISIONS
30.1. Withdrawal Notice and Other Units
30.1.1. Rights of Developer. Nothing contained in this
Declaration shall be deemed to prohibit Developer from developing any
condominium or other types of units, other than the Condominium Units within the
Condominium ("Other Units"), upon any portion of any Subsequent Phase with
respect to which Developer has recorded amongst the Public Records a Withdrawal
Notice.
30.1.2. Rights of Owners of Other Units to Use Neighborhood
Common Areas (as defined in the Community Declaration), Condominium Association
Property and Easements Created for Access. In the event that Developer
constructs Other Units, the owners of such Other Units ("Other Unit Owners") and
their family members, guests, invitees, and lessees may have as an appurtenance
to and a covenant running with such Other Units: (i) the right to use and enjoy
any landscaped areas, walks, parking areas, other facilities and improvements,
including, but not limited to, the real property and all improvements which
comprise the Condominium Association Property in the same manner and with the
same privileges as Condominium Unit Owners have or may have from time to time;
(ii) a perpetual nonexclusive easement over, across and through the Condominium
Association Property for the use and enjoyment thereof and from and to public
ways, including dedicated streets; and (iii) the right to use and enjoy the
"Neighborhood Common Areas."
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Condominium Unit Owners shall have a similar perpetual nonexclusive easement for
ingress and egress and access to, over and across the walks and other
rights-of-way located upon the portion of the Land covered by a Withdrawal
Notice from and to public ways, including dedicated streets and the any
condominium association or homeowner association property, subject to rules and
regulations established by the association governing the use and enjoyment of
such easements. The Condominium Association shall not establish any rule or
regulation with respect to the use and enjoyment of the Condominium Association
Property or the easements created by this Paragraph 30.1.2 which do not apply
uniformly to the Condominium Unit Owners, Other Unit Owners and their respective
family members, guests, invitees and lessees.
30.1.3. Obligations of Other Units. In the event that
Developer develops Other Units, the Condominium Association shall itemize
separately in the annual budget of the Condominium Association and all
adjustments and revisions thereto, the expenses ("Other Unit Expenses")
anticipated to be incurred by the Condominium Association to administer,
operate, maintain, repair, and improve the Condominium Association Property
including, but not limited to, the cost and expense of any taxes and insurance
which can be determined as applicable solely to the Condominium Association
Property. The Other Unit Expenses shall be reasonably divided between the
Condominium Association and the Other Units as determined by the Board of the
Condominium Association. Then, the respective portion shall then be assessed
among all existing Condominium Units in the same percentages as set forth in the
Schedule of Shares, and the respective portion shall be assessed against the
"Other Units Subject to Assessment" (as hereinafter defined) on such basis as is
set forth in their applicable neighborhood documents, whether condominium or
non- condominium. Each Other Unit Subject to Assessment shall also be
responsible for its proportionate share of any expense with respect solely to
the Condominium Association Property which would be subject to a Special
Assessment against Condominium Units. "Other Units Subject to Assessment" shall
mean the total number of Other Units developed from time to time on any portion
of the Land originally intended to be a Subsequent Phase with respect to which
the Developer has recorded amongst the Public Records a Withdrawal Notice and to
which Developer has granted the right to use the improvements located upon the
Condominium Association Property, which shall become subject to assessment as
provided in Paragraph 30.1 upon the recording amongst the Public Records of a
declaration adding such Other Units to the Fala Bella Resort and Golf Club
"Neighborhood" pursuant to the Neighborhood Declaration. In the event of
condemnation of any Other Units Subject to Assessment, assessments against such
Other Units Subject to Assessment shall be reduced or eliminated on the same
basis as Assessments shall be reduced or eliminated with respect to Condominium
Units.
30.1.4. Liens upon Other Units. There shall be a charge on and
continuing lien upon all Other Units Subject to Assessment against which
assessment is made as provided in Paragraph 30.1 which shall be subject to all
provisions herein to which Condominium Units are subject, including, but not
limited to, the rights of foreclosure of Other Units Subject to Assessment and
such right shall be set forth in the documents establishing the Other Units.
30.1.5. Conflict with Other Provisions. The matters set forth
in Paragraphs 30.1.2, 30.1.3 and 30.1.4 shall only become applicable if, as and
when Developer develops Other Units, and, in such event, shall control in the
event of any conflict between the terms and provisions of such Paragraphs
30.1.2, 30.1.3 and 30.1.4 and the terms and provisions of any other Paragraphs
in this Declaration. Amendment of this Article 30 shall require, in addition to
any votes or approvals elsewhere required, the written consent of Developer for
so long as Developer owns any
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Condominium Units or Other Units or any portion of the Land upon which they can
be built and by a majority of the Other Unit Owners, if any.
30.1.6. Merger. In the event Developer develops Other Units
which are submitted to the condominium form of ownership, the Condominium
Association may merge the condominiums operated by the Condominium Association
by calling a special meeting for such purpose, obtaining the affirmative vote of
seventy-five percent (75%) of the owners in each such condominium, obtaining the
approval of all record owners of liens, and upon the recording of new or amended
Articles of Incorporation, Declarations, and Bylaws.
30.2. Severability
Invalidation of any one of these covenants or restrictions or
of any of the terms and conditions herein contained shall in no way affect any
other provisions which shall remain in full force and effect.
30.3. Rights of Mortgagees
30.3.1. Right to Notice. The Condominium Association shall
make available for inspection upon request, during normal business hours or
under reasonable circumstances, the Neighborhood Documents and the books,
records and financial statements of the Condominium Association to Condominium
Unit Owners, prospective purchasers and the holders, insurers or guarantors of
any first mortgages encumbering Condominium Units. In addition, evidence of
insurance shall be issued to each Condominium Unit Owner and mortgagee holding a
mortgage encumbering a Condominium Unit upon written request to the Condominium
Association.
30.3.2. Rights of Listed Mortgagee. Upon written request to
the Condominium Association, identifying the name and address of the Listed
Mortgagee of a mortgage encumbering a Condominium Unit and the legal description
of such Condominium Unit, the Condominium Association shall provide such Listed
Mortgagee with timely written notice of the following:
30.3.2.1. Any condemnation, loss or casualty loss
which affects any material portion of the Condominium or any Condominium Unit
encumbered by a first mortgage held, insured or guaranteed by such Listed
Mortgagee;
30.3.2.2. Any lapse, cancellation or material
modification of any insurance policy or fidelity bond maintained by the
Condominium Association;
30.3.2.3. Any proposed action which would require the
consent of mortgagees holding a mortgage encumbering a Condominium Unit; and
30.3.2.4. Any failure by a Condominium Unit Owner
owning a Condominium Unit encumbered by a mortgage held, insured or guaranteed
by such Listed Mortgagee to perform his or her obligations under the
Neighborhood Documents, including, but not limited to, any delinquency in the
payment of Annual Assessments or Special Assessments, or any other charge owed
to the Condominium Association by said Condominium Unit Owner where such failure
or delinquency has continued for a period of sixty (60) days.
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30.3.3. Right of Listed Mortgagee to Receive Financial
Statement. Any Listed Mortgagee shall, upon written request made to the
Condominium Association, be entitled free of charge to financial statements from
the Condominium Association for the prior fiscal year and the same shall be
furnished within a reasonable time following such request.
30.3.4. Right to Cover Cost. Developer (until the date when
control of the Association is turned over to Home Owners other than the
Developer) and any Listed Mortgagee shall have the right, but not the
obligation, jointly or singularly, and at their sole option, to pay any of the
Assessments which are in default and which may or have become a charge against
any Condominium Unit. Further, Developer (until the date when control of the
Association is turned over to Home Owners other than the Developer) and any
Listed Mortgagees shall have the right, but not the obligation, jointly or
singularly, and at their sole option, to pay insurance premiums or fidelity bond
premiums or any New Total Tax on behalf of the Condominium Association where, in
regard to insurance premiums, the premiums are overdue and where lapses in
policies may or have occurred or, in regard to New Total Taxes, where such tax
is in default and which may or has become a charge against the Condominium
Property. Developer and any Listed Mortgagees paying insurance premiums or any
New Total Tax on behalf of the Condominium Association as set forth above shall
be entitled to immediate reimbursement from the Condominium Association plus any
costs of collection, including, but not limited to, Legal Fees.
30.4. Developer Approval of Condominium Association Actions
Notwithstanding anything in this Declaration to the contrary,
while Developer holds Condominium Units for sale or lease in the ordinary course
of business, none of the following actions may be taken without approval in
writing by Developer:
(i) Assessment of Developer as a Condominium
Unit Owner for capital improvements; and
(ii) Any action by the Condominium Association
that would be detrimental to the sale or
leasing of Condominium Units by Developer,
or that would interfere with the operation
of Fala Bella Resort and Golf Club as a
transient resort facility.
The determination as to what actions would be detrimental or
what constitutes capital improvements shall be in the sole discretion of
Developer; provided, however, that an increase in assessments for Common
Expenses without discrimination against Developer shall not be deemed to be
detrimental to the sale or lease of Condominium Units.
30.5. Notices
Any notice or other communication required or permitted to be
given or delivered hereunder shall be deemed properly given and delivered upon
the mailing thereof by United States mail, postage prepaid, to: (i) any
Condominium Unit Owner, at the address of the person whose name appears as the
Condominium Unit Owner on the records of the Condominium Association at the time
of such mailing and, in the absence of any specific address, at the address of
the Condominium Unit owned by such Condominium Unit Owner; (ii) the Condominium
Association, certified mail, return receipt requested, at 100 Mahogany Run Lane,
Naples, Florida 34114, or such other address as the Condominium Association
shall hereinafter notify Developer and the
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Condominium Unit Owners of in writing; and (iii) Developer, certified mail,
return receipt requested, to A. Jack Solomon, 3185 Horseshoe Drive South,
Naples, Florida 34104, or such other address or addresses as Developer shall
hereafter notify the Condominium Association of in writing, any such notice to
the Condominium Association of a change in Developer's address being deemed
notice to the Condominium Unit Owners. Upon request of a Condominium Unit Owner
the Condominium Association shall furnish to such Condominium Unit Owner the
then current address for Developer as reflected by the Condominium Association
records.
30.6. No Time-Share Estates
Pursuant to the requirements of Section 718.403(f) of the Act,
it is hereby specified that no time share estates will be created with respect
to Condominium Units in any Phase.
30.7. Assignment of Developer's Rights
Developer shall have the right to assign, in whole or in part,
any of its rights granted under this Declaration. No Condominium Unit Owner or
other purchaser of a portion of the Land shall, solely by the purchase, be
deemed a successor or assignee of any rights granted to Developer under this
Declaration, unless such purchaser is specifically designated as such in an
instrument executed by the Developer
30.8. Lease or Transient Lodging
A lessee or transient lodger of a Condominium Unit shall by
execution of a lease or transient occupation of a Condominium Unit, be bound by
all applicable terms and provisions of this Declaration and the Neighborhood
Documents and be deemed to accept his or her leasehold estate or other occupancy
subject to this Declaration and the Neighborhood Documents, agree to conform and
comply with all provisions contained therein and allow the lessor or the
Condominium Association to fulfill all obligations imposed pursuant thereto.
30.9. Documents
Any person reading this Declaration is hereby put on notice
that this Condominium is part of Lely Resort and, as such, is subject to the
Community Declaration, and the Neighborhood Declaration, as such documents may
be amended from time to time. These documents and all amendments thereto are
superior to this Declaration and should be read in conjunction with this
Declaration and other Neighborhood Documents.
30.10. Security
The Condominium Association may, but shall not be obligated
to, maintain or support certain activities within the Condominium designed to
make the Condominium safer than it otherwise might be. Developer shall not in
any way or manner be held liable or responsible for any violation of this
Declaration by any person other than Developer. Additionally, NEITHER DEVELOPER,
THE CDD, THE COMMUNITY ASSOCIATION NOR THE CONDOMINIUM ASSOCIATION MAKE ANY
REPRESENTATIONS WHATSOEVER AS TO THE SECURITY OF THE PREMISES OR THE
EFFECTIVENESS OF ANY MONITORING SYSTEM OR SECURITY SERVICE. ALL CONDOMINIUM UNIT
OWNERS AGREE TO HOLD DEVELOPER, THE CDD, THE COMMUNITY ASSOCIATION AND THE
CONDOMINIUM
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ASSOCIATION HARMLESS FROM ANY LOSS OR CLAIM ARISING FROM THE OCCURRENCE OF ANY
CRIME OR OTHER ACT. NEITHER THE CONDOMINIUM ASSOCIATION, DEVELOPER, THE
COMMUNITY ASSOCIATION, THE CDD, NOR ANY SUCCESSOR DEVELOPER SHALL IN ANY WAY BE
CONSIDERED INSURERS OR GUARANTORS OF SECURITY WITHIN THE CONDOMINIUM. NEITHER
THE CONDOMINIUM ASSOCIATION, DEVELOPER, THE COMMUNITY ASSOCIATION, THE CDD, NOR
ANY SUCCESSOR DEVELOPER, SHALL BE HELD LIABLE FOR ANY LOSS OR DAMAGE BY REASON
OR FAILURE TO PROVIDE ADEQUATE SECURITY OR INEFFECTIVENESS OF SECURITY MEASURES
UNDERTAKEN, IF ANY. ALL CONDOMINIUM UNIT OWNERS AND OCCUPANTS OF ANY CONDOMINIUM
UNIT, AND TENANTS, GUESTS AND INVITEES OF A CONDOMINIUM UNIT OWNER, ACKNOWLEDGE
THAT THE CONDOMINIUM ASSOCIATION AND ITS BOARD, THE COMMUNITY ASSOCIATION AND
ITS BOARD, DEVELOPER, THE CDD, OR ANY SUCCESSOR DEVELOPER DO NOT REPRESENT OR
WARRANT THAT ANY FIRE PROTECTION SYSTEM, BURGLAR ALARM SYSTEM OR OTHER SECURITY
SYSTEM, IF ANY, DESIGNATED BY OR INSTALLED ACCORDING TO GUIDELINES ESTABLISHED
BY DEVELOPER, THE CDD, THE COMMUNITY ASSOCIATION, OR THE CONDOMINIUM ASSOCIATION
MAY NOT BE COMPROMISED OR CIRCUMVENTED, THAT ANY FIRE PROTECTION OR BURGLAR
ALARM SYSTEMS OR OTHER SECURITY SYSTEMS OR OTHER SECURITY SYSTEMS WILL IN ALL
CASES PROVIDE THE DETECTION OR PROTECTION FOR WHICH THE SYSTEM IS DESIGNED OR
INTENDED. EACH CONDOMINIUM UNIT OWNER AND OCCUPANT OF ANY CONDOMINIUM UNIT AND
EACH TENANT, GUEST AND INVITEE OF A CONDOMINIUM UNIT OWNER, ACKNOWLEDGES AND
UNDERSTANDS THAT THE CONDOMINIUM ASSOCIATION, ITS BOARD, THE COMMUNITY
ASSOCIATION AND ITS BOARD, THE CDD AND ITS BOARD, DEVELOPER AND ANY SUCCESSOR
DEVELOPER, ARE NOT INSURERS AND THAT EACH CONDOMINIUM UNIT OWNER AND OCCUPANT OF
ANY CONDOMINIUM UNIT AND EACH TENANT, GUEST AND INVITEE OF A CONDOMINIUM UNIT
OWNER ASSUMES ALL RISKS FOR LOSS OR DAMAGE TO PERSONS, TO CONDOMINIUM UNITS AND
TO THE CONTENTS OF CONDOMINIUM UNITS AND FURTHER ACKNOWLEDGES THAT THE
CONDOMINIUM ASSOCIATION AND ITS BOARD, THE COMMUNITY ASSOCIATION AND ITS BOARD,
THE CDD AND ITS BOARD, DEVELOPER OR ANY SUCCESSOR DEVELOPER HAVE MADE NO
REPRESENTATIONS OR WARRANTIES NOR HAS ANY CONDOMINIUM UNIT OWNER OR OCCUPANT OF
ANY CONDOMINIUM UNIT, OR ANY TENANT, GUEST OR INVITEE OF A CONDOMINIUM UNIT
OWNER RELIED UPON ANY REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED,
INCLUDING ANY WARRANTY OR MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE,
RELATIVE TO ANY FIRE AND/OR BURGLAR ALARM SYSTEMS OR OTHER SECURITY SYSTEMS
RECOMMENDED OR INSTALLED, IF ANY, OR ANY SECURITY MEASURES UNDERTAKEN WITHIN THE
CONDOMINIUM, IF ANY.
31. PROVISIONS RELATING TO TERMINATION
31.1. Survival of Certain Obligations and Restrictions
In the event the Condominium is terminated in accordance with
and pursuant to the provisions of this Declaration, or if such provisions shall
not apply for any reason pursuant to law, Developer declares, and all
Condominium Unit Owners by taking title to a Condominium Unit covenant and
agree, that the documents providing for such termination shall require: (i) that
any
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improvements upon what now comprises or hereafter shall comprise the Condominium
Property which are committed to residential use shall be for residential use
only and shall contain Resort Units of a number not in excess of the number of
Resort Units now or hereafter in the Condominium; and (ii) the Condominium Unit
Owners of the Condominium, of both Resort and Commercial Units (as tenants in
common of the Condominium Property as set forth in Paragraph 31.3 below) shall
remain obligated to pay their share of the Common Expenses and expenses due the
Community Association, which will continue to be allocated to the Condominium
Property in the manner provided in the Neighborhood Documents as fully as though
the Condominium were never terminated, and the obligation to make such payments
shall be enforceable by all of the remedies provided for in this Declaration,
including a lien on the real property previously included in the Condominium,
including the portion now designated as Condominium Units.
31.2. Manner of Termination
This Declaration may be terminated by the affirmative written
consent of Condominium Unit Owners owning ninety-five percent (95%) of the
Condominium Units then part of the Condominium and the written consent of all
Listed Mortgagees then holding mortgages encumbering Condominium Units in the
Condominium; provided, however, that the Board consents to such termination by a
vote of three-fourths (3/4) of the entire Board taken at a special meeting
called for that purpose shall also be required; and also provided that, for so
long as Developer owns a Condominium Unit or has the right to add a Subsequent
Phase to the Condominium, Developer must consent in writing to such termination.
31.3. Ownership of Common Elements
In the event of the termination of the Condominium, the
Condominium Property shall be deemed removed from the provisions of the Act and
shall be owned in common by the Condominium Unit Owners, pro rata, in accordance
with the percentage each Condominium Unit Owner shares in the Common Elements,
as provided in this Declaration; provided, however, each Condominium Unit Owner
shall continue to be responsible and liable for his or her share of the Common
Expenses under the Declaration and Community Declaration, and any and all lien
rights provided for in this Declaration or elsewhere shall continue to run with
the real property designated herein as Condominium Property and shall encumber
the respective percentage shares of the Condominium Unit Owners thereof as
tenants in common.
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IN WITNESS WHEREOF, Developer has caused these presents to be duly
executed this day of , 1999.
WITNESSES: LELY GOLF VILLAS I LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Ronto Golf Developments, Inc.
a Florida corporation
a General Partner
By:
Print Name: _______________________________
Title:_____________________________________
Printed Name
(CORPORATE SEAL)
Printed Name
STATE OF FLORIDA
COUNTY OF COLLIER
The foregoing instrument was acknowledged before me this day of , 1999,
by _______________________ the _____________________ of Ronto Golf Developments,
Inc., a Florida corporation, as a General Partner of LELY GOLF VILLAS I LIMITED
PARTNERSHIP, a Delaware limited partnership, who is personally known to me.
He/She affixed thereto the seal of the corporation.
Notary Public
Typed, Printed or Stamped Notary Name
My Commission Expires:
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EXHIBIT A
TO
DECLARATION OF CONDOMINIUM
OF
FALA BELLA RESORT AND GOLF CLUB OF NAPLES, A CONDOMINIUM
Legal Description of the Land
-----------------------------
Please refer to the legal descriptions for Phases One through Seventeen,
Commercial Phases One through Four, the Roadway, Parking and Lakes Tract 1 (the
Initial Association Property), and Roadway and Parking Tract 2, Common
Recreational Tract 1, Common Recreational Tract 2, Spa Tract 1, Spa Tract 2, and
the Tennis Court Parcel (collectively the Subsequent Association Property), and
the Notes to the Survey, all of Fala Bella Resort and Golf Club of Naples, a
Condominium, which are part of Exhibit B hereof, which in the aggregate comprise
the Land.
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EXHIBIT B
DECLARATION OF CONDOMINIUM
OF
FALA BELLA RESORT AND GOLF CLUB OF NAPLES, A CONDOMINIUM
Legal Descriptions and Surveys, Plot Plans
and Graphic Descriptions of Improvements
for Phases One through Seventeen,
Commercial Phases One through Four,
the Initial Association Property,
the Subsequent Association Property
and the Notes to the Survey
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EXHIBIT C
TO
DECLARATION OF CONDOMINIUM
OF
FALA BELLA RESORT AND GOLF CLUB OF NAPLES, A CONDOMINIUM
Articles of Incorporation
of
Fala Bella Resort and Golf Club of Naples Condominium Association, Inc.
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EXHIBIT D
TO
DECLARATION OF CONDOMINIUM
OF
FALA BELLA RESORT AND GOLF CLUB OF NAPLES, A CONDOMINIUM
Bylaws of Fala Bella Resort and Golf Club of Naples Condominium Association,
Inc.
65
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EXHIBIT E
TO
DECLARATION OF CONDOMINIUM
OF
FALA BELLA RESORT AND GOLF CLUB OF NAPLES, A CONDOMINIUM
Site Plan
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EXHIBIT F
TO
DECLARATION OF CONDOMINIUM
OF
FALA BELLA RESORT AND GOLF CLUB OF NAPLES, A CONDOMINIUM
Schedule of Shares
67
Exhibit 10.9
ARTICLES OF INCORPORATION
OF
FALA BELLA RESORT AND GOLF CLUB OF NAPLES
CONDOMINIUM ASSOCIATION, INC.
(A Florida Corporation Not for Profit)
In order to form a corporation not for profit, under and in accordance
with Chapter 617 of the Florida Statutes, I, the undersigned, hereby incorporate
this corporation not for profit, for the purposes and with the powers
hereinafter set forth and to that end, I do, by these Articles of Incorporation,
certify as follows:
The terms contained in these "Articles" shall have the meanings set
forth in the Condominium Act, Chapter 718, Florida Statutes ("Act"), as amended
through the date of recording the first Declaration amongst the Public Records
of Collier County, Florida. All initially capitalized terms not defined herein
shall have the meanings set forth in the Declaration (as hereinafter defined).
For clarification, the following terms will have the following meanings:
A. "Act" means Condominium Act, Chapter 718, Florida Statutes, as
amended through the date of recording the first Declaration amongst the Public
Records.
B. "Articles" means these Articles of Incorporation of the
Association.
C. "Assessments" means the share of funds required for the payment of
"Annual Assessments" and "Special Assessments" (as such terms are defined in
each Declaration) which from time to time are assessed against an Owner.
D. "Association" means Fala Bella Resort and Golf Club of Naples
Condominium Association, Inc., a Florida corporation not for profit, responsible
for operating Fala Bella Resort and Golf Club of Naples, a Condominium (other
than the rental management of Condominium Units and the operation of the
Commercial Units), and any other Fala Bella Resort and Golf Club of Naples
Condominium(s) which may be developed.
E. "Board" means the Board of Directors of the Association.
F. "Bylaws" means the Bylaws of the Association.
G. "Common Elements" means the portion of the Condominium Property not
included in the Condominium Units.
H. "Common Expenses" means expenses for which the Owners are liable to
the Association as set forth in various sections of the Act and as described in
the Neighborhood Documents and include:
(i) expenses incurred in connection with operation,
maintenance, repair or replacement of the "Common
Elements" (as defined in each Declaration), costs of
carrying out the powers and
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duties of the Association with respect to Fala Bella
Resort and Golf Club of Naples Condominium(s) and the
Condominium Property of each, cost of fire and
extended coverage insurance on the Condominium
Property; and
(ii) any other expenses designated as Common Expenses from
time to time by the Board.
I. "Common Surplus" means the excess of receipts of the Association
collected on behalf of Fala Bella Resort and Golf Club of Naples Condominium(s)
(including, but not limited to, assessments, rents, profits and revenues, on
account of the Common Elements) over the Common Expenses.
J. "Community Declaration" means the Declaration of General Covenants,
Conditions and Restrictions for Lely Resort recorded in Official Records Book
1513, Page 835, of the Public Records of the County and all amendments thereto,
whereby portions of the real property at Lely Resort are set aside from time to
time by the declarant of the Community Declaration in accordance with the plan
for development set forth therein and whereby the maintenance of the land areas
designated therein as "Common Areas", and other responsibilities of the
Community Association, are made specifically applicable to Condominium Unit
Owners to be collected by the Community Association from either the Condominium
Unit Owner or the applicable Neighborhood Association via dues and initial,
annual or special assessments, as provided therein. The Declaration of
Neighborhood Covenants for Fala Bella Resort and Golf Club of Naples and
Accompanying Check- In Facility recorded in Official Records Book * , Page * ,
of the Public Records of the County ("Neighborhood Declaration") is the document
which designates Fala Bella Resort and Golf Club of Naples as a "Neighborhood"
under the provisions of the Community Declaration.
K. "Condominium Property" means the real property submitted to
condominium ownership by the recording of the Declaration of Condominium of Fala
Bella Resort and Golf Club of Naples, a Condominium, and any amendment or
amendments thereto and all improvements thereon, subject to any and all
easements associated therewith, including, but not limited to, the Condominium
Units and Common Elements and all easements intended for use in connection with
Fala Bella Resort and Golf Club of Naples Condominiums, all as more particularly
described in each Declaration.
L. "Condominium Unit" means "unit" as described in the Act and is that
portion of the Condominium Property which is subject to exclusive ownership.
M. "Condominium Unit Owner" means "unit owner" as defined in the Act
and is the owner of a Condominium Unit.
N. "County" means Collier County, Florida.
O. "Declarant" means Lely Golf Villas I Limited Partnership, a Delaware
limited partnership, its grantees, successors and assigns.
P. "Declaration" means a Declaration of Condominium by which a Fala
Bella Resort and Golf Club of Naples Condominium is submitted by Declarant to
the condominium form of ownership in accordance with the Act.
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Q. "Director" means a member of the Board.
R. "Fala Bella Resort and Golf Club " means a portion of the real
property within Lely Resort, more particularly described on Exhibit A hereto,
upon which Developer intends to develop the Condominium. Fala Bella Resort and
Golf Club is one of the "Neighborhoods" (as defined in the Community
Declaration) within Lely Resort. The Initial Phase and the Initial Association
Property shall initially be the portion of Fala Bella Resort and Golf Club upon
which the Developer shall develop the Condominium; however, Developer has
reserved the right to develop additional condominium developments and/or
non-condominium developments in the overall proposed Fala Bella Resort and Golf
Club.
S. "Fala Bella Resort and Golf Club Condominium(s)" means the
condominium or condominiums in Fala Bella Resort and Golf Club which are the
subject of a Declaration, including, but not limited to, Fala Bella Resort and
Golf Club Naples, a Condominium.
T. "Fala Bella Resort and Golf Club of Naples, a Condominium" means the
initial condominium in Fala Bella Resort and Golf Club which is the subject of
this Declaration.
U. "Lely Resort" means the name given to the planned development in
which the Condominium is located and which is more particularly described in the
Declaration.
V. "Member" means a member or members of the Association.
W. "Neighborhood Documents" means in the aggregate each Declaration,
these Articles, the Bylaws, any rules or regulations promulgated by the
Association and all of the instruments and documents referred to therein and
executed in connection with a Fala Bella Resort and Golf Club of Naples
Condominium.
X. "Phase" means those portions of the real property within Fala Bella
Resort and Golf Club of Naples and improvements thereon which, as contemplated
by Section 718.403 of the Act, may become part of the Condominium Property of a
Fala Bella Resort and Golf Club of Naples Condominium by the recording of a
Declaration or an amendment thereto.
Y. "Public Records" means the Public Records of the County.
Z. "Voting Certificate" means "voting certificate" as defined in the
Act and is the document which designates one (1) of the record title owners, or
the corporate, partnership or entity representative who is authorized to vote on
behalf of a Condominium Unit owned by more than one (1) owner or by any entity.
AA. "Voting Interests" means "voting interests" as defined in the Act
and are the voting rights distributed to Members pursuant to a Declaration.
ARTICLE I
NAME AND ADDRESS
The name of this Association shall be Fala Bella Resort and Golf Club
of Naples Condominium Association, Inc., whose principal office and mailing
address is 3185 Horseshoe Drive South, Naples, Florida 34104.
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ARTICLE II
PLAN OF DEVELOPMENT AND
PURPOSE OF ASSOCIATION
A. Declarant intends to develop the Condominium on property Declarant
owns within Lely Resort. Declarant intends to develop the Condominium as a
"phase condominium" as contemplated by Section 718.403 of the Act which is
planned to consist of twenty-one (21) Phases. If Declarant submits all
twenty-one (21) Phases to condominium ownership as part of the Condominium by
recording the Declaration and several amendments thereto amongst the Public
Records, then the Condominium shall be the only condominium in Fala Bella Resort
and Golf Club of Naples and shall be the only condominium administered by the
Association.
B. If Declarant does not submit all twenty-one (21) Phases to
condominium ownership as part of the Condominium, Declarant may submit the land
in Fala Bella Resort and Golf Club of Naples not included in the Condominium to
condominium ownership as one (1) or more additional Fala Bella Resort and Golf
Club of Naples Condominiums to be administered by the Association.
C. All or any portion of Fala Bella Resort and Golf Club of Naples not
included in Fala Bella Resort and Golf Club of Naples Condominiums may be
developed for non-residential uses, or with residential housing units, either as
a condominium which is not a Fala Bella Resort and Golf Club of Naples
Condominium, and thus would not be administered by the Association, or as a non-
condominium development, such as non-condominium townhouses, rental housing or
cooperatively owned housing, etc.
D. 1. The Association shall be the condominium association responsible
for the operation of each Fala Bella Resort and Golf Club of Naples Condominium
subject to the terms and restrictions of the Neighborhood Documents; however,
Declarant reserves the right to incorporate additional association(s) if more
than one (1) Fala Bella Resort and Golf Club of Naples Condominium is created.
Each Condominium Unit Owner shall be a Member of the Association as provided in
these Articles.
2. The purpose for which this Association is organized is to
maintain, operate and manage Fala Bella Resort and Golf Club of Naples,
including the Condominium Property; to own portions of, operate, lease, sell,
trade and otherwise deal with Fala Bella Resort and Golf Club of Naples and
certain of the improvements located therein now or in the future, all in
accordance with the plan set forth in the Neighborhood Documents and all other
lawful purposes.
ARTICLE III
POWERS
The Association shall have the following powers which shall be governed
by the following provisions:
A. The Association shall have all of the common law and statutory
powers of a corporation not for profit, which are not in conflict with the terms
of the Neighborhood Documents or the Act.
B. The Association shall have all of the powers to be granted to the
Association in the Neighborhood Documents. All provisions of the Declaration and
Bylaws which grant powers to the
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Association are incorporated into these Articles, including, but not limited to,
the promulgation and enforcement of rules and regulations.
C. The Association shall have all of the powers of a condominium
association under the Act and shall have all of the powers reasonably necessary
to implement the purposes of the Association including, but not limited to, the
following:
1. To make, establish and enforce reasonable rules and
regulations governing the use of the Condominium Property (including the
Condominium Units and the Common Elements);
2. To make, levy, collect and enforce Assessments and special
charges and any other charges and/or fees as provided in the Neighborhood
Documents against Condominium Unit Owners, in order to provide funds to pay for
the expenses of the Association, the maintenance, operation and management of
Fala Bella Resort and Golf Club of Naples and the payment of Common Expenses and
other expenses in the manner provided in the Neighborhood Documents and the Act
and to use and expend the proceeds of such Assessments in the exercise of the
powers and duties of the Association;
3. To maintain, repair, replace and operate the Condominium
Property in accordance with the applicable Declaration and the Act;
4. To reconstruct improvements on the Condominium Property in
the event of casualty or other loss;
5. To enforce by legal means the provisions of the
Neighborhood Documents and the Act;
6. To employ personnel, retain independent contractors and
professional personnel, and to enter into service contracts to provide for the
maintenance, operation and management of the Condominium Property and to enter
into any other agreements consistent with the purposes of the Association
including, but not limited to, agreements as to the management of the
Condominium Property and agreements to acquire possessory or use interests in
real property and to provide therein that the expenses of said real property and
any improvements thereon, including taxes, insurance, utility expenses,
maintenance and repairs, are Common Expenses of the Fala Bella Resort and Golf
Club of Naples Condominiums, and as to the installation, maintenance and
operation of a "master" television antenna system and a cable television system;
7. To elect as the "Voting Member", as defined in the
Community Declaration, the President of the Association. The next most senior
official of the Association shall be the alternate Voting Member. The Voting
Member shall cast the votes in the Community Association of all of the
Condominium Unit Owners on their behalf. The Voting Member may cast all such
votes as he, in his or her sole discretion, deems appropriate; and
8. To purchase: (i) Condominium Unit(s) upon which the
Association has chosen to exercise any right of first refusal it may have and to
obtain such financing as is necessary to effectuate the same; and (ii) other
real and/or personal property as determined by the Association in compliance
with the Neighborhood Documents.
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ARTICLE IV
MEMBERS
The qualification of Members of the Association, the manner of their
admission to membership, the manner of the termination of such Membership, and
the manner of voting by Members shall be as follows:
A. Until such time as Fala Bella Resort and Golf Club of Naples, a
Condominium is submitted to condominium ownership by the recordation of the
Declaration, the membership of this Association shall be comprised solely of the
members of the "First Board" (as defined in Article IX hereof).
B. Once Fala Bella Resort and Golf Club of Naples, a Condominium is
submitted to condominium ownership by the recordation of the Declaration, the
Condominium Unit Owners, which shall mean in the first instance Declarant as the
owner of all the Condominium Units, shall be entitled to exercise all of the
rights and privileges of Members.
C. Except as set forth above, membership in the Association shall be
established by the acquisition of ownership of fee title to a Condominium Unit
as evidenced by the recording of a deed or other instrument of conveyance
amongst the Public Records, whereupon the membership of the prior owner shall
terminate as to that Condominium Unit. Where title to a Condominium Unit is
acquired from a party other than Declarant, the person, persons, corporation or
other legal entity thereby acquiring such Condominium Unit, shall not be a
Member unless and until such acquisition is in compliance with the provisions of
the applicable Declaration. New Members shall deliver to the Association a true
copy of the deed or other instrument of acquisition of title to the Condominium
Unit.
D. No Member may assign, hypothecate or transfer in any manner his or
her membership or his or her share in the funds and assets of the Association
except as an appurtenance to his or her Condominium Unit.
E. If a second Fala Bella Resort and Golf Club of Naples Condominium is
submitted to condominium ownership, membership in the Association shall be
divided into classes ("Class Members") with Condominium Unit Owners in each Fala
Bella Resort and Golf Club of Naples Condominium constituting a class, and for
so long as Declarant owns any Condominium Units (collectively, "Units"), an
additional class comprised of those Units owned by Declarant shall also exist as
a separate class ("Declarant Class"). If one or more additional Fala Bella
Resort and Golf Club of Naples Condominiums are submitted to condominium
ownership, the Condominium Unit Owners thereof who are Members of the
Association shall also be Class Members as to each additional condominium. Each
class, except the Declarant Class, shall be designated by a numeral denoting the
sequence in which the Fala Bella Resort and Golf Club of Naples Condominium was
submitted to condominium ownership. For example, the Condominium Unit Owners of
Fala Bella Resort and Golf Club of Naples, a Condominium, provided it is the
first Fala Bella Resort and Golf Club of Naples Condominium submitted to
condominium ownership by recordation of a Declaration, would be "Class 1
Members."
F. With respect to voting, the following provisions shall apply:
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1. Either the membership as a whole shall vote or the Class
Members shall vote, which determination shall be made in accordance with
subparagraphs F.2 and F.3 immediately below. In any event, however, each
Condominium Unit, including each Condominium Unit owned by Declarant, shall be
entitled to only one (1) vote, which vote shall be exercised and cast in
accordance with the applicable Declaration(s) and the Neighborhood Documents;
provided, however, on such matters requiring a vote of the Declarant Class,
Condominium Units owned by the Declarant shall also have a vote in such class.
In the event there is more than one (1) owner with respect to a Condominium Unit
as a result of the fee interest in such Condominium Unit being held by more than
one (1) person or entity, such owners collectively shall be entitled to only one
(1) vote in the manner determined by the applicable Declaration.
2. In matters that require a vote, voting shall take place as
follows:
(a) Matters substantially pertaining to a particular
Fala Bella Resort and Golf Club of Naples Condominium or any combination of Fala
Bella Resort and Golf Club of Naples Condominiums shall be voted upon only by
the Class Members of the applicable Fala Bella Resort and Golf Club of Naples
Condominium(s) and shall be determined by a vote of the majority of such Class
Members at any meeting having a proper quorum (as determined in accordance with
the Bylaws); and
(b) Matters substantially pertaining to the
Association as a whole shall be voted on by the Membership and shall be
determined by a vote of the majority of the Membership in attendance at any
meeting having a quorum (as determined in accordance with the Bylaws).
3. Any decision as to whether a matter substantially pertains
to a particular Fala Bella Resort and Golf Club of Naples Condominium or any
combination of Fala Bella Resort and Golf Club of Naples Condominiums or to the
Association as a whole, for purposes of voting, shall be determined solely by
the Board. Notwithstanding the foregoing, no action or resolution affecting a
Fala Bella Resort and Golf Club of Naples Condominium or any combination of Fala
Bella Resort and Golf Club of Naples Condominiums which the Board determines to
require the vote of the Members as a whole shall be effective with regard to a
Fala Bella Resort and Golf Club of Naples Condominium unless the Class Members
of the particular Fala Bella Resort and Golf Club of Naples Condominium or any
combination of Fala Bella Resort and Golf Club of Naples Condominiums so
affected shall be given the opportunity to also vote on said action or
resolution as a class or classes.
4. The membership shall be entitled to elect the Board as
provided in Article IX of these Articles.
5. Notwithstanding any other provisions of these Articles, on
matters which require voting by the Members, if the question is one upon which,
by express provisions of the Act or the Neighborhood Documents (provided the
express provisions of the Neighborhood Documents are in accordance with the
requirements of the Act), requires a vote of other than a majority vote of a
quorum, then such express provision shall govern and control the required vote
on the decision of such question.
ARTICLE V
TERM
The term for which this Association is to exist shall be perpetual.
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ARTICLE VI
INCORPORATOR
The name and address of the Incorporator of these Articles are as
follows: A. Jack Solomon, 3185 Horseshoe Drive South, Naples, Florida 34104.
ARTICLE VII
OFFICERS
A. The affairs of the Association shall be managed by a President, one
(1) or several Vice Presidents, a Secretary and a Treasurer and, if elected by
the Board, an Assistant Secretary and an Assistant Treasurer, which officers
shall be subject to the directions of the Board. The Board may employ a managing
agent and/or such other managerial and supervisory personnel or entities as it
deems necessary to administer or assist in the administration of the operation
or management of the Association and Declarant shall have the right to be
reimbursed for expenses incurred by Declarant on behalf of the Association in
managing the Association.
B. The Board shall elect the President, the Vice President, the
Secretary, and the Treasurer, and as many other Vice Presidents, Assistant
Secretaries and Assistant Treasurers as the Board shall from time to time
determine appropriate. Such officers shall be elected annually by the Board at
the first meeting of the Board following the "Annual Members' Meeting" (as
described in Section 4.1 of the Bylaws); provided, however, such officers may be
removed by such Board and other persons may be elected by the Board as such
officers in the manner provided in the Bylaws. The President shall be a Director
of the Association, but no other officer need be a Director. The same person may
hold two (2) offices, the duties of which are not incompatible; provided,
however, the offices of President and Vice President shall not be held by the
same person, nor shall the same person hold the office of President who holds
the office of Secretary or Assistant Secretary.
ARTICLE VIII
FIRST OFFICERS
The names of the officers who are to serve until the first election of
officers by the Board are as follows:
President A. Jack Solomon
Vice President Mark S. Taylor
Secretary Karen Welks
Treasurer Karen Welks
ARTICLE IX
BOARD OF DIRECTORS
A. The number of Directors on the first Board of Directors ("First
Board"), the "Initial Elected Board" (as hereinafter defined) and all Boards
elected prior to the "Majority Election Date" (as hereinafter defined) shall be
three (3). Provided, however, beginning with such date, there shall
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also be a Class Director for each additional Fala Bella Resort and Golf Club of
Naples Condominium and, if necessary, there shall also be an additional Director
elected "at large", so that there will always be an odd number of Directors. The
number of Directors elected by the Members at and subsequent to the Majority
Election Date shall be as provided in Paragraph L of this Article IX.
B. The names and addresses of the persons who are to serve as the First
Board are as follows:
NAME ADDRESS
A. Jack Solomon 3185 Horseshoe Drive South
Naples, FL 34104
Mark S. Taylor 3185 Horseshoe Drive South
Naples, FL 34104
Karen Welks 3185 Horseshoe Drive South
Naples, FL 34104
Declarant reserves the right to designate successor Directors to serve on the
First Board for so long as the First Board is to serve, as hereinafter provided.
Declarant reserves the right to remove any Director from the First Board and the
right to remove any Director designated by Declarant in accordance with these
Articles.
C. If upon the occurrence of the "Majority Election Date" (as
hereinafter defined), more than one (1) Fala Bella Resort and Golf Club of
Naples Condominium has been submitted to condominium ownership, then a class of
Directors ("Class Directors") shall be created for each Fala Bella Resort and
Golf Club of Naples Condominium in the manner provided for in Paragraph G of
this Article IX. Each class shall be designated by a numeral denoting the
sequence in which the Fala Bella Resort and Golf Club of Naples Condominium was
submitted to condominium ownership. For example, the Directors of the Fala Bella
Resort and Golf Club of Naples Condominium, provided it is the first Fala Bella
Resort and Golf Club of Naples Condominium submitted to condominium ownership,
would be "Class 1 Directors." Each Fala Bella Resort and Golf Club of Naples
Condominium shall have one Class Director and one or more Director(s) shall be
elected "at large," in accordance with Paragraph A of this Article IX.
D. Upon the conveyance by Declarant to Owners other than Declarant
("Purchaser Members") of fifteen percent (15%) or more of the "Total Condominium
Units" (as hereinafter defined) (as evidenced by the recordation of deeds),
including Condominium Units located within all Phases of the Fala Bella Resort
and Golf Club of Naples Condominium as contemplated in the Declaration(s)
(provided the Declarant still holds the right to submit additional Phases to
condominium ownership), the Purchaser Members shall be entitled to elect
one-third (1/3) of the Board, which election shall take place at the Initial
Election Meeting. Declarant shall designate the remaining Directors on the Board
at the Initial Election Meeting. The Director to be so elected by the Purchaser
Members and the remaining Directors to be designated by Declarant are
hereinafter collectively referred to as the "Initial Elected Board" and shall
succeed the First Board upon their election and qualification. Subject to the
provisions of Paragraph IX.E below, the Initial Elected Board shall serve until
the next Annual Members' Meeting, whereupon, the Directors shall be designated
and elected in the same manner as the Initial Elected Board. The Directors shall
continue
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to be so designated and elected at each subsequent Annual Members' Meeting until
such time as the Purchaser Members are entitled to elect not less than a
majority of the Directors on the Board. Declarant reserves the right, until such
time as the Purchaser Members are entitled to elect not less than a majority of
the Directors on the Board, to designate successor Directors to fill any
vacancies caused by the resignation or removal of Directors designated by
Declarant pursuant to this Paragraph IX.D.
The term "Total Condominium Units" means the number of
Condominium Units contemplated for all Fala Bella Resort and Golf Club of Naples
Condominium (less the number of Condominium Units in any and all Phases of any
Fala Bella Resort and Golf Club of Naples Condominium developed as a phase
condominium pursuant to the Act, which Declarant decides neither to submit as
part of such Fala Bella Resort and Golf Club of Naples Condominium as provided
in the applicable Declaration nor submit to condominium ownership as a separate
Fala Bella Resort and Golf Club of Naples Condominium).
E. Purchaser Members are entitled to elect not less than a majority of
the Board upon the happening of any of certain events.
1. Purchaser Members other than the Declarant are entitled to
elect not less than a majority of the Board upon the happening of any of the
following, whichever shall first occur (reciting the provisions of Sections
718.301(1)(a) - (e), F.S., as required by Rule 61B-17.0012, F.A.C.):
a. Three (3) years after 50 percent of the sum of the
units that will be operated ultimately by the association have been conveyed to
purchasers;
b. Three (3) months after 90 percent of the units
that will be operated ultimately by the association have been conveyed to
purchasers;
c. When all the units that will be operated
ultimately by the association have been completed, some of them have been
conveyed to purchasers, and none of the others are being offered for sale by the
developer in the ordinary course or business; or
d. When some of the units have been conveyed to
purchasers and none of the others are being constructed or offered for sale by
the developer in the ordinary course of business; or
e. Seven years after recordation of the declaration
of condominium, or in the case of an association which may ultimately operate
more than one condominium, 7 years after recordation of the declaration for the
first condominium it operates, or in the case of an association operating a
phase condominium created pursuant to s. 718.403, 7 years after recordation of
the declaration creating the initial phase, whichever occurs first. The
developer is entitled to elect at least one member of the board of
administration of an association as long as the developer holds for sale in the
ordinary course of business at least 5 percent, in condominiums with fewer that
500 units, and 2 percent, in condominiums with more than 500 units, of the units
in a condominium operated by the association. Following the time the developer
relinquishes control of the association, the developer may exercise the right to
vote any developer-owned units in the same manner as any other unit owner except
for purposes of reacquiring control of the association or selecting the majority
members of the board of administration
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2. Notwithstanding the above Article IX.E (1), Declarant shall
have the right to at any time, upon written notice to the Association,
relinquish its right to designate a majority of the Board.
F. The election of not less than a majority of Directors by the
Purchaser Members shall occur on a date to be called by the Board for such
purpose ("Majority Election Date").
G. On the Majority Election Date, each class of Purchaser Members shall
elect one (1) Director and Declarant, until the Declarant's Resignation Event,
shall be entitled to designate one (1) Director. All of the Purchaser Members
shall also elect one or more Directors-at-large in accordance with Article IX.A.
herein, if applicable. Declarant reserves the right, until the Declarant's
Resignation Event, to name the successor, if any, to any Director it has so
designated; provided, however, Declarant shall in any event be entitled to
exercise any right it may have to representation on the Board as granted by law,
notwithstanding the occurrence of the Declarant's Resignation Event.
H. At the first Annual Members Meeting held after the Majority Election
Date, a "staggered" term of office of the Board shall be created as follows:
1. a number equal to fifty percent (50%) of the total number
of Directors rounded to the nearest or next whole number is the number of
Directors whose term of office shall be established at two (2) years and the
Directors serving for a two (2) year term will be the Directors receiving the
most votes at the meeting; and
2. the remaining Directors' terms of office shall be
established at one (1) year.
At each Annual Members Meeting thereafter, as many Directors
of the Association shall be elected as there are Directors whose regular term of
office expires at such time, and the term of office of the Directors so elected
shall be for two (2) years, expiring when their successors are duly elected and
qualified.
I. The Board shall continue to be elected by the Members subject to
Declarant's right to appoint a member to the Board as specified in the Act at
each subsequent Annual Members' Meeting, until Declarant is no longer entitled
to appoint a member to the Board.
J. The Initial Election Meeting and the Majority Election Date shall be
called by the Association, through its Board, within seventy-five (75) days
after the Purchaser Members are entitled to elect a Director or the majority of
Directors, as the case may be. A notice of the election shall be forwarded to
all Members in accordance with the Bylaws; provided, however, that the Members
shall be given at least sixty (60) days' notice of such election. The notice
shall also specify the number of Directors that shall be elected by the
Purchaser Members and the remaining number of Directors designated by Declarant.
K. Declarant shall cause all of its designated Directors to resign when
Declarant no longer holds at least five percent (5%) of the sum of the Total
Condominium Units in all Fala Bella Resort and Golf Club of Naples Condominiums
for sale in the ordinary course of business. In addition, Declarant may at any
time, in its sole discretion, cause the voluntary resignation of all of the
Directors designated by it. The happening of either such event is herein
referred to as the "Declarant's Resignation Event". Upon the Declarant's
Resignation Event, the Directors elected by
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Members shall elect successor Directors to fill the vacancies caused by the
resignation or removal of the Declarant's designated Directors. These successor
Directors shall serve until the next Annual Members' Meeting and until their
successors are elected and qualified; provided, however, nothing herein
contained shall be deemed to waive any right to representation on the Board
which Declarant may have pursuant to the Act. Declarant specifically reserves
the right to assert any right to representation on the Board it may have
pursuant to the Act, notwithstanding that the Declarant's Resignation Event may
have previously occurred.
L. At each Annual Members' Meeting held subsequent to the year in which
the Majority Election Date occurs, the number of Directors to be elected shall
be determined by the Board from time to time, but there shall not be less than
three (3) Directors. In the event, however, there are two (2) or more Fala Bella
Resort and Golf Club of Naples Condominiums, then the number of Directors shall
be one (1) from each Class and one (1) Director elected at large, at a minimum.
M. The following provisions shall govern the right of each Director to
vote and the manner of exercising such right:
1. There shall be only one (1) vote for each Director.
2. All of the Directors of the Board shall vote thereon as one
(1) body, without distinction as to class, on matters which pertain to the
Association or all of the Fala Bella Resort and Golf Club of Naples
Condominiums.
3. On matters pertaining exclusively to a particular Fala
Bella Resort and Golf Club of Naples Condominium(s), only the affected Class
Directors shall vote thereon.
4. Subject to the provisions of Subparagraphs 1, 2 and 3
immediately preceding, the Board as a whole shall determine whether a matter is
subject to a vote of the Directors, shall be voted on by Class Directors or by
the entire Board as a whole. In the case of deadlock by the Board, application
shall be made to a court of competent jurisdiction to resolve the deadlock.
5. In the determination of whether a quorum exists or whether
the Board has duly acted with respect to any matter, (a) on matters which are
voted on by the Board as a whole, such determination shall be made with respect
to the number of all of the Directors; and (b) on matters which are voted on by
Class Directors, such determination shall be made with respect to the number of
Class Directors.
ARTICLE X
POWERS AND DUTIES OF THE BOARD OF DIRECTORS
All of the powers and duties of the Association shall be exercised by
the Board in accordance with the provisions of the Act and the Neighborhood
Documents, where applicable, and shall include, but not be limited to, the
following:
A. Making and collecting Assessments against Members to defray the
costs of the Common Expenses; and collecting that portion of Common Expenses
attributable to Condominium Unit Owners in Fala Bella Resort and Golf Club of
Naples as determined in accordance with the Community Declaration.
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B. Using the proceeds of Assessments in the exercise of the powers and
duties of the Association and the Board.
C. Maintaining, repairing and operating the improvements within the
Fala Bella Resort and Golf Club of Naples Condominium(s).
D. Reconstructing improvements after casualties and losses and making
further authorized improvements within the Fala Bella Resort and Golf Club of
Naples Condominium(s).
E. Making and amending rules and regulations with respect to the Fala
Bella Resort and Golf Club of Naples Condominium(s).
F. Enforcing by legal means the provisions of the Neighborhood
Documents.
G. Contracting for the management and maintenance of the Condominium
Property and authorizing a management agent to assist the Association in
carrying out its powers and duties by performing such functions as the
submission of proposals, collection of Assessments, preparation of records,
enforcement of rules and maintenance, repair and replacement of improvements or
portions thereof for which the Association has such responsibility and other
services with funds that shall be made available by the Association for such
purposes and terminating such contracts and authorizations. The Association and
its officers shall, however, retain at all times the powers and duties granted
by the Neighborhood Documents and the Act including, but not limited to, the
making of Assessments, promulgation of rules and regulations and execution of
contracts on behalf of the Association.
H. Paying taxes and Assessments which are or may become liens against
the Common Elements of the Fala Bella Resort and Golf Club of Naples
Condominium(s) or against Association Property and assessing the same against
Condominium Units, the Owners of which are responsible for the payment thereof.
I. Purchasing and carrying insurance for the protection of Members and
the Association against casualty and liability in accordance with the Act and
the Neighborhood Documents and acquiring one insurance policy to insure the
Condominium Property of all Fala Bella Resort and Golf Club of Naples
Condominiums and to allocate the premiums therefor in a fair and equitable
manner.
J. Paying costs of all power, water, sewer and other utility services
rendered to the Condominium Property of each of the Fala Bella Resort and Golf
Club of Naples Condominiums and not billed directly to Owners of the individual
Condominium Units.
K. Hiring and retaining such employees as are necessary to administer
and carry out the services required for the proper administration and purposes
of this Association and paying all salaries therefor.
L. Engaging in mandatory non-binding arbitration as provided for in
Section 718.112(2)(a)2 of the Act for the settlement of disputes as provided for
in Section 718.1255 of the Act. The provisions of Sections 718.112(2)(a)2 and
718.1255 are incorporated by reference herein.
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M. Preparing a question and answer sheet, if and as required by the Act
and the rules promulgated in the Florida Administrative Code by the Division of
Florida Land Sales, Condominiums and Mobile Homes, and updating the question and
answer sheet at least annually.
N. Maintaining an adequate number of copies of the Neighborhood
Documents, as well as the question and answer sheet referred to in Paragraph
X.N. above, on the Condominium Property to ensure their availability to
Condominium Unit Owners and prospective purchasers. The Association may charge
its actual costs for preparing and furnishing the foregoing to those requesting
same.
O. Ensuring that the following contracts shall be in writing:
(i) Any contract for the purchase, lease or renting of
materials or equipment which is not to be fully
performed within one (1) year from the date of
execution of the contract.
(ii) Any contract, regardless of term, for the provision
of services; other than contracts with employees of
the Association, and contracts for attorneys and
accountant services, and any other service contracts
exempted from the foregoing requirement by the Act or
rules set forth in the Florida Administrative Code as
they relate to condominiums, as the Act and such
rules may be amended from time to time.
P. Obtaining competitive bids for materials, equipment and services
where required by the Act and rules set forth in the Florida Administrative Code
as they relate to condominiums, as the Act and such rules may be amended from
time to time.
Q. All other powers and duties reasonably necessary to operate and
maintain the Fala Bella Resort and Golf Club of Naples Condominium(s)
administered by the Association, in compliance with the Neighborhood Documents
and the Act.
ARTICLE XI
INDEMNIFICATION
Every Director and every officer of the Association (and the Directors
and/or officers as a group) shall be indemnified by the Association against all
expenses and liabilities, including counsel fees (at all trial and appellate
levels) reasonably incurred by or imposed upon them in connection with any
proceeding, litigation or settlement in which he or she may become involved by
reason of his or her being or having been a Director or officer of the
Association. The foregoing provisions for indemnification shall apply whether or
not he or she is a Director or officer at the time such expenses and/or
liabilities are incurred. Notwithstanding the above, in the event of a
settlement, the indemnification provisions herein shall not be automatic and
shall apply only when the Board approves such settlement and authorizes
reimbursement for the costs and expenses of the settlement as in the best
interest of the Association. In instances where a Director or officer admits or
is adjudged guilty of willful misfeasance or malfeasance in the performance of
his or her duties, the indemnification provisions of these Articles shall not
apply. Otherwise, the foregoing rights to indemnification shall be in addition
to and not exclusive of any and all rights of indemnification to which a
Director or officer may be entitled whether by statute or common law. The
indemnification hereby afforded to Directors and officers shall also extend to
any entity other than the Association
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found responsible or liable for the actions of such individuals in their
capacity as Directors or officers, including, but not limited to Declarant.
ARTICLE XII
BYLAWS
The Bylaws of the Association shall be adopted by the First Board and
thereafter may be altered, amended or rescinded by the affirmative vote of not
less than a majority of the Members present at an Annual Members' Meeting or
special meeting of the membership and the affirmative approval of a majority of
the Board at a regular or special meeting of the Board. In the event of a
conflict between the provisions of these Articles and the provisions of the
Bylaws, the provisions of these Articles shall control.
ARTICLE XIII
AMENDMENTS
A. Prior to the recording of a Declaration amongst the Public Records,
these Articles may be amended by an instrument in writing signed by the
President (or a Vice President) and the Secretary (or an Assistant Secretary)
and filed in the Office of the Secretary of State of the State of Florida. The
instrument amending these Articles shall identify the particular Article or
Articles being amended, give the exact language of such amendment and give the
date of adoption of the amendment by the Board. A certified copy of each such
amendment shall always be attached to any certified copy of these Articles or a
certified copy of the Articles as restated to include such Amendments and shall
be an exhibit to each Declaration upon the recording of each Declaration. This
Article XIII is intended to comply with Chapter 617, Florida Statutes.
B. After the recording of the first Declaration amongst the Public
Records, these Articles may be amended in the following manner:
1. The Board, as a whole, shall adopt a resolution setting
forth the proposed amendment and directing that it be submitted to a vote at a
meeting of Members, which may be either the Annual Members' Meeting or a special
meeting. Any number of amendments may be submitted to the Members and voted upon
by them at one meeting;
2. Written notice setting forth the proposed amendment or a
summary of the changes to be effected thereby shall be given to each Member of
record entitled to vote within the time and in the manner provided in the Bylaws
for the giving of notice of Meetings of Members ("Required Notice");
3. At such meeting a vote of the Members and of the Declarant
Class shall be taken on the proposed amendments. The proposed amendment shall be
adopted upon receiving the affirmative vote of a majority of the votes of all
Members entitled to vote thereon unless any Class of Members is entitled to vote
thereon as a Class pursuant to Article IV and/or Paragraph XIII.B hereof, in
which event the proposed amendment shall be adopted upon receiving the
affirmative vote of a majority of the votes of Members of each Class entitled to
vote thereon as a Class, the affirmative vote of a majority of the votes of all
Members entitled to vote thereon and the approval of the Declarant Class; or
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4. An amendment may be adopted by a written statement signed
by all Directors and written consent of Members representing the Voting
Interests sufficient to pass the amendment at a meeting where all members of the
Board are present and setting forth their intention that an amendment to the
Articles be adopted. Where an amendment is passed by written consent in lieu of
meeting, those Members not submitting written consent shall be notified in
writing of the passage thereof.
C. The Declarant Class shall be entitled to vote as a Class on all
amendments made pursuant to Paragraph XIII.B above.
D. No amendment may be made to the Articles which shall in any manner
reduce, amend, affect or modify the terms, conditions, provisions, rights and
obligations set forth in the applicable Declaration.
E. A copy of each amendment shall be certified by the Secretary of
State of the State of Florida and, after the recordation of a Declaration(s),
recorded amongst the Public Records as an amendment to each Declaration.
F. Notwithstanding the foregoing provisions of this Article XIII, there
shall be no amendment to these Articles which shall abridge, amend or alter the
rights of Declarant, including the right to designate and select the Directors
as provided in Article IX hereof, without the prior written consent thereto by
Declarant nor shall there be any amendment to these Articles which shall
abridge, alter or modify the rights of the Declarant, or of the holder,
guarantor or insurer of a first mortgage on any Condominium Unit or of any
"Institutional Mortgagee" (as defined in each Declaration) without such party's
prior written consent.
ARTICLE XIV
EMERGENCY POWERS
The following shall apply to the extent not viewed to be in conflict
with the Act:
A. During any emergency defined in Paragraph XIV.E below or in
anticipation of such emergency, the Board may:
1. Modify lines of succession to accommodate the
incapacity of any Director, officer, agent or
employee of the Association; and
2. Relocate the principal office of the Association or
designate alternate principal offices or authorize
officers to do so.
B. During any emergency defined in Paragraph XIV.E below:
1. One or more officers of the Association present at a
meeting of the Board may be deemed to be Directors
for the meeting, in order of rank and within the same
order of rank in order of seniority, as necessary to
achieve a quorum; and
2. The Director or Directors in attendance at a meeting
shall constitute a quorum.
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C. Corporate action taken in good faith during an emergency under this
Article XIV to further the ordinary affairs of the Association:
1. Binds the Association; and
2. May not be used to impose liability on a Director,
officer, employee or agent of the Association.
D. A Director, officer or employee of the Association acting in
accordance with any emergency bylaws is only liable for willful misconduct.
E. An emergency exists for the purposes of this Article XIV if a quorum
of the Directors cannot readily assemble because of a catastrophic event.
ARTICLE XV
REGISTERED OFFICE AND REGISTERED AGENT
The street address of the initial registered office of the Association
is 3185 Horseshoe Drive South, Naples, Florida 34104, and the initial registered
agent of the Association at that address shall be Mark S. Taylor.
IN WITNESS WHEREOF, the Incorporator has hereunto affixed his/her
signature, this day of , .
A. JACK SOLOMON
The undersigned hereby accepts the designation of Registered Agent of
Fala Bella Resort and Golf Club of Naples Condominium Association, Inc. as set
forth in Article XV of these Articles of Incorporation and acknowledges that he
is familiar with, and accepts the obligations imposed upon registered agents
under, the Florida Not For Profit Corporation Act.
MARK S. TAYLOR
STATE OF FLORIDA
COUNTY OF COLLIER
I HEREBY CERTIFY that on this day, before me a Notary Public duly
authorized in the State and County named above to take acknowledgments,
personally appeared A. Jack Solomon , to me known to be the person described as
the Incorporator in and who executed the foregoing Articles of Incorporation and
he acknowledged before me that he executed the same for the purposes therein
expressed. He is personally known to me or has produced as identification.
WITNESS my hand and official seal in the State and
County last aforesaid this day of , .
Notary Public, State of Florida at Large
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Typed, printed or stamped name of Notary
My Commission Expires:
18
Exhibit 10.10
BYLAWS
OF
FALA BELLA RESORT AND GOLF CLUB OF NAPLES
CONDOMINIUM ASSOCIATION, INC.
Section 1. Identification of Association
These are the Bylaws of Fala Bella Resort and Golf Club of Naples
Condominium Association, Inc. ("Association"), as duly adopted by its Board of
Directors ("Board"). The Association is a corporation not for profit, organized
pursuant to Chapter 617, Florida Statutes, for the purpose of managing,
operating, and administering the development known as Fala Bella Resort and Golf
Club of Naples, a Condominium, as more particularly set forth in the Articles of
Incorporation of the Association ("Articles").
1.1. The office of the Association shall be for the present at 3185
Horseshoe Drive South, Naples, Florida 34104, and thereafter may be located at
any place designated by the Board.
1.2. The fiscal year of the Association shall be the calendar year.
1.3. The seal of the corporation shall bear the name of the
corporation, the word "Florida" and the words "Corporation Not For Profit."
Section 2. Definitions
2.1. All terms shall have the meanings set forth in the Condominium
Act, Chapter 718, Florida Statutes ("Act"), as amended through the date of
recording the first "Declaration" amongst the Public Records of Collier County,
Florida ("County") and, for clarification, certain terms shall have the meanings
ascribed to them in the Articles. All terms defined in the Articles shall appear
with initial capital letters each time such term appears in these Bylaws.
2.2. Notwithstanding anything to the contrary, references to any of the
Neighborhood Documents shall be deemed to include any amendment to such document
as set forth therein.
Section 3. Membership; Members' Meetings; Voting and Proxies
3.1. The qualification of Members, the manner of their admission to
Membership and the termination of such Membership shall be as set forth in
Article IV of the Articles.
3.2. The Members shall meet annually on the Condominium Property or at
such other place in the County, at such time as determined by the Board and as
designated in the notice of such meeting ("Annual Members' Meeting"), commencing
with the year following the year in which the Articles are filed with the
Secretary of State. The purpose of the Annual Members' Meeting shall be to hear
reports of the officers, elect members of the Board (subject to the provisions
of Article IX of the Articles) and transact any other business authorized to be
transacted by the Members.
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3.3. Special meetings of the Members or any Class Members, as the case
may be, shall be held at any place within the State of Florida whenever called
by the President or Vice President of the Association or by a majority of the
Board. A special meeting must be called by such President or Vice President upon
receipt of a written request from one-third (1/3) of the Members or any Class
Members, as the case may be, except as otherwise provided in Sections 4.5(a) and
7.3(b) hereof. Unless specifically stated otherwise herein, the provisions of
these Bylaws pertaining to meetings of Members shall also be applicable to
meetings of Class Members.
3.4. Except as otherwise provided herein, written notice of a meeting
(whether the Annual Members' Meeting or a special meeting of the Members) shall
be mailed to each Member at his or her last known address as it appears on the
books of the Association. Proof of such mailing shall be given by affidavit of
the person who mailed such notice and also by such other method as may be
required by the Act. The notice shall state the time and place of such meeting
and the purposes for which the meeting is called. Unless a Member waives in
writing the right to receive notice of the meeting, written notice of Annual
Members' Meetings and special meetings of the Members shall be mailed or
delivered to each Member in the manner required by the Act, not less than
fourteen (14) days prior to the date of the meeting. Notice of the Annual
Members' Meeting or special meeting of the Members shall be posted at a
conspicuous place on the Condominium Property, as more particularly set forth in
the rules and regulations, at least fourteen (14) continuous days prior to the
meeting. If a meeting of the Members, either a special meeting or an Annual
Members' Meeting, is one which, by express provision of the Act or Neighborhood
Documents (provided the express provision of the Neighborhood Documents are in
accordance with the requirements of the Act) there is permitted or required a
greater or lesser amount of time for the mailing or posting of notice than is
required or permitted by the provisions of this Paragraph 3.4, then such express
provision shall govern.
3.5. The Members or any Class Members, as the case may be, may waive
notice of special meetings; and, at the discretion of the Board, act by written
agreement in lieu of a meeting. Written notice of the matter or matters to be
considered by written agreement in lieu of a meeting shall be given to the
Members or any Class Members, as the case may be, at the addresses and within
the time periods set forth in Section 3.4 hereof or duly waived in accordance
with such Section. The notice shall set forth a time period during which time a
response must be made by a Member. The decision of a majority of a quorum of the
Voting Interests (as evidenced by written response to be solicited in the
notice) shall be binding on the Members or any Class Members, as the case may
be, provided a quorum of the Members or any Class Members, as the case may be,
submits a response. However, if the question is one upon which, by express
provisions of the Act or the Neighborhood Documents (provided the express
provisions of the Neighborhood Documents are in accordance with the requirements
of the Act), requires a vote of other than a majority vote of a quorum, then
such express provision shall govern and control the required vote on the
decision of such question.
3.6. A quorum of the Members shall consist of persons entitled to cast
votes on behalf of thirty percent (30%) of the entire Membership. A quorum of
any Class Members shall consist of persons entitled to cast votes on behalf of
thirty percent (30%) of such Class Members. When a quorum is present at any
meeting and a question which raises the jurisdiction of such meeting is
presented, the holders of a majority of the Voting Interests present in person
or represented by written Proxy shall be required to decide the question.
However, if the question is one which, by express provision of the Act or the
Neighborhood Documents (provided the express provision of the Neighborhood
Documents is in accordance with the requirements of the Act), requires a vote
other
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than the majority vote of a quorum, then such express provision shall govern and
control the required vote on the decision of such question.
3.7. If any meeting of the Members or any Class Members, as the case
may be, cannot be properly held because a quorum is not in attendance, the
Members who are present, either in person or by Proxy, may adjourn the meeting
from time to time until a quorum is present. A quorum is not required for an
election to occur; however, at least twenty percent (20%) of the eligible voters
must cast a ballot in order to have a valid election of Directors. In the case
of the meeting being adjourned, the notice provisions for the adjournment shall,
subject to the Act, be as determined by the Board.
3.8. At any Annual Members' Meeting at which elections of Directors are
to occur, Directors shall be elected by written ballot or voting machine. In no
event shall Proxies be used in electing the Board, either in general elections
or elections to fill vacancies caused by resignation, recall, or otherwise,
unless otherwise provided in the Act. The procedures for the nomination of
candidates and voting in elections shall be as provided in Section
718.112(2)(d)(3) of the Act.
3.9. If a quorum is not in attendance at a Meeting, the Members
entitled to vote thereat who are present, either in person or by Proxy, may
adjourn the Meeting from time to time until a quorum is present. In the event
any meeting is adjourned or postponed to be continued at another time because a
quorum is not present at such meeting, then and in that event, the quorum
requirements provided herein shall be reduced to the presence in person or by
Proxy of twenty percent (20%) of the Voting Interests of Members or Class
Members of the Association at the adjourned meeting. Actions approved by a
majority of the Voting Interests of Members or Class Members present in person
or by Proxy at such adjourned meeting at which such reduced quorum exists shall
be binding upon all Members or Class Members and for all purposes except where
otherwise provided by law, in any Declaration, in the Articles, or in these
Bylaws. This reduction of the quorum requirements shall apply only if the Board
sends notice of the adjourned or postponed meeting to the Members or Class
Members as elsewhere provided, which notice must specifically provide that
quorum requirements will be reduced at the adjourned or postponed meeting.
3.10. Minutes of all meetings shall be kept in a businesslike manner
and available for inspection by the Members and Directors at all reasonable
times. The Association shall retain minutes for at least seven (7) years
subsequent to the date of the meeting the minutes report.
3.11. If, as and when any additional condominiums developed in Fala
Bella Resort and Golf Club of Naples, other than Fala Bella Resort and Golf Club
of Naples, a Condominium, are submitted to condominium ownership, Class Members
shall be created for Dwelling Unit Owners in each additional condominium in Fala
Bella Resort and Golf Club of Naples. All classes of Members shall vote in the
manner stated in Article IV of the Articles. Voting rights of Members shall be
as stated in the Declaration and the Articles. Such votes may be cast in person
or by Proxy. "Proxy" is defined to mean an instrument in writing, signed by a
Member, appointing a person to whom the Member delegates the Member's right to
cast a vote or votes in the Member's place and stead. Proxies shall be valid
only for the particular meeting designated therein and any lawful adjournments
thereof; provided, however, that no Proxy shall be valid for a period longer
than ninety (90) days after the date of the first meeting for which it was
given, provided this express provision is not inconsistent with the requirements
of the Act, in which case the Act shall govern and control. Each Proxy shall
contain the date, time and place of the meeting for which the Proxy is given. A
limited Proxy shall set forth those items which the holder of the Proxy may vote
and the manner in
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which the vote is cast. Members may vote by general Proxy, or by limited
proxies. Limited proxies and general proxies may be used to establish a quorum.
Limited proxies and general proxies may also be used for voting on the matters
outlined in section 718.112(2)(b)2 of the Act. To the extent permitted by law, a
proxy limited or general, may be used in the election of the Board. A Proxy must
be filed with the Secretary of the Association before the appointed time of the
meeting in order to be effective. Any Proxy may be revoked prior to the time a
vote is cast by virtue of such Proxy.
3.12. Upon demand of any Member at any time prior to a vote upon any
matter at a meeting of the Members, or any Class Members, any Member may demand
voting on such matter shall be by secret ballot. The chairman of the meeting
shall call for nominations for inspectors of election to collect and tally
written ballots upon the completion of balloting upon the subject matter.
3.13. Members shall have the right to participate in meetings with
reference to all designated agenda items in accordance with the rules and
regulations. In addition, any Member may tape record or videotape a meeting in
accordance with the rules and regulations.
Section 4. Board of Directors; Directors' Meetings
4.1. The form of administration of the Association shall be by a Board
of not less than three (3) Directors. At each Annual Members' Meeting held
subsequent to the year in which the Declarant's Resignation Event occurs, the
number of Directors (which must be an odd number) shall be determined by the
Board from time to time. Except for Declarant-appointed Directors, Directors
must be Members of the Association or the spouses, parents or children of
Members.
4.2. The provisions of the Articles setting forth the selection,
designation, election and removal of Directors, including but not limited to,
the division of the Board into Class Directors are hereby incorporated herein by
reference. Voting for Class Directors, if applicable, shall be noncumulative
(there shall be appurtenant to each Dwelling Unit as many votes for Directors as
there are Directors for the Class to be elected, together with as many votes for
Directors as there are Directors-at-large to be elected; provided, however, no
Member or Owner may cast more than one (1) vote for each Dwelling Unit owned by
him or her for any one (1) person nominated as a Class Director or
Director-at-large). Directors elected by the Members in accordance with Article
IX of the Articles shall be elected by a plurality of votes cast by the Members
present in person or by Proxy and entitled to vote at a properly held Annual
Members' Meeting or special meeting of the Members.
4.3. Subject to Section 4.5 below and the rights of Declarant as set
forth in the Articles and as set forth in Section 4.5(b) below, vacancies on the
Board shall be filled by person(s) elected by the affirmative vote of a majority
of the remaining Directors (or by the remaining Class Directors in which the
vacancy occurs, if applicable). Such person shall be a Director and have all the
rights, privileges, duties and obligations as a Director elected at the Annual
Members' Meeting. A Director elected by the Board to fill a vacancy shall hold
office only until the next election of Directors by the Members.
4.4. The term of each Director's service, except as provided in Section
4.3 of these Bylaws, shall extend until the next Annual Members' Meeting and
thereafter, until his or her successor is duly elected and qualified or until he
or she is removed in the manner elsewhere provided herein.
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4.5. (a) A Director elected by the Purchaser Members, as provided in
the Articles, may be removed from office with or without cause upon the vote or
the agreement in writing by a majority of all the Voting Interests. A director
elected by Class Members, as provided in the Articles, may be removed from
office with or without cause upon the vote or the agreement in writing by a
majority of such Class Members. Any such recall shall be effected and a recall
election shall be held, if applicable, as provided in Section 718.112(2)(k),
F.S., as it may be amended from time to time.
(b) A Director on the First Board or designated by Declarant
as provided in the Articles may be removed only by Declarant in its sole
discretion and without any need for a meeting or vote. Declarant shall have the
unqualified right to name successors to fill any vacancies occurring for any
reason on the Board among Directors on the First Board or designated by it, and
Declarant shall notify the Board as to any such removal or vacancy and the name
of the successor Director and of the commencement date for the term of such
successor Director.
4.6. The organizational meeting of the newly elected Board shall be
held within ten (10) days of its election at such place and time as shall be
fixed by the Directors at the meeting at which they were elected. Notice of the
organizational meeting shall be given in accordance with the provisions of
Section 4.8 hereinbelow.
4.7. Regular meetings of the Board may be held at such time and place
as shall be determined from time to time by a majority of Directors. Special
meetings of the Board may be called at the discretion of the President or the
Vice President of the Association. Special meetings must be called by the
Secretary at the written request of one-third (1/3) of the Directors.
Participation in meetings of the Board by telephone or another form of
electronic communication is permitted subject to the requirements of F.A.C.
61B-23.001(4). The provisions of these Bylaws pertaining to meetings of the
Board as a whole shall also be applicable to meetings of Class Directors.
4.8. Notice of the time, agenda and place of the organizational,
regular and special meetings of the Board, or adjournments thereof, shall be
given to each Director personally or by mail, telephone or telegraph at least
three (3) days prior to the day specified for such meeting. Except in an
emergency, notice of a Board meeting shall be posted conspicuously on the
Condominium Property of each additional condominium in Fala Bella Resort and
Golf Club of Naples, as more specifically set forth in the rules and
regulations, at least forty-eight (48) continuous hours in advance for the
attention of Members. Notice of any meeting where regular assessments against
Members are to be considered for any reason shall specifically contain a
statement that assessments will be considered and the nature of any such
assessments. Notice of a meeting where non-emergency Special Assessments or
amendments to rules and regulations regarding Dwelling Unit use will be
considered, shall be mailed or delivered to the Dwelling Unit Owners and posted
conspicuously on the Condominium Property not less than fourteen (14) days prior
to the meeting. Proof of such mailing shall be given by affidavit executed by
the person providing the notice and filed among the official records of the
Association. Any Director may waive notice of the meeting before, during or
after a meeting and such waiver shall be deemed equivalent to the receipt of
notice by such Director.
4.9. For matters to be considered by the Board as a whole, as set forth
in Article IX, Paragraph M of the Articles, a quorum of the Board shall consist
of the Directors entitled to cast a majority of the votes of the entire Board.
Matters approved by a majority of the Directors present
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at a meeting at which a quorum is present shall constitute the official acts of
the Board, except as specifically provided elsewhere herein or in any of the
Neighborhood Documents. For matters to be considered by Class Directors, as set
forth in Article IX, Paragraph M of the Articles, a quorum of the Board shall
consist of a majority of the Directors of the affected Class Directors and such
matters approved by a majority of the Class Directors present at a meeting at
which a quorum is present shall constitute the official acts of the Board,
except as specifically provided elsewhere herein or in any of the Neighborhood
Documents. A Director who is present at a meeting of the Board at which action
on any corporate matter is taken shall be presumed to have assented to the
action taken, unless he or she votes against such action or abstains from voting
in respect thereto because of an asserted conflict of interest. A vote or
abstention for each Director present shall be recorded in the minutes. If at any
meetings of the Board there shall be less than a quorum present, the majority of
those present entitled to vote may adjourn the meeting from time to time until a
quorum is present. At any properly held adjourned meeting any business which
might have been transacted at the meeting as originally called may be
transacted. In the case of the adjournment of a meeting, the notice provisions
for the adjournment shall, subject to the Act, be as determined by the Board.
4.10. The presiding officer at Board meetings shall be the President.
In the absence of the President, the Directors present shall designate any one
of their number to preside.
4.11. Directors shall not receive any compensation for their services.
4.12. The Board shall have the power to appoint executive committees of
the Board consisting of not less than two (2) Directors. Executive committees
shall have and exercise such powers of the Board as may be delegated to such
executive committees by the Board.
4.13. Meetings of the Board shall be open to all Members. Members shall
have the right to participate in meetings with reference to all designated
agenda items in accordance with the rules and regulations. In addition, any
Member may tape record or videotape a meeting in accordance with the rules and
regulations.
Section 5. Fining Procedure for Enforcement of the Neighborhood
Documents; Fees
5.1. A nonexclusive optional procedure for Board enforcement of the
Neighborhood Documents, including the rules and regulations, shall be as
follows:
5.1.1. First Offense (1st Notice)
When the Association becomes aware of noncompliance of a rule
or regulation by a Dwelling Unit Owner, family member, guest, invitee or lessee,
it shall send a certified letter to the Dwelling Unit Owner advising him or her
of the rule which he or she has been accused of violating and warning that
strict compliance with the rules and regulations will be required. Each day on
which a violation occurs shall be deemed to be a separate offense.
5.1.2. Second Offense (2nd Notice)
If the Association receives a second report that a violation
has been repeated or has been continued beyond the time specified within the
first notice, the Board, after verifying the violation, may authorize a fine to
be levied upon the Dwelling Unit Owner. The fine for a second
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offense may not exceed the maximum amount permitted by the Act. Notice of a
second violation shall be sent to the Dwelling Unit Owner by certified mail, and
shall contain notice to the Dwelling Unit Owner and, if applicable, its licensee
or invitee, of the right to an opportunity for a hearing before a committee of
other Dwelling Unit Owners. This notice shall further explain that pursuant to
F.S. 718.303(3), a fine may be levied for this and future repeat offenses with
this notice as the single notice and opportunity for hearing provided to the
Dwelling Unit Owner.
5.1.3. Third Offense (3rd Notice)
If the Association receives a third report that a violation
has been repeated or has continued beyond the time specified within the second
notice, the Owner may be charged a fine in an amount not to exceed the maximum
amount permitted by the Act, following verification of the violation by the
Board.
5.1.4. Fourth Offense
For repeated offenses or in any case where the Board deems it
appropriate, the Board may seek injunctive relief through court action. In
addition, a fine may be levied on the basis of each day of a continuing
violation, with a single notice and opportunity for hearing, provided that no
such fine shall in the aggregate exceed the amount set forth in Section
718.303(3) of the Act.
5.2. Exemptions and Hearings
(a) Any Dwelling Unit Owner may appear before the Association
to seek an exemption from or variance in the applicability of any given rule or
regulation as it relates to said person on grounds of undue hardship or other
special circumstances.
(b) Where the Association levies fines, such fines shall be
levied pursuant to the procedures set forth in the rules and regulations.
5.3. A Dwelling Unit Owner who fails to timely pay any Assessment shall
be charged a late charge by the Association for such late Assessment in an
amount not to exceed the maximum amount permitted by the Act. Owners shall be
responsible to pay all legal fees (including, but not limited to, attorney and
paralegal fees and court costs) incurred in connection with the collection of
late Assessments whether or not an action at law to collect said Assessment and
foreclose the Association's lien has been commenced. The Board has authorized
the following initial schedule of fees for such circumstances (which is,
however, subject to change without notice as provided in Paragraph 5.4):
(a) Fifty Dollars ($50) for a warning letter to a Dwelling
Unit Owner that he or she is delinquent in the payment of his or her
Assessments;
(b) One Hundred Dollars ($100) for a Claim of Lien plus
recording costs of $6.00 and sending of Notice of Intention to Foreclose;
(c) Fifty Dollars ($50) for any subsequent Claims of Lien plus
recording costs;
(d) Fifty Dollars ($50) for a Satisfaction of Lien plus
recording costs; and
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(e) Any further action would require an hourly computation of
attorney and/or paralegal time spent pursuing collection of such unpaid
Assessments.
5.4. (a) The existence of the Association's right to fine as herein
provided shall not preclude nor limit its right to seek any other enforcement
method or remedy provided: (i) pursuant to the Neighborhood Documents; (ii) at
law; or (iii) in equity.
(b) The amount of the fines as set forth herein may be
increased by the Board in its sole discretion; provided, however, any such
increase shall conform to the applicable requirements of the Act as to the
maximum dollar amount of such fines as such maximum dollar amount may be
increased by amendment of the Act from time to time.
5.5. Written Inquiries by Owners
Written inquiries by Members to the Board shall be handled in
accordance with Section 718.112(2)(a)2, F.S., as it may be amended from time to
time.
Section 6. Officers of the Association
6.1. Executive officers of the Association shall be the President, who
shall be a Director, one or more Vice Presidents, a Treasurer, a Secretary and,
if the Board so determines, an Assistant Secretary and an Assistant Treasurer,
all of whom shall be elected annually by the Board. Any officer may be removed
from office without cause by vote of the Directors at any meeting of the Board.
The Board shall, from time to time, elect and designate the powers and duties of
such other officers and assistant officers as the Board shall find to be
required to manage the affairs of the Association.
6.2. The President, who shall be a Director, shall be the chief
executive officer of the Association. The President shall have all of the powers
and duties which are usually vested in the office of the President of a
condominium association including, but not limited to, the power to appoint
committees from among the Members at such times as he or she may, in his or her
discretion, determine appropriate to assist in conducting the affairs of the
Association. The President shall preside at all meetings of the Board.
6.3. The Vice President(s) shall generally assist the President and
exercise such other powers and perform such other duties as shall be prescribed
by the Board. In the event there shall be more than one Vice President elected
by the Board, then they shall be designated "First," "Second," etc. and shall be
called upon in such order to exercise the powers and perform the duties of the
President if he or she is absent or incapacitated.
6.4. The Secretary shall cause the minutes of all meetings of the Board
and of the Members to be kept, which minutes shall be recorded in a businesslike
manner and shall be available for inspection by Members and Directors at all
reasonable times. The Secretary shall have custody of the seal of the
Association and shall affix the same to instruments requiring a seal when duly
signed. He or she shall keep the records of the Association, except those of the
Treasurer, and shall perform all of the duties incident to the office of
Secretary of the Association as may be required by the Board or the President.
The Assistant Secretary, if any, shall assist the Secretary and shall perform
the duties of the Secretary when the Secretary is absent.
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6.5. The Treasurer shall have custody of all the property of the
Association, including funds, securities and evidences of indebtedness. He or
she shall keep the assessment rolls and accounts of the Members; he or she shall
keep the books of the Association in accordance with good accounting practices;
and he or she shall perform all the duties incident to the office of Treasurer.
The Assistant Treasurer, if any, shall assist the Treasurer and shall perform
the duties of the Treasurer whenever the Treasurer is absent.
6.6. Officers shall not receive compensation for their services. The
compensation, if any, of all other employees of the Association shall be fixed
by the Board. This provision shall not preclude the Board from employing a
Director or an officer as an employee of the Association nor preclude the
contracting with a Director or an officer for the management of all or any
portion of Fala Bella Resort and Golf Club of Naples.
Section 7. Accounting Records; Fiscal Management
7.1. Accounting Records
(a) The Association shall maintain the official records of the
Association in accordance with Section 718.111(12) of the Act, which records
shall be open to inspection by Members and owners of first mortgages on Dwelling
Units or their authorized representatives at reasonable times. The Association
may charge Dwelling Unit Owners, owners of first mortgages on Dwelling Units or
their authorized representative its actual costs for preparing and furnishing
copies of the documents including, but not limited to, the Declaration,
Articles, Bylaws, rules and regulations, question and answer sheet and any
amendment to the foregoing to those requesting same. Authorization of a
representative of a Member must be in writing, signed by the Member giving the
authorization and dated within ten (10) working days before the date of the
inspection. The official records shall include accounting records for the
Association and separate accounting records for each condominium it operates,
maintained according to good accounting practices, and such accounting records
shall be maintained for a period of not less than seven (7) years. Accounting
records so maintained by the Association shall include, but are not limited to:
(i) accurate, itemized and detailed records of all receipts and expenditures;
(ii) a current account, and a quarterly statement of the account for each
Dwelling Unit or as reported at such interval as may be required by the Act as
amended from time to time by the Florida Legislature, designating the name of
the Dwelling Unit Owner, the due date and amount of each Assessment, the amount
paid upon the account, and the balance due; (iii) all audits, reviews,
accounting statements and financial reports of the Association; and (iv) all
contracts for work to be performed, and such bids shall be considered official
records and maintained for a period of one (1) year.
(b) A report of the actual receipts and expenditures of the
Association for the previous twelve (12) months ("Report") shall be prepared
annually by an accountant or Certified Public Accountant unless this requirement
is waived pursuant to Section 718.111(14) of the Act. The Report shall be
prepared consistent with the requirements of Rule 61B-22.006, F.A.C., and a copy
of such report shall be furnished in accordance with the Act to each Member. The
Report will include account classifications designated in the Act, if
applicable, and accounts otherwise included at the Board's discretion. The
Report shall be deemed to be furnished to the Member upon its delivery or
mailing to the Member at the last known address shown on the books and records
of the Association. In the event the requirements of Rule 61B-22.006, F.A.C. are
properly waived, then the Report shall be prepared and furnished complying with
Sections 718.111(13) and 718.111(14) of the Act and Rule 61B-22.006, F.A.C.
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7.2. Budget
(a) The Board shall adopt the budget for the Common Expenses
of each condominium in Fala Bella Resort and Golf Club of Naples and, if
applicable, a schedule for Association Expenses ("Budget") for each forthcoming
fiscal year ("Budget Year") at a special meeting of the Board ("Budget Meeting")
called for that purpose in October or November prior to the applicable Budget
Year. Prior to the Budget Meeting, a proposed Budget for each condominium in
Fala Bella Resort and Golf Club of Naples shall be prepared by or on behalf of
the Board, which Budget(s) shall include, but not be limited to, the following
items of expense applicable to each condominium in Fala Bella Resort and Golf
Club of Naples:
(i) Administration of the Association
(ii) Utilities
(iii) Management Fees
(iv) Maintenance
(v) Rent for recreational and other commonly used
facilities
(vi) Taxes upon Association property
(vii) Taxes upon leased areas
(viii) Insurance
(ix) Security provisions
(x) Other expenses
(xi) Operating capital
(xii) Reserves for Capital Expenditures and Deferred Maintenance
(xiii) Fees payable to the Division of Florida Land Sales,
Condominiums and Mobile Homes
(b) The Budget for each condominium in Fala Bella Resort and
Golf Club of Naples constitutes an estimate of the expenses to be incurred by
the Association for and on behalf of such condominium in Fala Bella Resort and
Golf Club of Naples. The procedure for the allocation of the expenses
attributable to each condominium in Fala Bella Resort and Golf Club of Naples,
which are the Common Expenses of such condominium in Fala Bella Resort and Golf
Club of Naples, shall be as follows:
(i) Expenses of the Association which are applicable
to more than one (1) condominium in Fala Bella Resort and Golf Club of Naples
(such as administrative expenses) shall be allocated by the Board amongst the
several condominiums in Fala Bella Resort and Golf Club of Naples to which such
expenses are applicable by multiplying the amount of such expenses by a fraction
with respect to each condominium in Fala Bella Resort and Golf Club of Naples,
the numerator of which is the number of Condominium Units within the particular
condominium in Fala Bella Resort and Golf Club of Naples to which such expenses
are being allocated and the denominator of which is the total number of
Condominium Units in the various condominiums in Fala Bella Resort and Golf Club
of Naples to which such expenses are applicable; provided, however, that if such
method of allocation is inequitable due to the fact that a grossly
disproportionate amount of such expenses are attributable to a particular
condominium in Fala Bella Resort and Golf Club of Naples, then the Board may
allocate such expenses in a manner deemed by it to be fair and equitable.
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(ii) Expenses of the Association which are applicable
to one (1) condominium in Fala Bella Resort and Golf Club of Naples (such as,
but not limited to, utilities and maintenance for the Common Elements of a
particular condominium in Fala Bella Resort and Golf Club of Naples) shall be
allocated by the Board as a Neighborhood Common Expense solely of such
condominium in Fala Bella Resort and Golf Club of Naples.
(iii) In the event there is only one (1) condominium
in Fala Bella Resort and Golf Club of Naples, then all expenses of the
Association shall be applicable to that condominium.
(c) Association Expenses with respect to the Association
Property, if any, shall be assessed against all Condominium Units in direct
proportion to the percentage of ownership in the common elements and in the
common surplus as set forth in the declarations of condominium of all the
condominiums in Fala Bella Resort and Golf Club Club of Naples, as they may
exist from time to time, after the allocation between condominiums is made by
the Board pursuant to Section 7.2(b)(i) hereinabove.
(d) The Board shall establish and maintain an adequate reserve
fund for the periodic maintenance, repair and replacement of the Condominium
Property. The Budget for each condominium in Fala Bella Resort and Golf Club of
Naples shall include, on an annual basis, the establishment of reserve accounts
for capital expenditures and deferred maintenance of the Condominium Property.
The reserve accounts shall include, but not be limited to, roof replacement,
roadway resurfacing and building exterior repainting regardless of the amount of
deferred maintenance expense or replacement cost, and for any other items for
which the deferred maintenance expense or replacement cost exceeds Ten Thousand
Dollars ($10,000). The amount to be reserved shall be computed by means of a
formula which is based upon estimated remaining useful life and estimated
replacement cost or deferred maintenance expense of each reserve item.
Notwithstanding any other provisions to the contrary contained herein, in the
event that, by a majority vote of either Members or Class Members, as
applicable, at a duly called meeting of the Association, less than a full
reserve or no reserve for deferred maintenance and replacement is elected, then
the applicable Budget shall be based on such lesser reserves or no reserves, as
the case may be. Reserve funds and any interest accruing thereon shall remain in
the reserve account or accounts, and shall be used only for authorized reserve
expenditures, unless their use for other purposes is approved in advance by a
vote of the majority of the Voting Interests voting in person or by limited
proxy at a duly called meeting of the Association.
(e) Copies of the applicable proposed Budget and notice of the
exact time and place of the Budget Meeting shall be mailed to each Member or
Class Member at the Member's last known address, as reflected on the books and
records of the Association, not less than fourteen (14) days prior to said
Budget Meeting, and the Budget Meeting shall be open to the Members. Failure to
timely adopt a Budget for each condominium in Fala Bella Resort and Golf Club of
Naples shall not alter or abrogate the obligation to pay Common Expenses.
(f) In administering the finances of the Association, the
following procedures shall govern: (i) the fiscal year shall be the calendar
year; (ii) any income received by the Association in any calendar year may be
used by the Association to pay expenses incurred by the Association in the same
calendar year; (iii) there shall be apportioned between calendar years on a pro
rata basis any expenses which are prepaid in any one (1) calendar year for
Common Expenses which cover more than such calendar year; (iv) Assessments shall
be made not less frequently than
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<PAGE>
quarterly in amounts no less than are required to provide funds in advance for
payment of all of the anticipated current expenses and for all unpaid expenses
previously incurred; and (v) expenses incurred in a calendar year shall be
charged against income for the same calendar year regardless of when the bill
for such expenses is received. Notwithstanding the foregoing, Assessments shall
be of sufficient magnitude to insure an adequacy and availability of cash to
meet all budgeted expenses and anticipated cash needs in any calendar year as
such expenses are incurred in accordance with the cash basis method of
accounting. The method of accounting shall substantially conform to generally
accepted accounting standards and principles.
(g) No Board shall be required to anticipate revenue from
Assessments or expend funds to pay for Common Expenses not included in a Budget
or which shall exceed budgeted items, and no Board shall be required to engage
in deficit spending. Should there exist any deficiency which results from
expenses being greater than income from Assessments, then such deficits shall be
carried into the applicable Budget for the next succeeding year as a deficiency
or shall be the subject of a Special Assessment to be levied by the Board as
otherwise provided in the applicable Declaration.
(h) The Board may also include in the proposed Budget a sum of
money as an assessment for the making of betterments to the Condominium Property
and for anticipated expenses by the Association which are not anticipated to be
incurred on a regular or annual basis. This sum of money so fixed may then be
levied upon the Members by the Board as a Special Assessment and shall be
considered an "Excluded Expense" under Section 7.3(a) hereof.
7.3. Adoption of Budget
Until the provisions of Section 718.112(2)(e) of the Act relative to
the Members' approval of a Budget requiring Assessments against the Members in
excess of 115% of such Assessments for the Members in the preceding year are
declared invalid by the courts, or until amended by the Florida Legislature, the
following shall be applicable (however, if such amendment merely substitutes
another amount for 115%, then such new amount shall be substituted for 115% each
time it is used in this Section 7.3):
(a) Should the Budget adopted by the Board at the Budget
Meeting require Assessments against Members of an amount which is not greater
than one hundred fifteen percent (115%) of such Assessments for the prior year,
the Budget shall be deemed approved by all Members. If, however, the Assessments
required to meet the Budget exceed one hundred fifteen percent (115%) of such
assessments for the Membership for the preceding year ("Excess Assessment"),
then the provisions of Subsections 7.3(b) and (c) hereof shall be applicable.
There shall be excluded in the computation of the Excess Assessment certain
expenses ("Excluded Expenses") as follows:
(1) Reserves for repair or replacement of any
portion of the Condominium Property;
(2) Expenses of the Association which are not
anticipated to be incurred on a regular or
annual basis;
(3) Expenses for betterments to the Condominium
Property;
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(4) Cable expenses; and
(5) Common Expenses of the Community
Association.
(b) Should the Excess Assessment be adopted by the Board, then
upon delivery to the Board, within twenty (20) days after the Budget Meeting, of
a written application requesting a special meeting signed by ten percent (10%)
of the Voting Interests of the Condominium Units, the Board shall call a special
meeting to be held upon not less than ten (10) days' written notice to each
Member, but to be held within thirty (30) days of the delivery of such
application to the Board. At said special meeting, the Members shall consider
and enact a Budget of Common Expenses. The adoption of the revisions to the
Budget of Common Expenses shall require approval of not less than a majority of
Voting Interests appurtenant to all Condominium Units in each condominium in
Fala Bella Resort and Golf Club of Naples. The Board may propose revisions to
the Members at a meeting of Members or in writing, and, if a revised Budget of
Common Expenses is enacted at said special meeting, then the revised Budget
shall be, as to the Common Expenses, incorporated into the final Budget. If no
written application is delivered as provided herein and a quorum is not obtained
or a substitute budget is not adopted by the Members, then the Budget originally
adopted by the Board shall be the final Budget and shall go into effect as
scheduled.
(c) Until the Majority Election Date, the Board shall not
impose a Assessment pursuant to a Budget for Common Expenses for each
condominium in Fala Bella Resort and Golf Club of Naples which is greater than
one hundred fifteen percent (115%) of the prior fiscal year's Assessment without
approval of a majority of the Voting Interests of Members to be so assessed.
(d) If, as and when any additional condominium(s) in Fala
Bella Resort and Golf Club of Naples, other than the Fala Bella Resort and Golf
Club of Naples, a Condominium, are created pursuant to the Act, then the Budget
shall allocate Neighborhood Assessments for Common Expenses to each condominium
in Fala Bella Resort and Golf Club of Naples. In each case in which the
Assessments for Common Expenses for the affected condominium in Fala Bella
Resort and Golf Club of Naples [less expenses for matters similar to those
matters set forth in Paragraphs 7.3(a)(1), 7.3(a)(2) and 7.3(a)(3) above] exceed
one hundred fifteen percent (115%) of such Assessments for the prior year, the
affected Members shall have the right to revise the Budget as same applies to
them in the same manner as set forth in Paragraph 7.3(b) above.
7.4. Allocation of Common Expenses
(a) The portion of the expenses to be allocated to the
operation and management of each condominium in Fala Bella Resort and Golf Club
of Naples shall be set forth in the Budget and shall constitute the Common
Expenses of such condominium in Fala Bella Resort and Golf Club of Naples. The
Common Expenses shall be apportioned to each Condominium Unit Owner based upon
his or her share of Common Expenses, as provided in the Declaration of each
condominium in Fala Bella Resort and Golf Club of Naples.
(b) Notwithstanding the allocation to each Condominium Unit of
its share of Common Expenses, an Owner shall also be liable for any Special
Assessments levied by the Board against his or her Condominium Unit as provided
in the Neighborhood Documents. The funds collected pursuant to a Special
Assessment shall be used only for the specific purpose or purposes set forth in
such notice, or returned to the Owners; provided, however, that upon completion
of such specific purpose or purposes any excess funds shall be considered Common
Surplus. The
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Association shall collect Assessments and Special Assessments for Common
Expenses from a Condominium Unit Owner in the manner set forth in the
Neighborhood Documents.
(c) To the extent that the Association at any time has either
a Common Surplus or Neighborhood Common Expense in regard to the operation of
condominium(s) in Fala Bella Resort and Golf Club of Naples which cannot be
attributed to one or more particular condominium in Fala Bella Resort and Golf
Club of Naples, then such Common Surplus or Neighborhood Common Expense shall be
prorated equally based on the number of Condominium Units within each
condominium in Fala Bella Resort and Golf Club of Naples and thereafter be
deemed a Neighborhood Common Expense or Common Surplus of each condominium in
Fala Bella Resort and Golf Club of Naples as set forth in its Declaration.
(d) If, as and when any additional condominiums in Fala Bella
Resort and Golf Club of Naples are created pursuant to the Act, the expenses
attributable to each condominium in Fala Bella Resort and Golf Club of Naples
shall be allocated and apportioned to each condominium in Fala Bella Resort and
Golf Club of Naples in the manner set forth in Paragraphs 7.4(a), 7.4(b), and
7.4(c) above.
7.5 Depository
The depository of the Association shall be such bank or banks as shall
be designated from time to time by the Board in which the monies of the
Association shall be deposited. All funds shall be maintained separately in the
Association's name, and reserve and operating funds of the Association shall not
be commingled. Withdrawal of monies from such account shall be only by checks
signed by such persons as are authorized by the Board. Notwithstanding the
foregoing, the President and/or the Treasurer of the Association shall be
authorized to sign checks on behalf of the Association, unless otherwise
specified by the Board.
Section 8. Rules and Regulations
The Board may adopt rules and regulations or amend or rescind existing
rules and regulations for the operation and use of each condominium in Fala
Bella Resort and Golf Club of Naples at any meeting of the Board; provided such
rules and regulations are not inconsistent with the Neighborhood Documents nor
detrimental to sales of Condominium Units by Declarant. Copies of any rules and
regulations promulgated, amended or rescinded shall be mailed to all Condominium
Unit Owners at the last known address as shown on the books and records of the
Association and shall not take effect until forty-eight (48) hours after such
mailing.
Section 9. Parliamentary Rules
The then latest edition of Robert's Rules of Order shall govern the
conduct of meetings of this Association when not in conflict with the
Neighborhood Documents or the Act. In the event of a conflict, the provisions of
the Neighborhood Documents and the Act shall govern.
Section 10. Amendments of the Bylaws
10.1. These Bylaws may be amended by the affirmative vote of not less
than a majority of the votes of Members entitled to vote thereon, represented in
person or by Proxy at a properly held Annual Members' Meeting or special meeting
of the Membership and the approval of a majority of
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<PAGE>
the Board at a regular or special meeting of the Board. A copy of the proposed
amendment shall be sent to each Member along with notice of the Annual Members'
Meeting or special meeting. An amendment may be approved at the same meeting of
the Board and/or Members at which such amendment is proposed.
10.2. An amendment may be proposed by either the Board or by the
Members, and after being proposed and approved by one of such bodies, must be
approved by the other as set forth above in order to become enacted as an
amendment.
10.3. No modification or amendment to these Bylaws shall be adopted
which would affect or impair the priority of any holder, insurer or guarantor of
a first mortgage on any Condominium Unit in Fala Bella Resort and Golf Club of
Naples, the validity of such mortgage or any of the rights of Declarant.
Section 11. Fidelity Bonding
The Association shall obtain and maintain adequate fidelity bonding of
all persons who control or disburse funds of the Association in accordance with
Section 718.111(11)(d) of the Act.
Section 12. Condemnation of Common Elements
The Association has a limited power to convey a portion of the Common
Elements to a condemning authority for the purpose of providing utility
easements, right-of-way expansion or other public purposes, whether negotiated
or as a result of eminent domain proceedings.
FALA BELLA RESORT AND GOLF CLUB OF NAPLES
CONDOMINIUM ASSOCIATION, INC.
By:
Print Name: ___________________________________
Its: President
Attest:
Print Name: ___________________________________
Its: Secretary
(CORPORATE SEAL)
15
Exhibit 10.13
FIRST AMENDMENT TO USE AND ACCESS AGREEMENT
FOR LELY GOLF VILLAS
THIS FIRST AMENDMENT TO USE AND ACCESS AGREEMENT FOR LELY
GOLF VILLAS ("Amendment") entered into as of this _____ day of May, 1999, by and
between GOLF ENTERPRISES, INC., a Kansas corporation (hereinafter referred to as
"GEI"), and LELY GOLF VILLAS I LIMITED PARTNERSHIP, a Delaware limited
partnership (hereinafter referred to as "LGV").
W I T N E S S E T H :
WHEREAS, GEI and LGV have previously entered into the Use and Access
Agreement for Lely Golf Villas, dated as of the 4th day of March, 1998, which is
recorded in Official Records Book 2398, at Page 0521, of the Public Records of
Collier County, Florida ("Original Agreement"); and
WHEREAS, GEI and LGV have decided it is mutually beneficial to make the
changes and clarifications set forth in this Amendment.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. The recitals set forth in the above referenced preambles are
true and correct, and are incorporated herein by reference.
2. In the event of any conflict between this Amendment and the
Original Agreement, this Amendment shall control.
3. Unless otherwise defined in this Amendment, all terms used in
this Amendment shall have the meanings set forth in the
Original Agreement.
4. Section 1.1 G of the Original Agreement is hereby deleted and
replaced by the following:
"G. A Unit Owner whose Unit is in the rental program
shall be eligible for each person who fits in the
definition of Unit Owner or is otherwise entitled to
the benefits of a Unit Owner to play one (1) eighteen
(18) hole round of golf at the Golf Facilities for a
maximum of one hundred (100) rounds per Year (period
from November 1 through October 31 of the following
year), provided that no one individual shall be
entitled to play more than forty-two (42) times per
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<PAGE>
Year (period from November 1 through October 31 of
the following year) under the following conditions:
(1) If his or her Unit is not occupied by a
Designated User renting the Unit through the
rental program, any person classified as a
Unit Owner or having the rights of a Unit
Owner, may make an advance reservation up to
one (1) year in advance, and will not be
required to pay a green fee. Such
reservation will be canceled if the Unit is
subsequently rented.
(2) If the Unit is occupied by a Designated
User, renting the Unit through the rental
program, the Unit Owner shall have no
advance reservation rights to play golf, but
shall be eligible to play on the stand-by
space available basis (i.e., no reservation
under this Agreement, even after tee time is
open to public) without payment of a green
fee. This play will count toward the one
hundred (100) play times and toward the
maximum of forty-two (42) per person.
(3) If the Unit Owner is scheduled to play one
(1) eighteen (18) hole round of golf at the
Golf Facilities the Unit Owner may play a
second eighteen (18) hole round if there is
space available at the actual tee-off time
without any reservation, without payment of
a green fee. The play will count toward the
one hundred (100) play times and towards the
maximum of forty-two (42) per person.
(4) Use under this Section G is limited during
the period from December 16 through April
15, during which time a Unit Owner(s) will
be able to use the Golf Facilities a maximum
of seven (7) days during any one (1) thirty
(30) day period and once all seven (7) days
have been used, the Unit Owner(s) must wait
ten (10) more days for before being eligible
for additional golf privileges, with the
exception that there may be one (1) period
of up to fourteen (14) days of use per year
within a particular thirty (30) day period
(in which case the Unit Owner may not use
the Golf Facilities for a period of ten (10)
days before and after the first and last day
of such use). If such Unit Owner(s) desires
to play golf at the Golf Facilities more
than one hundred (100) times for all of
those falling in the category of Unit Owner,
and more than forty-two (42) times for any
individual per year, the Unit Owner(s) may
do so, subject to the same reservation
privileges, as are applicable to the general
public. The published resort green fee will
be paid for such use in excess of one
hundred (100) rounds per all Owner(s) or
those classified as having the use rights of
Owner(s) and in excess of forty-two (42) per
individual as classified as an Owner during
the months of November through April. During
the months of May through
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October, from 1999 through 2004, no green
fee will be paid for such excess rounds.
Commencing in May of 2005, one- half (1/2)
of the published resort green fee will be
paid for such excess use during the months
of May through October."
5. Section 1.1 I(3) of the Original Agreement is hereby deleted
and replaced by the following:
"(3) The lowest rate charged for green fees on the day of
play shall be paid by LGV or Manager to GEI."
6. Section 1.2 is deleted in its entirety and replaced with the
following:
"1.2 Beach Hotel Guest Access. LGV or Manager may assign
some of its tee times to hotels located on the beach
in Collier County in order to obtain beach access
from such hotels for individuals occupying the units.
Such assignment will enable tee times to be reserved
for beach hotel guests on the same terms as any other
Designated User. Use of any assigned tee times is
subject to all terms under this Agreement (including
notice under Section 1.D), and payment to GEI by LGV
or Manager of the published green fees and cart and
equipment rental fees for all players. Such
assignment shall not relieve LGV or Manager of the
obligation to pay all Annual License Fees."
7. Section 2.1 A all items (a) through (g) are modified by
deleting the word "July" and replacing it in each of items (a)
through (g) with "November."
8. Notwithstanding anything contained in the Original Agreement
to the contrary, GEI agrees that if the Initial License Fee
has been paid for a Unit, the failure to pay other Initial
License Fees shall not be a lien on such Unit or be the
grounds for terminating that Unit's access rights to the Golf
Facilities.
9. In Section 2.2 E on the fifth line, "2001" is deleted and
replaced by "2002".
10. GEI and LGV agree that Section 3.4 is modified to provide that
GEI shall commence construction of the clubhouse by May 15,
1999, and construction shall be completed not later than March
31, 2000, however, GEI agrees to use reasonable efforts to
complete construction by February 28, 2000.
11. In Section 5, after the end of the first sentence, insert an
additional sentence:
"GEI shall give LGV and Manager notice of any such closing,
which will impact their tee times as soon as practical after
the decision to have such closing has been made, failure to do
so will not expose GEI to damages."
12. Section 7.2 A. is modified to provide that, on the fourth line
on Page 22, to delete the date "October, 1998" and replace it
with "July, 1999".
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13. In Section 7.4 the second sentence is deleted in its entirety
and replaced with the following:
"The Transfer Fee shall be Five Thousand Dollars ($5,000.00),
which may be increased each year beginning on November 1, 2000
and annually thereafter by four percent (4%)".
14. Section 13 is modified to provide that, on the eight line, to
delete the date "July 1, 1999" and replace it with "December
31, 1999." Section 13 is also modified by adding an additional
sentence at the end of Section 13. "Notwithstanding anything
contained herein to the contrary as to Units and Unit Owners
GEI's lien rights shall only be applicable as to the payment
of Annual License Fees."
15. Section 14 relating to Temporary Clubhouse is modified to
provide that the temporary clubhouse shall be located on the
portion of the Lely Golf Villas property described on Exhibit
"A" to this Amendment, and such temporary clubhouse shall be
removed not later than March 31, 2000, provided however, GEI
agrees to use reasonable efforts to complete removal of the
temporary clubhouse by February 28, 2000, all at the cost and
expense of GEI. GEI agrees that it will pay all costs and fees
to LGV for LGV to amend its Site Development Plan 98-61B
("SDP") to allow the temporary use of the temporary clubhouse
at a cost of approximately Ten Thousand Six Hundred Dollars
($10,600.00), which shall be paid by GEI to LGV within ten
(10) days of execution of this Amendment. GEI acknowledges
that LGV has had to pay Two Thousand One Hundred Four Dollars
and Fifty/One Hundredths ($2,104.50) to repair a force main to
continue the force main service to the temporary clubhouse,
which amount shall be reimbursed by GEI to LGV within ten (10)
days of execution of this Amendment. GEI acknowledges that its
force main and water main which presently service the
temporary clubhouse are under the area that will be used for
LGV's or Manager's reservation check-in facility, which is
anticipated will be under construction prior to GEI ceasing
use of the temporary clubhouse. GEI agrees to pay the
reasonable cost of such relocation of its force main and water
main which cost is estimated to be approximately Five Thousand
Dollars ($5,000.00) to Ten Thousand Dollars ($10,000.00), upon
notice from LGV that it has expended such sum for relocating
in order to keep the temporary clubhouse in operation. GEI
also agrees if LGV is required to move other utility services
or other facilities in order to accommodate LGV's permanent
construction, in order to allow GEI to continue to use the
temporary clubhouse, that GEI shall reimburse LGV for all
reasonable costs relating to same. GEI also agrees that if in
using the temporary clubhouse, if it, its employees, agents or
guests damage LGV's improvements which have already been made
to the temporary clubhouse site or to other areas within LGV's
property, GEI shall immediately reimburse LGV for any costs
and expenses to repair such damages.
16. Except as specifically modified by this Amendment, the
Original Agreement shall remain in full force and effect. GEI
also agrees and acknowledges that the leasehold mortgage
encumbering the Golf Courses in favor of LGV and the mortgage
encumbering the clubhouse property in favor of LGV shall
remain in full force and effect, and are not modified by this
Amendment, except as the Original Agreement
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<PAGE>
is modified by this Amendment. GEI acknowledges that this
Amendment does not, in any manner, release LGV's rights under
such mortgages.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
Signed, Sealed and Delivered in the
Presence of:
GOLF ENTERPRISES, INC., a Kansas
corporation
By:
Witness THEODORE F. KAHAN
Print Name: Vice President/General Counsel
(Corporate Seal)
Witness
Print Name:
STATE OF CALIFORNIA )
)ss
COUNTY OF LOS ANGELES )
The foregoing Amendment was acknowledged before me this ____ day of
May, 1999, by THEODORE F. KAHAN, as Vice President/General Counsel of GOLF
ENTERPRISES, INC., a Kansas corporation, who is personally known to me or
produced ____________________________________ as identification.
NOTARY PUBLIC, State of California, at Large
Name:
Commission Number:
Commission Expires:
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LELY GOLF VILLAS I LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: RONTO GOLF DEVELOPMENTS,
Witness INC., a Florida corporation, one of its
Print Name: General Partners
By:
A. JACK SOLOMON
Witness President
Print Name:
(Corporate Seal)
STATE OF FLORIDA )
)ss
COUNTY OF COLLIER )
The foregoing Amendment was acknowledged before me this ____ day of
May, 1999, by A. JACK SOLOMON, as President of RONTO GOLF DEVELOPMENTS, INC., a
Florida corporation, one of the General Partners of LELY GOLF VILLAS I LIMITED
PARTNERSHIP, a Delaware limited partnership, who is personally known to me or
produced ____________________________________ as identification.
NOTARY PUBLIC, State of Florida, at Large
Name:
Commission Number:
Commission Expires:
-6-
Exhibit 10.16
ARTICLES OF INCORPORATION
FOR
LELY RESORT MASTER
PROPERTY OWNERS ASSOCIATION, INC.
The undersigned, for the purpose of forming a not-for-profit
Corporation in accordance with the laws of the State of Florida, hereby
acknowledge and file these Articles of Incorporation in the office of the
Secretary of the State of Florida, and certify as follows:
ARTICLE I
The name of this Corporation shall be Lely Resort Master Property
Owners Association, Inc. For convenience, the Corporation shall be referred to
as the "Corporation".
ARTICLE II
PURPOSES AND POWERS
The Corporation shall have the following powers:
A. To promote the health, safety and social welfare of the owners of
property within Lely Resort, a community located near the city of Naples in
Collier County, Florida and described on Exhibit A attached hereto and made a
part hereof, and hereinafter referred to as "the Properties".
B. To provide for maintenance service and such other services
("Community Services") the responsibility for which has been imposed upon and
delegated to the Corporation pursuant to the Declaration of General Covenants,
Conditions and Restrictions for Lely Resort.
C. To carry out the duties and obligations and receive the benefits
given the Corporation by the Declaration of General Covenants, Conditions and
Restrictions for Lely Resort.
D. To establish By-Laws and Rules and Regulations for the operation of
the Corporation and to provide for the formal administration of the Corporation;
to enforce the By-laws, the Rules and Regulations of the Corporation and the
Declaration of General Covenants, Conditions and Restrictions for Lely Resort.
E. To contract for the management of the Properties and for the
furnishing of the Community Services and to delegate to the party with whom such
contract has been entered into the powers and duties of the Corporation.
F. To acquire, own, operate, mortgage, lease, sell and trade property,
whether real or personal, as may be necessary or convenient in the
administration of the Properties.
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G. To levy and collect assessments against Members of the Lely Resort
Master Property Owners Association, Inc. in order to pay all expenses of the
Corporation as provided in the Declaration of General Covenants, Conditions and
Restrictions for Lely Resort.
H. To manage, maintain, insure, equip, improve, repair, reconstruct,
pay taxes and expenses, replace and operate the Properties and provide the
Community Services and to contract with others for such Properties.
I. To grant easements, licenses, rights-of-way, etc., over and across
the Properties.
J. The Corporation shall have all of the common law and statutory
powers of a Corporation not-for-profit which are not in conflict with the terms
of these Articles, and the Declaration of Restrictions and Protective Covenants
for Lely Resort.
ARTICLE III
MEMBERS
The members of the Corporation shall be Lely Development Corporation,
Triangle Properties Southwest, Inc., Associated Real Estate Southwest, Inc.,
Eagle Consolidated, Inc., Flamingo Properties of Naples, Inc. and Resort
Development of Collier County, Inc., so long as they own all or any of the land
subject to the Declaration of General Covenants, Conditions and Restrictions for
Lely Resort; the owner of the Hotel Site described on Exhibit B; and all record
owners of a dwelling unit and/or plot as defined in the Declaration of General
Covenants, Conditions and Restrictions for Lely Resort. Membership shall be
appurtenant to and may not be separated from ownership of a dwelling unit and/or
plot.
ARTICLE IV
EXISTENCE
The Corporation shall have perpetual existence.
ARTICLE V
VOTING RIGHTS
Each member shall have one (1) vote for each dwelling unit and/or plot
owned by it. The owner of the Hotel shall have one (1) vote for each room in the
Hotel.
ARTICLE VI
SUBSCRIBERS
The name and address of the Subscriber to these Articles of
Incorporation is as follows:
John F. Stanley
2660 Airport Road South
Naples, Florida 33962
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ARTICLE VII
BOARD OF DIRECTORS
The Initial Board of Directors shall consist of three (3) Directors.
The names and addresses of the Initial Directors are:
NAME ADDRESS
---- -------
John J. Agnelli 373 Bay Meadows Drive
Naples, Florida 33962
Evelyn M. Cryder 134 Arctic Way
Naples, Florida 33962
David N. Blank 768 Sea Court
Marco Island, Florida 33937
The number of directors may be either increased or decreased from time
to time by the By-Laws, but shall never be less than 3.
At the first Annual Meeting and at each Annual Meeting thereafter, the
members shall elect Directors for terms as set forth in the By-Laws. Directors
need not be members of the Corporation.
ARTICLE VIII
OFFICERS
The affairs of the Corporation shall be administered by the Officers
designated in the ByLaws, who shall serve at the pleasure of said Board of
Directors. The names and addresses of the Officers who shall serve until the
first election of Officers pursuant to the provisions of the By-Laws are as
follows.
<TABLE>
<CAPTION>
NAME TITLE ADDRESS
---- ----- -------
<S> <C> <C>
John J. Agnelli President 373 Baymeadows Drive
Naples, Florida 33962
David N. Blank Vice-President 768 Sea Court
Marco Island, Florida 33937
Evelyn M. Cryder Secretary/Treasurer 134 Arctic Way
Naples, Florida 33962
</TABLE>
ARTICLE IX
BY-LAWS
The original By-Laws of the Corporation shall be adopted by the Initial
Board of Directors. Thereafter, the By-Laws may be altered, amended or rescinded
only in the manner provided for in By-Laws. Such alteration, amendment or
rescission of the By-Laws may not be adopted and shall
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<PAGE>
not become effective without the prior written consent of Lely Development
Corporation for as long as it is a member.
ARTICLE X
TRANSACTIONS IN WHICH DIRECTORS OR
OFFICERS ARE INTERESTED
In the absence of fraud, no contract or other transaction between the
Corporation and any other person, firm, association, corporation or partnership
shall be affected or invalidated by the fact that any Director or Officer of the
Corporation is pecuniarily or otherwise interested in such contract or other
transactions, or in any way connected with any person, firm, association,
corporation or partnership which is pecuniarily or otherwise interested therein.
Any Director may vote and be counted in determining the existence of a quorum at
any meeting of the Board of Directors of the Corporation for the purpose of
authorizing such contract or transaction with like force and effect as if he
were not so interested, or were not a Director, Member or Officer of such firm,
association, corporation or partnership.
ARTICLE XI
INDEMNIFICATION
Every Director and every Officer of the Corporation shall be
indemnified by the Corporation against all expenses and liabilities, including
counsel fees reasonably incurred by or imposed upon the Director or Officer in
connection with any proceeding or any settlement thereof to which the Director
or Officer may be a party, or in which the Director or Officer may become
involved by reason of the Director or Officer being or having been a Director or
Officer of the Corporation, whether or not a Director or Officer at the time
such expenses are incurred, except in such cases wherein the Director or Officer
is adjudged guilty of willful misfeasance or malfeasance in the performance of
the Director's or Officer's duty; provided that in the event of a settlement,
the indemnification herein shall apply only when the Board of Directors approves
such settlement and reimbursement as being for the best interest of the
Corporation. The foregoing right of indemnification shall be in addition to and
not exclusive of all rights to which such Director or Officer may be entitled.
ARTICLE XII
INITIAL REGISTERED OFFICE, AGENT AND ADDRESS
The principal office of the Corporation shall be at 2660 Airport Road
South, Naples, Florida 33962, or at such other place, within or without the
State of Florida as may be subsequently designated by the Board of Directors.
The initial registered office is at the above address and the initial registered
agent therein is John F. Stanley.
IN WITNESS WHEREOF, the subscriber has executed these Articles of
Incorporation, this 6th day of March, 1990.
/s/ John F. Stanley
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JOHN F. STANLEY
STATE OF FLORIDA )
) ss.:
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COUNTY OF COLLIER )
I hereby certify that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgments, personally
appeared JOHN F. STANLEY, well known to me and she acknowledged executing the
foregoing Articles of Incorporation of Lely Resort Master Property Owners
Association, Inc. for the uses and purposes expressed therein.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal at Collier County, Florida, this 6th day of March, 1990.
My Commission Expires: /s/ C.
NOTARY PUBLIC FOR FLORIDA
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CERTIFICATE DESIGNATING PLACE OF BUSINESS OR DOMICILE
FOR THE SERVICE OF PROCESS WITHIN THIS STATE
NAMING AGENT UPON WHOM PROCESS MAY BE SERVED
In pursuance of Chapter 48.091, Florida Statutes, the following is
submitted, in compliance with said Act:
First, that Lely Resort Master Property Owners Association, Inc.,
desiring to organize under the laws of the State of Florida with its initial
registered office as indicated in the Articles of Incorporation, at Naples,
County of Collier, State of Florida, has named JOHN F. STANLEY, located at 2660
Airport Road South, Naples, Florida 33962, as its agent to accept service of
process within the State.
ACKNOWLEDGMENT
Having been named to accept service of process for the above-styled
corporation, at place designated in this certificate, I hereby accept to act in
this capacity, and agree to comply with the provision of said Act relative to
keeping open said office.
/s/ John F. Stanley
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JOHN F. STANLEY
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Exhibit 10.17
BY-LAWS
OF
LELY RESORT MASTER PROPERTY OWNERS ASSOCIATION, INC.
ARTICLE I
GENERAL
Section 1.NAME: The name of the corporation shall be LELY RESORT MASTER PROPERTY
OWNERS ASSOCIATION, INC.
Section 2.PRINCIPAL OFFICE: The principal office shall be 8825 Tamiami Trail
East, Naples, Florida 33962.
ARTICLE II
DIRECTORS
Section 1. NUMBER AND TERM: The number of Directors which shall
constitute the whole Board shall be three (3). Directors need not be Members.
All Directors shall be elected to serve for a term of one (1) year or until
their successors shall be elected and shall qualify. .
Section 2. VACANCY AND REPLACEMENT: If the office of any Director or
Directors becomes vacant by reason of death, resignation, retirement,
disqualification, removal from office, or other wise, a majority of the
remaining Directors not less than a quorum at a special meeting of Directors
duly called for this purpose shall choose a successor or successors who shall
hold office for the unexpired term in respect of which said vacancy occurred.
In the event that only one Director remains, he shall have the power to
choose the successors to hold office for the unexpired term.
Section 3. REMOVAL: Any Director maybe removed by a vote of two-thirds
(2/3's) of the Membership.
Section 4. FIRST BOARD OF DIRECTORS: The Directors named in the
Certificate of Incorporation of the corporation shall constitute the first Board
of Directors and shall hold office and exercise all powers of the Board of
Directors until the first election, anything herein to the contrary
notwithstanding. Any or all of said Directors shall be subject to replacement in
the event of resignation or death as above provided.
Section 5. POWERS: The property and business of the corporation shall
be managed by the Board of Directors, which may exercise all corporate powers
not specifically prohibited by statute or the certificate of incorporation. The
powers of the Board of Directors shall specifically include, but no be limited
to, the following:
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A. To promote the health, safety and social welfare of the owners of
property within Lely Resort, a community located near the City of Naples in
Collier County, Florida and described on Exhibit A attached hereto and made a
part hereof, and hereinafter referred to as "the Properties".
B. To provide for maintenance service and such other services
("Community Services") the responsibility for which has bee imposed upon and
delegated to the Corporation and pursuant to the Declaration of General
Covenants, Conditions and Restrictions for Lely Resort.
C. To carry out the duties and obligations and receive the benefits
given the Corporation by the Declaration of General Covenants, Conditions and
Restrictions for Lely Resort.
D. To establish By-Laws and Rules and Regulations for the operation of
the Corporation and to provide for the formal administration of the Corporation
and the Declaration of General Covenants, Conditions and Restrictions for Lely
Resort.
E. To contract for the management of the Properties and for the
furnishing of the Community Services and to delegate to the party with whom such
contract has been entered into the powers and duties of the Corporation.
F. Too acquire, own, operate, lease, sell and trade property, whether
real or personal, as may be necessary or convenient in the administration of the
Properties.
G. To levy and collect assessments against Members of the Lely Resort
Master Property Owners Association, Inc. in order to pay all expenses of the
Corporation as provided in the Declaration of General Covenants, Conditions and
Restrictions for Lely Resort.
H. To manage, maintain, insure, equip, improve, repair, reconstruct,
pay taxes and expenses, replace and operate the Properties and provide the
Community Services and to contract with others for such Properties.
I. To grant easements, licenses, rights-of-way, etc., over and across
the Properties.
J. The Corporation shall have all of the common law and statutory
powers of a Corporation not-for-profit which are not in conflict with the terms
of these Articles, and the Declaration of Restrictions and Protective Covenants
for Lely Resort.
Section 6. COMPENSATION: Neither Directors nor officers shall receive
compensation for their services as such.
Section 7. MEETINGS:
A. The annual meeting of each Board newly elected by the Members shall
be held immediately upon adjournment of the meeting at which they were elected,
provided a quorum shall then be present, or as soon thereafter as may be
practical. The annual meeting of the Board of Directors shall be held at the
same place as the general member's meeting.
B. Special meetings shall be held whenever called at the direction of
the President or a majority of the Board. The Secretary shall give notice of
each meeting personally within 24 hours of the meeting, or by mail or telegram,
at least three (3) days before the calling of the meeting. An
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emergency meeting may be designated as such only by an affirmative vote of
two-thirds (2/3's) of the Board.
C. A majority of the Board shall be necessary and sufficient at all
meetings to constitute a quorum for the transaction of business, and the act of
a majority present at any meeting at which there is a quorum shall be the act of
the Board.
D. The assessments for which provision is herein made shall commence on
the first (1st) day of the month or as fixed by the Board of Directors to be the
day of commencement. The first (1st) annual assessment for any Member shall be
adjusted according to the number of days remaining in the year of assessment.
The due date of any assessment shall be determined by the Board and the manner
of payment shall likewise be determined by the Board.
Section 8. ORDER OF BUSINESS: The order of business at all meetings of
the Board shall be as follows:
A. Roll Call;
B. Reading of Minutes of the last Meeting;
C. Consideration of Communications;
D. Resignations and elections;
E. Reports of officers and employees;
F. Reports of committees;
G. Unfinished business;
H. original resolutions and new business;
I. Adjournment.
Section 9. EXECUTIVE OFFICERS: The executive officers of the
corporation shall be a President, Vice-President, Treasurer and Secretary, all
of whom shall be elected annually by said Board. Any two of said officers may be
united in one person except that the President shall not also be the Secretary
or an Assistant Secretary of the Corporation. If the Board so determines, there
may be more than one Vice-President.
ARTICLE III
OFFICERS
Section 1. EXECUTIVE OFFICERS: The executive officers of the
corporation shall be a President, Vice-President, Treasurer and Secretary, all
of whom shall be elected annually by said Board. Any two of said officers may be
united in one person except that the President shall not also be the Secretary
or an Assistant Secretary of the corporation. If the Board so determines, there
may be more than one Vice-President.
Section 2. SUBORDINATE OFFICERS: The Board of Directors may appoint
such other officers and agents as they may deem necessary, who shall hold office
during the duties as from time to time may be prescribed by said Board.
Section 3. TENURE OF OFFICERS: REMOVAL: All officers and agents shall
be subject to removal, with or without cause at any time by action of the Board
of Directors. The Board may delegate powers of removal of subordinate officers
and agents to any officer.
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Section 4. PRESIDENT:
A. The President shall preside at all meetings of the Members and
Directors; he shall have general and active management of the business of the
corporation; he shall see that all orders and resolutions of the Board are
carried into effect; he shall execute bonds, mortgages, and other contracts
requiring the seal, under the seal of the corporation; the seal when affixed may
be attested by the Secretary.
B. He shall have general superintendence and direction of all the other
officers of the Corporation and shall see that their duties are performed
properly.
C. He shall submit annual fiscal reports of the operations of the
Corporation and such period reports as may be, from time to time, called for by
the Directors. The annual fiscal report shall likewise be submitted to the
Members at the annual meeting. He shall also from time to time report to the
Board all matters within his knowledge which he feels should be brought to the
attention of the Directors.
D. He shall be an ex-officio member of all the committees and shall
have the general powers and duties of supervision and management usually vested
in the office of the president of a Corporation.
Section 6. SECRETARY:
A. The Secretary shall keep the minutes of the meetings of the members
of the Board' of Directors;
B. He shall see that all notices are duly given in accordance with the
provisions of these By-Laws or as required by law;
C. He shall be custodian of the corporate records, except fiscal
accounting records, of the seal of the corporation and shall see that the seal
of the corporation is affixed to all documents, the execution of which on behalf
of the corporation under its seal is duly authorized in accordance with the
provisions of these By-Laws;
D. He shall keep the register of the post office addresses of each
Member, which shall be furnished by the Secretary to any Member at the Member's
request as long as the Member is in good standing;
E. In general, he shall perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the President or by the Board of Directors.
Section 8. VACANCIES: If the office of the President, Vice-President,
Secretary, or Treasure, one or more, becomes vacant by reason of death,
resignation, disqualification or otherwise, the remaining Directors by a
majority vote of the whole Board of Directors provided for in these ByLaws may
choose a successor or successors who shall hold office for the unexpired term.
Section 9. RESIGNATION: Any Director or other officer may resign his
office at any time, such resignation to be made in writing, and to take effect
from the time of its receipt by the
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corporation, unless some time be fixed in the resignation, and then from that
date. The acceptance of a resignation shall be required to make it effective.
ARTICLE IV
MEMBERSHIP
Section 1. The Members of the Corporation shall be Lely Development
Corporation, Triangle Properties S.W., Inc., Associated Real Estate S.W., Inc.,
Eagle Consolidated, Inc., Flamingo Properties of Naples, Inc. and Resort
Development of Collier County, Inc. so long as they own all or any of the land
subject to the Declaration of General Covenants, Conditions and Restrictions for
Lely Resort Recorded in O.R. Book ______, Page ______ of the Public Records of
Collier County, Florida. In addition, the owner of the Hotel site described on
Exhibit B to the Declaration of the General Covenants, Conditions and
Restrictions for Lely Resort dated March 13, 1990 and recorded March 16, 1990 in
O.R. Book 1513, Pages 835-867 of the Public Records of Collier County, Florida
shall be Members of the Corporation and all record owners of a dwelling unit and
or Plot as defined in the Declaration of General Covenants, Conditions and
Restrictions for Lely Resort dated March 13, 1990, Recorded March 16, 1990 in
O.R. Book 1513, Page 835-867 of the Public Records of Collier County, Florida.
Membership shall be appurtenant to and may not be separated from ownership a
dwelling unit and or Plot as defined in the Declaration of General Covenants,
Conditions and Restrictions for Lely Resort. Recorded March 16, 1990 in O.R.
Book 1513, Page 835-867 of the Public Records of Collier County, Florida.
ARTICLE V
MEETING OF THE MEMBERSHIP
Section 1. PLACE: All meetings of the corporate membership shall be
held at the office of the corporation or such other place as may be stated in
the notice.
Section 2. FIRST AND ANNUAL MEETING:
A. The annual meeting shall be held on first Monday of March of each
year. If the meeting date should fall on a legal holiday, then the meeting shall
fall on the next secular day following.
B. At the annual meetings, except as heretofore set forth as other wise
provided in the Articles of Incorporation, a Board of Directors shall be
elected, such other business shall be transacted as may properly come before the
meeting.
C. Written notice of the annual meetings shall be served upon or mailed
by the Secretary to each member entitled to vote there at, at such address as
appears on the books of the corporation at least 14 days prior to the meeting.
Section 3. MEMBERSHIP LIST: At least 14 days before every election of
Directors a complete list of members entitled to vote at said election, arranged
numerically by dwelling unit, shall be prepared by the Secretary. Such list
shall be produced and kept for said and shall be open to examination by any
member in good standing throughout such time.
Section 4. VOTING MEMBERS: It is estimate at this time that there will
be 10,150 dwelling units constructed in Lely, a Resort Community, PUD. Until all
the dwelling units and or
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plots as defined in the Declaration of General Covenants, Conditions and
Restrictions for Lely Resort have been initially sold, there shall be 10,150
Members in the Master Property Owners Association and each Member, other than
Lely Development Corporation and the owner of the hotel shall one (1) vote for
each dwelling and or plot owned by it. The Owner of the hotel shall have one
vote for each room in the hotel and Lely Development Corporation shall have the
remaining votes to reach a total of 10,150. When all the dwelling units and or
plots have been initially sold, then the total Membership shall be based on the
actual number of dwelling units and or plots in Lely, as Resort Community, PUD,
plus the number of hotel rooms in the hotel constructed on the property
described on Exhibit B to the Declaration of General Covenants, Conditions and
Restrictions for Lely Resort as Recorded in O.R. Book 1513, Page 835 of the
Public Records of Collier County, Florida.
Section 5. SPECIAL MEETINGS:
A. Special meetings of the members, for any purpose or purposes, unless
otherwise prescribed by statute or by the certificate of incorporation, may be
called by the President and shall be called by the President or Secretary at the
request in writing of a majority of the Board of Directors or at the request in
writing of 100 Members. Such requests shall state the purpose or purposes of the
proposed meeting.
B. Written notice of a special meeting of members stating the time,
place and object thereof shall be served upon and mailed to each member entitled
to vote thereat, at such address as appears on the books of the corporation, at
least 14 days before such meeting.
C. Business transacted at all special meetings shall be confined to the
object stated in the notice thereof.
Section 6. RIGHT TO VOTE AND PROXIES: At any meeting of the members,
every member having the right to vote shall be entitled to vote in a person or
by proxy. Such proxies shall only be valid for such meeting or subsequent
adjourned meeting thereof, provided, however, that no persons shall be entitled
to vote as a proxy for a member who is not himself either a member or the spouse
of a Member of the corporation.
Section 7. QUORUM: A quorum shall be Fifty-One Percent (51%) of the
membership, including all of the votes of Lely Development Corporation. Members
may be present in person or by proxy. A quorum may transact any business of the
Corporation, except as otherwise provided by Florida Statutes. If, however, such
a quorum shall not be present or represented at any meeting of the members, the
members entitled to vote thereat, present in person or represented by written
proxy, shall have power to adjourn the meeting from time to time without notice,
other than an announcement at the meeting until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting originally called.
Section 8. VOTE REQUIRED TO TRANSACT BUSINESS: When a quorum is present
at any meeting, the vote of a majority of the voting members present, in person
or represented by written proxy, shall decide any question brought before the
meeting unless the question is one upon which by express provisions of the
Statutes or the Certificate of Incorporation or of these By-Laws a different
vote is required, in which case such expressed provisions shall govern and
control the decision of such question.
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Section 9. WAIVER AND CONSENT: Whenever the vote of members at a
meeting is required or permitted by any provisions of the Statutes or of the
Certificate of Incorporation, or these By-Laws, to be taken in connection with
any action of the corporation, the meeting and vote of members may be dispensed
with if all members who would have been entitled to vote if such meeting were
held, shall consent in writing to such action being taken.
ARTICLE VI
NOTICES
Section 1. SERVICE OF NOTICE OF WAIVER: Whenever any notice is required
to be given under the provisions of Florida Statute, the Certificate of
Incorporation or these By-Laws, a waiver thereof in writing signed by the person
or persons entitled to such notice, whether before or after the time stated
therein, shall be deemed the equivalent thereof.
ARTICLE VII
FINANCES
Section 1. FISCAL YEAR: The fiscal year shall begin on the first day of
January.
Section 2. CHECKS: All checks or demands for money and notes of the
corporation shall be signed by the President or Treasurer or by such officer or
officers or such other person or persons as the Board of Directors may from time
to time designate.
ARTICLE VIII
SEAL
The seal of the corporation shall have inscribed thereon the name of
the corporation, the year of its organization and the words, "non-profit". Said
seal may be used by causing it or a facsimile thereof to be impressed, affixed,
reproduced or otherwise.
ARTICLE IX
DEFAULT
If the assessments are not paid on the date when date then such
assessments shall become delinquent and shall bear interest thereon at three
(3%) percent over the Prime of Chase Manhattan Bank, adjusted monthly, until the
assessment is paid and shall also include all costs of collection, including a
reasonable attorneys' fee, and should legal proceedings be required to enforce
collection of payment-of an assessment the same may be foreclosed as a lien
against the dwelling units against which the assessment was made in the same
manner provided for enforcement which the assessment was made in the same manner
provided for enforcement of claims of mechanics, lien under the laws of the
State of Florida.
In addition the Board of Directors shall have the right to suspend a
Member's right to vote and a Member's right to use Foundation Common Area for
any period during which any assessment remains unpaid, and for a reasonable
period during or after any infraction of the Corporation's rules and regulations
governing the Corporation's Common Area. The annual and special assessments,
together with interest thereon and costs of collection shall be a charge on each
Member and shall be a continuing lien upon the Member's lot an/or dwelling unit
against with interest thereon, and costs
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of collection shall be the personal obligation of the person who is the owner of
each individual dwelling unit and/or lot or undivided interest therein at the
time of assessment.
In the event of violation of the provisions of the Declaration and
General Protective Covenants for Lely Resort dated March 13, 1990. Recorded
March 16, 1990 in O.R. Book 1513, Page 835, as may be amended from time to time,
or in the event of violation of the Articles of Incorporation or By-Laws which
may be amended from time to time, the Board may bring appropriate action to
enjoin such action or may enforce the Provisions of such documents or may sue
for damages or take such other course of action as they deem appropriate. In
case of such legal action the prevailing party shall be entitled to reasonable
attorneys fees, including attorney fees on appeal and court costs.
ARTICLE X
AMENDMENTS
From and after the enactment and approval of these By-Laws, amendments
may be adopted by two thirds (2/3's) vote of the Board at any annual or special
meeting called for that purpose, provided, however, that no amendment shall
become affective without the prior written consent of Lely Development
Corporation for as long as it is a member of the Corporation.
ARTICLE XI
AMENDMENT OF ARTICLES
Amendments to the Articles of Incorporation shall be purposed by the
Board of Directors and adopted by three-quarter (3/4) votes of the membership at
any annual or special meeting called for that purpose; provided, that full text
of any proposed amendment shall be included in the Notice of such a meeting.
ARTICLE XII
CONSTRUCTION
Whenever the masculine singular form of the pronoun is used in these
By-Laws, it shall be construed to mean the masculine, feminine or neuter;
singular or plural, whenever the context so requires.
ARTICLE XIII
ASSESSMENTS
"Creation of the Lien and Personal Obligation"
----------------------------------------------
A. Each Owner, by acceptance of a deed for a Plot, whether or not it
shall be so expressed in such deed, shall be covenanting and agreeing to pay to
the Master Property Owners Association: (i) an initial capital assessment at the
time of closing of the first conveyance of a Plot from LELY DEVELOPMENT
CORPORATION to a Member and Owner; (ii) annual assessments; (iii) special
assessments for capital improvements.
B. The Master Property Owners Association shall have the power to make
and collect assessments against Members to defray the costs, expenses and
maintenance of the Property owned, leased or maintained by the Master Property
Owners Association, and to enforce the provisions of
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these Protective Covenants. The Board of Directors of the Master Property Owners
association shall have the authority to consider current maintenance costs and
needs of the Master Property Owners Association in order to fix the annual
assessments for such costs to be paid by the Members of the Master Property
Owners Association.
C. The initial, annual and special assessments, together with interest
and costs of collection, including reasonable attorneys' fees, which include
those resulting from any appellate proceedings, shall be a continuing lien upon
the Plot against which such assessment is made.
D. Each such assessment, together with interest and costs of
collection, including reasonable attorneys, fees, which includes those resulting
from appellate proceedings, shall also be the personal obligation of the person
who was the owner of the Plot at the time such assessment fell due and unpaid
assessments shall also be the personal obligation of each person who became an
Owner of the Plot. Each Owner, by acceptance of any deed for a Plot, is
personally covenanting and agreeing to pay any such obligation falling due prior
to or during the time of his ownership and such personal obligation shall
survive any conveyance.
E. In the event that a Plot has been submitted to a plan of condominium
ownership or to any association, or to another such entity, then the
Neighborhood Association thereof shall have the duty and responsibility for
collecting and timely remitting to the Master Property Owners Association any
and all Master Property Owners Association assessments and other charges;
provide, however, that the Master Property Owners Association may, in its sole
discretion, elect to collect due and unpaid Master Property Association
assessments and other charges which are due and payable.
F. The purpose, amount, rate, exemption from and nonpayment of initial,
annual and special assessments, and the establishment of annual budgets shall be
as set forth in the Master Property Owners Association's By-Laws.
G. A Plot shall not be subject to assessment so long as it is Master
Property Owners Association Common Area, or it is Neighborhood Common Area, or
it is owned by a governmental agency and used solely for a public purpose.
H. "Dues" Each Member shall pay such dues as the Members shall
determine at their annual meeting.
Dues shall be a continuing lien upon the Plot of any Owner and the dues
shall be the personal obligation of the person who was the Owner of the Plot at
the time the person became an Owner and any due and unpaid dues shall also be
the personal obligation of each person who becomes an Owner of the Plot. Each
Owner, by acceptance of a Deed for a Plot, is personally covenanting and
agreeing to pay annual dues which fall due prior to or during the term of his
ownership and such personal obligation shall survive any conveyance of any Plot.
ARTICLE XIV
TRANSACTIONS IN WHICH DIRECTORS OR OFFICERS
ARE INTERESTED
In the absence of fraud, no contract or other transaction between the
Corporation and any other person, firm, association, corporation or partnership
shall be affected or invalidated by the fact
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that any Director or Officer of the Corporation is pecuniarily or otherwise
interested in such contract or other transactions, or in any way connected with
any person, firm, association, corporation or partnership which is pecuniarily
or otherwise interested therein. Any Director may vote and be counted in
determining the existence of a quorum at any meeting of the Board of Directors
of the Corporation for the purpose of authorizing such contract or transaction
with like force and effect as if he were not so interested, or were not a
Director, Member of Officer of such firm, association, corporation or
partnership.
ARTICLE XV
INDEMNIFICATION
Every Director and every officer of the Corporation shall be
indemnified by the Corporation against all expenses and liabilities, including
counsel fees reasonably incurred by or imposed upon the Director or Officer in
connection with any proceeding or any settlement thereof to which the Director
or Officer may be a party, or in which the Director or officer may become
involved by reason of the Director or officer being or having been a Director or
Officer of the Corporation, whether or not a Director or Officer at the time
such expenses are incurred, except in such cases wherein the Director or Officer
is adjudged guilty of willful misfeasance or malfeasance in the performance of
the Director's or officer's duty; provided that in the event of a settlement,
the indemnification herein shall apply only when the Board of Directors approves
such settlement and reimbursement as being for the best interest of the
Corporation. The foregoing right of indemnification shall be in addition to and
not exclusive of all rights to which such Director or Officer may be entitled.
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Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the use of our
report dated February 23, 1999, on the financial statements of Lely Golf Villas
I Limited Partnership, and to the reference to our Firm as "Experts" included in
this registration statement on Form S-11 (File No.
333-73415).
/s/ Arthur Andersen LLP
Miami, Florida,
May, 24, 1999.
<PAGE>
Exhibit 23.3
CONSENT
We understand that Lely Golf Villas I Limited Partnership ("Lely Golf
I") has filed a registration statement on Form S-11 (no. 333-73415) (the
"Registration Statement") with respect to the offering of up to 200 resort
condominium units coupled with a mandatory rental agreement under the Securities
Act of 1933, as amended. We hereby consent to the use in the Prospectus forming
a part of the Registration Statement, including the attached Projections, of our
name and extracts from our report dated November 1997 prepared for The Ronto
Group on behalf of Lely Golf Villas I Limited Partnership with respect to the
proposed 200 unit condominium resort project to be located in Lely Resort,
Naples, Florida.
/s/ Horwath Landauer Consulting, Inc.
HORWATH LANDAUER CONSULTING, INC.
May 27, 1999
