UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
Commission File Number:
333-264
Exact name of Registrant as specified in its charter:
South Seas Properties Company Limited Partnership
State or other Jurisdiction of incorporation or organization:
Ohio
I.R.S. Employer Identification Number:
59-2541464
Address of Principal Executive Offices:
12800 University Drive, Suite 350
Fort Myers, FL 33907
Registrant's Telephone Number, including Area Code:
(941) 481-5600
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
X YES NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. YES NO
<PAGE>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
FORM 10-Q
JUNE 30, 1996
INDEX
PAGE NO.
COVER LETTER
PART I
ITEM 1
FINANCIAL INFORMATION
Consolidated Balance Sheets at
June 30, 1995 and 1996 and December 31, 1995 1
Consolidated Statements of Operations
for the Three Months and Six Months Ended
June 30, 1995 and 1996 2
Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 1995 and 1996 3-4
Notes to Consolidated Financial Statements 5-6
ITEM 2
Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-13
PART II
OTHER INFORMATION 14
SIGNATURES 15
EXHIBITS:
EXHIBIT 10 - FIRST UNION LOAN AGREEMENT
EXHIBIT 11 - FINOVA DOCUMENTS
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
EXHIBIT 99 - CALCULATION OF WEIGHTED AVERAGE UNITS OUTSTANDING
<PAGE>
<TABLE>
<CAPTION>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(In Thousands)
June 30
Dec. 31
1995 1995 1996
(audited) (unaudited) (unaudited)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $7,340 $ 12,835 $ 10,388
Restricted cash 5,818 184 106
Restricted marketable securities - - 3,262
Accounts receivable, trade 6,261 4,541 4,769
Inventories 1,847 1,735 1,783
Prepaid expenses and other 1,975 1,078 2,219
Total current assets 23,241 20,373 22,527
PROPERTY, PLANT AND EQUIPMENT, net 76,668 73,261 77,391
LOAN COSTS, net 2,450 1,877 5,135
GOODWILL, net 6,805 6,988 6,622
OTHER ASSETS 1,662 1,980 2,530
Total assets $110,826 $104,479 $114,205
LIABILITIES AND PARTNERS' CAPITAL
DEFICIENCY
CURRENT LIABILITIES
Current maturities of notes
and mortgages payable $13,602 $12,092 $ 2,175
Current maturities of bonds
payable 12,998 2,437 -
Current obligations under
capital leases 398 387 271
Accounts payable 3,146 3,450 3,971
Accrued expenses 9,540 8,357 6,881
Customer deposits 4,708 2,304 2,203
Deferred revenue 1,073 - 428
Total current liabilities 45,465 29,027 15,929
NOTES AND MORTGAGES PAYABLE, less
current maturities 75,555 63,033 58,754
BONDS PAYABLE, less current
maturities - 12,776 43,500
LONG-TERM OBLIGATIONS UNDER
CAPITAL LEASES, less current
obligations 1,112 1,067 711
OTHER LONG-TERM OBLIGATIONS 1,384 1,384 1,304
COMMITMENTS AND CONTINGENCIES - - -
MINORITY INTERESTS 12 27 26
PARTNERS' CAPITAL DEFICIENCY (12,702) (2,835) (6,019)
Total liabilities and
partners' capital
deficiency $110,826 $104,479 $114,205
</TABLE>
The accompanying notes are an integral part of these financial statements.<PAGE>
<TABLE>
<CAPTION>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per unit data)
(unaudited)
Three Months Six Months
Ended June 30 Ended June 30
1995 1996 1995 1996
<S> <C> <C> <C> <C>
Revenues
Rooms $15,566 $17,275 $35,379 $40,125
Food and beverage 4,303 4,667 9,317 10,395
Retail 1,614 1,823 3,390 3,828
Golf 496 672 1,572 1,785
Spa and fitness 170 654 170 1,424
Other 4,585 4,372 8,921 9,509
Total revenues 26,734 29,463 58,749 67,066
Expenses
Rooms 3,580 3,942 6,908 8,025
Food and beverage 3,219 3,581 6,669 7,602
Retail 1,171 1,265 2,365 2,598
Golf 231 252 501 537
Spa and fitness 73 384 73 786
Other 1,847 1,748 3,325 3,477
Condominium lease and rental
expenses 4,558 5,004 9,993 11,106
Sales and marketing 1,362 1,830 2,670 3,813
Maintenance and grounds 1,073 1,233 2,109 2,561
General and administrative
- resort properties 4,777 4,163 8,812 8,733
General and administrative
- corporate overhead 1,145 984 1,919 1,895
Depreciation and amortization 1,438 1,837 2,798 3,716
Interest expense 2,256 2,829 4,406 5,382
Total expenses 26,730 29,052 52,548 60,231
Income before non-operating items 4 411 6,201 6,835
Net gain on disposal/sale of
fixed assets - - 3 4
Minority interests (5) (9) (29) (31)
Net income $ (1) $ 402 $6,175 $6,808
Net income per unit $ - $ .09 $ 1.45 $ 1.58
Weighted average units
outstanding 4,261 4,331 4,249 4,320
</TABLE>
The accompanying notes are an integral part of these financial statements.<PAGE>
<TABLE>
<CAPTION>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Page 1 of 2
(In Thousands)
(unaudited) Six Months
Ended June 30
1995 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and others $ 59,359 $ 66,053
Cash paid to suppliers, employees and affiliates (46,757) (52,672)
Interest paid (2,252) (7,235)
Net cash provided by operating
activities 10,350 6,146
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures/purchase of assets (2,601) (3,531)
Proceeds from sale of assets 3 4
Loans to affiliates, net of repayments 724 -
Change in restricted cash/marketable securities 738 2,450
Cash acquired in purchase of resort property 353 -
Net cash used by investing
activities (783) (1,077)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 5,339 43,500
Deferred loan costs (101) (3,627)
Principal payments, long-term debt (4,256) (16,343)
Principal payments, under capital
lease obligations (107) (528)
Principal payments, bonds payable - (12,998)
Distributions to partners (862) (610)
Distributions to minority interest (10) (17)
Proceeds from the issuance of limited
partner units - 487
Principal payments under revolving lines
of credit - (11,885)
Net cash provided/(used) by
financing activities 3 (2,021)
Net increase in cash 9,570 3,048
Cash and cash equivalents, beginning of period 3,265 7,340
Cash and cash equivalents, end of period $12,835 $10,388
</TABLE>
(continued)
The accompanying notes are an integral part of these financial statements.<PAGE>
<TABLE>
<CAPTION>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Page 2 of 2
(In Thousands)
(unaudited)
Six Months
Ended June 30
1995 1996
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Net income $ 6,175 $ 6,808
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation/amortization expense 2,798 3,716
(Gain)/loss on disposal/sale of fixed assets (3) (4)
Minority interest 29 31
Changes in assets and liabilities
(Increase) decrease in:
Accounts receivable, net 1,872 1,492
Inventories (38) 64
Prepaid expenses and other assets (108) (1,112)
Increase (decrease) in:
Accounts payable 1,027 825
Accrued expenses (140) (2,524)
Customer deposits (1,078) (2,505)
Deferred revenues (184) (645)
Total adjustments 4,175 (662)
Net cash provided by operating activities $10,350 $6,146
Supplemental schedule of noncash investing and financing activities:
Capital lease obligations of $190 were incurred during the six months
ended June 30, 1995 when South Seas entered into leases for the upgrade of
equipment.
</TABLE>
The accompanying notes are an integral part of these financial statements.<PAGE>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary (consisting of
only normal recurring adjustments) to present fairly South Seas
Properties Company Limited Partnership ("South Seas") consolidated
financial position as of June 30, 1995 and 1996, and the consolidated
results of its operations for the three months and six months ended
June 30, 1995 and 1996, and its consolidated cash flows for the six
months ended June 30, 1995 and 1996. The results of operations for
the six month period ended June 30, 1996 are not indicative of the
results to be expected for the full year due to the seasonality of the
business operation. For further information, refer to the audited
consolidated financial statements and notes thereto, included in
South Seas' Prospectus dated March 25, 1996.
Note 2. Impact of Recently Issued Accounting Standards
In October 1995, FASB issued SFAS No. 123, "Accounting for Stock
Based Compensation," effective for fiscal years beginning after
December 15, 1995. SFAS No. 123 requires a fair value based
method of accounting for stock-based compensation. South Seas
issued 94,250 limited partnership units under its' Management
Equity Incentive Plan during the three months ended June 30, 1996.
South Seas will apply the existing accounting rules contained in
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," rather than adopt SFAS No. 123. Therefore,
no expense recognition for employee stock-based compensation will
be reflected in results of operations, however full disclosure as
required by SFAS No. 123 will be provided annually in the notes.
Note 3. Change in Debt Structure
On March 28, 1996, South Seas completed the funding of the financing
transaction as offered in the form S-1 Registration Statement. The
total aggregate principal amount raised was $43,500,000, with
interest payable monthly at 10%, and no principal reduction until
maturity on April 15, 2003.
The Notes are non-callable during the first four years of the term then
become redeemable, in whole or in part, at the option of South Seas at
various redemption prices (108.24% to 112.62% of principal) during or
after the year 2000. Subsequent to the occurrence of certain events,
the holders of Notes will be offered the opportunity to exchange the
Notes for partnership units at an exchange rate of $12 per partnership
unit (subject to adjustment in certain circumstances). Upon the
stated maturity of the Notes, holders of Notes will be offered the
opportunity to exchange the Notes at an exchange rate of $10.50 per
unit (subject to adjustment in certain circumstances).
On May 13, 1996, South Seas entered into a loan modification agreement
whereby the entire amount of an existing loan balance ($6,985,998.92)
could be treated as a revolving loan. On May 14, 1996 South Seas
paid $6,885,000 under this new loan arrangement.
<PAGE>
No changes were made to existing amortization, interest or maturity
terms.
This loan matures in full on January 1, 1997. (See Exhibit 10).
On June 24, 1996, South Seas amended an existing loan agreement whereby
the
loan was bifurcated into a "permanent loan amount" (approximately $14.1
million) and a "revolving loan amount" ($5 million). No changes were
made in the existing amortization schedule of principal, interest
remains fixed at 10.8% on the permanent loan amount, and will be
prime plus two hundred (200) basis points on the revolving loan
amount. On June 28, 1996 South Seas paid $5,000,000 under this
revolving loan. (See Exhibit 11).
<PAGE>
PART I - FINANCIAL INFORMATION
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with "Selected
Historical Financial Data," "Selected Unaudited Pro Forma Consolidated
Financial Data" and the historical and pro forma and audited consolidated
financial statements for South Seas Properties Company Limited Partnership
("South Seas") and the notes thereto appearing in the Prospectus.
GENERAL
South Seas is one of the largest owners and operators of upscale beachfront
and/or destination resorts and hotels in Florida. South Seas owns six
resort and hotel properties, leases, operates and manages one resort spa,
owns a golf and tennis club, and manages two additional resort properties
located on Florida's Southwest coast. South Seas consolidates the results
of operations of its owned properties and records management fees on the
managed properties.
South Seas has implemented a growth strategy which focuses on improving
results at existing properties through increased revenues and increasing
its operating leverage through centralized management. South Seas' growth
strategy also focuses on acquiring and, to a lesser extent, developing new
resorts and hotels in targeted markets with demographic
and business characteristics consistent with its market profile. The
Sanibel Inn was acquired on June 1, 1995 in exchange for 71,374 limited
partnership units ("Units") plus a contingent, deferred cash payment of up
to $700,000. This acquisition was accounted for under the purchase method
for financial reporting purposes, and its results of operations have been
included in the consolidated financial statements of South Seas for periods
subsequent to the date of acquisition. In June 1995, South Seas entered
into a four year lease agreement (the "Safety Harbor Lease") through a
wholly-owned subsidiary, Safety Harbor Management Company, Ltd. ("Safety
Harbor Management Co.") with an unrelated party pursuant to which it manages
the Safety Harbor Resort and Spa ("Safety Harbor," Safety Harbor and the
Sanibel Inn are collectively referred to herein as the "New Resorts").
The Safety Harbor Lease also provides Safety Harbor Management Co., with an
option, expiring on May 31, 2000, to purchase Safety Harbor for an aggregate
purchase price of between $17.5 million and $22.5 million, depending on the
year the option is exercised. Management views the Safety Harbor Lease as
a turnaround opportunity at an under-performing resort, as evidenced by its
occupancy rate of approximately 35% in 1994 and 1995. Management believes
that the performance of Safety Harbor can be improved by making certain
renovations at the resort and also utilizing South Seas' marketing resources
and operating skills. The Safety Harbor Lease requires that South Seas spend
a minimum of $1.8 million in capital toward renovation during the term of the
lease. South Seas anticipates that it will benefit from improved operating
results at Safety Harbor since the lease payments under the Safety Harbor
lease are fixed amounts and South Seas' right to purchase Safety Harbor under
the Safety Harbor Lease is based on a series of annual fixed option prices.
SEASONALITY
Properties owned or operated by South Seas (collectively "the Properties")
are affected by normally recurring seasonal patterns. Room rates and
occupancy are generally higher during the months of January, February,
March and April than during the remainder of the year. As much as 45-50%
of South Seas' revenues is earned in the first four months of
<PAGE>
each year. Accordingly, South Seas' operations are seasonal in nature, with
lower revenue and net income in the second, third and fourth calendar
quarters.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO
THE THREE MONTHS ENDED JUNE 30, 1995
Revenues. Revenues consist principally of room rentals, food and beverage
sales, retail sales, spa and fitness revenues, and golf course operations.
Other revenue includes marina operations, long distance telephone charges,
fees for the use of recreation facilities, commissions from realty sales,
interest income and other miscellaneous items. Revenues for the three
months ended June 30, 1996 increased by $2.7 million, or 10.2% over the
prior period.
Room revenues increased by $1.7 million, or 11.0% over the prior period.
Approximately $1.3 million, or 75.5% of the increase represents room
revenues attributable to the New Resorts. Room revenues at resorts owned
throughout both periods ("Comparable Resorts") increased by approximately
$418,000 or 2.8%. The increase in room revenues at Comparable Resorts
resulted from a decrease in the average daily rate
("ADR"), offset by an increase in the percentage of occupancy. ADR at
Comparable Resorts was $190.72 for 1996, compared to $193.70 in 1995, a
decrease of $2.98, or 1.5%. Occupancy percentage at Comparable Resorts
increased to 80.4% in 1996 from 78.2% for the same period in 1995. The
changes in ADR and occupancy combine to reflect South Seas efforts to
maximize revenue per available room ("REVPAR"), during both high and low
demand periods. During the April through June period of 1996, REVPAR for
Comparable Resorts increased $2.01 or 1.2% over the same period in 1995.
The New Resorts had an occupancy percentage of 47.2%, ADR of $144.11 and
REVPAR of $68.03 during the three months ended June 30, 1996, however
relative occupancy levels, REVPAR, and ADR at the New Resorts is in large
part a result of Safety Harbor. Management of South Seas believes operating
results at Safety Harbor will improve over time as its operational skills and
marketing resources are fully utilized.
Food and beverage revenues for the three months ended June 30, 1996
increased by $364,000, or 8.5% over the same period in 1995. The increase
was due primarily to the additional food and beverage operations at Safety
Harbor, $336,000 or 92.3% of the total increase. Food and beverage revenues
at the Comparable Resorts increased slightly by $28,000 or .7% over the
prior period.
Retail revenues for the three months ended June 30, 1996 increased by
$209,000, or 12.9% over the same period in 1995. Approximately $62,000,
or 29.7% of the increase was due primarily to retail operations at the
New Resorts. Retail revenues for Comparable Resorts for the three month
period in 1996 increased by $147,000, or 9.2% compared to the prior period.
The newly renovated Dunes Golf & Tennis Club's pro shop produced approximately
$54,000 of the growth over the prior period.
Other revenues for the three months ended June 30, 1996 decreased by
$213,000, or 4.6% over the prior period. Approximately $361,000 of the
decrease was attributable to the Comparable Resorts. Commissions from
realty sales accounted for $182,000 of the decrease. However, it should
be noted that total realty commissions for the six months ended June 30,
1995 and 1996 were $1,025,000 and $1,052,000, respectively. Therefore,
there is no material variance but merely a shift in the recognition of
those revenues (from first quarter to second quarter). Other revenues at
the corporate level decreased approximately $172,000. The reduction relates
to
<PAGE>
the impact of the consolidation of the New Resorts. This decrease was
offset by $148,000 associated with other revenues from the New Resorts.
Expenses. Total expenses for the three months ended June 30, 1996
increased by $2.3 million, or 8.7% over the prior period. As a percentage
of revenues, expenses decreased slightly from 99.9% to 98.6% for the period.
Room expense for the three months ended June 30, 1996 increased by $362,000
or 10.1% over the prior period. Room expense at Comparable Resorts
increased $57,000 or 1.6% for the same period. Approximately $306,000 or
84.3% of the total increase reflects the additional expenses associated
with the New Resorts. As a percentage of room revenues, room expense
decreased slightly from 23.0% to 22.8%.
Sales and marketing costs for the three months ended June 30, 1996
increased $468,000 or 34.4% over the prior period, of which $333,000 or
71.2% of the total increase was associated with operations of the New
Resorts. The $135,000 or 10.8% increase experienced at the Comparable
Resorts is consistent with the increase in revenues. As a percentage of
total revenues, sales and marketing increased from 5.1% in the three months
ended June 30, 1995 to 6.2% for the three months ended June 30, 1996,
primarily due to increased marketing effort to reposition Safety Harbor.
For the three months ended June 30, 1996, maintenance and grounds expense
increased by $160,000 or 14.9% over the prior period, of which $128,000 or
80.0% of the total increase was attributable to the New Resorts. Increase
at the Comparable Resorts for the same period was $32,000 or 3.2% and is
consistent with expected maintenance costs for 1996. As a percentage of
total revenues, maintenance and grounds expense increased from 4.0% to 4.2%.
General and administrative expense for the three months ended
June 30, 1996 decreased by $776,000, or 13.1% over the prior period, and as
a percentage of revenues decreased from 22.2% to 17.5%. Approximately
$495,000 increase in general and administrative expenses was attributable
to operations of the New Resorts. These costs were offset by savings in
insurance reserves. At June 30, 1995 South Seas accrued $325,000 in
additional health insurance reserves. At June 30, 1996 South Seas reduced
casualty insurance reserves by $347,000. The combined impact of these two
insurance adjustments produces a $672,000 decrease from June 1995 to June
1996. The remaining $458,000 is due to timing of certain expenses. Certain
expenses budgeted to occur during this time period were not incurred.
However, management anticipates these to be incurred in future periods.
Depreciation and amortization expense for the three months ended June 30,
1996 increased by $399,000 or 27.8% over the prior period. As a percentage
of revenues, depreciation and amortization expense increased from 5.4% to
6.2%. The increase, both in dollars and as a percentage of revenues,
resulted from the impact of New Resorts acquired in June 1995 ($195,000 or
48.9% of the total), and higher amortization of loan costs associated with
the public debt offering.
Interest expense for the three months ended June 30, 1996 increased by
$573,000 or 25.4% over the prior period. The increase was primarily
attributable to the additional indebtedness that was incurred in March
1996 with the issuance of the $43.5 million of convertible bonds.
Net Income. As a result of the foregoing factors, net income for the
<PAGE>
three months ended June 30, 1996 increased by $403,000 compared to the prior
period.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO
THE SIX MONTHS ENDED JUNE 30, 1995
Revenues. Revenues consist principally of room rentals, food and beverage
sales, retail sales, spa and fitness revenues, and golf course operations.
Other revenue includes marina operations, long distance telephone charges
, fees for the use of recreation facilities, commissions from realty sales,
interest income and other miscellaneous items. Revenues for the six months
ended June 30, 1996 increased by $8.3 million, or 14.2% over the prior
period.
Room revenues increased by $4.7 million, or 13.4% over the prior period.
Approximately $3.8 million, or 79.5% of the increase represents room
revenues attributable to the New Resorts. Room revenues at Comparable
Resorts increased by approximately $973,000 or 2.8%. The increase in room
revenues at Comparable Resorts resulted from a slight increase in the ADR,
combined with an increase in the percentage of occupancy. ADR at Comparable
Resorts was $223.44 for 1996, compared to $222.72 in 1995, an increase of
$.72, or .3%. Occupancy percentage at Comparable Resorts increased to
81.2% in 1996 from 80.5% for the same period in 1995. The changes in ADR
and occupancy combine to reflect South Seas efforts to maximize REVPAR,
during both high and low demand periods. During the six months ended
June 30, 1996, REVPAR for Comparable Resorts increased $2.09 or 1.2% over
the same period in 1995. The New Resorts had an occupancy percentage of
52.5%, ADR of $162.74 and REVPAR of $85.46 during the six months ended
June 30, 1996, however relative occupancy levels, REVPAR, and ADR at the
New Resorts is in large part a result of Safety Harbor. Management of
South Seas believes operating results at Safety Harbor will improve over
time as its operational skills and marketing resources are fully utilized.
Food and beverage revenues for the six months ended June 30, 1996 increased
by $1.1 million, or 11.6% over the same period in 1995. The increase was
due primarily to the additional food and beverage operations at Safety
Harbor, $964,000 or 89.4% of the total increase. Food and beverage
revenues at the Comparable Resorts increased slightly by $114,000 or
1.2% over the prior period.
Retail revenues for the six months ended June 30, 1996 increased by
$438,000, or 12.9% over the same period in 1995. Approximately $148,000,
or 33.8% of the increase was due primarily to retail operations at the
New Resorts. Retail revenues for Comparable Resorts for the six month
period in 1996 increased by $290,000, or 8.6% compared to the prior period.
The newly renovated Dunes Golf & Tennis Club's pro shop produced
approximately $80,000 of the growth over the prior period.
Other revenues for the six months ended June 30, 1996 increased by
$588,000, or 6.6% over the prior period. Approximately $146,000 of
the increase was attributable to the Comparable Resorts. Club memberships
at the newly renovated Dunes Golf and Tennis Club accounted for $260,000
of the increase. This increase was offset by lower management fees of
$77,000, due to ownership of the Sanibel Inn in 1996 (and thus elimination
of management fee income). The New Resorts contributed $442,000 or 75.2%
of the total increase in other revenues.
Expenses. Total expenses for the six months ended June 30, 1996 increased
by $7.7 million, or 14.6% over the prior period. As a percentage <PAGE>
of revenues, expenses increased slightly from 89.4% to 89.8% for the period.
Room expense for the six months ended June 30, 1996 increased by $1.1
million or 16.2% over the prior period. Room expense at Comparable Resorts
increased $324,000 or 4.8% for the same period. Approximately $793,000 or
71.0% of the total increase reflects the additional expenses associated
with the New Resorts. As a percentage of room revenues, room expense
increased slightly from 19.5% to 20.0%.
Sales and marketing costs for the six months ended June 30, 1996 increased
$1.1 million or 42.8% over the prior period, of which $702,000 or 61.4% of
the total increase was associated with operations of the New Resorts. The
$441,000 or 17.2% increase experienced at the Comparable Resorts is slightly
above the percentage growth in revenues and reflects marketing efforts
targeted for the off-season. As a percentage of total revenues, sales and
marketing increased from 4.5% in the six months ended June 30, 1995 to 5.7%
for the six months ended June 30, 1996, primarily due to increased marketing
effort to reposition Safety Harbor.
For the six months ended June 30, 1996, maintenance and grounds expense
increased by $452,000 or 21.4% over the prior period, of which $308,000 or
68.1% of the total increase was attributable to the New Resorts. Increase
at the Comparable Resorts for the same period was $144,000 or 7.0% and is
consistent with expected maintenance costs for 1996. As a percentage of
total revenues, maintenance and grounds expense increased from 3.6% to 3.8%.
General and administrative expense for the six months ended
June 30, 1996 decreased by $103,000, or 1.0% over the prior period, and as
a percentage of revenues decreased from 18.3% to 15.9%. Approximately $1.3
million increase in general and administrative expenses was attributable to
operations of the New Resorts. These costs were offset by savings in
insurance reserves. At June 30, 1995 South Seas accrued $325,000 in
additional health insurance reserves. At June 30, 1996 South Seas reduced
casualty insurance reserves by $347,000. The combined impact of these two
insurance adjustments produces a $672,000 decrease from June 1995 to June
1996. The remaining $700,000 is due to timing of certain expenses.
Certain expenses budgeted to occur during this time period were not incurred.
However, management anticipates these to be incurred in future periods.
Depreciation and amortization expense for the six months ended June 30,
1996 increased by $918,000 or 32.8% over the prior period. As a percentage
of revenues, depreciation and amortization expense increased from 4.8% to
5.5%. The increase, both in dollars and as a percentage of revenues,
resulted from the impact of New Resorts acquired in June 1995 ($395,000 or
43.0% of the total), one time non-cash write-offs of approximately $150,000
in loan costs associated with the early retirement of existing loans with
the proceeds from the public debt offering, and higher amortization of loan
costs associated with the public debt offering.
Interest expense for the six months ended June 30, 1996 increased by
$976,000 or 22.1% over the prior period. The increase was attributable
to the additional indebtedness that was incurred in March 1996 with the
issuance of the $43.5 million of convertible bonds and $320,000 was
associated with the New Resorts.
Net Income. As a result of the foregoing factors, net income for the
six months ended June 30, 1996 increased by $633,000 compared to the prior
<PAGE>
period.
LIQUIDITY AND CAPITAL RESOURCES
South Seas has historically financed its operations and capital
expenditures with cash generated from operations, bank borrowings,
borrowings from private investors, corporate bonds and short-term credit
facilities.
On March 28, 1996, South Seas completed the public offering of $43,500,000
of its 10% subordinated notes as offered in the Form S-1 Registration
Statement ("Notes Offering"). The total aggregate principal amount raised
was $43,500,000, including the full $3.5 million over allotment, with
interest payable monthly at 10%, and with no principal reduction until
maturity on April 15, 2003.
The Notes are non-callable during the first four years of the term then
become redeemable, in whole or in part, at the option of South Seas at
various redemption prices (108.24% to 112.62% of principal) during or
after the year 2000. Subsequent to the occurrence of certain events, the
holders of Notes will be offered the opportunity to convert the Notes at
an exchange rate of $12 per partnership unit (subject to adjustment in
certain circumstances). Upon the stated maturity of the Notes, holders
of Notes will be offered the opportunity to convert the Notes at an
exchange rate of $10.50 per unit (subject to adjustment in certain
circumstances).
South Seas believes that cash generated by operations, together with
the proceeds from the Notes Offering will be adequate to meet its working
capital, debt service and capital expenditure requirements through 1996.
South Seas' outstanding indebtedness, together with the Notes, places
certain debt service obligations on the partnership. Subsequent to 1996
South Seas believes that it may be necessary to obtain additional debt or
equity financing in order to accommodate its plan for growth and expansion.
South Seas intends to pursue resort and/or hotel acquisitions and to a
lesser extent development opportunities in order to achieve growth in its
portfolio of properties. A portion of the expenditures associated with this
growth strategy will be funded with cash generated from operations and
approximately $10.7 million in proceeds from the Notes Offering.
In addition, under the terms of the indenture (executed in connection with
the Notes Offering), South Seas may release, under certain conditions, the
$3.3 million in funds reserved for interest payments on the Notes. These
funds would also be available for renovations and/or acquisitions.
However, South Seas anticipates that implementation of its growth
strategy will require it to obtain additional debt or equity financing.
The amount of additional financing required by South Seas in order to
implement its growth strategy will depend on several factors, including
the purchase price and renovation costs associated with acquisitions and
South Seas' available cash resources at the time of a particular
transaction. Although there can be no assurance as to South Seas'
ability to obtain financing in the amounts it requires on commercially
reasonable terms, if at all, South Seas believes that, based upon its
current financial condition and results of operations, such financing
will be available to it. South Seas' inability to obtain additional
financing could have a material adverse effect on its results of
operations, financial condition and future prospects. The indenture
places restrictions on the amount of additional Funded Indebtedness
(as defined in the prospectus delivered in connection with the Notes
Offering) that South Seas may incur.
On June 30, 1996, South Seas had cash and cash equivalents of $10.4
<PAGE>
million; and restricted cash and marketable securities, which was primarily
funds held as a interest reserve fund on notes payable, of $3.4 million.
Cash and cash equivalents increased by $3.0 million during the six months
ended June 30, 1996.
Cash flow from operations was approximately $6.1 million for the six months
ended June 30, 1996 as compared to $10.4 million in the prior
period. Cash flow from operations was negatively impacted by a $4.9 million
increase in interest paid during 1996. This significant increase in interest
paid was attributed to the early retirement of numerous notes, bonds and
accrued interest thereon with the proceeds from the public offering and
now having higher debt balances with monthly interest payments. South
Seas' other major source of cash in the 1996 period was proceeds of $43.5
million from the Notes Offering. In addition to funding its operating
activities, South Seas' major uses of cash during the 1996 period were
principal payments on outstanding debt of approximately $41.8 million
(primarily through proceeds of the Notes Offering, including $11.9 million
under revolving lines), capital expenditures and asset purchases of
approximately $3.5 million, and distributions to partners of approximately
$610,000.
South Seas is not currently a party to any legal proceeding which,
in Management's opinion, is likely to have a material adverse effect on
its operating results or financial position.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In October 1995, FASB issued SFAS No. 123, "Accounting for Stock Based
Compensation," effective for fiscal years beginning after
December 15, 1995. SFAS No. 123 requires a fair value based method of
accounting for stock-based compensation. South Seas issued 94,250
limited partnership units under its' Management Equity Incentive Plan
during the three months ended June 30, 1996. South Seas will apply the
existing accounting rules contained in Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees." Therefore, no expense
recognition for employee stock-based compensation will be reflected in
results of operations, however full disclosure as required by SFAS
No. 123 will be provided annually in the notes.
<PAGE>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Change in Partnership Units
As part of South Seas Management Equity Incentive Plan, 94,250
limited partnership units were sold during the three months ended
June 30, 1996 at $10 per unit. Each unit comes with five options
to purchase additional units in the future. Refer to Exhibit 10.1
"Management Equity Incentive Plan" as filed under Form 10Q for the
period ended March 31, 1996.
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
No matters submitted during the three months ended June 30, 1996.
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit I - Weighted Average Units Outstanding
(b) Reports on Form 8-K
Not applicable
<PAGE>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
SIGNATURES
JUNE 30, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
ROBERT M. TAYLOR RICHARD E. KRICHBAUM
CHAIRMAN OF VICE PRESIDENT OF FINANCE
T&T RESORTS, L.C., GENERAL S.S. RESORT MANAGEMENT L.C
PARTNER OF SOUTH SEAS PROPERTIES GENERAL PARTNER OF SOUTH SEAS
COMPANY LIMITED PARTNERSHIP RESORTS COMPANY, L.P.
(SIGNATURE) (SIGNATURE)
AUGUST 14, 1996 AUGUST 14,1996
TIMOTHY R. BOGOTT VIRGINIA S. BROOKS
PRESIDENT CORPORATE CONTROLLER
S.S. RESORT MANAGEMENT, L.C. S.S. RESORT MANAGEMENT, L.C.
GENERAL PARTNER OF SOUTH SEAS GENERAL PARTNER OF SOUTH SEAS
RESORTS COMPANY, L.P. RESORTS COMPANY, L.P.
(SIGNATURE) (SIGNATURE)
AUGUST 14, 1996 AUGUST 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 10,494,000
<SECURITIES> 3,262,000
<RECEIVABLES> 4,883,000
<ALLOWANCES> (114,000)
<INVENTORY> 1,783,000
<CURRENT-ASSETS> 22,527,000
<PP&E> 114,159,000
<DEPRECIATION> (36,768,000)
<TOTAL-ASSETS> 114,205,000
<CURRENT-LIABILITIES> 15,929,000
<BONDS> 43,500,000
0
0
<COMMON> 0
<OTHER-SE> (6,019,000)
<TOTAL-LIABILITY-AND-EQUITY> 114,205,000
<SALES> 67,066,000
<TOTAL-REVENUES> 67,066,000
<CGS> 60,231,000
<TOTAL-COSTS> 60,231,000
<OTHER-EXPENSES> 31,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,382,000
<INCOME-PRETAX> 6,808,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 6,808,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,808,000
<EPS-PRIMARY> 1.58
<EPS-DILUTED> 1.58
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CALCULATION OF WEIGHTED AVERAGE UNITS OUTSTANDING
The weighted average number of partnership units used in the computation of
earnings per unit is as follows:
Three Months
Ended June 30
1995 1996
<S> <C> <C>
Actual number of units
outstanding at the beginning of the
period 4,237,194 4,308,568
Weighted average number of units issued
during the period 23,791 22,667
Weighted average number of units
outstanding during the period 4,260,985 4,331,235
</TABLE>
May 7, 1996
South Seas Properties Company Limited Partnership
12800 University Drive
Ft. Myers, FL 33907
RE: First Union National Bank of Florida Loan No. 8385321361
Dear Sirs:
This letter, upon your acceptance hereof, will constitute a commitment
(herein "Commitment") that FIRST UNION NATIONAL BANK OF FLORIDA (herein
"Lender"), will enter into a Loan Modification Agreement with SOUTH SEAS
PROPERTIES COMPANY LIMITED PARTNERSHIP, an Ohio limited partnership,
(herein "Borrower"), which Loan Modification Agreement shall provide for
conversion of the existing Term Loan to a Revolving Credit Loan ("Loan")
subject to the following terms and conditions:
1. The Lender will advance principal to the Borrower from time to
time. However, the total of such advances of principal by Lender to
Borrower shall never exceed the amount of the present outstanding principal
balance of $6,985,998.92 reduced each month, commencing June 5, 1996 and
continuing on the Fifth (5th) day of each month thereafter until December
5, 1996, by the amount of each month's principal reduction in the amount of
$14,000.00. The outstanding principal balance may decrease or increase
from time to time as principal payments are made by Borrower or advances of
principal are made by Lender to Borrower, subject to the limitations as
contained herein.
2. No advances of principal by the Lender to the Borrower will be
permitted after January 1, 1997.
3. In consideration of Lender's agreement to modify the Loan,
Borrower shall pay to Lender a Fee in the amount of Five Thousand and
No/100 Dollars ($5,000.00) which shall be paid to Lender upon acceptance of
this Commitment Letter.
4. Requests for advances of principal by the Borrower shall be made
to the Lender in writing and the Borrower, in such written principal
advance request, shall warrant and represent to the Lender that there has
been no material change in the status or financial condition of the
Borrower. Such advance by the Lender to the Borrower shall be contingent
upon the Borrower not being in default of any of the monetary conditions of
any loan document. If there has been no event of default by the Borrower
and the advance request meets the other requirements for such advance as
contained herein, Lender shall make such advance to the Borrower within two
(2)business days.
5. Borrower, at its own cost, shall furnish an Endorsement to
the existing Title Insurance Policy, reflecting that no change has occurred
in the status of the Mortgaged Property as reflected in the original Title
Insurance Policy, with the exception that all real estate taxes on the
Mortgaged Property have been paid.
6. Documents for the Loan Modification shall be prepared by, and
be in form satisfactory to, Lender's counsel. Borrower shall be
responsible for paying all of the expenses incurred with regard to the Loan
Extension Closing, which expenses shall include, but not be limited to,
recording fees, Lender's attorneys'' fees estimated to be Two Thousand Six
Hundred and No/100 Dollars ($2,600.00) and any other reasonable costs
incurred with regard thereto.
7. This Commitment shall be null and void if it has not been
accepted and returned to Lender within fourteen (14) days of the date of
this letter. If this Commitment is timely accepted, and the Loan
Modification Closing does not occur within forty-five (45) days of
acceptance, this Commitment shall terminate without further notice to
Borrower, and thereafter, Lander shall have no further obligation under
this Commitment.
8. This Commitment may not be assigned to or relied upon by
any third party, and shall constitute, if accepted, a legally binding
contract.
9. Time is of the essence with respect to this Commitment and
the performance of each and every term and condition contained herein.
10. Notwithstanding anything to the contrary herein contained or
implied, Lender, by this Commitment or by any action pursuant thereto,
shall not be deemed a partner of or a joint venturer with Borrower, and
Borrower hereby indemnifies and agrees to hold Lender harmless (including
payment of all attorneys'' fees and costs) from any and all claims or
damages resulting from such a construction of the parties' relationship.
11. WAIVER OF RIGHT TO JURY TRIAL AND VENUE. BORROWER AND
INFERIOR LIEN HOLDERS HEREBY WAIVE THEIR RIGHTS TO A TRIAL BY JURY IN ANY
ACTION HEREINAFTER BROUGHT BY OR AGAINST THEM PURSUANT TO OR IN ANY WAY
RELATING TO THIS COMMITMENT OR ANY OF BORROWER'S OR INFERIOR LIEN HOLDERS'
OBLIGATIONS ARISING THEREFROM, AND THE LOAN EXTENSION DOCUMENTS WILL
CONTAIN A SIMILAR WAIVER REGARDING THE LOAN EXTENSION, IF CLOSED.
BORROWER, INFERIOR LIEN HOLDERS, AND LENDER HEREBY AGREE THAT VENUE FOR ANY
SUCH ACTION SHALL BE IN LEE COUNTY, FLORIDA, OR THE FEDERAL COURT, OR THE
UNITED STATES DISTRICT COURT IN AND FOR THE MIDDLE DISTRICT OF FLORIDA.
THE PREVAILING PARTY IN ANY SUCH ACTION SHALL BE ENTITLED TO RECOVER FROM
THE OTHER REASONABLE ATTORNEYS' FEES AND COSTS OF SUIT.
Respectfully submitted,
FIRST UNION NATIONAL BANK OF FLORIDA
By:
Kevin R. Kinahan
Vice President
APPROVAL AND ACCEPTANCE
The undersigned hereby acknowledge receipt of the foregoing
Commitment, and by execution hereof acknowledge that such Commitment is
offered by Lender in reliance upon the information and documentation
previously provided by or on behalf of Borrower to Lender; accepts such
Commitment; and agrees to the terms and conditions set forth herein; and
returns this Commitment.
The undersigned's acceptance of this Commitment constitutes an
unconditional agreement to pay all fees, commissions, costs, charges,
taxes, and other expenses incurred in connection with this Commitment,
whether or not the Loan Modification closes, but not limited to, the
Commitment Fees, fees of Lender's counsel, examination of title to the
Land, and mortgage title insurance thereon, and all recording fees and
charges.
APPROVED AND ACCEPTED THIS 13th day of May, 1996.
SOUTH SEAS PROPERTIES COMPANY LIMITED
PARTNERSHIP, an Ohio limited partnership
Print Name: By Rober M. Taylor, Manager and Chairman
T & T RESORTS, L.C.,
General Partner
Prepared By:
Bruce G. Fedor, Esquire
800 Laurel Oak Drive, Suite 400
Naples, Florida 33963-2738
(941) 598-4444
LOAN MODIFICATION AGREEMENT
THIS AGREEMENT, is entered into as of this 13th day of May, 1996, between
FIRST UNION NATIONAL BANK OF FLORIDA ("Lender") and SOUTH SEAS PROPERTIES
COMPANY LIMITED PARTNERSHIP, an Ohio limited partnership, ("Borrower").
WITNESSETH:
WHEREAS, FIRST UNION NATIONAL BANK OF FLORIDA, Successor by Merger
to BANCFLORIDA, a Federal Savings Bank, ("Lender"), loaned to SANIBEL
RESORT HOTEL LIMITED PARTNERSHIP, a Delaware limited partnership,
("Sanibel"), the sum of Seven Million Five Hundred Thousand and No/100
Dollars ($7,500,000.00), evidenced by Mortgage Note, Mortgage, Security
Agreement and Assignment of Rents dated October 28, 1988 and recorded in 0.
R. Book 2026, Page 2156 of the Public Records of Lee County, Florida; and
WHEREAS, effective January 1, 1995, Borrower assumed and agreed to
pay said indebtedness and perform all the obligations under said Mortgage
Note ("Note"), Mortgage, Security Agreement and Assignment of Rents
referenced above pursuant to an Assumption Agreement that was recorded in
0. R. Book 2606, Page 2948 of the Public Records of Lee County, Florida;
and
WHEREAS, the Note, Mortgage, Security Agreement and Assignment of
Rents were modified by a certain Loan Modification Agreement dated December
19, 1995 and recorded at 0. R. Book 2667 commencing at Page 2634 of the
Public Records of Collier County, Florida; and
WHEREAS, the Note and Mortgage were in default but were reinstated
pursuant to a certain Loan Reinstatement and Modification Agreement
executed on March 27, 1992 and recorded at 0. R. Book 2287, Page 3828 of
the Public Records of Lee County, Florida; and which Mortgage, Assumption
Agreement and Loan Modification Agreement, by and between Under and
Borrower, encumber the real property described in EXHIBIT A attached hereto
and made a part hereof (the "Premises"), and which Mortgage, Assumption
Agreement, Loan Modification Agreement and other loan documents executed in
connection therewith and specified therein shall be hereinafter referred to
collectively as the "Mortgage;" and
WHEREAS, Borrower and Lender have agreed to modify the Note and
Mortgage as hereinbelow set forth.
NOW, THEREFORE, in consideration of TEN AND NO/100 DOLLARS
($10.00) paid by Borrower and other good and valuable consideration,
receipt of which is hereby acknowledged, the parties agree as follows:
1 . Recitals. The above recitals are true and correct and are
incorporated herein by reference.
2. Outstanding Balance.Borrower and @Lender agree that the
present outstanding principal balance due under the Note as of this date is
Six Million Nine Hundred Eighty Five Thousand Nine Hundred Ninety Eight and
75/100 Dollars ($6,985,998.92).
3. The Lender will advance principal to the Borrower from time
to time. However, the total of such advances of principal by Lender to
Borrower shall never exceed the amount of the present outstanding principal
balance of $6,985,998.92 reduced each month, commencing June 5, 1996 and
continuing on the Fifth (5th) day of each month thereafter until December
5, 1996, by the amount of each month's principal reduction in the amount of
$14,000.00. The outstanding principal balance may decrease or increase from
time to time as principal payments are made by Borrower or advances of
principal are made by Lender to Borrower, subject to the limitations as
contained herein.
4. No advances of principal by the Lender to the Borrower will
be permitted after January 1, 1997.
5. Requests for advances of principal by the Borrower shall be
made to the Lender in writing and the Borrower, in such written principal
advance request, shall, warrant and represent to the Lender that there has
been no material change in the status or financial condition of the
Borrower. Such advance by the Lender to the Borrower shall be contingent
upon the Borrower not being in default of any of the monetary ttermsand
conditions of any loan document. If there has been no event of default by
the Borrower and the advance request meets the other requirements for such
advance as contained herein, Lender shall make such advance to the Borrower
within two (2) business days.
On Maturity, January 31, 1997, all unpaid principal and all
accrued but unpaid interest shall be due and payable in full.
6. Consideration. In consideration of the modifications
contained herein, Borrower has paid to LLendera Modification Fee of Five
Thousand Hundred and no/100 ($5,000.00) Dollars.
7. Reaffirmation of Security Interest. The parties herein
agree that the Premises,as defined in the Mortgage, shall continue to serve
as security and collateral for the repayment of any and all indebtedness
due by Borrower to Lender under the Loan and Note, and for the performance
by Borrower of each and every of the covenants and agreements in the Loan
Documents, and that upon the occurrence of an Event of Default under the
Loan Documents, the Lender may exercise any and all remedies available to
it as to all of the Premises described in the Mortgage.
8. Warranties and Representations. Borrower hereby affirms,
warrants, and represents that all of the warranties and representations
made in the Mortgage and other documents or instruments recited herein or
executed with respect thereto, directly or indirectly, are true and correct
as of the date hereof, and that Borrower is not in default of any of the
foregoing or aware of any default with respect thereto.
9.Modification and Ratification. Except as herein modified, the terms and
conditions of the Mortgage, Note, and other Loan Documents are hereby
ratified and affirmed, and shall remain in full force and effect.
10. No Novation. It is the intent and agreement of the parties
that this instrument shall not constitute a novation and shall in no way
adversely affect the lien priority of the Mortgage. In the event that this
Agreement, or any part hereof, shall be construed by a court of competent
jurisdiction as operating to affect the lien priority of the Mortgage over
the claims which would otherwise be subordinate thereto, then to the extent
that third persons acquiring an interest in such property between the time
of execution of the Mortgage and the execution hereof are prejudiced
thereby, this Agreement, or such portion hereof as shall be so construed,
shall be void and of no force and effect, and said Mortgage then shall be
enforced pursuant to the terms therein contained, independent of this
Agreement; provided, however, that notwithstanding the foregoing, the
parties hereto, as between themselves, shall be bound by all terms and
conditions hereof until all indebtedness owing under the Mortgage, and
notes secured thereby, shall have been paid in full.
11. Lien. Borrower warrants and represents that the Mortgage as
amended by this Agreement is a valid lien and security interest on the
Premises with a first priority position as stated therein. If at any time
Lender shall determine that the lien priority of its Mortgage as stated
therein is invalid or in jeopardy, or if at any time, Lender is unable to
obtain title insurance insuring such lien as a valid lien with the priority
stated therein on the Premises, then Under shall have the option declaring
this to be a default under the Mortgage and this Agreement.
12. Defenses, Setoffs, and Counterclaims. Borrower warrants,
represents, and acknowledges that it has no defenses, claims, or offsets
against the obligations evidenced by the Note, Mortgage, and other Loan
Documents.
13. Entire Agreement; Amendments. This Agreement, the
Commitment Letter dated May 7, 1996, and the other Loan Documents represent
and constitute the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof, superseding all prior and
oral or written negotiations or understandings between the parties.
Neither this Agreement nor the other Loan Documents, nor any provisions
thereof, may be changed, waived, discharged, or terminated, except by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge, or termination is sought.
14. Miscellaneous.
(a) Paragraph headings as used herein are for convenience only and
shall not be construed as controlling the scope of any provisions hereof;
(b) This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida,
(c) Time is of the essence of this Agreement;
(d) As used herein, the neuter gender shall include the masculine
and feminine genders, and vice versa, and the singular, the plural, and
vice versa, as the context demands; and
(e) This Agreement shall inure to the benefit and be binding upon
the parties as well as their successors and assigns, heirs, and personal
representatives.
15. Waiver of Jury Trial. BORROWER HEREBY WAIVES THE RIGHT TO
JURY TRIAL IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION
WITH, OR' ARISING OUT OF THIS AGREEMENT, THE COMMITMENT, NOTE, MORTGAGE, OR
OTHER LOAN DOCUMENTS, OR THE VALIDITY, PROTECTION, INTERPRETATION,
COLLECTION, OR ENFORCEMENT THEREOF, OR ANY OTHER CLAIM OR DISPUTE HOWEVER
ARISING BETWEEN BORROWER AND LENDER.
IN WITNESS WHEREOF, the undersigned have signed and sealed this
Agreement the day and year first above written.
BORROWER:
WITNESSES: SOUTH SEAS PROPERTIES COMPANY
LIMITED PARTNERSHIP,
an Ohio limited partnership
Print Name: By:
Robert M. Taylor, Manager
& Chairman
Print Name: T&T Resorts, L.C.
General Partner
Print Name:
LENDER
FIRST UNION NATIONAL
BANK OF FLORIDA
By:
Kevin R. Kinahan,
Vice President
FIRST UNION RENEWAL REAL ESTATE PROMISSORY NOTE #2
$6,985,998.92 May 3, 1996
LENDER: FIRST UNION NATIONAL BANK OF FLORIDA (hereinafter termed
"LENDER")
BORROWER(S):
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP, an Ohio limited
partnership
12800 University Drive, Fort Myers, Lee County, FL 33907
BORROWER(S) REPRESENT HEREWITH THAT THE LOAN EVIDENCED HEREBY IS BEING
OBTAINED FOR THE FOLLOWING PRIMARY PURPOSE: X BUSINESS - PERSONAL- FAMILY
OR HOUSEHOLD- AGRICULTURAL
FOR VALUE RECEIVED: to wit, money loaned, the above named; the
undersigned BORROWER, promises to pay to the order of LENDER at its office
in the above city, or wherever else LENDER may specify, the sum of Six
Million Nine Hundred Eighty-five Thousand Nine Hundred Ninety-eight and
92/100 Dollars ($6,985,998.92), with interest until paid.
CONTRACT RATE OF INTEREST: At the rate of LENDER'S PRIME RATE Plus
three-quarters percent (.75%) as that rate may change from time to time
with changes to occur on the date the LENDER'S PRIME RATE changes; payable
in full on January 31, 1997 ("Maturity").
TERMS OF PAYMENT: payable in consecutive equal monthly payments of
principal and interest, commencing on June 5, 1996, and continuing on the
5th day of each month thereof until Maturity, with a principal amount
sufficient to fully amortize the principal balance in seventeen (17), years
plus an irregular payment of all remaining principal and accrued interest
on January 31, 1997.
The undersigned agrees to pay a late charge equal to 5 % of each payment of
principal and/or interest which is not paid within IO days of the date on
which it is due. At LENDER'S option, the contract rate shall become the
highest rate allowed by the law of the state of LENDER'S office as set
forth herein commencing with and continuing for so long as the loan or any
portion thereof is in Default (as hereinafter defined). Further, upon
BORROWER'S Default and where LENDER deems it necessary or proper to employ
an attorney to enforce collection of any unpaid balance or to otherwise
protect its interests hereunder, the BORROWER agrees to pay LENDER'S
reasonable attorneys fees (including appellate costs, if any) and
collection costs. Liability for reasonable attorneys fees and costs shall
exist whether or not any suit or proceeding is commenced.
This Renewal Real Estate Promissory Note #2 shall constitute a Loan
Agreement whereby the Lender will advance principal to the Borrower from
time to time. However, the total of such advances of principal by Lender
to Borrower shall never exceed the amount of the present outstanding
principal balance of $6,985,998.92 reduced each month, commencing June 5,
1996 and continuing on the Fifth (5th) day of each month thereafter until
December 5, 1996, by the amount of each month's principal reduction in the
amount of $14,000.00. The outstanding principal balance may decrease or
increase from time to time as principal payments are made by Borrower or
advances of principal are made by Lender to Borrower, subject to the
limitations as contained herein.
No advances of principal by the Lender to the Borrower will be permitted
after January 1, 1997.
Requests for advances of principal by the Borrower shall be made to the
Lender in writing and the Borrower in such written principal advance
request, shall warrant and represent to the Lender that there has been no
material change in the status or financial condition of the Borrower. Such
advance by the Lender to the Borrower shall be contingent upon the Borrower
not being in default of any of the monetary terms and conditions of any
loan document. If there has been no event of default by the Borrower and
the advance request meets the other requirements for such advance as
contained herein, Lender shall make such advance to the Borrower within two
(2) business days.
Interest is computed on the basis of a 360 day year for the actual number
of days in the interest period (Actual/360 Computation) unless indicated
below.
DEFINITIONS OF LENDER'S PRIME RATE AND COMPUTATION FORMULAE APPEAR BELOW IN
ADDITIONAL PROVISIONS
All payments received during normal banking hours after 2:00 p.m. shall be
deemed received at the opening of the next banking day.
If the scheduled payment amount is insufficient to pay accrued interest,
BORROWER shall make an additional payment of the amount of the accrued
interest in excess of the scheduled payment.
Each of the undersigned, whether BORROWER, sureties, or endorsers, and all
others who may become liable for all or any part of the OBLIGATIONS
evidenced hereby, do hereby, joint and severally, waive presentment,
demand, protest, notice of protest and/or of dishonor, and also notice of
acceleration of maturity on Default or otherwise. Further, they agree that
Lender may, from time to time, extend, modify, amend or renew this Note for
any period (whether or not longer than the original period of the Note) and
grant any releases, compromises of indulgences with respect to the Note or
any extensions, modifications, amendments or renewals thereof or any
security therefor, or to any party liable thereunder or hereunder, all
without notice to or consent of any of the undersigned and without
affecting the liability of the undersigned hereunder.
PAYMENT of this Note and all obligations of the undersigned
BORROWER hereunder ("OBLIGATIONS") to LENDER, its successors and assigns,
is secured inter alia (and includes the terms and obligations set forth
therein), by a valid, subsisting Mortgage and Security Agreement (the
"Mortgage") recorded or to be recorded in the county in which the real
property described in the Mortgage (the "Property') is located, and by this
reference is incorporated herein. If this Note is issued pursuant to a
loan agreement of even date herewith, made by and between Borrower and
Lender (the Loan Agreement"), which term shall be deemed to include any
construction loan agreement or development loan agreement, then by this
reference, the Loan Agreement is specifically incorporated herein;
If default be made in the payment of any installment under this
Note or if the Borrower violates any of the terms or breaches any of the
conditions of the Mortgage or the Loan Agreement, if applicable, the entire
principal sum and accrued interest shall become due and payable without
notice unless otherwise provided herein or therein at the option of the
Lender. Failure to exercise this option shall not constitute a waiver of
the right to exercise the same at any other time. Upon such default, the
principal of the Note and any part thereof, and accrued unpaid interest, if
any, shall bear interest at the rate of either eighteen percent (18%)
simple interest per annum after default until paid or at the then highest
legal rate permissible by law. All parties liable for the payment of this
Note agree to pay the Lender reasonable attomey's fees for the services and
expenses of counsel employed after maturity or default to collect this Note
(including any appeals relating to such enforcement proceedings) or to
protect or enforce the security hereto, whether or not suit be brought.
The remedies of Lender as provided herein, in the Mortgage and
Loan Agreement shall be cumulative and concurrent, and may be pursued
singly, successively or together at the sole discretion of Lender and may
be exercised as often as occasion therefore shall arise. No act of
omission or commission of Lender, including specifically any failure to
exercise any right, remedy or recourse, shall be effective as a waiver
thereof unless it is set forth in a written document executed by Lender and
then only to the extent specifically recited therein. A waiver or release
with reference to one event shall not be construed as continuing as a bar
to, or as a waiver or release of, any subsequent right, remedy or recourse
as to any subsequent event.
Borrower and all sureties, endorsers and guarantors of this Note
hereby (a) waive demand, presentment for payment, notice of nonpayment,
protest, notice of protest and all other notice, filing of suit and
diligence in collecting this Note, in enforcing any of the security rights
or in proceeding against the Property, (b) agree to any substitution,
exchange, addition or release of any of the Property or the addition of
release of any party or person primarily or secondarily liable hereon, (c)
agree that Lender shall not be required first to institute any suit, or to
exhaust his, their or its remedies against Borrower or any other person or
party to become liable hereunder or against the Property in order to
enforce payment of this Note, (d) consent to any extension, rearrangement,
renewal or postponement of time of payment of this Note and to any other
indulgency with respect hereto without notice, consent or consideration to
any of the foregoing (except the express written release by Lender of any
such person), they shall be and remain jointly and severally, directly and
primarily, liable for all sums due under this Note, the Mortgage and the
Loan Agreement.
As used herein, the words, "Borrower" and "Under" shall be deemed
to include Borrower and Lender as defined herein and their respective
heirs, personal representatives, successors and assigns.
This Note is executed and delivered at the Place of Execution and
shall be construed and enforced in accordance with the laws of the State of
Florida.
BORROWER hereby further warrants, covenants and agrees as follows:
Anything contained herein to the contrary notwithstanding, if
for any reason the effective rate of interest on this Note should exceed
the maximum lawful rate, the effective rate shall be deemed reduced to and
shall be such maximum lawful rate, and any sums of interest which have been
collected in access of such maximum lawful rate shall be applied as a
credit against the unpaid balance due hereunder.
If the interest provision contained herein refers to "LENDER'S
PRIME RATE," the LENDER'S PRIME RATE shall be that ate announced by LENDER
from time to time as its prime rate both above and below LENDER'S PRIME
RATE, and BORROWER acknowledges the LENDER'S PRIME RATE is not represented
or intended to be the lowest or most favorable rate of interest offered by
LENDER.
LENDER'S Actual/360 or 365/360 computation determines the annual
effective interest yield by taking the stated (nominal) interest rate for a
year's period and then dividing said rate by 360 to determine the daily
periodic rate to be applied for each day in the interest period.
Application of such computation produces an annualized effective interest
rate exceeding that of the nominal rate.
At LENDER'S option, any repayments of this Note, other than by
U.S. currency, will not be credited to the outstanding loan balance until
LENDER receives collected funds.
In the event any provision(s) of this instrument shall be left
blank or incomplete, BORROWER hereby authorizes and empowers LENDER to
supply and complete the necessary information as a ministerial task
consistent with the understanding between the parties.
BORROWER warrants that BORROWER does not have either a "record" or
reputation for violating Laws of the United States or of any State relating
to liquor (as referred to in 18 U.S.C.A. 3617, (et seq.) Or narcotics
and/or any commercial crimes.
The COLLATERAL SHALL, AT ALL TIMES, BE AT BORROWER'S risk. The
loss, injury to or destruction of COLLATERAL shall not release BORROWER
from payment or other performance hereof. BORROWER agrees to obtain and
keep in force Physical Damage and/or Property Damage Insurance on said
COLLATERAL, and any other insurance required by LENDER. Such insurance is
to be in form and amounts satisfactory to LENDER, with the same payable to
LENDER. All such policies shall provide for thirty (30) days written
minimum cancellation notice to LENDER. BORROWER shall furnish to LENDER
the original policies or certificate or other evidence satisfactory to
LENDER of compliance with the foregoing provisions. LENDER is authorized,
but not obligated, to purchase any or all of said insurance or "single
interest insurance' protecting only its security interest, all at
BORROWER'S expense. In such event, BORROWER agrees to reimburse LENDER for
the cost of such insurance to the extent that the same is not included in
the principal amount of the Note.
BORROWER hereby assigns to LENDER the proceeds of all such
insurance to the extent of the unpaid balance hereunder, and directs any
insurer to make payments directly to LENDER. BORROWER further hereby
grants to LENDER his Power of Attorney, which shall be irrevocable for so
long as any amount is unpaid hereunder. Said Power of Attorney gives
LENDER the sole right to file Proof of Loss and/or any other forms required
to collect from any insurer any amount due from any loss, damage or
destruction of the COLLATERAL; to agree to and bind BORROWER as to the
amount of said recovery; to designate Payee(s) of such recovery; to grant
releases to payor-insurers for their liability; to grant subrogation rights
to any such payor-insurer, to endorse any settlement check or draft.
BORROWER further agrees not to exercise any of the foregoing Powers granted
to LENDER, without the latter's written consent. In the event of any
default hereunder, LENDER is authorized in its sole discretion to cancel
any insurance and credit any premium refund against the unpaid balance due
on BORROWER'S OBLIGATIONS.
If, with respect to any security pledged hereunder, a stock
dividend is declared or any stock split-up made or right to subscribe is
issued, all certificates for the shares representing such stock dividend or
stock split-up right to subscribe will be immediately delivered, duly
endorsed to the LENDER as additional COLLATERAL security.
If, at any time, the COLLATERAL shall be deemed unsatisfactory to
and by LENDER, or in the event LENDER shall otherwise deem itself, its
security interests, its COLLATERAL or said debt unsafe or insecure, then
and on demand of LENDER, BORROWER shall immediately furnish such further
COLLATERAL or make such payment on said account as will be satisfactory to
LENDER to be held by said LENDER as if originally pledged hereunder.
At its option, LENDER may discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on said
COLLATERAL, may pay for insurance and for the maintenance and preservation
of same. BORROWER agrees to reimburse LENDER, on demand, for any such
payment made, or any such expense incurred by LENDER pursuant to the
foregoing authorization. Until Default, as hereinafter defined, BORROWER
shall have the right to retain possession of the COLLATERAL, unless
otherwise agreed by the parties hereto, and to use in any lawful manner not
inconsistent with the AGREEMENT and with any policy of insurance thereon.
BORROWER shall be liable for all documentary and intangible taxes assessed
at closing or from time to time during the life of the transaction.
LENDER may, to the extent permitted by law, with or without
notice, before or after maturity of this Note, transfer or register in the
name of its nominee(s) all or any party of the COLLATERAL, and also
exercise any or all rights of collection, conversion or exchange and other
similar rights, privileges and options pertaining to the COLLATERAL; but
shall have no duty to exercise any such rights, privilege or options or to
sell or otherwise realize upon any of the COLLATERAL as herein authorized
or to preserve the same and shall not be responsible for any failure to do
so or delay in so doing. As to any COLLATERAL consisting of instruments or
chattel paper, it is agreed that LENDER shall not be required to take any
steps whatever to preserve any rights against prior Parties.
LENDER shall have no custodial or ministerial duties to perform
with regard to COLLATERAL pledged except for its safekeeping; and by way of
explanation and not by way of limitation thereof, LENDER shall incur no
liability for any of the following: loss or depreciation of the COLLATERAL,
unless caused by its willful misconduct, failure to present any paper for
payment or to protest or give notice of non-payment or any other notice
with respect to any paper or COLLATERAL; or its failure to present or
surrender for redemption, conversion or exchange any bond, stock, paper or
other Security whether in connection with any merger, consolidation,
recapitalization, reorganization or arising out of the intendment or
refunding of the original Security or its failure to notify any party
hereto that the COLLATERAL should be so presented or surrendered.
Upon any transfer of this Note, the LENDER may deliver the
property held as security or any part thereof, to the transferee, as well
as any subsequent holder hereof who shall thereupon become vested with all
the powers and rights herein given to the LENDER in respect to the property
so transferred and delivered, and the LENDER shall thereafter be forever
relieved and fully discharged from any liability or responsibility with
respect to such property so transferred but with respect to any property
not so transferred, the LENDER shall retain all rights and powers hereby
given.
With prior written consent of LENDER, other COLLATERAL may be
substituted for the original COLLATERAL herein, in which event all rights,
duties, obligations, remedies and security interests provided for, created
or granted shall apply fully to such substitute COLLATERAL.
Upon the occurrence of any of the "EVENTS OF DEFAULT", as
hereinafter defined, LENDER is herewith expressly authorized to exercise
its right of Set-Off or Bank Lien as to any monies deposited in demand,
checking, time, savings or other accounts of any nature maintained in and
with it by any of the undersigned, without advance notice. Said right of
Set-Off shall also be exercised and applicable where LENDER is indebted to
any signer hereof by reason of any Certificate of Deposit, Note or
otherwise.
WAIVER OF JURY TRIAL. BY THE EXECUTION HEREOF, BORROWER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY AGREES, THAT:
(A) NEITHER THE BORROWER NOR ANY ASSIGNEE, SUCCESSOR, HEIR, OR
LEGAL REPRESENTATIVE OF ANY OF THE SAME SHALL SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION PROCEDURE
ARISING FROM OR BASED UPON THIS PROMISSORY NOTE, ANY OTHER LOAN AGREEMENT
OR ANY LOAN DOCUMENT EVIDENCING, SECURING OR RELATING TO THE OBLIGATIONS OR
TO THE DEALINGS OR RELATIONSHIP BETWEEN OR AMONG THE PARTIES THERETO;
(B) NEITHER THE BORROWER NOR LENDER SHALL SEEK TO CONSOLIDATE ANY
SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION
IN WHICH A JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED;
(C) THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY
THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS;
(D) NEITHER THE BORROWER, NOR LENDER HAS IN ANY WAY AGREED WITH
OR REPRESENTED TO ANY OTHER PERSON OR PARTY THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES; AND
(E) THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO
ENTER INTO THIS TRANSACTION.
EVENTS OF DEFAULT
BORROWER shall be in default under this AGREEMENT upon the
happening of any of the following events, circumstances or conditions;
namely:
(1) Default in the payment or performance of any of
theOBLIGATIONS provided hereunder or in connection herewith or any other
OBLIGATIONS of BORROWER or any affiliate (as defined in 1 1 U. S. C. 10 1
(2); hereinafter affiliate) or BORROWER or any endorser, guarantor or
surety for BORROWER to LENDER or any affiliate of LENDER howsoever created,
primary or secondary, whether direct or indirect, absolute or contingent,
now or hereafter existing, due or to become due, or of any other covenant,
warranty, or undertaking expressed herein, therein, or in any other
document establishing said endorsement, guaranty or surety; or any other
document executed by BORROWER in conjunction herewith;
(2) Any warranty, representation or statement made or furnished
to LENDER by or on behalf of BORROWER, or any guarantor, endorser, or
surety for BORROWER in connection with the Note or to induce LENDER to make
a loan to BORROWER which was false in any material respect when made or
furnished or has become materially false, if such warranty of BORROWER or
guarantor, endorser or surety for BORROWER was ongoing in nature; or
(3) Death, dissolution, termination of existence, insolvency,
business failure, appointment of a receiver, custodian, or trustee for any
part of the property of, assignment for the benefit of creditors by, or the
commencement of any proceeding under any bankruptcy or insolvency laws by
or against BORROWER or any endorser, guarantor, or surety for BORROWER; or
(4) BORROWER or any guarantor, endorser, or surety for BORROWER
shall allow the acquisition of substantially all of the business or assets
of BORROWER or guarantor or surety for BORROWER or a material portion of
such business assets if such a sale is outside BORROWER'S or guarantor's,
endorser's or surety's ordinary course of business or more than 50% of the
outstanding stock or voting power of BORROWER in a single transaction or a
series of transactions, or acquire substantially all of the business or
assets or more than 50% of the outstanding stock or voting power of any
other entity, or enter into any transaction of merger or consolidation
without prior written consent of LENDER; or
(5) Failure of a corporate BORROWER or endorser, guarantor or
surety for said BORROWER to maintain its corporate existence in good
standing; or
(6) Upon the entry of any monetary judgment or the assessment
and/or filing of any tax lien against BORROWER or any endorser, surety, or
guarantor, or upon the issuance of any writ of garnishment, judicial
seizure of, or BORROWER be generally not paying BORROWER'S debts as such
debts become due; or
(7) The BORROWER or any endorser, guarantor, or surety for said
BORROWER shall be a debtor, either voluntarily or involuntarily , under (as
as the term debtor is defined in) the Bankruptcy Code or should the
BORROWER be generally not paying BORROWER's debts as such debts become due;
or
(8) Failure of said BORROWER, endorsers, guarantors or sureties
to furnish financial statements or other financial information reasonably
requested by LENDER; or
(9) Loss, theft, substantial damage, destruction, sale or encumbrance to
or of any COLLATERAL or the assertion or making of any levy, seizure,
mechanic's or materialman's lien or attachment thereof or thereon; or
(10) If LENDER should otherwise deem itself or the debt created
hereunder unsafe or insecure; or should LENDER, in good faith, believe that
the prospect of payment or other performance is impaired.
REMEDIES ON DEFAULT (including Powers of Sale)
Upon the occurrence of any of the foregoing events, circumstances
or conditions of Default, all of the OBLIGATIONS evidenced herein and
secured hereby shall at the option of the LENDER, immediately be due and
payable without notice. Further, LENDER shall then have all the rights and
remedies of a SECURED PARTY under the Uniform Commercial Code AS adopted by
the state LENDER'S office as set forth herein.
Without limitation thereto, LENDER shall have the
following specific rights and remedies:
(1) To take immediate possession of the COLLATERAL without notice or
resort to legal process; and for such purpose, to enter upon any premises
on which the COLLATERAL or any part thereof may be situated and remove the
same therefrom; or at its option, to render the COLLATERAL unusable.
Further, also at its option, to depose of said COLLATERAL on BORROWER'S
premises.
(2) To require BORROWER to assemble the COLLATERAL and make it
available to LENDER at a place to then be designated by said LENDER, which
is reasonably convenient to both parties.
(3) To exercise its rights of Set-Off by applying any monies of
BORROWER on deposit with LENDER toward payment of the OBLIGATIONS evidenced
or referred to herein or secured hereby, without notice. If any process is
issued or ordered to be served on LENDER, seeking to seize BORROWER'S
rights and/or interest in any bank account maintained with LENDER; the
balance in any said account shall immediately be deemed to have been and
shall be set-off against any and all OBLIGATIONS of BORROWER to LENDER, as
of the time of issuance of any such writ or process; whether or not
BORROWER and/or LENDER shall then have been served therewith.
(4) To dispose of COLLATERAL as allowed by the Uniform Commercial
Code, as adopted by the State of LENDER'S office as set forth herein, in
any County or place selected by LENDER, at either Private or Public Sale
(at which Public Sale LENDER may be the purchaser) with or without having
the COLLATERAL physically present at said site.
(5) To make or have made any repairs deemed necessary or desirable
at time of repossession, possession or sale, the cost of which is to be
charged against BORROWER.
(6) To apply to proceeds realized from disposition of the
COLLATERAL to satisfy the following terms, in the order here listed:
(a) The cost of reimbursing any person whose interest in the
premises is physically damaged by the entry and removal of the COLLATERAL,
upon BORROWER'S failure to do so; next to
(b) The expenses of taking, removing, holding for sale, repairing
or otherwise preparing for sale and selling of said COLLATERAL specifically
including the LENDER'S reasonable Attomey's fees (including appellate
costs, if any) and both legal and collection expenses; next to
(c) The expense of liquidating any liens, security interests,
attachments or encumbrances superior to the security interests herein
created; and finally to
(d) The unpaid principal and all accumulated interest hereunder
and to any other debt owed to LENDER by any signer hereof.
Any surplus, after the satisfaction of the foregoing items (a)
through (d) shall be paid to BORROWER or to any other PARTY lawfully
entitled thereto and known to this LENDER. Further, if proceeds realized
from disposition of the COLLATERAL shall fail to satisfy any of the
foregoing items (a) through (d), BORROWER shall forthwith pay deficiency
balance to LENDER.
No waiver, amendments or modifications shall be valid unless in
writing. Further, this Note shall be governed by and construed under the
laws of the State of the LENDER'S office as set forth herein. All terms
and expressions contained herein which are defined in Articles 1, 3 or 9 of
the Uniform Commercial Code of the State of LENDER'S office set forth
herein shall have the same meaning herein as in said Articles of Said Code.
No waiver by LENDER of any default(s) shall operate as a waiver of any
other default or the same default on a future occasion. All rights of
LENDER hereunder shall inure to the benefit of its successors and assigns;
and all obligations of BORROWER shall bind his heirs, executors,
administrators, successors and/or assigns.
If more than one person has signed this instrument, such parties
are jointly and severally obligated hereunder. Further, use of the
masculine pronoun herein shall include the feminine and neuter and also the
plural. If any provision of this instrument shall be prohibited or invalid
under applicable law, such provision shall be ineffective but only to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of the Agreement.
"Agreement" refers to the entire PROMISSORY NOTE herein. In the case of
conflict between the terms of this Agreement and the Mortgage, Loan
Agreement and/or Commitment Letter issued in connection herewith, the
priority of controlling terms shall be first this Agreement, then the
Mortgage, the Loan Agreement, then the Commitment Letter.
IN WITNESS WHEREOF, the Borrower, on the day and year first written above,
has caused this Note to be executed under seal
by (I) if a corporation, adoption of the facsimile seal printed hereon for
such special occasion and purpose (or if an impression seal appears herein
by affixing such impression seal) by its duly authorized officer(s) or,
(ii) if by individuals, hereunto setting their hands and seals.
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP,
an Ohio limited partnership
By: ______________________
Robert M. Taylor, Manager and Chairman,
T&T RESORTS, L.C.
General Partner
AMENDMENT NO. 2 TO LOAN AGREEMENT
This Amendment No. 2 To Loan Agreement (the "Agreement") is entered
into to be effective as of the 24th day of June, 1996 by and between FINOVA
Capital Corporation, a Delaware corporation, formerly known as Greyhound
Financial Corporation, a Delaware corporation ("Lender") and Marco SSP,
Ltd., a Florida limited partnership ("Borrower").
RECITALS:
A. Borrower and Lender are parties to a Loan Agreement dated as
of September 23, 1994, as previously amended by Amendment No. 1 to Loan
Agreement dated as of December 12, 1994 (collectively, the "Loan
Agreement"), relating to a loan in an amount of up to $19,500,000 ("Loan").
B. As of the effective date of this Agreement, the outstanding
principal balance of the Loan is $19,090,711.45 (the "Existing Loan
Amount").
C. Borrower has requested, and Lender has agreed, subject to the
terms and conditions set forth in this Agreement, to convert $5,000,000 of
the Existing Loan Amount to a revolving line of credit so that Borrower may
prepay without penalty all or a portion of such amount and subsequently
have access to such funds when its working capital needs dictate. This is
not intended to constitute a new loan to the Borrower, but rather, the
conversion of a portion of the existing credit from a permanent to a
revolving facility.
NOW, THEREFORE, in consideration of the foregoing recitals and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Borrower and Lender hereby agree as follows:
AGREEMENT
1. Defined Terms. Except as otherwise defined herein or
unless the context otherwise requires, capitalized terms used in
this Agreement shall have the meaning given to them in the Loan
Agreement.
2. Amendments to Loan Agreement. So long as the conditions
precedent described in paragraph 4 of this Agreement are met to the
satisfaction of Lender, which satisfaction shall be evidenced by Lender's
execution of this Agreement (unless otherwise provided herein), the Loan
Agreement shall be modified and supplemented as follows:
2.1 The Loan, and the Existing Loan Amount shall be
bifurcated into two components comprised of:
(a) a "Permanent Loan" of $14,090,711.45 (the
"Permanent Loan Amount"); and
(b) a "Revolving Loan 11 of $5,000,000 (the
"Revolving Loan Amount").
2 . 2 As used in the Loan Agreement, the term "Loan Amount" is
hereby amended so as to refer to, collectively, at all times following the
date of this Agreement, the Permanent Loan Amount and the Revolving Loan
Amount.
2.3 As used in the Loan Agreement, the term "Note" is hereby
amended so as to refer to, at all times following the date of this
Agreement, the Amended And Restated Promissory Note of even date with this
Agreement, in the form attached hereto as Exhibit "All ("Amended Note").
2.4 The outstanding principal balance of the Permanent Loan shall
continue to accrue interest at the rate of Basic Interest described in
paragraph 1. 2 of the Loan Agreement; the outstanding principal balance of
the Revolving Loan shall bear interest at a new floating rate described in
the Amended Note, and therefore, the reference to the Note in the second
line of said paragraph 1.2 of the Loan Agreement is hereby amended so as to
refer to, at all times following the date of this Agreement, the Permanent
Loan.
2.5 Paragraph 2.3.1 of the Loan Agreement, which describes the
payment obligations with respect to the Loan, is at all times following the
date of this Agreement, @superseded by the payment provisions set forth in
the Amended Note.
2.6 The reference to "Basic Interest" appearing in paragraph
2.3.3 of the Loan Agreement is hereby amended so as to refer to, at all
times following the date of this Agreement, all interest accruing under the
Amended Note.
2.7 Paragraph 2.5, which governs prepayment of the Loan,
is hereby amended so as, in all respects, to refer only to the
Permanent Loan.
2.8 The provisions regarding the Revolving Loan set forth in
Section 3 below are deemed to supplement, and become a part of, the Loan
Agreement.
2.9 The address for notice to Lender under the Loan
Documents is amended to:
If to Lender: FINOVA Capital Corporation
(two copies) Vice President-Commercial Real Estate 7272 East
Indian School Road Suite 410
Scottsdale, Arizona 85251 Telecopy No.: 602-874-6444
with a copy to:
Vice President - Group Counsel
7272 East Indian School Road
Suite 410
Scottsdale, Arizona 85251
Telecopy No.: 602-874-6445
2.10 All references to Greyhound Financial Corporation set forth
in the Loan Documents shall hereinafter refer to "FINOVA Capital
Corporation."
3. Revolving Loan Terms. The following terms and conditions
shall define and govern the Revolving Loan:
3.1 Lender hereby agrees to make advances of the Revolving Loan
to Borrower, each of which shall be in an amount equal to the lesser of (a)
the amount requested in writing by Borrower, or'(b) the excess of (i) the
Revolving Loan Amount over (ii) the then outstanding principal balance of
the Revolving Loan ("Revolving Loan Availability"); subject, however, to
the following additional terms and conditions:
(a) No advances under the Revolving Loan shall be available
unless and until (i) Lender has received an endorsement to the Title Policy
dated after the recording of Amendment No. 2 to Mortgage evidencing that no
new liens or encumbrances have come of record with respect to the Property
since June 7, 1996, at 5: 00 p.m. , or (ii) if any lien or encumbrance has
come of record since such date, it is removed or bonded over to Lender's
satisfaction.
(b) At the time of the requested advance, there exists no monetary
or other material Event of Default or Incipient Default under the Loan
Documents;
(c) All advance requests shall be in writing and signed by
Borrower, and shall be for a minimum advance amount of $500,000;
(d) Borrower shall not be entitled to any advance when the
Revolving Loan Availability is less than $500,000;
(e) No more than six (6) advances on the Revolving
Loan shall be available to Borrower during any Loan Year;
(f) Advances on the Revolving Loan shall not be available during
the ninety (90) day period preceding theMaturity Date;
(g) The projected Debt Service Coverage Ratio after giving effect
to the requested advance shall be no less than 1.10:1.00. For purposes of
calculating such "projected" Debt Service Coverage Ratio, Lender shall
compare (i) Cash Flow as reported by the Borrower in the Required Financial
Information for the most recently ended four calendar quarters with (ii)
the aggregate Debt Service that will be due on the Permanent Loan and the
Revolving Loan for the first twelve full calendar months following the date
of the requested advance, assuming that the Revolver Rate (as defined
below) in effect at the time of the proposed advance does not change during
such twelve month period, and assuming there are no principal payments made
on the Revolving Loan during such twelve month period.
3.2 Interest shall accrue on the outstanding principal balance of
the Revolving Loan at a variable rate of interest more specifically
described in the Amended Note (the "Revolver
Rate"). The Borrower shall make interest-only payments of
accrued interest on the Revolving Loan in arrears on the first
day of each calendar month following the date of this
Agreement through the Maturity Date, whereupon the entire outstanding
principal balance of the Revolving Loan together with any and all accrued
and unpaid interest thereon shall be due and payable in full.
3.3 The Revolving Loan shall be due and payable in full at any
time Borrower tenders a prepayment of the Permanent Loan, and following any
such prepayment, advances on the Revolving Loan shall no longer be
available to Borrower.
3.4 On each anniversary of the date of this Agreement and on the
Due Date, Borrower shall pay to Lender a nonutilization fee equal to
one-quarter (.25) percent of the daily average unborrowed funds available
under the Revolving Loan over the preceding twelve months (or in the case
of the Due Date, since the last anniversary of the date of this Agreement).
3.5 Borrower will use the proceeds of all advances of
the Revolving Loan only for the Borrower's business purposes.
4. Conditions Precedent. The amendments described in this
Agreement, shall not be effective until the following conditions precedent
have been satisfied:
4.1 Borrower shall have delivered (or cause to be delivered) to
Lender the following documents and items, all of which are to be properly
completed, executed and otherwise satisfactory in form and substance to
Lender, in its sole discretion:
(a) this Agreement;
(b) the Amended Note;
(c) an Amendment No. 2 to Mortgage;
(d) amendments to the UCC Financing Statements reflecting Lender's new
name and address;
(e) a partnership resolution of Borrower authorizing its entry into this
Agreement and the transactions contemplated hereunder;
(f) a corporate resolution of Borrower's general partner
authorizing.,Borrower's entry into this Agreement and the transactions
contemplated hereunder; and
(g) an updated legal opinion from Borrower's counsel updating and
confirming the opinions set forth in its Opinion Letter delivered in
connection with the original Loan Closing, with respect to the Loan
Documents, as modified by this Agreement.
4.2 Borrower has paid to Lender a modification fee of
$10,000.
4.3 Borrower has paid to Lender $5,000.00 as a reimbursement to
Lender for outside counsel legal fees and expenses incurred in the
preparation, negotiation and consummation of this Agreement, and including
$624.56 of outside legal fees and costs incurred in connection with the
Subsequent Advance of the Loan made by Lender in November of 1995. If any
such expenses, or other costs relating to this Agreement such as title
endorsement premiums, recording and filing fees and the like, are not
reimbursed by Borrower to Lender as of the effective date of this
Agreement, Borrower hereby authorizes Lender to draw on the unfunded
portion of the Revolving Loan as a source for reimbursement so long as
Lender has given Borrower a written notice detailing the costs to be
reimbursed and giving Borrower five (5) Business Days to respond with any
objections or comments that it may have.
5. Indebtedness Acknowledged. Borrower acknowledges that the
indebtedness evidenced by the Loan Documents is just and owing and agrees
to pay the indebtedness in accordance with the terms of the Loan Documents.
Borrower further acknowledges and represents that no event has occurred and
no condition presently exists that would constitute an Event of Default or
Incipient Default under the Loan Documents.
6. Validity of Documents. Borrower reaffirms, acknowledges and
agrees that the Loan Agreement and the other Loan Documents represent
valid, enforceable and collectable obligations of ]Borrower, and that
Borrower presently has no existing claims, defenses (personal or otherwise)
or rights of setoff whatsoever with respect to the obligations of Borrower
under the Loan Agreement or any of the other Loan Documents.
7. Reaffirmation of Warranties. Borrower confirms and restates to
Lender as of the date hereof all its representations and warranties set
forth in the Loan Agreement, as amended hereby, and the other Loan
Documents. Borrower agrees that all liens and security interests granted
by it to Lender are reaffirmed for the benefit of Lender and shall secure
the Loan as modified hereby. Borrower further acknowledges that Lender has
performed, and is not in default of, its obligations under the Loan
Documents and that there are no offsets, defenses.,or counterclaims with
respect to any of Borrower's obligations under the Documents.
8. Ratification of Terms and Conditions. Borrower and Lender
hereby ratify and confirm the Loan Agreement and each of the other Loan
Documents, as amended and supplemented hereby, in all respects; and, except
as amended and/or supplemented hereby, all terms, conditions and provisions
of the Loan Agreement and each of the other Loan Documents shall continue
in full force and effect. In the event of any conf lict or inconsistency
between the terms and conditions of this Agreement and any of the Loan
Documents, the provisions of this Agreement shall control.
9. Miscellaneous.
9.1 This Agreement may not be amended or otherwise modif ied
except in a writing duly executed by the parties hereto.
9.2 If any one or more of the provisions of this Agreement is
held to be invalid, illegal or unenforceable in any respect or for any
reason (all of which invalidating laws are waived to the fullest extent
possible), the validity, legality and enforceability of any remaining
portions of such provision(s) in every other respect and of the remaining
provision(s) of this Agreement shall not be in any respect impaired.
9.3 This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes all prior written or oral understandings and agreements between
the parties in connection therewith.
9.4 All Schedules and Exhibits referred to herein are
herein incorporated by this reference.
9.5 This Agreement may be executed in one or more counterparts,
and any number of which having been signed by all the parties hereto shall
be taken as one original.
Marco SSP, Ltd.,
a Florida limited partnership
By: Marco SSP, Inc., a Florida corporation, its General Partner
By: ____________________________
Robert M. Taylor, Its Chairman
FINOVA Capital Corporation,
a Delaware corporation, formerly known as
Greyhound Financial Corporation
By: ____________________________
Its _________
Exhibit A - Amended and Restated Promissory Note
Exhibit B - Amendment No. 2 to Mortgage
Acknowledgement and Consent of Subordinating Parties
The undersigned, being the Subordinating Parties under that
certain Subordination and Standstill Agreement ("Affiliates") dated
September 23, 1994 in favor of Lender, hereby acknowledge and agree to the
foregoing Amendment and further acknowledge that the Indebtedness described
in such Subordination and Standstill Agreement (to which any claims of the
Subordinating Parties against Borrower are subordinated) is hereinafter
deemed to include the full amount of the Permanent Loan and Revolving Loan
and all other obligations of Borrower arising under the Loan Documents, as
modified pursuant to the foregoing Agreement.
Marco SSP, Inc.,
a Florida corporation
By: ____________________________
Robert M. Taylor, Its Chairman
South Seas Properties Company Limited Partnership, an Ohio limited
partnership
By: T&T Resorts, L.C., a Florida limited liability company, its general
partner
By: ____________________________
Robert M. Taylor, Its Chairman
South Seas Resorts Company Limited Partnership, a Florida limited
partnership
By: S. S. Resort Management, L.C.,
Its General Partner
By: ____________________________
Robert M. Taylor, Its Chairman
____________________________
Robert M. Taylor
____________________________
Allen G. Ten Broek
Acknowledgement and Consent of Guarantor
The undersigned hereby acknowledges and consents to the foregoing
Amendment No. 2 and further restates and reaffirms its guarantee of the
Loan, as amended by the foregoing Amendment No. 2,
pursuant to its Guaranty and Subordination Agreement in favor of Lender
dated September 23, 1994.
South Seas Properties Company Limited
Partnership, an Ohio limited partnership
By: T&T Resorts, L.C., a Florida limited liability company,
its general partner
By: ____________________________
Robert M. Taylor
Its Chairman EXHIBIT "A"
AMENDED AND RESTATED PROMISSORY NOTE
U.S. $19,500,000 September 23,-1994
Amended And Restated
as of June 24, 1996
FOR VALUE RECEIVED, the undersigned Marco SSP, Ltd., a Florida
limited partnership (the "Maker"), promises to pay to FINOVA Capital
Corporation, a Delaware corporation, formerly known as Greyhound Financial
Corporation ("Lender"), or order, at its principal offices at 7272 East
Indian School Road, Suite 410, Scottsdale, Arizona 85251, or at such other
place as the holder of this Note ("Holder") may from time to time,designate
in writing, in lawful money of the United States of America, the principal
sum of NINETEEN MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS
($19,500,000) (the "Loan") or so much thereof as has been disbursed and not
repaid, together with interest on the unpaid principal balance from time to
time outstanding from the date hereof until paid, as more fully provided
for below. All payments hereunder shall be made in immediately available
funds.
This Note amends and restates a Promissory Note executed by Maker
and delivered to Lender pursuant to a Loan Agreement dated as of September
23, 1994 between Maker and Lender. This Note has been executed by Maker
and delivered to Lender pursuant to such Loan Agreement as modified by
Amendment No. 1 To Loan Agreement dated as of December 12, 1994 and
Amendment No. 2 To Loan Agreement ("Amendment No. 211) of even date
herewith (together with any-and all extensions, renewals, modifications and
restatements thereof, "Loan Agreement") and evidences advances of the
Permanent Loan -and the Revolving Loan (collectively, the "Loan") as
defined i.n---and made pursuant to the Loan Agreement. Maker and Lender
agree to make reference to the original Promissory Note dated September 23,
1994 for purposes of defining the terms upon which interest on the Loan
accrued and payments of principal and interest on the Loan were due at all
times prior to the date of this Note. The term "Business Day," as used
herein, shall have the meaning prescribed in the Loan Agreement.
BASIC INTEREST - PERMANENT LOAN
Except as otherwise provided herein, interest ("Basic Interest")
shall accrue on the outstanding principal balance of that component of the
Loan described in Amendment No. 2 as the Permanent Loan at a f ixed rate
per annum equal to ten and eight tenths percent (10. 800-.) . Basic
Interest shall be calculated on the basis of actual number of days elapsed
during the period for which interest is being charged predicated on a year
consisting of 360 days.
VARIABLE INTEREST - REVOLVING LOAN
Except as otherwise provided herein, interest ("Variable
Interest") shall accrue on the outstanding balance of that component of the
Loan described in Amendment No. 2 as the Revolv--a'mg Loan initially at an
annual rate ("Initial Interest Rate") equal to Prime (as hereinafter
defined) in effect on the date of the initial advance ("Advance") of the
Revolving Loan ("Initial Prime") plus two hundred (200) basis points,
subject to adjustment on each Interest Rate Change Date (as hereinafter
defined) , but in no ev@nt to exceed the maximum contract rate permitted
under the Applicable Usury Law (as hereinafter defined) . The interest rate
shall change on each Interest Rate Change Date by adding to or subtracting
from the Initial Interest Rate, as the case may be, the change, if any,
between Initial Prime and Prime in effect on the applicable Interest Rate
Change Date. As used in this Note, the following capitalized terms have
the meaning set forth opposite them below:
"Prime" shall mean the rate of interest publicly announced, from time to
time, by Citibank N.A., New York, New York ("Citibank"), as the Citibank
base rate, notwithstanding the fact that some borrowers of Citibank may
borrow from Citibank at rates of interest less than such announced rate; or
if Citibank ceases to publish such rate, such other published rate
("Alternative Reference Rate") as Holder shall deem comparable in its sole
and absolute discretion; and
"Interest Rate Change Date" means: (a) the first business day of Citibank
during each calendar month following the date of the initial advance of the
Revolving Loan; or (b) if the Alternative Reference Rate is being utilized,
the first business day of the publisher of the Alternative Reference Rate
during each calendar month following the date of such initial advance.
Except following an acceleration, or in circumstances where Holder
has exercised the option reserved to it in the following sentence, payments
of principal, interest and any other amounts due and payable hereunder
shall, at the option of Holder, earn interest after they are due at a rate
("Overdue Rate") equal to (a) four hundred (400) basis points above the
rate of Basic Interest and Variable Interest otherwise payable hereunder,
or (b) the maximum contract rate permitted under the Applicable Usury Law,
whichever of (a) or (b) is lesser. At the option of Holder, while an Event
of Default (as that term is defined in the Loan Agreement) exists, and in
all events after an acceleration of the Note by Holder, interest shall
accrue on the entire outstanding principal balance of this Note at the
Default Rate (as defined in the Loan Agreement). Notwithstanding anything
in this Note to the contrary, interest on any overdue amounts at the
Overdue Rate shall cease accruing at any time that interest at the Default
Rate commences to accrue on the outstanding balance due hereunder.
The contracted for rate of interest of the Loan contemplated
hereby, without limitation, shall consist of the following: (i) Basic
Interest and Variable Interest, calculated in accordance with the
provisions of this Note; (ii) the Overdue Rate, calculated and applied to
the overdue payments under this Note in accordance-w-ith the provisions
hereof; (iii) the Default Rate, calculated and applied to the principal
balance of this Note in accordance with the provisions of the Loan
Agreement; (iv) any late charge calculated and applied to an overdue
payment in accordance with the provisions hereof; (v) the Prepayment
Premium (as defined in the Loan Agreement); (vi) the Loan Fee, in the
amount of $292,500 described in the Loan Agreement; (vii) the modification
fee of $10,000 described in Amendment No. 2 to Loan Agreement; and (viii)
all Additional Sums (as hereinafter defined) if any. Maker agrees to pay
an effective contracted for rate of interest which is the sum of the
above-referenced elements but in no event to exceed the maximum contract
rate permitted under the Applicable Usury Law (as defined below). All
fees, charges, goods, things in action or any other sums or things of value
(other than amounts described in (i), (ii), (iii), (iv), (v), (vi) and
(vii) hereof), pursuant to this Note, the Loan Agreement, the other Loan
Documents or any other documents or instruments in any way pertaining to
this lending transaction, or otherwise with respect to this lending
transaction, that under any applicable law may be deemed to be interest
with respect to this lending transaction, for the purpose of any applicable
law that may limit the maximum amount of interest to be charged with
respect to this lending transaction (the "Additional Sums"), shall be
payable by Maker as, and shall be deemed to be, additional interest, and
for such purposes only, the agreed upon and "contracted for rate of
interest" of this lending transaction shall be deemed to be increased by
the rate of interest resulting from the Additional Sums.
PAYMENTS - PERMANENT LOAN
Commencing on the first day of the first full month following the
date of this Note, and on the first day of each calendar month thereafter
through the first to occur of the Maturity Date or repayment of this Note,
Maker shall remit monthly payments consisting of (a) principal based upon
the amortization schedule attached hereto as "Schedule l, and (b) accrued
Basic Interest on the actual outstanding principal balance of the Permanent
Loan, in arrears.
PAYMENT - REVOLVING LOAN
Commencing on the first day of the first full calendar month
following the date hereof, and on the first day of each calendar month
thereaf ter until the Maturity Date, Maker shall remit to Holder monthly
payment consisting of Variable Interest on the outstanding principal
balance of the Revolving Loan.
All payments under this Note shall be applied first to any late
charge or other fees, then to accrued but unpaid Basic Interest, then to
any other amounts due and payable hereunder or under the Loan Agreement,
and the balance, if any, to outstanding principal.
On the Due Date (as hereinafter defined) , the entire unpaid
principal balance of this Note, all accrued and unpaid Basic Interest and
Variable Interest, and all other charges or amounts owing in connection
with the Loan shall be due and payable in ful-1. The Due Date shall mean
the earlier of (i) the Maturity Date; (ii) the date of satisfaction of the
Loan through pre-payment by the Maker pursuant to the Loan Agreement; or
(iii) the date on which Lender or Holder accelerates payment of the Loan
due to an Event of Default (as defined in the Loan Agreement) by the Maker.
If any installment of principal, interest or any other payment
required to be made in connection with the Loan is not paid when due and,
except in the case of the final installment for which no grace period is
allowed, such breach continues for three (3) Business Days, or upon the
occurrence of any other Event of Default (as defined in the Loan
Agreement), Holder may at its option, without notice or demand, declare
immediately due and payable the entire unpaid principal balance hereof, all
accrued and unpaid Basic Interest and Variable Interest thereon, any
prepayment premium required under the Loan Agreement, and all other
obligations owing in connection with the Loan.
In the event that any monthly installment of principal and
interest shall not be paid within ten (10) Business Days of the date when
due, a "late charge" of two percent (2.0%) of the late payment may be
charged by the Holder for the purposes of defraying the expense incident to
handling such delinquent payments. Such late charge represents the
reasonable estimate of Maker and Lender of a fair average compensation for
the loss which may be sustained by Lender due to the failure of the Maker
to make timely payments. All late charges shall be due and payable monthly
on the same dates provided herein for the payment of installments.
Except as expressly provided in Section 2.5 of the Loan Agreement,
prepayment of the Permanent Loan will not be permitted in whole or in part.
Holder shall not by any act or omission be deemed to have waived
any of its rights or remedies hereunder unless such waiver be in writing
and signed by an authorized officer of Holder and then only to the extent
specifically set forth therein; a waiver on one occasion shall not be
construed as continuing or as a bar to or waiver of such right or remedy on
any other occasion. All remedies conferred upon Holder by this Note, the
Loan Agreement, or any other instrument or agreement related hereto shall
be cumulative and none is exclusive, and such remedies may be exercised
concurrently or consecutively at Holder's option.
If Holder undertakes to collect this Note, Maker will pay to
Holder in addition to any indebtedness due and unpaid, all costs and
expenses of collection, including, without limitation, attor- neys' fees
and expert witnesses' fees, whether or not legal proceedings shall be
instituted. In the event Holder institutes legal proceedings to enforce
this Note, the award of costs of collection, including attorneys' fees,
shall be made by the court (and not by a jury).
Maker, and every person or entity at any time liable for the
payment of the indebtedness evidenced by this Note, hereby abso- lutely
waive: presentment for payment, protest and demand; notice of dishonor,
protest, demand and nonpayment of this Note; and each and every other
notice of any kind except for notices expressly provided in this Note or in
any of the other documents securing payment of, or otherwise related to,
this Note. Maker and every such person or entity further consent to
renewals or extensions of the payment of any sums to be paid under this
Note at any time and from time to time, without limit as to the number or
aggregate period of such renewals or extensions, at the request of any
other person or entity liable for them. Any such renewals or extensions
may be made without notice to,any person or entity liable for the payment
of the indebtedness evidenced by this Note.
This Note is given and accepted as evidence of indebtedness
only and not in payment or satisfaction of any indebtedness or obligation.
Time is of the essence with respect to all of Maker's
obligations and agreements under this Note.
This Note and all its provisions, conditions, promises and
covenants shall be binding upon Maker, and its successors and assigns,
provided nothing herein shall be deemed Holder's consent to any assignment
restricted or prohibited by the terms of the Loan Agreement. If more than
one person or entity has executed this Note as Maker, the obligations of
such persons and entities shall be joint and several.
If any one or more of the provisions contained in this Note shall
be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby; provided that where the provisions of
any invalidating law may be waived, they are waived by Maker to the fullest
extent possible.
THIS NOTE AND THE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF ARIZONA AND TO THE EXTENT
THEY PREEMPT THE LAWS OF SUCH STATE, THE LAWS OF THE UNITED STATES.
MAKER: (A) HEREBY IRREVOCABLY SUBMITS ITSELF TO THE PROCESS,
JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF ARIZONA, MARICOPA
COUNTY, AND TO THE PKOCESS, JURISDICTION, AND VENUE OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF ARIZONA, FOR THE PURPOSES OF SUIT,
ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR THE
SUBJECT MATTER HEREOF (EXCEPT AS MAY BE SPECIFICALLY PROVIDED TO THE
CONTRARY IN THE MORTGAGE), OR, IF HOLDER INITIATES SUCH ACTION ANY COURT IN
WHICH HOLDER SHALL INITIATE SUCH ACTION AND THE CHOICE OF SUCH VENUE SHALL
IN ALL I NSTANCES BE AT HOLDERIS ELECTION; AND (B) WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY
OF MOTION, DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY
CLAIM THAT MAKER IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE
ABOVE-NAMED COURTS, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER. MAKER HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK ANY OMGMENT
OR ACTION IN ANY OTHER FORUM.
LENDER AND MAKER ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER ANY OF THE LOAN DOCUMENTS WOULD BE BASED UPON DIFFICULT AND
COMPLEX ISSUES AND THEREFORE, THE PARTIES AGREE THAT ANY LAWSUIT ARISING
OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED BY A JMGE SITTING WITHOUT A
JURY, AND MAKER HEREBY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN
ANY SUCH PROCEEDING.
ALL OF THE PROVISIONS SET FORTH ABOVE ARE A MATERIAL
INDUCEMENT FOR LENDER'S MAKING THE LOAN TO MAKER.
MAKER'S Initials
It is the intent of the parties to comply with the applicable
usury law ("Applicable Usury Law") chosen by Maker and Lender in the
preceding paragraph, or any other usury law applicable. Accordingly, it is
agreed that notwithstanding any provisions to the contrary in this Note,
the Loan Agreement, or in any of the documents securing payment hereof or
otherwise relating hereto, in no event shall this Note or such documents
require the payment or permit the collection of interest in excess of the
maximum contract rate permitted by the Applicable Usury Law. If (a) any
such excess of interest otherwise would be contracted for, charged or
received from Maker or otherwise in connection with the Loan evidenced
hereby, or (b) the maturity of the indebtedness evidenced by this Note is
accelerated in whole or in part, or (c) all or part of the principal or
interest of this Note shall be prepaid, so that under any of such
circumstances the amount of interest contracted for, charged or received in
connection with the Loan evidenced hereby, would exceed the maximum
contract rate permitted by the Applicable Usury Law, then in any such
event: (1) the provisions of this paragraph shall govern and control; (2)
neither Maker nor any other
person or entity now or hereafter liable for the payment hereof will be
obligated to pay the amount of such interest to the extent that it is in
excess of the maximum contract rate permitted by the Applicable Usury Law;
(3) any such excess which may have been collected shall be either applied
as a credit against the then unpaid principal amount hereof or refunded to
Maker, at the Holder's option; and (4) the effective rate of interest will
be automatically reduced to the maximum amount of interest permitted by the
Applicable Usury Law. It is further agreed, without limiting the
generality of the foregoing, that to the extent permitted by the Applicable
Usury Law: (x) all calculations of the rate of interest which are made for
the purpose of determining whether such rate would exceed the maximum
contract rate permitted by the Applicable Usury Law shall be made by
amortizing, prorating, allocating and spreading during the period of the
full stated term of the Loan, all interest at any time contracted for,
charged or received from Maker or otherwise in connection with such Loan;
and (y) if the effective rate of interest on the Loan should at any time
exceed the maximum contract rate allowed under the Applicable Usury Law,
such excess interest that would otherwise have been collected had there
been no ceiling imposed by the Applicable Usury Law shall be paid to Holder
from time to time, if and when the effective interest rate on the Loan
otherwise falls below the maximum amount permitted by the Applicable Usury
Law, to the extent that interest paid to the date of calculation does not
exceed the maximum contract rate permitted by the Applicable Usury Law,
until the entire amount of interest which would have otherwise been
collected had there been no ceiling imposed by the Applicable Usury Law has
been paid in full. Maker further agrees that should the maximum contract
rate permitted by the Applicable Usury Law be increased at any time
hereafter because of a change in the law, then to the extent not prohibited
by the Applicable Usury Law, such increases shall apply to all indebtedness
evidenced hereby regardless of when incurred; but, again to the extent not
prohibited by the Applicable Usury Law, should the maximum contract rate
permitted by the Applicable Usury Law be decreased because of a change in
the law, such decreases shall not apply to the indebtedness evidenced
hereby regardless of when incurred.
Maker warrants and represents that the loan evidenced hereby
is for business or investment purposes.
This Note is secured by, among other things, a Mortgage (With
Security Agreement, Assignment of Leases and Rents and Fixture Filing)
encumbering real and personal property owned by Maker and located in Marco
Island, Florida.
MAKER:
STATE OF
) Ss.
County of
Marco SSP, Ltd., a Florida
limited partnership
By: Marco SSP, Inc.,
a Florida corporation Its General Partner
By:
Print Name:
Its:
Tax I.D. No.:
The foregoing instrument was acknowledged before me this
day of June, 1996, by the of
Marco SSP, Inc., a Florida corporation, the General Partner of Marco SSP,
Ltd., a Florida limited partnership, for and on behalf of the limited
partnership. He/she is personally known to me or has produced as
identification.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My commission expires:
Notary Public
EXHIBIT "B"
WHEN RECORDED RETURN TO:
DECONCINI McDONALD BRAMMER
YETWIN & LACY, P.C.
ATTN: Gregory W. Huber, Esq.
2901 N. Central Ave., Suite 1644
Phoenix, AZ 85012-2736
AMENDMENT NO. 2 TO MORTGAGE
This Amendment No. 1 to Mortgage (the "Amendment") is entered into to be
effective as of the 24th day of June, 1996, by and between Marco SSP,
Ltd.,a Florida limited partnership, ("Mortgagor"), and FINOVA Capital
Corporation, a Delaware corporation, formerly known as Greyhound Financial
Corporation, a Delaware corporation ("Mortgagee").
RECITALS:
A. Mortgagee and Mortgagor entered into a Loan Agreement dated September
23, 1994, as amended by an Amendment No. 1 To Loan Agreement dated December
12, 1994 (collectively, "Loan Agreement")
that evidences a loan from Mortgagee to Mortgagor (the "Loan").
B. The Loan is secured by, among other things, a Mortgage,
Assignment of Rents and Security Agreement dated September 23 1994, and
recorded September 23, 1994, in the real estate records of the Collier
County, Florida, in Official Record Book 1988, Page 0056 between Mortgagor
and Greyhound Financial Corporation, as amended by Amendment No. 1 to
Mortgage, Assignment of Leases and Rents and Security Agreement dated
November 13, 1995 and recorded in the real estate records of the Collier
County, Florida on November 22, 1995, in Official Record Book 2122, Page
0277("Mortgage"). The Mortgage encumbers certain real property and
improvements located in Collier County, Florida, as more specifically
described on Exhibit B attached hereto and incorporated herein by this
reference.
C. Pursuant to an Amendment No. 2 to Loan Agreement dated as of
even date herewith, $5,000,000.00 of the original Loan Amount has been
converted into a revolving line of credit which Mortgagor may pay down
(without penalty) and redraw throughout the original term of the Loan, and
in connection therewith, Mortgagor has executed and delivered to Mortgagee
an Amended And Restated Promissory Note, a copy of which is attached hereto
as Exhibit "A"
and which replaces the Note originally secured by the Mortgage. Mortgagor
and Mortgagee wish to amend the Mortgage to confirm that the Mortgage
secures the obligations of Mortgagee, as amended.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, the covenants
contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Mortgagee and Mortgagor
agree as follows:
1. Without limiting the generality of any other provision
contained in the Mortgage, Mortgagor conf irms that the Mortgage secures
(and the Mortgagor's "Indebtedness" as that term is used in the Mortgage
include) payment and performance of the obligations of Mortgagor under the
Loan Agreement as amended by the Amendment No. 2 to Loan Agreement dated as
of even date herewith, and any and all amendments, replacements or
restatements thereof, as well as Mortgagor's obligations under the Amended
And Restated Promissory Note of even date herewith in the form of Exhibit
"A" hereto executed by Mortgagor and delivered to Mortgagee.
2 . Mortgagor and Mortgagee hereby ratify and confirm the
Mortgage, as amended hereby, in all respects; and, except as amended
hereby, the Mortgage shall remain in full force and effect.
3. This Amendment may he executed in counterpart, and any number
of such counterparts which have been executed by all persons whose
signatures are required below shall constitute one original.
IN WITNESS WHEREOF, this instrument is executed as of th day
and year first above written.
MORTGAGOR Marco SSP, Ltd.,
a Florida limited partnership
By: Marco SSP, Inc., a Florida corporation, its General Partner
By:
Print Name:
Title:
MORTGAGEE
STATE OF
) Ss.
County of
FINOVA Capital Corporation,
a Delaware corporation, formerly known as
Greyhound Financial Corporation
By:
Print Name:
Title:
The foregoing instrument was acknowledged before me this
day of June, 1996, by the of
Marco SSP, Inc., a Florida corporation, the General Partner of Marco SSP,
Ltd., a Florida limited partnership, for and on behalf of the limited
partnership. He/she is personally known to me or
has produced as identification.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My commission expires:
Notary Public
STATE OF ARIZONA
) Ss.
County of Maricopa)
The foregoing instrument was acknowledged before me this
day of 1996, by
of FINOVA Capital Corporation, a Delaware corporation, formerly
known as Greyhound Financial Corporation,-on behalf of said corporation.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary Public
My commission expires:
AMENDED AND RESTATED PROMISSORY NOTE
U.S. $19,500,000 September 23, 1994
7
Amended And Restated
as of June 24, 1996
FOR VALUE RECEIVED, the undersigned Marco SSP, Ltd., a F or@ida
limited partnership (the "Maker") , promises to pay to FI140VA Capital
Corporation, a Delaware corporation, formerly known as Greyhound Financial
Corporation ("Lender") , or order, at its principal offices at 7272 East
Indian School Road, Suite 410, Scottsdale, Arizona 85251, or at such other
place as the holder of this Note ("Holder") may from time to time designate
in writing, in lawful money of the United States of America, the principal
sum of NINETEEN MILLION FIVE HUNDRED THOUSAND UNITED STATES DOLLARS ($19,
500, 000) (the "Loan") or so much thereof as has been disbursed and not
repaid, together with interest on the unpaid principal balance from time to
time outstanding from the date hereof until paid, as more fully provided
for below. All payments hereunder shall be made in immediately available
funds.
This Note amends and restates a Promissory Note executed by Maker
and delivered to Lender Pursuant to a Loan Agreement dated as of September
23, 1994 between Maker and Lender. This Note has been executed by Maker
and delivered to Lender pursuant to such Loan Agreement as modified by
Amendment No. 1 To Loan Agreement dated as of December 12, 1994 and
Amendment No. 2 To Loan Agreement ("Amendment No. 211) of even date
herewith (together with any and all extensions, renewals, modifications and
restatements thereof, "Loan Agreement") and evidences advances of the
Permanent Loan and the Revolving Loan (collectively, the "Loan") as defined
in and made pursuant to the Loan Agreement. Maker and Lender agree to make
reference to the original Promissory Note dated September 23, 1994 for
purposes of defining the terms upon which interest on the Loan accrued and
payments of principal and interest on the Loan were due at all times prior
to the date of this Note. The term "Business Day," as used herein, shall
have the meaning prescribed in the Loan Agreement.
BASIC INTEREST - PERMANENT LOAN
Except as otherwise provided herein, interest ("Basic Interest")
shall accrue on the outstanding principal balance of that component of the
Loan described in Amendment No. 2 as the Permanent Loan at a f ixed rate
per annum equal to ten and eight tenths percent (10.80%). Basic Interest
shall be calculated on the basis of actual number of days elapsed during
the period for which interest is being charged predicated on a year
consisting of 360 days.
VARIABLE INTEREST - REVOLVING LOAN
Except as otherwise provided herein, interest ("Variable
Interest") shall accrue on the outstanding balance of that qomponent of the
Loan described in Amendment No. 2 as the Revolv-ing Loan initially at an
annual rate ("Initial Interest Rate") equal-to Prime (as hereinafter
defined) in effect on the date of the initial advance ("Advance") of the
Revolving Loan ("Initial Prime") plus two hundred (200) basis points,
subject to adjustment on - each Interest Rate Change Date (as hereinafter
defined) , but in no event to exceed the maximum contract rate permitted
under the Applicable Usury Law (as hereinafter defined) . The interest rate
shall change on each Interest Rate Change Date by adding to or subtracting
from the Initial Interest Rate, as the case may be, the change, if any,
between Initial Prime and Prime in effect on the applicable Interest Rate
Change Date. As used in this Note, the following capitalized terms have
the meaning set forth opposite them below:
"Prime" shall mean the rate of interest publicly announced, from time to
time, by Citibank, N.A., New York, New York ("Citibank"), as the Citibank
base rate, notwithstanding the fact that some borrowers of Citibank may
borrow from Citibank at rates of interest less than such announced rate; or
if Citibank ceases to publish such rate, such other published rate
("Alternative Reference Rate") as Holder shall deem comparable in its sole
and absolute discretion; and
"Interest Rate Change Date" means: (a) the first business day of Citibank
during each calendar month following the date of the initial advance of the
Revolving Loan; or (b) if the Alternative Reference Rate is being utilized,
the first business day of the publisher of the Alternative Reference Rate
during each calendar month following the date of such initial advance.
Except following an acceleration, or in circumstances where Holder
has exercised the option reserved to it in the following sentence, payments
of principal, interest and any other amounts due and payable hereunder
shall, at the option of Holder, earn interest after they are due at a rate
("Overdue Rate") equal to (a) four hundred (400) basis points above the
rate of Basic Interest and Variable Interest otherwise payable hereunder,
or (b) the maximum contract rate permitted under the Applicable Usury Law,
whichever of (a) or (b) is lesser. At the option of Holder, while an Event
of Default (as that term is defined in the Loan Agreement) exists, and in
all events after an acceleration of the Note by Holder, interest shall
accrue on the entire outstanding principal balance of this Note at the
Default Rate (as defined in the Loan Agreement) . Notwithstanding anything
in this Note to the contrary, interest on any overdue amounts at the
Overdue Rate shall cease accruing at any time that interest at the Default
Rate commences to accrue on the outstanding balance due hereunder.
The contracted for rate of interest of the Loan contemplated
hereby, without limitation, shall consist of the following: (i) Basic
Interest and Variable Interest, calculated in accordance with the
provisions of this Note; - (ii) the Overdue Rate, calculated and applied to
the overdue payments under this Note in accordance-with the provisions
hereof; (iii) the Default Rate, calculated and applied to the principal
balance of this Note in accordance with the provisions of the Loan
Agreement; (iv) any late charge calculated and applied to an overdue
payment in accordance with the provisions hereof; (v) the Prepayment
Premium (as defined in the
Loan Agreement)(vi) the Loan Fee, in the amount of $292,500
described in the Loan Agreement; (vii) the modification fee of
$10,000 described in Amendment No. 2 to Loan Agreement; and (viii)
all Additional Sums (as hereinafter defined) , if any. Maker agrees to pay
an effective contracted for rate of interest which is the sum of the
above-referenced elements but in no event to exceed the maximum contract
rate permitted under the Applicable Usury Law (as defined below). All
fees, charges, goods, things in action or any other sums or things of value
(other than amounts described in (i) , (ii), (iii), (iv), (v), (vi) and
(vii) hereof), pursuant to this Note, the Loan Agreement, the other Loan
Documents or any other documents or instruments in any way pertaining to
this lending transaction, or otherwise with respect to this lending
transaction, that under any applicable law may be deemed to be interest
with respect to this lending transaction, for the purpose of any applicable
law that may limit the maximum amount of interest to be charged with
respect to this lending transaction (the "Additional Sums"), shall be
payable by Maker as, and shall be deemed to be, additional interest, and
for such purposes only, the agreed upon and "contracted for rate of
interest" of this lending transaction shall be deemed to be increased by
the rate of interest resulting from the Additional Sums.
PAYMENTS - PERMANENT LOAN
Commencing on the first day of the first full month following the
date of this Note, and on the first day of each calendar month thereaf ter
through the f irst to occur of the Maturity Date or repayment of this Note,
Maker shall remit monthly payments consisting of (a) principal based upon
the amortization schedule attached hereto as "Schedule 1", and (b) accrued
Basic Interest on the actual outstanding principal balance of the Permanent
Loan, in arrears.
PAYMENT - REVOLVING LOAN
Commencing on the first day of the first full calendar month
following the date hereof, and on the first day of each calendar month
thereafter until the Maturity Date, Maker shall remit to Holder monthly
payment consisting of Variable Interest on the outstanding principal
balance of the Revolving Loan.
All payments under this Note shall be applied first to any late
charge or other fees, then to accrued but unpaid Basic Interest, then to
any other amounts due and payable hereunder or under the Loan Agreement,
and the balance, if any, to outstanding principal.
On the Due Date (as hereinafter defined) , the entire unpaid
principal balance of this Note, all accrued and unpaid Basic Interest and
Variable Interest, and all other charges or amounts owing in connection
with the Loan shall be due and payable in full. The Due Date shall mean
the earlier of (i) the Maturity Date; (ii) the date of satisfaction of the
Loan through pre-payment by the Maker pursuant to the Loan Agreement; or
(iii) the date on which Lender or Holder accelerates payment of the Loan
due to an Event of Default (as defined in the Loan Agreement) by the Maker.
If any installment of principal, interest or any other payment
required to be made in connection with the Loan is not paid when due and,
except in the case of the final installment for which no grace period is
allowed, such breach continues for three (3) Business Days, or upon the
occurrence of any other Event of Default (as def ined in the Loan
Agreement) , Holder may at its option, without notice or demand, declare
immediately due and payable the entire unpaid principal balance hereof, all
accrued and unpaid Basic Interest and Variable Interest thereon, any
prepayment premium required under the Loan Agreement, and all other
obligations owing in connection with the Loan.
In the event that any monthly installment of principal and
interest shall not be paid within ten (10) Business Days of the date when
due, a "late charge" of two percent (2.0%) of the late payment may be
charged by the Holder for the purposes of defraying the expense incident to
handling such delinquent payments. Such late charge represents the
reasonable estimate of Maker and Lender of a fair average compensation for
the loss which may be sustained by Lender due to the failure of the Maker
to make timely payments. All late charges shall be due and payable monthly
on the same dates provided herein for the payment of installments.
Except as expressly provided in Section 2. 5 of the Loan
Agreement, prepayment of the Permanent Loan will not be permitted in whole
or in part.
Holder shall not by any act or omission be deemed to have waived
any of its rights or remedies hereunder unless such waiver be in writing
and signed by an authorized officer of Holder and then only to the extent
specifically set forth therein; a waiver on one occasion shall not be
construed as continuing or as a bar to or waiver of such right or remedy on
any other occasion. All remedies conferred upon Holder by this Note, the
Loan Agreement, or any other instrument or agreement related hereto shall
be cumulative and none is exclusive, and such remedies may be exercised
concurrently or consecutively at Holder's option.
If Holder undertakes to collect this Note, Maker will pay to
Holder in addition to any indebtedness due and unpaid, all debts and
expenses of collection, including, without limitation, attor- neys, fees
and expert witnesses' fees, whether or not legal proceedings shall be
instituted. In the event Holder institutes legal proceedings to enforce
this Note, the award of costs of collection, including attorneys' fees,
shall be made by the court (and not by a jury).
Maker, and every person or entity at any time liable for the
payment of the indebtedness evidenced by this Note, hereby abso- lutely
waive: presentment for payment, protest and demand; notice of dishonor,
protest, demand and nonpayment of this Note; and each and every other
notice of any kind except for notices expressly provided in this Note or in
any of the other documents securing payment of, or otherwise related to,
this Note. Maker and every such person or entity further consent to
renewals or extensions of the payment of any sums to be paid under this
Note at any time and from time to time, without limit as to the number or
aggregate period of such renewals or extensions, at the request of any
other person or entity liable for them. Any such renewals or extensions
may be made without notice to any person or entity liable for the payment
of the indebtedness evidenced by this Note.
This Note is given and accepted as evidence of indebtedness only
and not in payment or satisfaction of any indebtedness or
obligation.
Time is of the essence with respect to all of Maker's obligations and
agreements under this Note.
This Note and all its provisions, conditions, promises and
covenants shall be binding upon Maker, and its successors and assigns,
provided nothing herein shall be deemed Holder's consent to any assignment
restricted or prohibited by the terms of the Loan Agreement. If more than
one person or entity has executed this Note as Maker, the obligations of
such persons and entities shall be joint and several.
If any one or more of the provisions contained in this Note shall
be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby; provided that where the provisions of
any invalidating law may be waived, they are waived by Maker to the fullest
extent possible.
THIS NOTE AND THE RIGHTS, DUTIES AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF ARIZONA AND TO THE EXTENT THEY PREEMPT THE LAWS OF
SUCH STATE, THE LAWS OF THE UNITED STATES.
MAKER: (A) HEREBY IRREVOCABLY SUBMITS ITSELF TO THE PROCESS,
JURISDICTION AND VENUE OF THE COURTS OF THE STATE OF ARIZONA, MARICOPA
COUNTY, AND TO THE PROCESS, JURISDICTION, AND VENUE OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF ARIZONA, FOR THE PURPOSES OF SUIT,
ACTION OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE OR THE
SUBJECT MATTER HEREOF (EXCEPT AS MAY BE SPECIFICALLY PROVIDED TO THE
CONTRARY IN THE MORTGAGE), OR,-,IF HOLDER INITIATES SUCH ACTION ANY COURT
IN WHICH HOLDER- SHALL INITIATE SUCH ACTION AND THE CHOICE OF SUCH VENUE
SHALL IN ALL INSTANCES BE AT HOLDER'S ELECTION; AND (B) WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, HEREBY WAIVES AND AGREES NOT TO ASSERT BY
WAY OF MOTION, DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING
ANY CLAIM THAT MAKER IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE
ABOVE-NAMED COURTS, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER. MAKER HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK ANY
JUDGEMENT OR ACTION IN ANY OTHER FORUM.
LENDER AND MAKER ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER ANY OF THE LOAN DOCUMENTS WOULD BE BASED UPON DIFFICULT AND
COMPLEX ISSUES AND THEREFORE, THE PARTIES AGREE THAT ANY LAWSUIT ARISING
OUT OF ANY SUCH CONTROVERSY SHALL BE TRIED BY A JUDGE SITTING WITHOUT A
JURY, AND MAKER HEREBY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN
ANY SUCH PROCEEDING.
ALL OF THE PROVISIONS SET FORTH ABOVE ARE A MATERIAL INDUCEMENT
FOR LENDER'S MAKING THE LOAN TO MAKER.
MAKER's Initials
It is the intent of the parties to comply with the applicable,
usury law ("Applicable Usury Law") chosen by Maker and Lender in the
preceding paragraph, or any other usury law applicable. Accordingly, it is
agreed that notwithstanding any provisions to the contrary in this Note,
the Loan Agreement, or in any of the documents securing payment hereof or
otherwise relating hereto, in no event shall this Note or such documents
require the payment or permit the collection of interest in excess of the
maximum contract rate permitted by the Applicable Usury Law. If (a) any
such excess of interest otherwise would be contracted for, charged or
received from Maker or otherwise in connection with the Loan evidenced
hereby, or (b) the maturity of the indebtedness evidenced by this Note is
accelerated in whole or in part, or (c) all or part of the principal or
interest of this Note shall be prepaid, so that under any of such
circumstances the amount of interest contracted for, charged or received in
connection with the Loan evidenced hereby, would exceed the maximum
contract rate permitted by the Applicable Usury Law, then in any such
event: (1) the provisions of this paragraph shall govern and control; (2)
neither Maker nor any other person or entity now or hereafter liable for
the payment hereof will be obligated to pay the amount of such interest to
the extent that it is in excess of the maximum contract rate permitted by
the Applicable Usury Law; (3) any such excess which may have been collected
shall be either applied as a credit against the then unpaid principal
amount hereof or refunded to Maker, at the Holder's option; and (4) the
effective rate of interest will be automatically reduced to the maximum
amount of interest permitted by the Applicable Usury Law. It is further
agreed, without limiting the generality of the foregoing, that to the
extent permitted by the Applicable Usury Law: (x) all calculations of the
rate of interest which are made for the purpose of determining whether such
rate would exceed the maximum contract rate permitted by the Applicable
Usury Law shall be made by amortizing, prorating, allocating and spreading
during the period of the full stated term of the Loan, all interest at any
time contracted for, charged or received from Maker or otherwise in
connection with such Loan; and (y) if the effective rate of interest on the
Loan should at any time exceed the maximum contract rate allowed under the
Applicable Usury Law, such excess interest that would otherwise have been
collected had there been no ceiling imposed by the Applicable Usury Law
shall be paid to Holder from time to time, if and when the effective
interest rate on the Loan otherwise falls below the maximum amount
permitted by the Applicable Usury Law, to the extent that interest paid to
the date of calculation does not exceed the maximum contract rate permitted
by the Applicable Usury Law, until the entire amount of interest which
would have otherwise been collected had there been no ceiling imposed by
the Applicable Usury Law has been paid in full. Maker further agrees that
should the maximum contract rate permitted by the Applicable Usury Law be
increased at any time hereafter because of a change in the law, then to the
extent not prohibited by the Applicable Usury Law,such increases shall
apply to all indebtedness evidenced hereby regardless of when incurred;
but, again to the extent not prohibited by the Applicable Usury Law, should
the maximum contract rate permitted by the Applicable Usury Law be
decreased because of a change in the law, such decreases shall not apply to
the indebtedness evidenced hereby regardless of when incurred.
Maker warrants and represents that the loan evidenced hereby
is for business or investment purposes.
This Note is secured by, among other things, a Mortgage (With
Security Agreement, Assignment of Leases and Rents and Fixture Filing)
encumbering real and personal property owned by Maker and located in Marco
Island, Florida.
MAKER:
STATE OF
) Ss.
County of
Marco SSP, Ltd., a Florida
limited partnership
By: Marco SSP,Inc.,
a Florida corporation Its General Partner
By:
Print Name
Its:
Tax I. D. No.:
The foregoing instrument was acknowledged this _____day of June,
1996, by _______, the __________ of Marco SSP, Inc., a Florida corporation,
the General Partner of Marco SSP, Ltd., a Florida limited partnership, for
and on behalf of the limited partnership. He/she is personally known to me
or has produced _______ as identification.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My commission expires:
Notary Public
Print Key Output Page
5763SSl V3RINO 940909 GFC 11/20/95
10:14:31
Display Device....... : BR 1
User................. : JLB_
11/20/95 AMORTIZATION SCHEDULE
lOfl4:21
Contract-Sch Rate Date Remaining
Periods
MARCO Annual: .10800000 Start: 1995/11 227
Periodic: .0090DOOO 2014/10
Avg. Prnl Bal: 12,890,392.62
Seqt Payment Principal Principal Period - 0-
-
Due Date BaLamce Reduction
Interest Payment
1 1995/12 26,416.63
2 1996/01 26,654.38
3 1996/02 26,894.27
4 1996/03 27,136.32
5 1909/04 27,380.54
6 1996/05 27,626.97
7 1906/06 27,875.61
8 1996/07 28,126.49
9 1996/08 28,379.63
10 1996/09 28,635.05
11 1996/10 28,892.76
12 1996/11 29,152.80
SCHEDULE1
(Amended And Restated Promissory Note)
Print Key Output Page1
5763SSI V3RJXO 940909 OPC 11/20/95 10:14;37
Display Device... : BRIMHALLS1
'User............ : TLB
11/20/95 AMORTIZATION SCHEDULE IO--,l4:21
contraot-Sc:h Rate Date Remaining
Periods
MARCO Annual: .10800000 Start: 1995/11
227
Periodic: .00900000 Exp: 2014/10
Avg. Prnl Bal: 12,890,392,-62
Seq# Payment Prinoipal Principal Period:Lc-
Due Date Balance Reduction Interest
Payment
13 1996/12 29,415.17
14 1997/01 29,679.91
15 1997/02 29,947.03
16 1997/03 30,216.55
17 1997/04 30,488.50
18 1997/05 30,762.90
19 1997/06 31,039.76
20 1997/07 31,319.12
21 1997/08 31,600.99
22 1997/09 31,885.40
23 1997/10 32,172.37
24 1997/11 32,461.92
Print key output Page
1
5763SSl V3RlMO 940909 GFC 11/20/95 10:14:41
Display Devir-e o o t * . : BR @l
User................... : JLB-
11/20/95 AMORTIZATION SCHEDULE 16@-14:21
Contract-Sch Rate Date Remaining
Periods
@co Annual: .10800000 Start: 1995/11 227-
Periodic: .00900000 Exp: 2014/10
Avg. Prnl Bal: 12,890,392.62
Seq# Payment Principal Principal
Periodic
Due Date Balance Reduction Interest
Payment
25 1997/12 32,754.08
26 1998/01 33,048.87
27 1998/02 33,346.31
28 1998/03 33,646.42
29 1996/04 33,949.24
30 1998/05 34,254.78
31 1998/06 34,563.08
32 1998/07 34,874.14
33 1998/08 35,188.01
34 1998/09 35,504.70
35 1998/10 35,824.25
36 1998/11 36,146.66
Print Key Output Page
1
5763S$l V3@O 940909 GFC 11/20/95 10:14:44
Display Device . . . . . : BRI
U"r................... : .7LB-
11/20/95 AMORTIZATION SCHEDULE id,-14:21
Contract-Sch Rate Date Remaining
Periods
MARCO Annual: .10800000 Start: 1995/11 227-
P*riodic: .00900000 Exp; 2014/10
Avg. Prnl Bal: 12,890,392.62
Seq# Payment Principal principal Periodic
Due Date Balance Reduction Interest
payment
37 1998/12 36,471.98
38 1999/01 36,800.23
39 1999/02 37,131.43
40 1999/03 37,465.62
41 1999/04 37,802.81
42 1999/05 38,143.03
43 1999/06 38,486.32
44 1999/07 38,832.70
45 1999/08 39,182.19
46 1999/09 39,534.83
47 1999/10 39,890.64
48 1999/11 40,249.66
Print Key Output Page
5763SSI V3RlMO 940909 GFC 11/20/95 10:14:48
Display Device . . . : BRI @ LLS1
Usor................... : JLB
11/20/95 AMORTIZATION SCHEDULE 16:14:21
Contract-Sch Rat* Date Remaining
Periods
MARCO Annual: .10800000 start: 1995/11 227-
Periodic: .009DO000 Exp: 2014/10
Avg. Prnl Bal: 12,890,392.62
Seq# Payment Principal Principal
Periodic -
Due Date Balance Reduction Interest
Payment
49 1999/12 40,611.91
50 2000/01 40,977.41
51 2000/02 41,346.21
52 2000/03 41,718.33
53 2000/04 42,093.79
54 2000/05 42,472.64
55 2000/06 42,854.89
56 2000/07 43,240.58
57 2000/08 43,629.75
58 2000/09 44,022.42
59 2000/10 44,418.62
60 2000/11 44,818.39
Print Key Output page
5763SS1 V3RJMO 940909 GFC 11/20/95
10:14:5
Di*Play Device....... BRI 1
User................. TLB_ -
11/20/95 AMORTIZATION SCHEDULE 14:
Contract-Sch Rate Date Remaining
Period
mmco Annual: .10800000 Start: 1995/11 227
Periodic: .00900000 Exp,. 2014/10
Avg. Prnl Bal: 12,890,392.62
Seq# Paymp-nt Principal Principal
Period:Ec-
Due Date Balance Reduction
Interest Payment
61 2000/12 45,221.75
62 2001/01 45,628.75
63 2001/02 46,039.41
64 2001/03 46,453.76
65 2001/04 46,871.84
66 2001/05 47,293.69
67 2001/06 47,719.33
68 2001/07 48,148.81
69 2001/08 48,582.15
70 2001/09 49,019.39
71 2001/10 49,460.56
72 2001/11 49,905.71
WHEN RECORDED RETURN TO:
DECONCINI McDONALD BRAMMER
YETWIN & LACY, P.C.
ATTN: Gregory W. Huber, Esq.
2901 N. Central Ave., Suite 1644
Phoenix, AZ 85012-2736
AMENDMENT NO. 2 TO MORTGAGE
This Amendment No. I to Mortgage (the "Amendment") is entered into to be
effective as of the 24th day of June, 1996, by and between Marco SSP,Ltd.,
a Florida limited partnership,("Mortgagor") , and FINOVA Capital
Corporation, a Delaware corporation, formerly known as Greyhound Financial
Corporation, a Delaware corporation ("Mortgagee").
RECITALS:
A. Mortgagee and Mortgagor entered into a Loan Agreement dated
September 23, 1994, as amended by an Amendment No. 1 To Loan Agreement
dated December 12, 1994 (collectively, "Loan Agreement") that evidences a
loan from Mortgagee to Mortgagor (the "Loan").
B. The Loan is secured by, among other things, a Mortgage,
Assignment of Rents and Security Agreement dated September 23, 1994, and
recorded September 23, 1994, in the real estate records of the Collier
County, Florida, in Official Record Book 1986, Page 0056 between Mortgagor
and Greyhound Financial Corporation, as amended by Amendment No. 1 to
Mortgage, Assignment of Leases and Rents and Security Agreement dated
November 13, 1995 and recorded in the real estate records of the Collier
County, Florida on November 22,1995, in Official Record Book 2122, Page
0277("Mortgage"). The Mortgage encumbers certain real property
andimprovements located in Collier County, Florida, as more specifically
described on Exhibit "B" attached hereto and incorporated herein by this
reference.
C. Pursuant to an Amendment No. 2 to Loan Agreement dated as of
even date herewith, $5,000,000.00 of the original Loan Amount has been
converted into a revolving line of credit which Mortgagor may pay down
(without penalty) and redraw throughout the original term of the Loan, and
in connection therewith, Mortgagor has executed and delivered to Mortgagee
an Amended And Restated Promissory Note, a copy of which is attached hereto
as Exhibit "A"
and which replaces the Note originally secured by the Mortgage. Mortgagor
and Mortgagee wish to amend the mortgage to confirm that the Mortgage
secures the obligations of Mortgagee, as amended.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals,the covenants
contained herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Mortgagee and Mortgagor
agree as follows:
1. Without limiting the generality of any other provision
contained in the Mortgage, Mortgagor confirms that the Mortgage secures
(and the Mortgagor's "Indebtedness" as that term is used in the Mortgage
include) payment and performance of the obligations of Mortgagor under the
Loan Agreement as amended by the Amendment No. 2 to Loan Agreement dated as
of even date herewith, and any and all amendments, replacements or
restatements thereof, as well as Mortgagor's obligations under the Amended
And Restated Promissory Note of even date herewith in the form of Exhibit
"A" hereto executed by Mortgagor and delivered to Mortgagee.
2. Mortgagor and Mortgagee hereby ratify and confirm the Mortgage,
as amended hereby, in all respects; and, except as amended hereby, the
Mortgage s,hall remain in full force and effect.
3. This Amendment may be executed in counterpart, and any number
of such counterparts which have been executed by all persons whose
signatures are required below shall constitute one original.
IN WITNESS WHEREOF, this instrument is executed. as of the day
and year first above written.
MORTGAGOR Marco SSP, Ltd.,
a Florida limited partnership
By: Marco SSP, Inc., a Florida corporation
its General Partner
MORTGAGEE
STATE OF @
) Ss.
County of
FINOVA Capital Corporation,
a Delaware corporation, formerly known as
Greyhound Financial Corporation
By:
Print Name:
Title:
The foregoing instrument was acknowledged bef ore me this June, 1996, by
__________, the _________ of Marco SSP,Inc., a Florida corporation, the
General Partner of Marco SSP, Ltd., a Florida limited partnership, for and
on behalf of the limited partnership. He/she is personally known to me or
has produced _____________as identification.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
My commission expires:
Notary Public
STATE OF ARIZONA
) Ss.
County of Maricopa)
The foregoing instrument was acknowledged before me this
day of 1996, by . the
of FINOVA Capital Corporation, a Delaware corporation, formerly
known as Greyhound Financial Corporation.- -on behalf of said corporation.
Ss.
IN WITNESS WHEREOF, I hereunto set my hand and of f icial s-ea-1.
Notary Public
My commission expires:
EXHIBIT B
A Parcel of land lying in Section 18, Township 52 South, Range 26 East,
Collier County, Florida, and being more particularly described as-follows:
Commencing at the intersection of the centerlines of South Collier-
Boulevard and Valley Avenue, as-shown on the plat of Marco Beach, Unit 10,
recorded in Plat Book 6, Pages 74 through 79, inclusive, of the Public
Records of Collier County, Florida; thence North 85 degrees, 41'minutes 07
seconds West, a distance of 50.00 feet to a point on the Westerly
Right-of-Way line of the aforementioned South Collier Boulevard, thence
North 04 degrees, 18 minutes 53 seconds East, along said Westerly
Right-of-Way for a distance of 544.69 feet to a Point of Curvature of a
curve having a radius of 1950.00 feet concave to the Northwest; thence
Northerly along said curve, curving to the left through a central angle of
03 degrees 33 minutes 11 seconds and an arc distance of 120.93 feet to the
Point of Beginning of the hereby described parcel of land; thence leaving
said Right-of Way line South 89 degrees 16 minutes 35 -seconds West, a
distance of 731.23 feet to an iron pin; thence continue South 89 degrees 16
minutes 35 seconds West, a distance of 118 feet more or less to a point,
said point hereafter known as Point "D" and the approximate Mean High Water
Line (elevation +1.5 contour) of the Gulf of Mexico as it existed on
December 9th, 1980; thence retur@ to the aforementioned Point of Beginning;
thence continue Northerly along said Westerly Right-of-Way line of South
Collier Boulevard and the aforementioned curve having a radius of 1950.00
feet concave to the Northwest, curving to the left through a central angle
of 11 degrees 33 minutes 00 seconds and an arc distance of 393.09 feet to
the Point of Tangency; thence North 10 degrees 47 minutes 18 seconds West,
a distance of 15.96 feet; thence leaving said Right-of Way South 86 degrees
13 minutes 24 seconds West, a distance of 703.92 feet to an iron pin,
thence continue South 86 degrees 13 minutes 24 seconds West, a distance of
149 feet more or less to a point and the Approximate Mean High Water Line
(elevation +1.5 contour) of the Gulf of Mexico as it existed on December
9th, 1980 thence meander in a Southerly direction along said Approximate
Mean High Water Line (elevation +1.5) 363 feet more or less to the
aforementioned Point "D" and the Point of Termination.
