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 MARCH 31, 1998
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
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
FORM 10-Q
MARCH 31, 1998
INDEX
PAGE NO.
COVER LETTER
PART I
ITEM 1
FINANCIAL INFORMATION
Consolidated Balance Sheets at
March 31, 1998 and
December 31, 1997 1
Consolidated Statements of Operations
for the Three Months Ended
March 31, 1997 and 1998 2
Consolidated Statements of Cash Flows
for the Three Months Ended
March 31, 1997 and 1998 3-4
Notes to Consolidated Financial Statements 5-7
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-12
PART II
OTHER INFORMATION 13
SIGNATURES 14
EXHIBITS:
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
EXHIBIT 99.1 - CALCULATION OF WEIGHTED AVERAGE
UNITS OUTSTANDING
EXHIBIT 10.1 SECOND AMENDMENT (CAPITAL IMPROVEMENTS) TO
AMENDED AND RESTATED LOAN AGREEMENT
EXHIBIT 10.2 THIRD AMENDMENT (PLANTATION VIEW) TO AMENDED
AND
RESTATED LOAN AGREEMENT
<PAGE>
<TABLE>
<CAPTION>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(unaudited)
March 31, December 31,
1998 1997
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,013 $2,933
Restricted cash 83 144
Accounts receivable, trade 9,433 5,814
Receivables from affiliates - 27
Inventories 1,648 1,714
Prepaid expenses and other 1,941 2,255
Total current assets 15,118 12,887
PROPERTY, PLANT AND EQUIPMENT, net 90,391 87,684
LOAN COSTS, net 4,260 4,386
GOODWILL, net 6,839 6,942
OTHER ASSETS 4,374 3,484
Total assets $120,982 $115,383
LIABILITIES AND PARTNERS' CAPITAL
DEFICIENCY
CURRENT LIABILITIES
Current maturities of notes
and mortgages payable $ 1,963 $1,500
Payables to affiliates 290 -
Accounts payable 6,404 4,986
Accrued expenses 2,980 1,767
Accrued payroll and related 2,346 3,772
Customer deposits 4,318 5,297
Deferred revenue 1,850 1,949
Total current liabilities 20,151 19,271
NOTES AND MORTGAGES PAYABLE, less
current maturities 67,273 70,163
BONDS PAYABLE 43,500 43,500
OTHER LONG-TERM OBLIGATIONS 1,305 1,305
COMMITMENTS AND CONTINGENCIES - -
PARTNERSHIP UNITS SUBJECT TO REDEMPTION 825 825
MINORITY INTERESTS 59 30
PARTNERS' CAPITAL DEFICIENCY (12,131) (19,711)
Total liabilities and
partners' capital
deficiency $120,982 $115,383
</TABLE>
The accompanying unaudited notes are an integral part of these unaudited
consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per unit data)
(unaudited)
Three Months
Ended March 31
1998 1997
<S> <C> <C>
Revenues
Rooms $25,878 $24,932
Food and beverage 6,440 6,178
Retail 1,756 1,905
Golf 1,492 1,406
Spa and fitness 750 697
Other 5,099 4,644
Total revenues 41,415 39,762
Expenses
Rooms 4,650 4,539
Food and beverage 4,772 4,448
Retail 1,263 1,300
Golf 300 378
Spa and fitness 433 367
Other 1,846 1,690
Condominium lease and rental expenses 6,189 6,102
Sales and marketing 1,753 1,869
Maintenance and grounds 1,590 1,504
General and administrative -
resort properties 4,725 4,940
General and administrative -
corporate overhead 1,024 913
Depreciation and amortization 2,227 2,005
Total expenses 30,772 30,055
Income before non-operating items 10,643 9,707
Interest expense (2,582) (2,625)
Minority interests (30) (22)
Net income $ 8,031 $ 7,060
Net income per unit, basic $ 1.78 $ 1.59
Net income per unit, diluted $ 1.05 $ .95
Weighted average units outstanding 4,515 4,427
</TABLE>
The accompanying unaudited notes are an integral part of these unaudited
consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Page 1 of 2
(In Thousands)
(unaudited)
Three Months
Ended March 31
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and others $ 36,718 $ 37,930
Cash paid to suppliers, employees and affiliates (27,024) (26,071)
Interest paid (2,528) (2,541)
Net cash provided by operating
activities 7,166 9,318
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures/purchase of assets (4,537) (2,276)
Loans to affiliates, net of repayments 317 (50)
Purchase of resort property assets - (3,411)
Option payments (307) -
Acquisition costs and deposits (569) -
Change in restricted cash/marketable securities 61 112
Net cash used by investing
activities (5,035) (5,625)
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred loan costs (172) (139)
Principal payments, long-term debt (550) (444)
Principal payments, under capital
lease obligations (57) (68)
Distributions to partners (452) (329)
Distributions to minority unit holders - (16)
Principal payments under revolving line
of credit (4,500) (4,000)
Draws under line of credit 500 500
Proceeds from long-term debt 2,180 -
Net cash used by
financing activities (3,051) (4,496)
Net decrease in cash (920) (803)
Cash and cash equivalents, beginning of period 2,933 6,459
Cash and cash equivalents, end of period $ 2,013 $ 5,656
</TABLE>
(continued)
The accompanying unaudited notes are an integral part of these unaudited
consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Page 2 of 2
(In Thousands)
(unaudited)
Three Months
Ended March 31
1998 1997
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Net income $ 8,031 $ 7,060
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation/amortization expense 2,227 2,005
Minority interest 30 22
Changes in assets and liabilities
(Increase) decrease in:
Accounts receivable, net (3,619) (710)
Inventories 66 (77)
Prepaid expenses and other assets 304 46
Increase (decrease) in:
Accounts payable 1,652 539
Accrued expenses (447) 1,508
Customer deposits (979) (779)
Deferred revenues (99) (296)
Total adjustments (865) 2,258
Net cash provided by operating activities $7,166 $9,318
Supplemental schedule of noncash investing and financing activities:
In January, 1997 South Seas acquired the Seaside Inn on Sanibel Island,
Florida for $6.5 million. In connection with the acquisition, South Seas
assumed liabilities of $2.5 million.
</TABLE>
The accompanying unaudited notes are an integral part of these unaudited
consolidated financial statements.
<PAGE>
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 March 31, 1998 and
December 31, 1997 and the consolidated results of its
operations for the three months then ended and its
consolidated cash flows for the three months ended March
31, 1997 and 1998. The results of operations for the
three month period ended March 31, 1998 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' 10-K report. Certain amounts in
the financial statements have been reclassified to
conform with the current presentation. These
reclassifications had no effect on the results of
operations previously reported. The consolidated
balance sheet at December 31, 1997 has been derived from
the audited financial statements at that date but does
not include all disclosures required by generally
accepted accounting principles. Refer to South Seas
annual 10-K report for complete footnote disclosure.
Note 2. Computation of Earnings Per Unit
Basic net income per unit is computed by dividing net
income by the weighted average number of partnership
units outstanding during the period. Accordingly, units
outstanding for per unit purposes could be lower than
actual units issued and outstanding at period end.
Income per unit assuming dilution is computed by
dividing net income by the weighted average number of
units outstanding, increased by assumed conversion of
other potentially dilutive securities during the period.
Potentially dilutive units which have been included in
the diluted per unit calculation were 4,143 in both 1997
and 1998, derived from the assumed conversion of
convertible bonds. Unit options issued under the
Incentive Plan were not assumed exercised in 1997 or
1998 due to their exercise price not exceeding market
value.
Note 3. Revolving Credit Line
In connection with the $40 million revolving line of
credit with Credit Lyonnais, New York Branch, South
Seas had available $16.4 million and $15.0 million at
March 31, 1997 and 1998, respectively. South Seas
applies surplus seasonal working capital or draws
working capital based on seasonal needs to reduce or
increase the outstanding revolving loan balance.
Note 4. Acquisition
In March 1998, South Seas purchased a 9,233 square foot
retail shopping center, adjacent to South Seas
Plantation, for $2.9 million. This purchase was
primarily financed with the proceeds of a new loan in
the amount of $2.18 million. The note bears interest at
LIBOR plus 225 to 300 basis points (the spread is
determined by loan covenants relating to South Seas
financial performance each quarter). Interest is due
monthly, quarterly principal payments are $37 in 1999,
$44 in 2000, two quarterly payments of $51 each in
2001, with a ballooning maturity balance of $1.75
million.
Note 5. Recently Issued Accounting Pronouncements
SFAS 130, Reporting Comprehensive Income, is effective
for fiscal years beginning after December 15, 1997.
This Statement establishes standards for reporting and
display of comprehensive income and its components in a
full set of general purposes financial statements. This
Statement requires that all items that are required to
be recognized under accounting standards as components
of comprehensive income be reported in a financial
statement that is displayed with the same prominence as
other financial statements. At March 31, 1998 South
Seas had no items that qualified under this
pronouncement and therefore no change occurred in its
reporting practices.
SFAS 131, Disclosures about Segments of an Enterprise
and Related Information, effective for fiscal years
beginning after December 15, 1997, establishes
standards for reporting information about operating
segments in annual financial statements and interim
financial reports issued to unitholders. Generally,
certain financial information is required to be
reported on the basis that is used internally for
evaluating performance of and allocation of resources
to operating segments. Management has reviewed the
criteria for segment reporting and has determined no
such segmentation is applicable to its operations.
Note 6. Subsequent Events
On May 1, 1998, South Seas entered into a ten-year
lease agreement on the Best Western Pink Shell Resort
on Ft. Myers Beach. The lease requires annual minimum
rental payments of $2.2 million, plus a percentage rent
based on property revenues at various tiers. Terms of
the agreement include South Seas (through its wholly
owned subsidiary) purchasing $2.0 million of the
existing furniture and fixtures (to be used in the
operation of the resort) and maintaining a net worth of
$2.0 million, $1.9 million of which is in the form of a
guarantee from South Seas. Due to the timing of the
transaction, the remaining 1998 rental payments have
been set at $211 per month with no percentage rent from
the date of closing. Regular lease terms become
effective January 1, 1999.
Note 6. Subsequent Events continued
On April 15, 1998 South Seas publicly announced that
it had entered into an agreement with CapStar Hotel
Company (CapStar), under which CapStar and its
affiliates will acquire substantially all of South
Seas assets. Under the terms of the agreement, South
Seas is obligated to make a tender offer for all of its
outstanding 10% subordinated Notes due April 15, 2003
and to solicit the consent of the Noteholders to
certain modifications to the existing provisions of the
Indenture governing the Notes.
<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
Consolidated Financial Data? and the audited consolidated
financial statements for South Seas and the notes thereto
appearing in the annual 10-K report for the year ended
December 31, 1997.
GENERAL
South Seas Properties Company Limited Partnership ("South
Seas") is one of the largest owners and operators of upscale
beachfront destination resorts and hotels in Florida. South
Seas owns seven resort and hotel properties, plus an 18 hole
golf course, and manages one additional resort property,
(collectively referred to as the "Properties"), all located
on Sanibel, Captiva, Estero and Marco Islands off Southwest
Florida's gulf coast. South Seas, through its 99% owned
subsidiary, South Seas Resorts Company Limited Partnership
(?Management Company"), leases and operates a resort and spa
located on Tampa Bay, Florida. The Properties are designed
to appeal to families, leisure and retired travelers and
business groups. The Properties range in size and style from
the 552-unit South Seas Plantation resort on Captiva Island,
to the 269 unit, 11 story Marco Radisson, to the 30-unit Song
of the Sea Inn, a bed-and-breakfast located on Sanibel
Island. By offering a wide variety of price points and
vacation experiences, South Seas is able to appeal to a broad
section of the vacation market. The Properties offer a
combined total of approximately 1,700 condominium and hotel
units, consisting of approximately 2,300 guestrooms,
including luxurious beach homes, fully equipped condominiums,
suites, cottages and hotel rooms. South Seas owns and
operates The Dunes Golf and Tennis Club on Sanibel Island,
which features an 18-hole, par 70 golf course, seven soft
surface tennis courts, full banquet and restaurant facilities
and other amenities. Guests staying at any of the Properties
have access to the amenities and vacation activities offered
at all of the Properties. South Seas believes that this
feature, combined with the Properties' attractive locations,
enhances customer satisfaction and guests' perceptions of
value.
Overall management and marketing of the Properties is
coordinated through the Management Company, which is
headquartered in Fort Myers. The day-to-day operation of each
Property is the responsibility of an on-site general manager.
Management functions provided on a centralized basis include
marketing, reservations, human resources, property renovation
and development, management information systems, finance and
accounting. By providing these functions on a centralized
basis, South Seas is able to achieve improved results on a
more cost-effective basis. Marketing of the Properties is
accomplished through a combination of South Seas' own sales
force and arrangements with both national and international
representatives.
SEASONALITY
Properties owned or operated by South Seas are affected by
normally recurring seasonal patterns. Room rates are
substantially higher and occupancy is somewhat higher during
the months of January, February, March and April than during
the remainder of the year. Approximately 45% of South Seas'
revenues are earned in the first four months of each year.
Accordingly, South Seas' typically reports lower revenue and
net income in the second, third and fourth calendar quarters.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31,
1998 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1997
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,
management fees from non-consolidated entities, fees for the
use of recreation facilities, commissions from realty sales,
interest income and other miscellaneous items. Revenues for
the three months ended March 31, 1998 increased by
approximately $1.7 million, or 4.2% over the prior period.
Rooms revenues increased by approximately $946,000, or
3.8% over the prior period. The increase in room revenues
resulted from an increase in the average daily rate ("ADR")
and a slight increase in the percentage of occupancy.
Occupancy percentage increased to 80.6% for the three months
ended March 31, 1998 from 80.4% for the same period in 1997.
The increase in ADR reflects South Seas? efforts to maximize
revenue per available room (?REVPAR?), during peak demand
periods.
Food and beverage revenues for the three months ended
March 31, 1998 increased by $262,000, or 4.2% over the same
period in 1997. Approximately $122,000 or 46.4% of the
increase was due to increased food and beverage sales at
Safety Harbor Resort and Spa (?Safety Harbor?). Marco
Radisson also experienced strong growth in food and beverage
sales, increasing by $172,000 or 25.0% over the prior period,
primarily due to an increase in room nights in the group
market segment and therefore higher banquet revenues.
Retail revenues decreased by $149,000 or 8.5% from the
prior period. Management believes two factors influenced this
decline: poor weather and an amenity access charge program.
In 1998, Southwest Florida experienced significantly more
days of rain during the peak season time frame than in the
prior period. Poor weather means fewer guests frequenting
retail outlets on-site and greater propensity to spend time
off-site at major shopping outlets and malls. In addition, at
South Seas Plantation, an amenity access program was
instituted to restrict charge privileges to registered guests
only.
Other revenues for the three months ended March 31, 1998
increased by $455,000, or 9.8% over the prior period.
Approximately $267,000 or 58.7% of the total increase was
recognized at South Seas Plantation. Marked growth was
experienced in several areas including deposit forfeitures,
long distance telephone fees and group recreation programs.
Also at South Seas Plantation, a per person per night service
charge policy was implemented to cover a variety of
previously individually charged services and products.
Another individual increase of approximately $145,000 was
experienced in commissions from real estate closings.
Expenses. Total expenses for the three months ended March
31, 1998 increased by approximately $717,000, or 2.4% over
the prior period. As a percentage of revenues, expenses
decreased from 75.6% to 74.3%. Analysis of major financial
line items follows:
Room expenses for the three months ended March 31, 1998
increased by $111,000 or 2.5% over the prior period. As a
percentage of room revenues, room expenses decreased slightly
from 18.2% to 18.0%, primarily due to the elimination of one
senior level management position at the central reservations
facility.
Sales and marketing costs for the three months ended March
31, 1998 decreased by $116,000 or 6.2% over the prior period.
As a percentage of total revenues, sales and marketing
decreased from 4.7% in the three months ended March 31, 1997
to 4.2% for the three months ended March 31, 1998. Included
in the March 31, 1998 results are approximately $452,000 of
marketing/media rebates. This unusual, non-recurring
reduction in expense is due to an independent audit of
circulation of specific directory publications over the
previous seven year period. Circulation totals were below
guaranteed levels at the time of placement, therefore, these
rebates (per contract) are being refunded. South Seas
management has decided to maintain their current marketing
budgets for 1998, therefore, this should be a positive
variance to the prior period throughout 1998.
Depreciation and amortization expense for the three months
ended March 31, 1998 increased by $222,000 or 11.1% over the
prior period. As a percentage of revenues, depreciation and
amortization expense increased from 5.0% at March 31, 1997 to
5.4% at March 31, 1998. The increase in dollars and
percentage is primarily a result of depreciation on recent
renovations and capital improvements.
Net Income. As a result of the foregoing factors, net
income for the three months ended March 31, 1998 increased by
$971,000 or 13.8% compared to the prior period.
LIQUIDITY AND CAPITAL RESOURCES
South Seas has historically financed its operations and
capital expenditures through a combination of cash generated
from operations, bank borrowings, borrowings from private
investors, bond offerings 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 terms of the Notes provided for the payment
of interest 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).
In December, 1996, South Seas obtained an irrevocable,
transferable letter of credit in an amount not to exceed
$3.26 million, for use as a replacement for a reserve fund
established in connection with the Notes Offering. No
amounts had been drawn as of March 31, 1998. As of March 31,
South Seas has requested a release of the letter of credit
from the Trustee, having satisfied the conditions in the
indenture to accomplish the release.
On April 15, 1998, South Seas publicly announced that it
had entered into an agreement with CapStar Hotel Company
(CapStar), under which CapStar and its affiliates will
acquire substantially all of South Seas assets. In
connection with the announced transaction, South Seas will
make a tender offer for all of its outstanding 10%
subordinated Notes due April 15, 2003 and to solicit the
consent of the noteholders to certain modifications to the
existing provisions of the Indenture governing the Notes.
On March 31, 1998, South Seas had cash and cash
equivalents of approximately $2.0 million, and restricted
cash of $83,000. Cash and cash equivalents decreased by
$920,000 during the three months ended March 31, 1998.
Cash flow from operations was approximately $7.2 million
for the three months ended March 31, 1998 as compared to $9.3
million in the prior period. Cash flow from operations was
temporarily negatively impacted by an increase of
approximately $2.0 million in accounts receivable at March
31, 1998 over the prior period. This was a timing issue on
collections and reversed in April 1998. South Seas? other
major source of cash in the 1998 period was proceeds of long-
term debt of approximately $2.2 million for the purchase of a
retail shopping center adjacent to South Seas Plantatation.
This strategic location provides South Seas the opportunity
to increase its retail opportunities, as well as, increasing
available on-site facilities by moving certain operations.
South Seas? major uses of cash during the 1998 period were
principal payments on outstanding debt of approximately $4.6
million (net of draws), combined capital expenditures and
acquisition/option payments of approximately $5.4 million,
and distributions to partners of approximately $452,000.
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
SFAS 130, Reporting Comprehensive Income, is effective for
fiscal years beginning after December 15, 1997. This
Statement establishes standards for reporting and display of
comprehensive income and its components in a full set of
general purposes financial statements. This Statement
requires that all items that are required to be recognized
under accounting standards as components of comprehensive
income be reported in a financial statement that is displayed
with the same prominence as other financial statements. At
March 31, 1998 South Seas had no items that qualified under
this pronouncement and therefore no change occurred in its
reporting practices.
SFAS 131, Disclosures about Segments of an Enterprise and
Related Information, effective for fiscal years beginning
after December 15, 1997, establishes standards for reporting
information about operating segments in annual financial
statements and interim financial reports issued to
unitholders. Generally, certain financial information is
required to be reported on the basis that is used internally
for evaluating performance of and allocation of resources to
operating segments. Management has reviewed the criteria for
segment reporting and has determined no such segmentation is
applicable to its operations.
<PAGE>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Change in Partnership Units
Not applicable
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
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
March 31, 1998
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 T&T RESORTS, L.C. VICE PRESIDENT OF FINANCE
GENERAL PARTNER OF S.S. RESORT MANAGEMENT L.C.
SOUTH SEAS PROPERTIES GENERAL PARTNER OF
COMPANY LIMITED PARTNERSHIP SOUTH SEAS RESORTS
(SIGNATURE) COMPANY, L.P.
MAY 15, 1998 (SIGNATURE)
MAY 15, 1998
TIMOTHY R. BOGOTT VIRGINIA S. BROOKS
PRESIDENT CORPORATE CONTROLLER
S.S. RESORT MANAGEMENT, L.C. S.S. RESORTMANAGEMENT,
GENERAL PARTNER OF SOUTH SEAS L.C.
RESORTS COMPANY, L.P. GENERAL PARTNER OF SOUTH
(SIGNATURE) SEAS RESORTS COMPANY, L.P.
MAY 15, 1998 (SIGNATURE)
MAY 15, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,013,000
<SECURITIES> 0
<RECEIVABLES> 9,584,000
<ALLOWANCES> (151,000)
<INVENTORY> 1,648,000
<CURRENT-ASSETS> 15,118,000
<PP&E> 138,906,000
<DEPRECIATION> (48,515,000)
<TOTAL-ASSETS> 120,982,000
<CURRENT-LIABILITIES> 20,151,000
<BONDS> 43,500,000
0
0
<COMMON> 0
<OTHER-SE> (11,247,000)
<TOTAL-LIABILITY-AND-EQUITY> 120,982,000
<SALES> 41,415,000
<TOTAL-REVENUES> 41,415,000
<CGS> 13,264,000
<TOTAL-COSTS> 30,772,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,582,000
<INCOME-PRETAX> 8,031,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 8,031,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,031,000
<EPS-PRIMARY> 1.78
<EPS-DILUTED> 1.05
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SOUTH SEAS PROPERTIES COMPANY LIMITED PARTNERSHIP
CALCULATION OF WEIGHTED AVERAGE UNITS OUTSTANDING
EXHIBIT 99.1
The weighted average number of partnership units used in the computation
of earnings per unit is as follows:
Three Months
Ended March 31
1997 1998
<S> <C> <C>
Actual number of units
outstanding at the beginning of the
year 4,426,568 4,515,818
Weighted average number of units issued
during the year - -
Weighted average number of units
outstanding during the year 4,426,568 4,515,818
</TABLE>
EXH99_1/ss
SECOND AMENDMENT (CAPITAL IMPROVEMENTS) TO
AMENDED AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDMENT (CAPITAL IMPROVEMENT) TO AMENDED
AND RESTATED LOAN AGREEMENT (this "Second Amendment"), dated as
of the,,4'1@dav of February, 1998, modifies and amends that
certain AMENDED AND RESTATED LOAN AGREEMENT dated as of
September 26, 1996, as amended by First Amendment (Seaside)
dated as of May 30, 1997 (collectively, the "Loan Agreement"),
all between
Credit Lyonnais New York Branch, a branch duly licensed
under the laws of the State of New York, of Credit
Lyonnais, S.A., a banking corporation organized and
existing under the laws of the Republic of France
("CLNY"), Barnett Bank, N.A., a national banking
association, formerly known as Barnett Bank of Lee
County, N.A. ("Barnett") and FINOVA Capital Corporation,
a Delaware corporation formerly known as Greyhound
Financial Corporation ("FINOVA") (each of CLNY, Barnett
and FINOVA, or their respective successors and assigns,
is individually referred to as a "Participanf', and are
collectively referred to as the "Lender"; use of such
term hereinafter shall include all Participants,
collectively, and at the same time, each Participant
individually), CLNY as administrative agent for Lender
(in such capacity, CLN-Y or any successor to, or assignee
of, CLN-Y, hereinafter referred to as "Administrative
Agent"), and CLN-Y as collateral agent for Lender (in
such capacity, CLNY or any successor to, or assignee of,
CLNY, hereinafter referred to as "Collateral Agent";
unless the context requires reference as Collateral Agent
or Administrative Agent, CLN-Y or such successor or
assign shall be hereinafter referred to as "Agent")
and
South Seas Resort Limited Partnership, an Ohio limited
partnership ("SSRILP"), South Seas Properties Company Limited
Partnership, an Ohio limited partnership ("SSPC") (formerly
known as Captiva Resort Company Limited Partnership), Marco SSP
Ltd., a Florida limited partnership ("MSSP"), South Seas
Resorts Company Limited Partnership, a Florida limited
partnership ("SSRC") and Safety Harbor Management Company,
Ltd., a Florida limited partnership ("SHMC") (SSPC, SSRLP,
MSSP, SSRC and SHMC, collectively, the "Borrower"; use of such
term hereafter shall include all entities constituting
Borrower, including all general partners of partnerships
constituting Borrower, collectively, and at the same time, each
of the entities, individually).
Capitalized ten-ns used in this Second Amendment shall have the
meanings set forth in the
Loan Agreement, unless otherwise defined herein.
RECITALS:
A. On September 26, 1996, Lender and Borrower entered
into the transactions described in the Loan Agreement and the
other Loan Documents, with respect to Loans aggregating the
original principal amount of Eighty Million and No/100 Dollars
($80,000,000.00).
B. As of May 30, 1997, the parties to the Loan
Agreement executed First Amendment (Seaside), amending the Loan
Agreement to allow for an Adjusted Eurodollar Interest Rate and
clarifying certain other provisions of the Loan Agreement.
C. Lender and Borrower desire to provide for an
amendment of the Loan Documents to allow Borrower to defer
repayment of a portion of the outstanding principal balance
under the Term Loan and to allow Borrower to use the deferred
funds to make certain capital improvements.
NOW, THEREFORE, for and in consideration of the above
premises and the mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, Borrower and
Lender, intending to be mutually bound hereby, agree as
follows:
TERMS
I . Incoiporation of Recitals: The Recitals set forth above
are true and correct and are
incorporated herein by reference.
2. Principal Balance of the Loans: Borrower confinns
and acknowledges that, as of January 21, 1998, the principal
balance of the Loans is $64, 1 00,000.00, and that such amount
is due Lender free and clear of all claims, demands, setoffs,
defenses or counterclaims. Of such amount outstanding,
$38,250,000.00represents the principal balance of the Tenn
Loan. Pursuant to the Term Note, payments of principal under
the Term Loan are to be made quarterly beginning March 3 1,
1997.
3. No Default under the Loans: Borrower represents and
warrants that there is no
Default or Event of Default under the Loan Documents nor any-
event which, with notice or the
passage of time, or both, would become an Event of Default.
4. Amendment to Loan Aizreement Rep-ardinp- Pa=ents of
Principal under Term Loan:
Section 2.3(b) of the Loan Agreement is hereby amended to read
as follows:
[2.3(a) to remain unchanged]
2.3(b)
anaggregateprincipalpaymentof$1,200,000.00duringthePeriodbeginn
ing on the fifth Installment Payment Date, in two equal
quarterly payments of $550,000.00 each, on March 31, 1998, and
June 31, 1998, and two equal quarterly payments of $50,000.00
each, on
2
September 30, 1998, and December 31, 1998 (Borrower
acknowledging that the amount of principal payments which have
been deferred by Lender aggregates $ 1,000,000.00 (the
"Defeffed Principal"), one-half of which deferral was made in
the third payment for calendar year 1998 and the other half in
the fourth payment for 1998);
with the outstanding principal amount of the Tenn Note being
due and payable in one payment of
$29,225,000.00, together with any accumulated and unpaid
interest thereon, on the Maturity Date.
[2.3(c), (d) and (e) to remain unchanged]
5. Conditions to Amendment: This Second Amendment shall
be effective upon its execution, and Borrower's deferral of the
Deferred Principal under the Tenn Loan shall not constitute a
default, provided that the following conditions are satisfied:
(a) The Deferred Principal shall be fiilly
expended by Borrower during calendar
year 1998, and such use must be solely for the purpose of
making capital improvements to the
Project (including, without limitation, refurbishment of
units) pursuant to the 1998 Capital
Expenditure Budget attached hereto as Exhibit A, which capital
improvements would be recognized
as such under GAAP;
(b) Within fifty (50) days after the end of the
applicable fiscal quarter, Borrower shall provide Agent with
quarterly reports of capital expenditures as of the last day of
each of the calendar quarters of 1998, setting forth the amount
of such Deferred Principal expended to date and listing in
detail the capital improvements toward which such expenditures
were made; and
(c) Within fifty (50) days after December 31, 1998,
Borrower shall provide Agent with a report and certification in
form and content satisfactory to Agent detailing all
expenditures of Deferred Principal, all capital improvements
made with the Deferred Principal, and a timetable of when each
expenditure was made, and certifying that all such capital
improvements would be recognized as "capital improvements"
under GAAP.
(d) Lender shall have ten (1 0) Business Days to
review each such quarterly report and the final report and
certification. In the event Lender objects to Borrower's
classification of any improvement for which any portion of the
Deferred Principal was expended being classified as a &Ccapital
improvement", Borrower shall promptly (and in all events within
ten (10) Business Days after Lender notifies Borrower of such
disallowance) prepay principal under the Tenn Loan to the
extent of the amount of the expenditure as to which such
objection has been made.
6. Fees and Exl2enses: Borrower shall pay all of Lender's
counsels' fees and costs
incurred in connection with the preparation of this Second
Amendment.
7. No Other Amendment: Lender's consent and amendment
herein shall be applicable only to the matters set forth in
this Second Amendment aiid Lender shall not be obligated to
consent to any other request or transaction or waive any other
provisions of the Loan Documents.
8. Affin-nation of Loan Documents: Release of Lender:
Except as otherwise expressly modified herein, all tenns and
provisions of the Loan Documents as originally executed are and
remain unchanged and in ftill force and effect. Borrower and
Taylor and Ten Broek (by execution of a Joinder to this Second
Amendment) agree that execution of this Second Amendment shall
be deemed a reaffin-nation of the representations, warranties
and covenants contained in the Loan Documents and that saine
are true and correct as of the date of execution of this Second
Amendment. Borrower, Taylor and Ten Broek hereby, jointly and
severally: (1) acknowledge that Lender has performed all of its
obligations, if any, under the Loan Documents; (ii) acknowledge
that none has any claims, defenses or rights of setoff against
Lender or as to the validity or enforceability of the Loan
Documents or any of them, or any other documents executed in
connection therewith; and (iii) waive, discharge and release
forever any and all existing claims, actions, causes of action,
demands, defenses or rights of setoff, whether in contract,
tort or otherwise (collectively, the "Claims"), which any or
all of them, or any of their partners, might have against
Lender or its officers, directors, shareholders, agents or
employees, or the successors or assigns of any of the
foregoing. Borrower, Taylor and Ten Broek acknowledge and
agree that the affirmations, acknowledgments, waivers and
discharges contained in this Section are a material inducement
for Lender to enter into this Second Amendment.
9. Florida Law-, Invalidity: Entire AP-reement:
InteMretation: This Second Amendment shall be govemed by
Florida law. This Second Amendment represents the entire
Agreement between the parties with respect to the subject
matter and supersedes all prior or contemporaneous agreements.
Shouldanypartorprovisionhereofbedeemedbyacourtofcompetentjurisd
ictionto be invalid or unenforceable, such invalidity or
unenforceability shall not affect the remaining provisions, all
of which shall remain in full force and effect. This Second
Amendment shall not be construed more strictly against one
party than the other by virtue of the fact that one party or
its counsel may have drafted same, all parties and their
counsel having had the opportunity to participate in the
negotiation and drafting of this Second Amendment. This Second
Amendment may be executed in one or more counterparts, each of
which shall be deemed an on'ginal and all of which, together,
shall constitute a single instrument.
10. WAIVER OF JURY TRIAL. BORROWER, ITS PARTNERS AND
LENDER
HERF-BY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT
ANY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION
BASED ON
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS SECOND
AMENDMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (VERBAL OR WRITTEN), OR ACTIONS OF ANY PARTY HERETO.
THIS WAIVER OF TRIAL BY J-URY PROVISION IS A MATERIAL
INDUCEMENT FOR LENDER TO ENTER INTO THIS SECOND
AMENDMENT.
I
4
IN WITNESS WHEREOF, the parties hereto have executed this
Second Amendment as of
the date written above.
BORROWER:
SOUTH SEAS RESORT LIMITED PARTNERSHIP,
an Ohio limited partnership
By: SAN-CAP Resort, L.C., a Florida limited
liability
By:
any, its General Partner
Robert M.
lor, Manager
SOUTH SEAS PROPERTIES COMPANY L@ED
PARTNERSHIP, an Ohio limited partnership
By: T&T
comp
By:
.C., a Florida limited liability
its neral Partner
Robert M.
aylor, Manager
MARCO SSP, LTD., a Florida limited partnership
By: Marco S its General Partner
By:
Robert M.
aylor, Chairman
SOUTH SEAS RESORTS COMPANY LIMITED
PARTNERSHIP, a Florida limited partnership
By: S.S. Resort Management, L.C., a Florida
limited li
By:
company, its General Partner
Robert M. aylor, Manager
SAFETY HARBOR MANAGEMENT COMPANY,
LTD., a Florida limited partnership
By: S.S. Resort Management, L.C., a Florida
limited li company, its General Partner
By:
Robert aylor, Manager
COLLATERAL AGENT, ADMINISTRATIVE
AGENT AND PARTICIPANT:
CREDIT LYONNAIS NEW YORK BRANCH, a branch, duly licensed under
the laws of the State of New York, of Credit Lyonnais, S.A., a
banking corporation organized and existing under the laws of
the Republic of France
By:
Name:
Title:
6
03/'04./98 IVED 14:26 FAX 954 763 2439
E.,NGLISH, McMALIC.
@002
SOUTH SEAS RFSORTs COMPANY LMTED
PARTNF,RSHU, a Flor-ida limited p@ership
By: S.S. Resort limited li
Management, L.C., a Fjorida
company, its General Partner
By:-
Robert
aylor, Manager
SAFF-TY OR @AGEMENT COMPANY,
LTD., a Florida limited partnership
By- S.S. Resort iinu'ted li
By:
Management, L.C., a Florida
company, its General Paftner
Robert
r, Manager
COLLATERAL AGEN-F, ADMINISTRATIVE
AGENT AND PARTICIPANT:
CREDIT LYONNAIS NF- W YORK BRANCH, a branc@ duly licensed under
the laws of the State of New York, of Credit Lyonnais, S.A., a
banking corporation organized and existing under the laws of
I
the Republic of France
Title:
6
1;02/.12.'A'98 THU 18:'16' FAX '1-95'4-763-'2439
Em
la 027
PARTICIPANTS:'
- -B@ 'N@ a national bnuWi3g
association
By.
Nai=-. -
i
Title.
FIN 'CAPITAL CORPPRANON, a Delaware
Title-.
7
S tt @,4A" @@, @ @
OTHER PARTICIPANTS:
BARNETT B@, N.A. a national banking
association
By
Nanic: -- - - ---
Title: Senior Vice President
FINOVA CAPITAL CORPORATION, a Delaware
corporation
By:
Name:
Title:
EXHIBIT A
1998 CAPITAL EXPENDITURE BUDGET
h:\tLscrs\wp\crcdit\ssr\pinkshel\documts\amcnd.cn7
2.12.98jlk
(Attached)
9
SOUTH SEAS PROPERTIES COMPANY
CAPITAL EXPENDITURES
Analysis of Re-Forecast ISS7 and Preliminary Budget 1998
(000's)
BASE CAPITAL:
South Seas Plantation
South Seas-Health Club
Sundial
Sundial-Pool Renov2tion
Dunes Golf & Tennis Club
Dunes-Pavilion
S2nibel Inn
Best Westem-Sanibel
Song of Sea
M2rco Radisson
Safety Harbor
Seaside Inn
SubtOt2l
South Seas and Captiva Prop
Vacation Planning Center
Corpor2te/MIS
South Se2S-Telephone System
Sanibel Inn-Prop Renov2tion/Roof UnfundL-d
Song of the Sea-Refurbishment
Best Westem Refurbishment
Base Capital Reserve-All Properties (to be 21located)
TOTAL BASE CAPEX
BASE CAPEX AS % of TOTAL REVENUES
PROJECT CAPITAL:
South Seas Plantation
Kings Crown Ca"over
South End Canyover
Owner Refurb Prog
Fiber Optic
Point of Sale System
Sanibel Inn
Room Renovation
Parking Lot
Marco Radisson
Rooms and Olher Renovation
Elevator Add@ion
Safety Harbor
Room Renovation
Land Purchase
Option Payments
Pink Shell Lease Investment
MIS-Springer Miller'96 Carryover
VPC-Yield Mgt System
Corp-Execulive Syslem
MIS-Financial System
Corp-Marketing Data Base System
Shirley's Property Aquisdion
Project t&nagement-Supervision
POL Capital Call
Corp Acquisition Deposfts-Bowdhch/Pink Shell
Corp Acquisdion Deposfts-Suck Key
Corp AcquisRion Deposhs-TradeyAnds
Corp Acquisition Deposits and Due Diligence
TOTAL PROJECT CAPEX
PROJECT CAPEX AS % of TOTAL REVENUES
TOTAL CAPEX FOR
EXISTING PROPEFTTIES
Re-forecast
@12/97
1997
Prelim Budget
@12/97
1998
$1,820 $350
350
562 125
334
168 60
90
122 30
56 70
44 15
438 780
325
66 15
3,276
102 47
294 225
186
200
200
1,000
4,258 3,816
3.56% 3.02%
50
112
2,150
30 1'000
136
208
46
682 1,490
1,380
826
227
1,065 1,065
2,000
241
230 20
24
475 50
85
425
90
190
100
500
262
500
$6,784 $8 @5
5.67% 7.03%
$11.042 $12.591
TOTAL CAPEX AS % of TOTAL REVENUES
9.23%
10.05%
JOINDER TO SECOND AMENDMENT
The undersigned hereby join in the Second Amendment to which
this Joinder is attached for
the purpose of affinning the provisions thereof
ALLEN G. TEN BROEK
ROBERT M
LOR
FIRST AMENDMENT (CAPITAL IMPROVEMENTS) TO
CONSOLIDATED, AMENDED AND RESTATED TERM NOTE
THIS FIRST AMENDMENT (CAPITAL IMPROVEMENT), TO
CONSOLIDATE R.) AMENDED AND RESTATED TERM NOTE (this "First
Amendment"), dated as of the day of February, 1998, modifies
and amends that certain consolidated, Amended and Restated Term
Note as follows:
1. Section 3a (Payment of Principal) is hereby amended
to read as follows:
3a. PayLnent of Principal. The Principal amount of this
Note shall be payable to
Agent for the account of Lender in quarterly installments
beginning on March 31, 1997 (the "First
Installment Payment Date"), as follows:
(a) an aggregate Principal payment of
$1,750,000.00 during the Period beginning on the First
Installment Payment Date, in four equal quarterly payments of
$437,500.00 each, each payment (an "Installment Payment") being
made on the last Business Day of such quarter (such date, an
"Installment Payment Date");
(b) an aggregate Principal payment of
$1,200,000.00 during the Period beginning on the fifth
Installment Payment Date, in two equal quarterly payments of
$550,000.00 each and two equal quarterly payments of $50,000.00
each;
(c) an aggregate Principal payment of
$2,700,000.00 during the Period beginning on the ninth
Instalhuent Payment Date, in four equal quarterly payments of
$675,000.00 each;
(d) an aggregate Principal payment of
$3,250,000.00 during the Period beginning on the thirteenth
Installment Payment Date, in four equal quarterly payments of
$812,500.00 each; and
(e) an aggregate Principal payment of
$1,875,000.00 during the Period begimiing on the Seventeenth
Installment Payment Date, in two equal quarterly payments of
$937,500.00 each,
with the outstanding Principal balance of the Tenn Note being
due and payable in one payment of
$29,225,000.00, together with any accumulated and unpaid
interest thereon, on the Maturity Date.
IN WITNESS WHEREOF, the Borrower has executed this First
Amendment as of the date
written above.
BORROWER:
SOUTH SEAS RESORT LIMITED PARTNERSHIP,
an Ohio limited partnership
By: SAN-CAP Resort, L.C., a Florida limited
liability co
By:
, its General Partner
Robert M. Ta
r, Manager
SOUTH SEAS PROPERTIES COMPANY LRMITED
PARTNERSHIP, an Ohio limited paanership
By: T&T Resorts, L.C., a Florida limited liability
comdanv
. I
By:
General Partner
Robert M. Taylor, Manager
MARCO SSP, LTD., a Florida limited partnership
By: Marco S
2
By:
., its General Partner
Robert M.
aylor, Chainnan
SOUTH SEAS RESORTS COMPANY LIMITED
PARTNERSHIP, a Florida limited partnership
By: S.S. Resort Management, L.C., a Florida
limited liab'
By:
company, its General Partner
Robert M. Tayl
Manager
SAFETY HARBOR MANAGEMENT COMPANY,
LTD., a Florida limited partnership
By: S.S. Resort Management, L.C., a Florida
H:\users\wp\credit\ssr\pinkshei\documts\amendnte.cn2:2.05.98.ji
k
3
limited li
By:
ity company, its General Partner
Robert
aylor, Manager
THIRD AMENDMENT (PLANTATION VIEW) TO
,KMENDED AND RESIAT-EL), LO,
ENT
THIS THIRD AMENDMENT (PLANTATION VIEW) TO AMENDED AND
RESTATED
LOA- I AGREEMENT (this "Third Amendment"), dated as of the
@C)day of March, 1998, mod'fies
- -
I
and an -,nds that certain AMENDED AND RESTATED LOAN AGREEMENT
dated as of SeptemLer 26, 1996, as amended by First Amendment
(Seaside) to Amended and Restated Loan Agreemei,t dated as of
May 30, 1997 (the "First Amendment"), and Second Amendment
(Capital Improvem,Tit) to Amended and Restated Loan Agreement
dated as of February 27, 1998 (as so amended al I as same may
be amended from time to time, the "Loan Agreement") between
Credit Lyonnais New York Branch, a branch duly licensed under
the laws of the State of New York, of Credit Lyonnais, S.A., a
banking corporation organized and existing under the laws of
the Republic of France ("CLNY"), Bamett Bank, N.A., a national
batiking association, formerly known as Bamett Bank of Lee
County, N.A. ("Barnett") and FINOVA Capital Corporation, a
Delaware corporation fon-nerly known as Greyhound Financial
Corporation ("FINOVA") (each of CLNY, Bamett and FINOVA, or
their respective successors and assigns, is individually
referred to as a "Participant", and are collectively referred
to as the "Lender"; use of such terrn hereinafter shall include
all Participants, collectively, and at the same time, each
Participant individually), CLNY as administrative agent for
Lender (in such capacity, CLNY or any successor to, or assignee
of, CLNY, hereinafter referred to as "Administrative Agent"),
and CLNY as collateral agent for Lender (in such capacity, CLNY
or any successor to, or assignee of, CLNY, hereinafter referred
to as "Collateral Agent"; unless the context requires reference
as Collat--ral Agent or Administrative Agent, CLNY or such
successor or assip shall be hereinafter referred to as "Agent")
and
South Seas Resort Limited Partnership, an Ohio limited
partnership ("SSRLP"), South Seas Properties Company Limited
Partnership, an Ohio limited partnership ("SSPC") (formerly
known as Captiva Resort Company Limited Partnership), Marco SSP
Ltd., a Flon'da limited partnership ("MSSP"), South Seas
Resorts Company Limited Partnership, a Flon'da limited
partnership ("SSRC") and Safety Harbor Management Company,
Ltd., a Florida limited partnership ("SHMC") (SSPC, SSRLP,
MSSP, SSRC and SHMC, collectively, the "Borrower"; use of such
ten-n hereafter shall include all entities constituting
Borrower, including all general partners of partnerships
constituting Borrower, collectively, and at the same time, each
of the entities, individually).
H:\users\WP\credit\ssr\plan-v\documts\amendiag.cn6:3.20.98--jan
Capitalized ten-ns used in this Third Amendment shall have the
meanings set forth in the
Loan Agreement, unless otherwise defined herein.
RECITALS:
A. On September 26, 1996, Lender and Borrower entered
into the transactions described in the Loan Agreement and the
other Loan Documents, with respect to Loans aggregating the
original principal amount of Eighty Million and No/100 Dollars
($80,000,000.00).
B. SSPC desires to acquire a shopping center known as
Plantation View Shopping Center, located in Lee County,
Florida, consisting of approximately 9,233 square feet of gross
leasable building area (hereinafter defined as "Plantation
View"). The legal description of Plantation View is more
particularly set forth on "A" attached hereto and made a part
hereof
C. Borrower has requested that Lender make a term loan
to Borrower in the original principal amount of Two Million One
Hundred Eighty Thousand and No/100 Dollars ($2,180,000.00) (the
"Plantation View Loan") as part of SSPC's acquisition of
Plantation View. The Plantation View Loan will be evidenced by
a terrr. note, a first mortgage and security agreement and
related security documents (collectively, the "Plantation View
Loan Documents"). In connection with the Plantation View Loan,
all representations, warranties and covenants of Borrower in
the Loan Documents shall hereafter apply to Plantation View.
All entities constituting Borrower shall continue to be jointly
and severally obligated for all sums evidenced by the Loans and
shall become jointlyand severally obligated for all sums
evidenced by the Plantation View Loan.
D. Lender has agreed to make the Plantation View Loan on
the terms and subject to the
conditions set fo,-th below.
NOW, THEREFORE, for and in consideration of the above
premises and the mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, Borrower and
Lender, intending to be mutually bound hereby, agree as
follows:
TERMS
I . Incorporation of Recitals: The Recitals set forth above
are true and correct and are
incorporated herein by reference.
2. Princil2al Balance of the Loans and the Seaside
Loan: Borrower confinns and acknowledges that, as of March 3,
1998, the outstanding principal balance of the Loans is
$63,600,000.00, and the outstanding principal balance of the
Seaside Loan (as defined in the First Amendme,.it (Seaside) to
Amended and Restated Loan Agreement) is $3,500,000.00, and that
all such amounts are due Lender free and clear of all claims,
demands, setoffs, defenses or counterclaims.
H:\users\WP\credit\ssr\plan-v\documts\amendlag.cn6:3.20.98:jan
2
3. No Default under the Loans or the Seaside Loan:
Borrower represents and warrants that there is no Default or
Event of Default under the Loan Documents or the documents
evidencing the Seaside Loan, nor any event which, with notice
or the passage of time, or both, would become an Event of
Default.
4. Amendments to Loan Aueement Rei4ardini4 Plantation
View: The Loan Ageement is hereby amended as follows to
effectuate the addition of Plantation View to various concepts
relevant to the Loan:
(a) Recital D is hereby amended to read as follows:
D. On September 23, 1994, Greyhound Financial
Corporation entered into a transaction (the "FINOVA
Transaction") in which it extended credit to MSSP in the
original principal amount of $19,500,000.00 (the "FINOVA Loan",
as further defined hereinafter) secured by a mortgage (the
"FINOVA Mortgage", as further defined hereinafter) on the
"Radisson" (as hereinafter defined). As of January 1, 1997,
Bamett entered into a transaction (the "Seaside Transaction")
described in the Assumption and Modification Agreement
("Assumption and Modification Agreement") with respect to the
Seaside Loan, secured by a mortgage on "Seaside Inn" (as
hereinafter defined). SSPC has acquired the Plantation View
Shopping Center (the "Plantation View Transaction") (the
Initial Transaction, the Modified Transaction, the FINOVA
Transaction, and the Seaside Transaction, together, the
"Previous Transactions," and the documents evidencing the
Previous Transactions, together, the "Previous Documents").
(b) Recital F is hereby amended to read in
pertinent part as follows:
F. SSRLP is the owner in fee simple of the real
property situated in Lee County, Florida
("South Seas Plantation"), more particularly described in
Exhibit "A- I " attached hereto. MS SP is
the owner in fee simple of the real property situated in
Collier County, Florida ("Radisson"), more
particularly described in Exhibit "A-2" attached hereto.
SSPC is the owner in fee simple of the real
property situated in Lee County, Florida, more particularly
described in Exhibits "A-3" ("Sundial"), "A-4" ("Dunes"), "A-5"
("Sanibel Inn"), "A-6" ("Best Western-Sanibel"), "A-7" ("Song
of the Sea"), "A-8" ("Seaside Inn") and "A-9" ("Plantation
View") attached hereto (South Seas Plantation, Sundial, and
Dunes are, hereafter, collectively referred to as the "Modified
Land"; Sanibel Inn, Best Westem-Sanibel, Song of the Sea and
the Radisson are, hereafter, collectively referred to as the
"New Land"; the Modified Land, the New Land, Seaside Inn and
Plantation View are hereinafter referred to collectively as the
"Land").
(c) The definition of "Assets" in Section 1.8 is
hereby amended to include all property now or hereafter owned
by Bor-rower, including, without limitation, those items
described therein consisting of, or related to, Plantation
View.
(d) Section 1.53 is hereby amended to add those items
described therein
consisting of, or relating to, Plantation View, to the list of
Improvements included in such definition.
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3
The Plantation View Improvements are generally described on
Exhibit "B" attached hereto and made
a part hereof
(e) Section 1.88 (definition of "Outstanding Loan
Amount") is hereby amended to add the phrase "and the Term Note
(Plantation View) dated as of March .30, 1998" before the
phrase "at such time."
(f) Section 1.100 is hereby amended to add
Plantation View, as well as any developments and properties
acquired by Borrower after the date hereof with proceeds of the
Revolving Credit Loan or through application of Section 1 1. 8
of the Loan Agreement, to the list of developments included in
the definition of Project. The change in the definition of
Project shall be deemed incorporated in all Loan Documents in
which the term "Project" is used.
(g) Paragraph 1. 125 is hereby arnended to add the
following survey to the list of
surveys:
(i) Boundary Survey for Plantation View Shopping Center
Commercial Condominium located on lots 4, 5 and 6
unrecorded Chadwick's addition to Gulfview in Section 26,
Township 45 South, Range 21 East, Captiva Island, Lee
County, Florida, dated February 26, 1998, prepared by
Johnson Engineering Inc. and identified as Project No.
21893, as revised.
(h) The following new definitions are added in
Article 1:
" Plantation View Closiny- Date" shall mean the date of
this Third Amendment.
"Plantation View" shall have the meaning given in the
Recitals.
"Plantation View Loan" shall have the meaning given in
the Recitals.
(i) Section 3.23 is hereby amended to add the
following:
As of the Plantation View Closing Date, Borrower has not
received any other
financing for the Project or any portion thereof that has not
been satisfied.
0) Section 3.25 is hereby amended to add the following to
the list of
environmental site assessments listed in that Section:
... (i) The Phase I Environmental site assessment of
Plantation View dated
February 2, 1998, prepared by Missimer Intemational, Inc.
ti-@ Section 3.41 is hereby arnended to add
Plantation View to the list of properties
k-i
owned by SSPC.
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(1) The following is hereby added as Section 3.57:
... 3.57 Plantation View Loan as Pennitted Real Prol2erty
Indebtedness. The
Plantation View Loan, and the value and financial condition of
Plantation View, meet, in all
respects, the requirements of the definition of "Permitted Real
Property Indebtedness" described in the Indenture, such that:
(i) the Plantation View Loan constitutes "Permitted Real
Property Indebtedness" under the Indenture and; (ii) the
Plantation View Loan is a part of the "Senior Indebtedness" and
the "Designated Senior Indebtedness" described therein. The
obligations of Borrower under the Plantation View Loan are
being incurred to acquire the real property and related
tangible and intangible personal property, fixtures and
improvements constituting Plantation View. Borrower is in full
compliance with the requirements of the Indenture as to the
incurring of such Permitted Real Property Indebtedness in such
a manner as does not violate the terins of the Indenture.
Borrower and Lender acknowledge that, in order to qualify as
"Permitted Real Property Indebtedness" under the Indenture, the
Plantation View Loan is to be secured exclusively by a
mortgage, deed of trust, security agreement or assignment, or
other lien or charge against the Plantation View real property
and/or improvements thereon (and/or any personal property
(tangible or intangible) and fixtures relating thereto
(collectively, the "Plantation View Assets"). Borrower and
Lender agree that, notwithstanding anything to the contrary
contained in the Plantation View Loan Documents, the Plantation
View Loan shall be secured only by the Plantation View Assets.
(m) A new section 6.37 is hereby added, to read as
follows:
6.37 Satisfaction of Oblii4ations/Sale of
Assets/Termination of Security Interests. Borrower agrees that
it shall not be permitted to satisfy and pay in full any of the
Obligations relating to South Seas Plantation, or sell, assign
or convey South Seas Plantation (or any interest therein), or
request that Lender terminate (in full or in part) the secuiity
interests or liens otanted by Borrower to Lender relating to
South Seas Plantation pursuant to the Loan Agreement, the
Mortgage, the Security Agreement or the other Security
Documents if, after such satisfaction and payment, any amounts
or Obligations would remain unpaid, outstarding, or unfulfilled
under either the Plantation View Loan or the Seaside Loan, or
both.
(n) Section 8.3 is hereby amended to add a
representation by Borrower that, based upon payment of
documentary starnp taxes and intangible taxes concurrently
herewith, no additional documentary stamp or intangible taxes
are due and payable on the amount of the Plantation View Loan,
and an agreement by Borrower that if any taxes should become
payable in connection with the Plantation View Loan, the
provisions of Section 8.3 containing Borrower's agreement to
pay such taxes shall apply to any such taxes.
(o) The following is hereby added to Section 7.l:
... (v) Default under Plantation View Loan. SSPC shall
be in default of any covenant, agreement or obligation under
the Plantation View Loan or any of the Plantation View Loan
Documents.
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4a. Satisfaction of Requirement to Amend Indenture.
Pursuant to the First Amendment, Borrower undertook to amend
certain definitions set forth in the Indenture, as provided
therein, and has amended the Indenture in the manner set forth
in the First Supplemental Indenture dated as of February 27,
1998 (the "First Supplemental Indenture"); however, and
notwithstanding the First Supplemental Indenture: (i) Borrower
and Lender agree that the provisions of the First Amendment and
the Seaside Consolidated, Amended and Restated Revolving Credit
Note which provide for the commencement of principal
amortization in the event the amendment of the Indenture has
not been effected within a certain period of time shall remain
in force and effect and such pn'ncipal amortization shall
commence, and principal paymen' s shall be made, on the dates
provided therein; and (ii) because the amendments effected by
the First Supplemental Indenture do not pennit the Seaside Loan
to be consolidated with the Revolving Credit Loans, such
consolidation shall not take place.
5. Modification of Seaside Loan Documents. Borrower
agrees that, within a reasonable time period, not to exceed
sixty (60) calendar days after the effective date of this Third
Amendment, it will execute such documents as Lender shall deem
necessary or desirable to modify the documents evidencing the
Seaside Loan to add, as collateral security for the Seaside
Loan, all such tangible and intangible personal property and
fixtures as contemplated by and permitted under the Indenture
as amended by First Supplemental Indenture.
6. Exhibits. The exhibits and schedules to the Loan
Agreement are hereby amended as
follows:
(a) A new Exhibit A-9 to the Loan Agreement ("Plantation View
Legal Description") is added in the fon-n of Exhibit A
hereto.
(b) Exhibit B to the Loan Agreement ("Improvements") is
hereby amended as set forth in Exhibit B hereto to add
Plantation View.
(c) Exhibit C ("Litigation Proceedings"), setting forth a
schedule of litigation proceedings, is hereby amended and
restated as the schedule set forth as Exhibit C hereto.
(d) Exhibit G to the Loan Agre(@ment ("Budget") is hereby
amended to add Plantation View.
7. Particil2ation Interests. The Participants'
interests in the Plantation View Loan, expressed either as a
sum in Dollars or as a percentage of the sum of the Plantation
View Loan commitment, shall be as set forth on Exhibit D
attached hereto, as same may be amended by the Participants
from time to time. The Participants shall be bound, for
purposes of the Plantation View Loan, by all provisions bf the
Loan Agreement with regard to the relationship among them and
with the Collateral Agent and the Administrative Agent.
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8. Conditions to Effectiveness: The parties' obligations
hereunder shall be contingent
on the satisfaction of the following conditions on or prior to
the Plantation View Closing Date:
(a) execution by Borrower and delivery to Lender of an
officer's certificate in the forrn attached hereto as
Exhibit E certifying that the Plantation View Loan meet,
in all respects, the requirements of the definition of
Perrnitted Real Property Indebtedness described in the
Indenture as amended by First Supplemental Indenture
dated as of Febr-uary 27, 1998, and certifying complianc-
- - with the requirements of the Indenture as to the
incurring of such Permitted Real Property Indebtedness in
- -.uch a manner as does not violate the tenns of the
Indenture.
(b) execution of the documents specified in the Plantation
View Loan closing checklist provided to the parties; and
(c) receipt and approval by Lender of the legal opinions
specified in the Plantation View Loan closing checklist.
9. Fees and Exl2enses: Borrower shall pay all of
Lender's counsels' fees and costs incurred in connection with
the preparation of this Third Amendment and Lender's counsel's
review of any documentation relating to the Plantation View
Loan.
10. No Other Amendment: Lender's consent and amendment
herein shall be applicable only to the matters set forth in
this Third Amendment and Lender shall not be obligated to
consent to any other request or transaction or waive any other
provisions of the Loan Documents.
Affin-nation of Loan Documents, Release of Lender:
Except as otherwise expressly modified herein, all terms and
provisions of the Loan Documents as originally executed are and
remain unchanged and in full force and effect. Borrower and
Taylor and Ten Broek (by execution of a Joinder to this Third
Amendment) agree that execution of this Third Amendment shall
be deemed a reaffirmation of the representations, warranties
and covenants contained in the Loan Documents and that same are
true and correct as of the Plantation View Closing Date.
Borrower, Taylor and Ten Broek hereby, jointly and severally,:
(i) acknowledge that Lender has performed all of its
obligations, if any, under the Loan Documents; (ii) acknowledge
that none has any claims, defenses or rights of setoff against
Lender or as to the validity or enforceability of the Loan
Documents or any of them, or any other documents executed in
connection therewith; and (iii) waive, discharge and release
forever any and all existing claims, actions, causes of action,
demands, defenses or rights of setoff, whether in contract,
tort or otherwise (collectively, the "Claims"), which any or
all of them, or any of their partners, might have against
Lender or its officers, directors, shareholders, agents or
employees, or the successors or assigns of any of the
foregoing. Borrower, Taylor and Ten Broek acknowledge and agee
that the affirmations, acknowledgments, waivers and discharges
contained in this Section are a material inducement for Lender
to enter into this Third Amendment.
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12. Florida Law, Invalidity, Entire A2reement,
Interpretation: This Third Amendment shall be govemed by
Florida law. This Third Amendment represents the entire
Agreement between the parties with respect to the subject
matter and supersedes all prior or contemporaneous agreements.
Should any part or provision hereof be deemed by a court of
competent jurisdiction to be invalid or unenforceable, such
invalidity or unenforceability shall not affect the remaining
provisions, all of which shall remain in full force and effect.
This Third Amendment shall not be construed more strictly
against one party than the other by virtue of the fact that one
party or its counsel may have drafted same, all parties and
their counsel having had the opportunity to participate in the
negotiation and drafting of this Third Amendment. This Third
Amendment may be executed in one or more counterparts, each of
which shall be deemed an original and all of which, together,
shall constitute a single instrument.
13. WAIVER OF JURY TRIAL. BORROWER, ITS PARTNERS AND
LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHT ANY MAY HAVE TO A TRIAL BY @Y IN RESPECT TO ANY
LITIGATION BASED ON OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH, THIS THIRD AMENDMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (VERBAL OR WRITTEN), OR ACTIONS OF ANY
PARTY HERETO. THIS WAIVER OF TRIAL BY JURY PROVISION IS A
MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THIS THIRD
AMENDMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Third
Amendment as of the
date written abgve.
BORROWER:
SOUTH SEAS RESORT LIMITED PARTNERSHIP,
an Ohio limited partnership
By: SAN-CAP
liability co
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By:
Resort, L.C., a Florida limited
. its General Partner
Robert M. T lor, Manager
SOUTH SEAS PROPERTEES CONEPANY LMTED
PARTNTERSHIP, an Ohio limited partnership
By: T&T Reso!ls, L.C., a Florida limited liability
company
By:
1 General Partner
Robert M. Taylor, Manager
MARCO SSP, LTD., a Florida limited partnership
By: Marco SS
By:
c., its General Partner
Robert M. Ta
lor, Chairman
SOUTH SEAS RESORTS COMPANY LIMITED
PARTNERSHIP, a Florida limited partnership
By: S.S. Resort gement, L.C., a Flon'da limited li
mpany, its General Partner
By:
Robert M. T
lor, Manager
SAFETY HARBOR MANAGEMENT COMPANY,
LTD., a Florida limited partnership
By: S.S. Resort limited li
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9
By:
Robert
anagement, L.C., a Florida
ompany, its General Partner
. Taylor, Manager
COLLATERAL AGENT, ADMINISTRATIVE
AGENT AND PARTICIPANT:
CREDIT LYONNAIS NEW YORK BRANCH, a branch, duly licensed under
the laws of the State of New York, of Credit Lyonnais, S.A., a
banking corporation organized and existing under the laws of
the Republic of France
By:
Name:
Title:
OTHER PARTICIPANTS:
BARNETT BANY,, N.A. a national banking
association
By:
Name:
Title:
FINOVA CAPITAL CORPORATION, a Delaware
corporation
By:
Name:
Title:
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an
I 0
SOUTH SEAS RESORTS COMPANY LIMITED
PARTNERSHIP, a Florida limited partnership
By: S.S. Resort Management, L.C., a Florida limited liability
company, its General Partner
By:
Robert M. Taylor, Manager
SAFETY HARBOR MANAGEMENT COMPANY,
LTD., a Flon'da limited partnership
By: S.S. Resort Management, L.C., a Flon'da I'm'ted I'ab'lity
company, its General Partner
1 1 1 1
By:
Robert M. Taylor, Manager
COLLATERAL AGENT, ADMINISTRATIVE
AGENT AND PARTICIPANT:
CREDIT LYONNAIS NEW YORK BRANCH, a branch, duly licensed under
the laws of the State of New York, of Credit Lyonnais, S.A., a
banking corporation organized and existing under the laws of
the Republic of France
By
Na
Title:
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I 0
OTHER PARTICIPANTS:
BARNETT BANK, N.A. a national banking
association
nt-
Title: Sr. Vice President
FINOVA CAPITAL CORPORATION, a Delaware
corporation
By:
Name:
Title:
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I I
OTHER PARTICIPANTS:
BARNETT BANK, N.A. a national banking
association
By:
Name:
Title:
FINOVA CAPITAL CORPOPATION, a Delaware
corporation
z @A
By:
Nar
Title: N.11CF: PRF-SIDENT
Title: N.11CF: PRF-SIDENT
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I 1
JOINDER TO THIRD AMENDMENT
The undersigned hereby join in the Third Amendment to which
this Joinder is attached for
the purpose of affirming the provisions thereof
ALLEN G. TEN BROEK
ERT TAYLOR
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EXHIBIT A
TO THIRD AMENDMENT
EXHIBIT "A-9"
PLANTATION VIEW LEGAL DESCRIPTION
ATTACHED
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v\documts\amendiag.cn6:3.20.98:j,,,,
12
Commonwealth
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Commitment No.: 864-458553
F,i, 1. (- No - : M7 6.3 8 8 R
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PAR('FT, 2:
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SOI]Tli, RAINGF 23 FA@';T,
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FORMFRT.,Y MIJN.@ON c;TRFF.'T; THENCE RI)N NORTH 02 DEGRFFS 55'
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SOIJTH O.-i T)F(,TZF.FS 07' 23" WEST FOR 6.57 PEPT; THENCF
SOIJTH 86 DPGRFFS 521 .3711 PA'.QT :FOR 88.92 PFFT TO THF@ WFST
T,TNF OF SATD NFFD PARCET@ RFCORDF.T) TN OFFTCTAT., RECORDS
BOOK 1.555 AT PAGF 1586; THFNCE SOIJTli 02 DFARFFS 55' 20" WFST
AT,ONG TTIF. WEST 1,TNF, OF SATD PARCET, FOR 47.86 FEET TO A
CONCRFTE MONIJMF.NT AT T14P, T?qTF.R.0,F,(',TTOiN WTTli THP
NORTHF.ASTFRT.,,Y T,TNF OF VA(ATPN qt]NqFT T)RTVF. Aq 0,14OWN
ON TNF, TJNRF(-,ORT)FD PT,AT OF CFADWTCK'S ADD.TTTON TO
CIJ.T.FVTFW; TtiF.NCE ,;OtITH 18 T)F(.'YRFFS '41.' 40" WFST
AT,ONN SATD PARC,'FT., ANT) PFRPFiVnTCliT,AR TO SATT)
NORTHFASTFRI,Y 1,TN.Fl FOR
5.00 FRET TO A CONCRETE MONTJMFNT AT THR TNTERSECTTON WTTE
THF
NORTHEASTERT.,Y T.,TlqF. Or VA(-ATFI) SL@NSFT NRTVE AS gHOWN ON
TFF 'Pt.,.AT OF CAPTIVA BEACH RFCORDRD ' TN PI,AT BOOK 7 AT
PAGF. 7-3, Pl.jBf,,T.(- RFCORnq; THENCF CONTTNTJE SOIJTH 18
T)FrlpP.Fq 4.1.' 40" WFQT FOR 10-00 PF,FT TO TH.F, CFNTFRT,TNF,
OF @-,ATD VACATED SIINSET DRTVF; TTIFNCE NORTH 71 NFGREFS 18'
20" WF,,;T Al.,ON(3, SATD CENTER T,TNF FOR 63.88 FF.FT Tn TFF
POTNT OF BFGTNNTWA.
REARTNOS MFNTTONFN A@F PT,AN@ COOIROTNATFS FOR TTTF FT,ORTT)A.
WEST ZONF, Aq REFFRFNCFD TN PRFV.TO(JS CONVEYANCFS WTTR THE
SOIJTHF.RT@Y T.,TNF@ OF CAPTTVA DRTVF 80t)THWFST AS BFARTNG
NORTH 71 nF(7RFF.,3 18' 20" WR,9T. .
EXHIBIT B
TO THIRD AMENDMENT
PLANTATION VIEW IMPROVEMENTS
ATTACHED
H:\users\WP\credit\ssr\plan-v\documts\amendlag.cn6:3.20.98.jan
13
Platitation View Sizoppitig Center
B.1 DESCRIPTION AND ANALYSIS OF TI-IE PITOPERTY
LOCAUON
'14820 Captiva Drive Southwest
Captiva Island, Florida 33924
LAND
Size and Configuration: The subject property is approximately
28,170 square feet, and is
shaped irregularly.
Froiitage and Accessibility: The subject property has road
frontage and access from
Captiva Drive, a two lane, asphalt-paved, publicly maintained
roadway.
Topograpliy: Like aU properties located in Captiva Island, the
subject property is only
slightly above mean sea level. It is generally level and is at
street grade.
Flood Zone: The subject property is located in Flood Zones A-11
(Elevation 12 feet) and V-14 (Elevation 13 feet) as per Panel
No. 125124 0264 B, effective September 19, 1984. According to
tl-ie Federal En-iergency Managenient Agency (FEMA), Zone A is
designated an area of a 100-year flood zone base flood
elevations and flood hazard factors not determined. Zone V is
an area of a 100-year coastal with velocity (wave action), base
flood elevations and flood hazard factors have been determined.
Utilities and Public Services: Public water, sewer,
electricity, telephone, police and fire protection are aU
available to the subject site. The South Seas Resorts provides
water and sewer services. The Lee County Electric Power Co-op
provides electrical service.
Easenients and Encroachments: Typical utility and access
easements are assumed to exist throughout subject site. We are
not aware of any easements which negatively in,ipact the
utility of the property for continuation of its current use.
Development on Neighboring Sites: The subject property is
bounded by a U.S. Post Office to the west, Chadwick's Square
shopping center on the east, vacant land to the south and
Captiva Drive Southwest to the north. Most development within
the immediate area consists of low-rise resorts, condominium
buildings and commercial buildings.
Artliur Andersen LLP - Hospitality Consulting Services Group
Plantation View Shopping Cetiter
PROPERTY IMPROVEMEN-FS
General
The Plantation View Shopping Center, built iii 1984, is a 9,233
square-foot retail shopping center. The two-story center was
constructed on pilings to protect against flooding. The center
is in average to good condition. The L-shaped center is
currently configured with three retail bays; however, it was
originally designed so that seven individual units could be
sold (commercial condon@ium).
CONSTRUCNON @RMA'NON
The following section outlines various building
components.
Floors:
Foundation:
Building Frame:
Date of Construction:
Roofing Systeni:
Exterior Walls.
Mechanical Systems:
HVAC Systeiii:
Second story floors are of plywood on floor
joists.
The foundation system consists of 8" X 8", 20' C.C.A. treated
driven to refusal or 2 blow/ inch. Each piling is a 20-ton
capacity wood piling. There appears to be no indication of
foundation problems such as settlement or major cracking of
exterior walls or floors.
Wooden frame construction with cedar siding.
The property was constructed in 1984.
All roof structures consist of wood frame
structure. Sloped roof areas utilized typical
three tab fiberglass shingles. Mildew stains
vvere noted on some portions of the shingles.
Exterior walls consist of wood siding. The exterior walls are
in good condition. The front of each bay consists of glass
storefronts.
Each bay has a separate central heating and cooling system.
The air conditioning units appear to be ii-i average condition.
Arthur Andersen LLP - Hospitality Consulting Services Group
Plantation View Shopping Ceiiter
Plutyibitig:
Water is provided from the public utility by a two inch water
service fed from the main along Captiva Road Southwest. Water
distribution piping within the site appears to be PVC. Waste
and vent piping appears to consist of PVC pipe materials.
Electrical Systeni: Each bay has separate electrical
meters. The electrical system
appears to be adequate for the
subject property.
Interior Fiiiislies:
Dooi-s:
Walls:
Ceilings:
Site Iniprovenients:
Parkiiig:
Liglititig:
Interior doors consist of flush hollow and solid
core.
In general, the walls consist of painted wood
paneling or painted gypsum wallboard.
Ceilings are of 2X4 acoustical panels. There appears to be no
evidence of roof leaks manifesting themselves as stains on
ceiling surfaces.
Parking is provided for a total of 42 vehicles. There are 11
uncovered spaces, 7 semi-covered and 24 covered spaces.
Parking facilities appear to be adequate for the size of the
center.
The site is illuiiiiiiated by decorative lighting
located on the building and in the parking area.
LaiLdscapinglWatering: The site is tastefully and extensively
landscaped with native vegetation,
flowering shrubs, and pali-ii trees.
All landscape materials appear to be
thriving in good condition and
wellmaintained. An irrigation system
is provided for all landscaped areas
around the buildings.
Signage:
Overall, signage appears to be adequate.
Artliur Andersen LLP - Hospitality Consulting Services Group
EXHIBIT C
TO THIRD AMENDMENT
LITIGATION PROCEEDINGS
(1) Geor2e Jammel v. South Seas Resort Limited Partnership,
Case No. 95-0094-17 CA
(ii) Creative Deco, Inc. (bankruptcy claim)
(iii) 012tics Intemational, Inc. (bankruptcy claim)
(iv) South Seas Resort Limited Partnership v. Elaine
Brandenstein
(v) South Seas Resort Limited Partnership v. Cal2tiva
Clothing & Co.. Inc., Case No. 98-0010308-CA (accounts
receivable damages)
(vi) Embassy Kosher Tours, Inc. v. Roizer Kumar d/b/a Safety
Harbor Resort and S@a; Case No. 97-6780-Cl- 1 3 (Pinellas
County Circuit Court)
(vii) Audit of Best Westem-Sanibel by State of Florida,
Division of Florida Land Sales, Condominiums and Mobile
Homes
(viii) Clayton Strong, Complaint filed with National Labor
Relations Board (all compliance requirements completed)
(ix) LaPenn v. Mariner Groul2 dba South Seas Plantation
(x) South Seas Resort Limited Partnershil2 v. Philil2 Medico,
Case No. 97-002861 CC (accounts receivable damages)
(xi) South Seas Resort Limited Partnership (SSRLP) (defendant)
and SCG Mortizai4e Corporation v. Charlie Lee Smith, Case
No. 96-008236 CA (Mortgage Foreclosure Action in which
SSRLP is a defendant)
(xii) Oliza Benavides v. South Seas Resort Limited
Partnershil2, LCDHR Charge No. 97080E, EEOC Charge No.
15L-97-0079
(xiii) Janice Reguero v. South Seas Resort Limited
Partnershil2, LCDHR Charge No. 98009E, EEOC Charge No.
15L-98-0008
(xiv) Denise L. Soyko v. Sundial Beach Resort, LCDHR Charge
No. 97086E, EEOC Charge No. 15L-97-0085
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(xv) Eli Estimo Attomey Demand Letter v. South Seas
Plantation, Attomey Demand Letter
(xvi) Kayleen Edwards Attomey Demand Letter v. Sanibel
Inn, Attomey Demand Letter
Personal injury cases.
All cases involving personal injury are covered by
insurance and insurance carriers have undertaken representation
without reservation of n'ghts. Bankruptcy Court cases involve
claims by Borrower for unpaid sums against entities which are
now in bankruptcy.
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15
NAMEOFBANK
EXHIBIT D
TO THIRD AMENDMENT
PARTICIPATION INTERESTS
Credit Lyonnais New York Branch
FINOVA Capital Corporation
Bamett Bank, N.A.
TOTALS
PLANTATION VIEW
LOAN
COMMITMENT
940,125.00 43.125
817,500.00 37.500
422,375.00 19.37
2,180,000.00 100.00
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jan
16
19.375
EXHIBIT E
TO THIRD AMENDMENT
OFFICER'S CERTIFICATE
(ATTACHED)
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17
\1 1.@ i -
;, 1-1
@-1- -
'I@
South Seas Properties Company
February 19, 1998
Lisa Georce
Sun Trust Bank
225 Eat Robinson Street
Suite 250
Orlando, FL 32801
Re@ South Seas Properties Company Limited Partnership 10@'o
Subordinated Notes Due April 15, 200')
Dear Lisa@
In accordance with Section 1.2 Compliance Certificates
and Ot)iniona, the enclosed executed Officer's Cer-tificate has
been prepared statinsz compliance of Section 10.9 Funded
Indebtedness Limitation as it relates to the acquisition of
Plantation View Shoppinc, Center.
Please feel free to contact me. if you need anv additional
information reL'ard]nQ this
transaction. The current scheduled date of closin- in Ntarch
2- 1998.
Sincerel@-.
Emens
r of Project Finance
cc: Rick Krichbaum
Ginny Brooks
Ron Stepanovic - Baker & Hostetler
Ntarshall Emas - En-lish, N/[cCaughan & O'B@,-an Sherry Stanley
- - Coll, Davidson, Carter
Gresa Huber - DeConcini, N,[cDonaid, Brammer Diane Jensen -
Pavese, Garner
LISAt;i-'! JP.El@,
12,?OOL71iii,er.,@DI-ii,e - Si@350-F,71-t.,-Jfyel-,,, Fh)l-
idz33907- Telephotie (9-8) 481-5600-Fdz.-v (941) 481-6667
OFFICER'S CERT]IFICATE
10% Subordinated Notes Due April 15, 2003
(Non-Recourse to the General Partner)
The undersigned, being an authorized officer of T & T
Resorts, L.C., a Florida limited liability company (the
"General Partner"), the General Partner of South Seas
Properties Company Limited Partnership, an Ohio limited
partnership (the "Partnership"), hereby certifies pursuant to
Section 1.2 of the Indenture, dated as of March 28, 1996, from
the Partnership to SunTrust Bank, Central Florida, National
Association (the "Indenture"), as follows:
I
I . The undersigned has read Sect'on 10.9 of the Indenture
and the definitions contained
in the Indenture relating to Section 10.9.
2. In order to form the basis of his belief set forth
in item 4 below, the undersigned sought and obtained an
independent appraisal from Arthur Andersen, LLP for the
Plantation View Shopping Center. Based solely on such
independent appraisal, the fair market value of the Plantation
View Shoppiniz Center exceeds 133% of the accregate principal
amount of Funded Indebtedness which will be incurred for the
acquisition. The undersigned has also calculated the Funded
Indebtedness at the time of the incurrence of Funded
Indebtedness and after giving pro forma effect thereto as if
such Funded Indebtedness had been incurred at the beginning of
the four full quarterly periods immediately preceding the date
of the acquisition and the Property Debt Service Coveraize
Ratio is greater than the required 1.25 to 1.
3 . The undersi I
_@ed believes that he has made such
examination as is necessary to enable him to express an
informed opinion as to whether the condition contained in
Section 10.9 has been complied with by the Partnership.
4. Based on the foregoing, the undersigned believes
that the acquisition of Plantation View Shopping Center falls
within the definition of Permitted Real Property Indebtedness
and, therefore, the conditions contained in Section 10.9 of the
Indenture have been complied with by the Partnership.
T & T RESORTS, L.C., General Partner of South Seas Properties
Company Limited Partnership
By- -
Richard E. Krichbaum, Vice President
OFFCERTIRE.IO
Indenture Agreement
Section 10.9 Funded lndebtness Limitation
Compliance Test Relating To Purchase of Plantation View
ShoppingCenter
For purposes of documentation of Compliance with the terms
and conditions as set forth in the Indenture dated March 28,
1996 between South Seas Properties Company Limited Partnership
(Partnership) and Sun Trust Bank, Central Florida (Trustee).
(See Indenture Agreement for page and paragraph references)
Page 7 - Permitted Real Property lndebtness, (ii) (a) and (b)
noted below.
(a) Fair Market Value (Appraised Value) equal to or exceeding
133% of the aggregate principal amount
Appraised Value @ 2/13/98 $2,900,000
Credit Lyonnais Loan at Closing $2,180,000
Ratio: 1.33
Required Minimum Ratio- 1.33
(b) Property Debt Service Coverage Ratio of at least 1.25
after proforma effect of such Funded Indebtedness.
Est. Consolidated Net Operating Profit
of the Property 255,235
Less- Capital Expenditure at 2.5%
of Gross Revenue of $255,235 (6,381)
Est. Consolidated Cash Flow of the Property $248,854
Proforma Consolidated Interest Expense
of the Property ($2,180,000 X 8.65%) $188,570
Ratio: 1.32
Required Minimum Ratio: 1.25
Note- These tests have been performed on an estimated
12/31/97 basis due to closing date being scheduled
for early March, 1998.
Conclusion: Based on the above test, the purchase of Plantation
View Shopping Center is in compliance with Section
10.9 Funded Indebtedness Limitation of the
Indenture Agreement dated March 28, 1996.
INDR=NTUR PVS/lo
