SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
SunVest Resorts, Inc.
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(Name of Small Business Issuer in Its Charter)
Florida 65-0693150
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
307 South 21st Avenue, Hollywood, Florida 33020
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(Address of Principal Executive Offices) (Zip Code)
(954) 922-6070
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(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
Name of Each Exchange
Title of Each Class on Which Registered
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None None
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Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.02 par value
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(Title of Class)
End page
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Part 1
(Alternative 2)
Item 6. Description of Business
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General
SunVest Resorts, Inc., a Florida corporation (the
"Company"), was created on August 6, 1996, through the merger of
Telshare International, Inc., a publicly-held Delaware
corporation, and two Florida corporations, Colony Plaza
Development, Inc. ("Colony"), and Cove Development, Inc.("Cove").
Teleshare International, Inc., had ceased operations in 1988, but
maintained its publicly held status. As a result of the merger,
the shareholders of Colony and Cove, Harvey Birdman, Diane
Birdman, Louis Birdman, Herbert Hirsch and Bonita Hirsch
(collectively, the "HB Group"), acquired 8,000,000 out of
8,866,000 shares of common stock outstanding, or 90.12% of the
outstanding stock of the Company. At the time of the merger,
Colony owned a newly acquired 302-room resort hotel called Colony
Plaza and located in Ocoee, west of Orlando, Florida, and Cove
owned a newly-acquired 173-room resort hotel called Pirates Cove
and located in Daytona Beach Shores, Florida. The Company
conducts all of its activities strictly through subsidiaries and,
as used herein, the term "Company" refers to SunVest Resorts,
Inc. acting through one or more subsidiary, unless the context
indicates otherwise. Colony and Cove are the Company's only
corporate subsidiaries. As discussed on page 4 below, the Company
also owns 100% of the membership interests in Lakeshore LC.
The HB Group, the members of which constitute the management
of the Company, See, Directors, Executive Officers and
Significant Employees, has engaged in the business of acquiring,
renovating and converting hotels into resort hotel condominiums
("condotels") and multi-family rental projects into primary and
second home condominium communities for the last ten years.
Through the end of 1999, the HB Group had converted 11 condotels
and multi-family projects, containing 1711 units with an
aggregate sell-out price of $70.3 million.
Current Business and Properties
The Company converts hotels into condotels and develops
large-scale age-focused communities called "active adult
communities (AACs)." All of the Company's current projects are
located in Florida.
Condotels
Conversion into condotels is accomplished through the
purchase and renovation of resort hotels. A typical project
consists of substantial interior and exterior renovation and
upgrading of the existing property through the installation of
kitchens, and other condominium amenities, upgrading bathrooms
and renovation of the common areas such as the front desk,
swimming pool, tennis courts, restaurant, lounge, gift shop and
laundry facility.
As discussed below, in its two condotel projects, Colony
Plaza and Pirates Cove, the Company has retained ownership and
responsibility for the operation of the front desk,
End page 2
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restaurant, lounge and gift shop (the "Commercial Component").
The Company has outsourced property maintenance, laundry, rental
and resale agent services to organizations experienced in
hotel/condominium management under 15-year contracts, expiring in
February 2011 (with respect to Colony Plaza) and in September
2010 (with respect to Pirate's Cove). These organizations manage
the units for the owners and retain 55% of the total rental
income and pay 45% of the total rental income to the unit owners.
The Company receives 3% of the gross revenue from rental
operations and 5% of the gross revenue from food and beverage
operations.
Since 1996, the Company has converted Colony Plaza and
Pirates Cove. Colony's total investment in Colony Plaza was
approximately $6.25 million financed by means of a $1,548,000
first mortgage loan from BankAtlantic FSB, Ft. Lauderdale,
Florida ("BankAtlantic"), personally guaranteed by members of the
HB Group, and a three-year, 18% second mortgage loan from
Mortgage Investment Group 9, Ltd., a Florida limited partnership
("MIG-9"). The general partner of MIG-9, owning a 1% general
partnership interest, is an entity owned by the HB Group; the
members of the HB Group have also purchased 18% of the limited
partnership interests in MIG-9 at the same price as the other
limited partners. In 1996, 25 units at Colony Plaza were
transferred by Colony to Holiday Vacation Ventures, a Florida
general partnership ("HVV"), in exchange for a 65% partnership
interest. HVV, in turn, sold timeshare interests in such units.
As of September 30, 1999, Colony owned the Commercial Component
of Colony Plaza and HVV owned approximately 200 weeks in
timeshare interests. All of the remaining 277 units were owned by
individual unit owners.
Cove's total investment in Pirates Cove was approximately
$5.4 million, financed by means of a $1,258,000 first mortgage
loan from BankAtlantic, personally guaranteed by members of the
HB Group, and a $1,300,000 second mortgage loan from Mortgage
Investment Group 10, Ltd. ("MIG-10"). MIG-10 has been structured
identically to MIG-9. As of September 30, 1999, the assets of
Cove consisted of the Commercial Component of Pirates Cove and
eight (8) unsold condotel units, from which Cove derived rental
income on the same basis as the individual owners of the other
165 units.
Active Adult Communities
AAC's are large-scale master planned communities for active
adults age 55 and over. A typical AAC is a complex of
individually-owned garden style or multi-story residences, with
resort-type amenities, such as swimming pool, tennis court and
fitness center, as well as amenities associated with permanent
residence, such as community center, hobby rooms, and convenience
store. AACs are a segment of the resort market experiencing above-
average growth due to the general aging of the U.S. population
with, according to Modern Maturity, the number of Americans over
age 55 projected to grow to 75 million by 2010. The resulting
increase in demand for AAC units is projected to occur as "baby
boomers" acquire second homes to be used as eventual retirement
residences.
The Company entered the AAC business in late 1998 by
acquiring, through a wholly-owned Florida limited liability
company, Lakeshore Club Development LC ("Lakeshore LC"),
Lakeshore Club. Lakeshore LC was established by the Company by
means of a nominal contribution to capital. Lakeshore Club is a
complex of 500 already existing garden-style
END PAGE 3
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units set on 110 acres in Fedhaven, Polk County, Florida, 10
miles east of Lake Wales, 45 miles south of Disney World, in
Orlando, Florida, and on a 7500-acre Lake "Walk in the Water".
The sports-related amenities will include a fishing pier,
marina, lakefront promenade, tennis courts, exercise rooms,
miniature golf course and driving range and baseball, basketball,
volleyball and handball courts. In addition, it will contain
community amenities such as a clubhouse, 350-seat theater for
shows and social events (under the direction of a full-time
social director), arts and crafts rooms, library, bank, post
office, laundromat, beauty salon, restaurant/convenience store,
as well as a 24-hour, on-call paramedic emergency service and an
on-site fire department.
Lakeshore LC acquired Lakeshore Club for $5.5 million and
expects to spend an additional $7.5 million in renovation costs
of the 500 units and the common areas, for a total investment of
$26,000 per unit in combined construction and acquisition costs.
The total cost of the 500-unit conversion, including soft costs
(i.e. interest, marketing, advertising and support personnel
costs) and $5.5 million in acquisition costs, is estimated at
$20.1 million. A projected total sellout of $33.0 million is
expected, with an average sales price per unit of $66,000.
Lakeshore LC has financed the acquisition and initial
renovation and other costs of the Lakeshore Club through a $6.2
million first mortgage from BankAtlantic and a $2.5 million
second mortgage loan from Mortgage Investment Group 20, Ltd. (MIG-
20"). MIG-20 has been structured identically to MIG-9 and MIG-10.
The terms of the first mortgage are: maturity date of September
1, 2001 and interest rate at prime + 1 1/2%. The terms of the second
mortgage are: maturity December 2001, interest rate 18%, with no
principal amortized. Management believes that the proceeds from
the two loans and net proceeds from the sale of units will be
sufficient to carry out the 500-unit conversion and common areas
construction and renovation through complete sellout. As of
December 31, 1999, the conversion and renovation of 60 among the
Lakeshore Club units was substantially completed. On January 14,
2000, Lakeshore LC closed on the sale of the first of such units.
The 110-acre parcel can accommodate up to 200 additional
garden-style units. Having already received the appropriate
approvals from Polk County, if Lakeshore LC achieves satisfactory
results in selling the existing 500 units, it will construct the
additional units at a cost of approximately $50,000 per unit. The
aggregate sellout price, at an average of $85,000 sales price per
unit for the 200 units, is projected to be $17.0 million.
On December 30, 1999, Lakeshore LC acquired, for $1.8
million, 420 acres of undeveloped land contiguous to Lakeshore
Club. Lakeshore LC financed this purchase by means of a $1.3
million first mortgage seller-financed loan and a $500,000 second
mortgage loan from Mortgage Investment Group 24, Ltd. ("MIG-24").
MG-24 has been structured identically to MIG-9 and MIG-10. This
phase II parcel has the capacity for the development of up to
2000 AAC units and a golf course. The Company intends to develop
this parcel in phases after the 700 units at Lakeshore Club are
substantially sold.
Construction
Presently, all renovation activities are carried out by the
Company through third party general contractors and
subcontractors, under the supervision of the Company's
management. If the Company were to expand its development as
opposed to renovation activities, the Company
END PAGE 4
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would become subject to the risks and challenges typically
associated with development. Among such risks are construction-
related risks, e.g. weather, local labor conditions and
availability of materials and supplies. Among such challenges is
proper coordination between construction of units with unit sales
orders in order to control the costs and risks associated with
completed but unsold inventory.
Marketing and Sales Activities
Domestically, the Company markets its condotels through
newspaper and other advertising and contacts within real estate
brokerage firms in the area where the project is located. In
Puerto Rico and South America, where the Company has discovered a
significant as yet untapped market for their products, the
Company markets through newspaper advertising and local real
estate brokerage companies. Sales to residents of Puerto Rico
and South America are facilitated by a program developed by the
Company for verifying the income, employment status and credit
history of these customers thus facilitating their obtaining
acquisition financing from U.S. lending institutions.
The Company's marketing activities in connection with the
Lakeshore Club are and will be focused on 50 and over active
adults in South Florida, New York, New Jersey, Massachusetts,
Michigan, Ohio, Illinois, Wisconsin and Ontario and Quebec,
Canada. The Company will use advertising in retirement
publications, newspapers, radio and television and through an in-
house telemarketing program. To attract attention from potential
purchasers travelling through Central Florida for vacation or
otherwise, the Company has secured over two dozen billboards
located along key stretches of highways connecting Fedhaven to
Orlando, Tampa and South Florida.
While more than one factor may contribute to a given sale,
the Company believes that a substantial portion of sales at its
AAC will be attributable to follow-ups on referrals from
residents of these communities and to exposing potential
purchasers to the AAC experience. As a result, as more units at
the Lakeshore Club become renovated and all the amenities are
completed, the Company will implement a program which enables
prospective purchasers to visit and stay (for a modest charge) in
vacation homes for a few days to one week to experience the
Lakeshore Club lifestyle prior to deciding whether to purchase a
home. The Company sells all of its units through in-house
commissioned sales personnel.
Employees
Since its inception and as of September 30, 1999, the
Company had no employees. However, as of that date, the Company
leased the services of 95 full-time employee equivalents, which
are being leased from an independent employee leasing company.
Substantially all of such personnel work within the state of
Florida, primarily at the Company's main office complex located
in Hollywood, Broward County, Florida, and in various sales
offices throughout the state and Puerto Rico.
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Regulation
The Company's sales and operations are subject to regulation
by the federal government and by the State of Florida. On a
federal level, the Federal Trade Commission enforces the Federal
Trade Commission Act, which prohibits unfair or deceptive acts or
competition in interstate commerce. Other federal legislation to
which the Company is or may be subject is contained in the
Securities Act of 1933, as amended, the Securities and Exchange
Act of 1934, as amended, the Truth-in-Lending Act and Regulation
Z, the Equal Opportunity Credit Act and Regulation B, the
Interstate Land Sales Full Disclosure Act and the Civil Rights
Acts of 1964 and 1968. In Florida, the Condominium Act and the
rules and regulations promulgated thereunder as administered by
the Division of Land Sales, Condominiums and Mobile Homes of the
Department of Business and Professional Regulations, provide the
most significant regulation of its conversion business. Florida
law requires the Company to file and obtain approval for a
detailed offering statement describing its business and all
material aspects of a proposed development and sale of fee simple
interests. The Company is required to deliver the offering
statement to all prospective purchasers, together with certain
additional information concerning the terms of the purchase.
Florida law also permits the purchaser of a fee simple interest
to cancel a contract of purchase at any time within 15 calendar
days following the date on which the purchaser has received the
last of the documents that Florida law requires the seller to
provide. The Company believes that it is in material compliance
with all federal and state laws and regulations to which it is
currently or may be subject. Any failure to comply with
applicable laws or regulations could have a material adverse
effect on the profitability of the Company.
Market and Competition
The Company is subject to significant competition from other
entities engaged in the business of resort development, sales and
operation. The condotel and condominium conversion segment of
the Company's business, which is focused in Florida, is
fragmented and localized. Competitors are typically private and,
often, single-project companies. Some may have greater capital
resources than the Company.
The AAC market in Florida is similarly locally-based and
fragmented, but, recently, it has attracted at least one leading
national AAC developer, Del Webb Corporation, which has recently
acquired the Spring Creek communities near Ocala, Florida. Many
of these local and national entities possess significantly
greater financial, marketing, personnel and other resources than
the Company. In addition, there are many hotels and other
vacation resorts in Florida that provide competitive alternatives
to the purchase of a home in the Company's AAC community. The
Company believes, however, that it will compete effectively with
these other entities on the basis of the quality of the homes and
amenities and the very competitive prices it is able to provide
at Lakeshore Club.
Certain Factors Affecting the Company's Operations
Set forth below is a brief description of certain matters
that may affect the Company and its operations:
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Financing and Leverage.
The maturity dates, interest rate and outstanding balance
(as of September 30, 1999) of the Company's mortgage loans were
as follows:
Maturity Interest
Borrower Lender Secured by Date Rate Balance
- -------- ------ ---------- ------- --------- ---------
Lakeshore LC MIG-20 Phase I of Oct. 1, 2001 18% 2,500,000
Lakeshore Club
Lakeshore LC MIG-24 420 Acres July 1, 2001 18% 500,000
(Phase II land)
Lakeshore LC BankAtlantic Phase I Oct. 1, 2002 Prime 6,513,726
FSB Lakeshore Club + 1.5%
Lakeshore LC Lightsey 420 acres April 1, 2009 8% 1,350,000
(Seller) (Phase II land)
Colony (as a Litchfield Timeshare March 31, 2000 Prime 323,466
partner in HVV)Financial Corp interests + 3%
Colony (as a Litchfield A/R from sales Revolving loan Prime 422,343
partner in HVV)Financial Corp of timeshare with no + 3%
Interests maturity date
Colony Union Bank Commercial April 29, 2003 8 3/4% 378,189
Component at
Colony Plaza
Cove BankAtlantic 8 unsold units June 30, 2000 10.25% 375,000
Cove Vacation 8 unsold units Demand 12.00% 200,000
Investment (2nd mortgage)
Plan, Inc.
("VIP")(an
entity owned
by the HB Group)
Cove Union Bank Commercial April 29, 2003 8 3/4% 227,476
Component at
Pirates Cove ----------
TOTAL $12,790,200
Copies of the documents relating to the material among these
mortgages (those with an outstanding balance in excess of
$500,000) are attached as Exhibits 6(a).1, 6(a).2, 6(a).3 and 6(a).4.
As shown above, of the mortgage loans, only the loan from
Litchfield Financial Corp to Colony (as a partner in HVV),
secured by timeshare interests, with a principal amount of
$323,466 (at September 30, 1999) and the loans from BankAtlantic
and VIP to Cove, secured by the 8 unsold units, with an aggregate
principal amount (at September 30, 1999) of $575,000, are due in
their entirety in the next twelve months. With respect to the
Litchfield loan, HVV has been repaying this loan from proceeds of
sales of timeshare interests; in fact, the principal balance of
this loan as of December 31, 1999, was reduced to $213,102.
Should such proceeds generated in the next three months not be
sufficient to repay this loan, management believes that HVV will
be able to refinance it with the current lender or any one of the
many other lenders in the Orlando area specializing in timeshare
financing. With respect to the loans to Cove secured by the 8
unsold units, management believes that the fair market value of
this collateral significantly exceeds the amount of both
mortgages and that Cove would be able to refinance the
BankAtlantic loan and the VIP loan if a sufficient number of
units is not sold before June 30, 2000.
As shown on Exhibit A to the note attached as Exhibit
6(a).3, the terms of the acquisition/construction loan to
Lakeshore LC from BankAtlantic do call for certain principal
payments. However, under the note, the borrower has 120 days to
make up a shortfall in principal reduction for a given quarter.
By operation of both of these provisions, Lakeshore LC's
principal repayment obligations for the next twelve months under
the BankAtlantic note are, in the aggregate, $2.7 million
($225,000 + $787,500 + $1,012,500 + $675,000). These principal
repayment requirements must be read in light of the arrangement
informally agreed to by BankAtlantic that $25,000 from the
proceeds of each of the first 150 units at Lakeshore Club would
be paid to the lender as a release price and that $37,500 of such
proceeds from the sale of each of the other 350 units would be
paid to the lender as a release price. The Company projects a
sell-off of $10.428 million in units at Lakeshore Club during
2000, giving BankAtlantic a total reduction of principal
(including repaying $1,325,000 in additional advances during
2000) of $4,012,500, an amount substantially higher than the $2.7
million aggregate amount in principal reduction called for in the
note.
In the event sales of units at Lakeshore Club occur slower
than projected, management intends to obtain a modification of
the loan delaying principal repayments further into the future.
Management has already advertised Lakeshore Club for sale with
the view to selling Phase I at a price at least sufficient to
repay all indebtedness of Lakeshore LC, except the seller
financing with respect to the 420 acres. Under the worst
scenario, where no significant sales of units take place,
management believes that it has at least until June 30, 2000, to
convert Lakeshore Club into a rental project and refinance it as
such. In this connection, it is to be noted that before its
acquisition by Lakeshore LC, Lakeshore Club was an entirely
rental project and that the units not yet converted are still
being rented by Lakeshore LC, yielding during 1999 approximately
$500,000 in rental income. Management believes that, if
necessary, the units at Lakeshore Club could be slightly
refurbished and the project would be a viable rental property
that could carry the existing debt on Lakeshore Club and the
Phase II land.
In terms of the Company's debt service requirements in the
next twelve months with respect to the mortgage loans owed by
Cove, the combination of rental income from the 8 unsold units
and Cove's share of the revenue from the Commercial Component in
2000 is projected to
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be sufficient - if none of these units or the Commercial
Component itself are sold and these loans are not paid off - to
pay the approximately $82,341 in debt service for the twelve
months. Colony's Commercial Component is subject to an agreement
under which it would be sold by Colony for an aggregate purchase
price of $625,000, with a closing scheduled for February 1, 2000.
Under the terms of this purchase, Colony would repay the Union
Bank mortgage to which the property is subject within nine months
after the closing, i.e. using the $100,000 down payment and a
portion of the first three $131,250 quarterly installments due
under the terms of the sale. The documents relating to this
proposed sale are attached as Exhibit 6(a).5.
The loans to HVV from Litchfield Financial Corp. would, in
the aggregate, require a debt service of approximately $67,000
over the next twelve months. HVV's income from rental of the
units and sales of timeshare interests in the units will be
sufficient to carry the two loans. The timeshare interests are
listed for sale as a block at a price which would repay the two
loans.
The interest component of the debt service requirements of
Lakeshore LC over the next twelve months would, of course, be
paid in full if the projected sales of 158 units, yielding
$10.428 million in net proceeds, were to occur during 2000. In
the absence of significant sales of units, as stated above,
management's options would be to obtain a modification of the
BankAtlantic and MIG-20 loans, refinance with a new lender or
refinance Lakeshore Club as a rental project.
During 1998 and 1999, the Company's cash flow needs were
partially met by means of advances from the HB Group and entities
controlled by the HB Group. As of September 30, 1999, the amounts
advanced to Cove, Colony and Lakeshore LC were as follows:
Obligee Amount
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Herbert Hirsch $311,864
Diane Birdman 203,892
Harvey Birdman 183,244
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TOTAL $679,000
VIP 693,000
Corporate Realty Services, Inc.
(accrued fees for administrative support services)
and P.D. Payroll Corp
(accrued payroll service fees) 76,100
------
TOTAL $769,100
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GRAND TOTAL $1,448,100
These advances have accrued interest at 12% and are due on
demand. Management anticipates repaying the advances from VIP
whenever the timeshare interests owned by Colony are sold. The
accrued administrative support and payroll service fees fluctuate
with the needs of the Company's subsidiaries and are really in
the nature of an operating expense. With respect to the advances
from the three shareholders, the Company and the shareholders are
in the process of negotiating a repayment plan which takes into
account the Company's projected cash flow needs in 2000.
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In general terms, as a result of acquiring Lakeshore Club
and the adjacent land, the Company is currently highly leveraged.
The Company's degree of leverage from time to time will affect
its net available capital resources, which could limit its
ability to capitalize on business opportunities or withstand
adverse changes.
Cyclical Nature of Real Estate Operations and Other
Conditions Generally. All of the Company's projects are subject
to real estate market conditions (both where they are located and
in areas where potential customers reside), the cyclical nature
of real estate operations, general national economic conditions
and changing demographic conditions. These are long-term projects
and sales activity varies from period to period, with the
ultimate success of any project not to be judged by results in
any particular period or periods. A project may generate
significantly higher sales levels at inception (whether because
of pent-up demand or other reasons) than it does during later
periods. Revenues and earnings of the Company will also be
affected by period-to-period fluctuations in the mix of product
and unit closing among the Company's projects.
Profitability of the Company's real estate operations also
depend upon the availability and cost of mortgage financing
available to the potential buyers of its units. An increase in
interest rates, which may result from governmental policies and
other factors outside the control of the Company, may adversely
affect the buying decisions of potential unit buyers and their
ability to sell their existing homes.
Geographic Concentration. The Company's current business
operations are centralized in Florida. This geographic
concentration and limited number of projects may create increased
vulnerability to regional economic downturns or adverse project-
specific matters.
Potential Mergers. On July 1, 1999, the Company entered
into an Agreement and Plan of Merger with SellMAX.com, Inc., a
start-up e-commerce company specializing in selling high-ticket
items over the Internet in a non-auction arrangement. The
agreement became effective on September 3, 1999. Under the terms
of the agreement, SellMAX would have merged into the Company,
with the SellMAX shareholders receiving 90% of the equity of the
Company and its management becoming the management of the
Company. Also, at the closing of the merger, the Company would
have sold its stock in Colony and Cove and its membership
interest in Lakeshore LC to the HB Group in a transaction
determined to be fair to the shareholders of the Company other
than the members of HB Group by an independent appraisal firm.
In the course of due diligence, both parties reached the
conclusion that a merger would not be in the best interests of
the parties and its shareholders. All negotiations were,
therefore, terminated on November 13, 1999.
In the next twelve months, management intends to continue
its efforts to enhance the Company's ability to raise equity
capital and thus facilitate a more active trading market for the
Company's stock and liquidity for the shareholders. This
objective is more likely to be achieved by means of a merger of
the Company with a merger partner conducting a business which is
perceived by the capital markets as having a higher growth
potential than the Company's existing real estate business.
Management intends, therefore, to pursue merger opportunities
END PAGE 10
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with companies conducting a technology-related business, as well
as companies with exceptional potential in the real estate
business.
Forward Looking Information; Certain Cautionary Statements.
Certain statements contained in this Registration Statement
that are not historical results are forward looking statements.
These forward looking statements involve risks and uncertainties
including, but not limited to, those referred to above. Actual
results may differ materially from those projected or implied.
Further, certain forward looking statements are based upon
assumptions of future events which may not be accurate.
Item 7. Description of Property.
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Except for its conversion and development projects, the
Company does not own any property. The Company's executive
offices are located at 307 South 21st Avenue in Hollywood,
Florida, in a 2,500 square foot building owned by VIP. In 1998
and 1999 (9 months), respectively, the Company paid $27,000 and
$21,000, respectively, in rent to VIP.
Item 8. Directors, Executive Officers and Significant
Employees.
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Position with the Issuer, Term of
Service;
Name Age Business Experience and Family Relationships
- ---- --- --------------------------------------------
Herbert Hirsch 59 Mr. Hirsch has served as President and a director of
the Company since August 1996. Mr. Hirsch's primary
responsibilities are to coordinate all sales and
marketing activities, to review and approve all sales
contracts and closings and to coordinate all
advertising efforts. Since 1990, Mr. Hirsch, as a
member of the HB Group, has been a principal with
several single project entities engaged in the resort
condominium and second home residential condominium
conversion and development business.
Harvey Birdman 61 Mr. Birdman has served as Executive Vice President
and a director of the Company since August 1996. Mr.
Birdman's primary responsibilities are to initiate
all project acquisitions, to arrange all financing
and to analyze all strategic and project planning.
Since 1990, Mr. Birdman, as a member of the HB Group,
has served as a principal with several single-project
entities engaged in the resort condominium and second
home residential condominium conversion and
development business. Mr. Birdman is the husband of
Diane Birdman and father of Louis Birdman.
Diane Birdman 55 Mrs. Birdman has served as a Vice President, the
Treasurer and a director of the Company since August
1996. Mrs. Birdman's primary responsibilities are to
coordinate the administration of the condominium
associations at the resort properties owned and
END PAGE 11
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developed by the Company and to oversee the
accounting department. Since 1990, Mr. Birdman, as a
member of the HB Group, has served as a principal
with several single-project entities engaged in the
resort condominium and second home residential
condominium conversion and development business. Mrs.
Birdman attended Broward Community College, where she
majored in Accounting, and attended Temple
University, where she majored in Business. Mrs.
Birdman is the wife of Harvey Birdman and the mother
of Louis Birdman.
Louis Birdman 35 Mr. Birdman has served as a Vice President, the
Secretary and a director of the Company since August
1996. Mr. Birdman's primary responsibilities are to
manage all design and construction activities, as
well as to interact with municipal planning, zoning
and building officials. Mr. Birdman is the owner of
Louis Birdman Architect, P.A., and was the co-founder
and principal-in-charge of ARC Avenue, Inc., from
1985-1995 and co-founder of ARC-CON Design Build,
Inc., - General Contractors, where he was principal-
in-charge from 1989-1995. Mr. Birdman is a registered
architect in Florida and a certified member of the
National Council of Architectural Registration
Boards. He received his Bachelor's degree in Design
and Architecture from the University of Florida and
his Bachelor's degree in Architecture from the
University of Miami. Mr. Birdman is the son of Harvey
and Diane Birdman.
Cary Greenberg 52 Mr. Greenberg has served as Vice President and Chief
Financial Officer of the Company since March 1998.
Mr. Greenberg's primary responsibilities include
oversight of the financial accounting and internal
controls systems of the Company. In addition, he
participates in the analysis of the financial
feasibility of proposed projects. Prior to joining
the Company, Mr. Greenberg served for twelve years as
the Chief Financial Officer of a subsidiary of
American Greetings Corporation. Greenberg is a
Certified Public Accountant in New York, Florida and
Texas.
Item 9 Remuneration of Directors and Officers.
(a) Name of Individual Capacity in Which Aggregate
or Identity of Group Remuneration was Received Remuneration
-------------------- ------------------------- ------------
3 highest paid Directors, President, Vice- $0
directors and President, and Treasurer
executive officers or Secretary
as a group
(b) Remuneration pursuant to ongoing plan or arrangement. None.
END PAGE 12
- -----------
Item 10. Security Ownership of Management and Certain Security Holders.
--------------------------------------------------------------
The following table sets forth information about the voting
securities held of record as of November 9, 1999, by each of the
officers and directors of the Company and all such persons as a
group:
Name and Address Percent
Title of Class of Owner Amount Owed of Class
- ------------------- -------------------- ------------------- --------
Common Stock, Herbert Hirsch 1,445,000 Shares 16.05%
$.02 par value 307 S 21st Ave.
Hollywood, FL 33020
Common Stock, Harvey Birdman 1,266,000 Shares 14.07%
$.02 par value 307 S 21st Ave.
Hollywood, FL 33020
Common Stock, Diane Birdman 1,517,000 Shares 16.86%
$.02 par value 307 S 21st Ave.
Hollywood, FL 33020
Common Stock, Louis Birdman(1) 1,855,000 Shares 20.61%
$.02 par value 307 S 21st Ave.
Hollywood, FL 33020
All Officers and
Directors as a Group 6,083,000 67.59%
* Percentages are based on 9,000,000 shares of Common Stock
issued and outstanding on November 9, 1999.
(1) Includes 100,000 Shares owned by Mr. Birdman's children. Mr.
Birdman disclaims beneficial ownership of such shares.
The following table sets forth information as of November 9,
1999, about each shareholder who owns more that 10% of any class
of the Company's securities:
Percent
Title of Class Name and Address of Owner Amount Owned of Class
- -------------- ------------------------- ------------ --------
Common Stock, Herbert Hirsch 1,445,000 Shares 16.05%
$.02 par value 700 S. Ocean Blvd., #1106
Boca Raton, Florida 33432
Common Stock, Harvey Birdman 1,266,000 Shares 14.07%
$.02 par value 3755 NE 214th Street
Aventura, Florida 33180
END PAGE 13
- -----------
Common Stock, Diane Birdman 1,517,000 Shares 16.86%
$.02 par value 3755 NE 214th Street
Aventura, Florida 33180
Common Stock, Louis Birdman(1) 1,855,000 Shares 20.61%
$.02 par value 3755 NE 214th Street
Aventura, Florida 33180
Common Stock, Bonita Hirsch(2) 1,747,000 Shares 19.41%
$.02 par value 700 S. Ocean Blvd., #1106
Boca Raton, Florida 33432
All Officers and
Directors as a Group 6,083,000 67.59%
* Percentages are based on 9,000,000 shares of Common Stock
issued and outstanding on November 9, 1999.
(1) Includes 100,000 Shares owned by Mr. Birdman's children. Mr.
Birdman disclaims beneficial ownership of such shares.
(2) Includes 300,000 shares owned by Mrs. Hirsch's grandchildren.
Mrs. Hirsch disclaims beneficial ownership of such shares.
As of November 9, 1999, there are no outstanding options,
warrants or other rights to purchase securities from the Company.
Item 11. Interest of Management and Others in Certain Transactions.
---------------------------------------------------------
Employee Leasing
Until May, 1999, the Company leased employees providing
personnel-related services from P.D. Payroll Corp., a Florida
corporation owned by the HB Group ("PD"). PD employed the sales,
administrative and in-house construction personnel relating to
properties converted by the Company. In addition, PD provided
centralized payroll and personnel services, including worker's
compensation administration. The Company reimbursed PD at cost
for the salaries and benefits of such personnel. In the last two
years, the Company paid $374,000 to PD. As stated above, since
May 1999, these employees have been employed by an unrelated
company.
The Company has received administrative support from
Corporate Realty Services, Inc. ("CRS"), 48% of which is owned by
the HB Group. The administrative support services have included
such services as record keeping, accounting, use of office
equipment and management services for each of the properties
converted by the Company. The Company pays CRS a base rate fee of
$229,000 per annum plus expenses, which management believes
represents an arms-length, fair price for such services. CRS
maintains credit with suppliers and is reimbursed for the cost of
supplies incurred in connection with the services provided to the
resort properties. In the last two years, the Company has paid
$360,000 to CRS.
END PAGE 14
- -----------
Other Transactions
From time to time, in order to help the Company meet its
cash flow obligations, members of the HB Group and entities
controlled by them have made advances to the Company. These
advances have been unsecured and have carried an interest rate of
12%. During 1998, the Company made advances in the total amount
of $335,000 to one or more entities controlled by the HB Group.
These advances were unsecured, carried interest at 12% and were
repaid in their entirety in January 1999. As of September 30,
1999, the Company owed $679,000 to members of the HB Group and
$814,000 to entities controlled by the HB Group.
Members of the HB Group own 100% of the stock of the general
partner of MIG-9, MIG-10, MIG-20 and MIG-24, each a limited
partnership which is a second mortgage lender to Colony, Cove and
Lakeshore LC, respectively. The HB Group also owns an 18% limited
partnership interest in each of MIG-9, MIG-10, MIG-20 and MIG-24,
which it acquired on the same terms as the other limited
partners. The mortgage loans held by MIG-9 and MIG-10 have been
repaid as of December 31, 1998. In the last two years, the HB
Group received in the aggregate $49,750 in their distributive
share of interest received by MIG-9, MIG-10, MIG-20 and MIG-24.
Item 12. Securities Being Offered.
------------------------
The Company is authorized by its Articles of Incorporation
to issue 25,000,000 shares of common stock, $.02 par value, which
is the only class of equity securities authorized.
Shareholders are entitled to one vote per share on all
matters to be voted on by shareholders and are not entitled to
cumulate their votes in the election of directors, which means
that the holders of a majority of the shares voting for the
election of directors can elect all of the directors then
standing for election should they choose to do so. Shareholders
are entitled to receive dividends, if any, as may be declared
from time to time by the Board of Directors, from funds legally
available therefor. Shareholders are entitled to share pro rata
in any distribution to the holders of common stock in the event
of any liquidation, dissolution or winding-up of the Company.
The Company's Common Stock is covered by an SEC rule that
imposes additional sales practice requirements on broker-dealers
who sell such securities to persons other than established
customers and accredited investors, generally institutions with
assets in excess of $5,000,000 or individuals with net worth in
excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse. For transactions covered by
the rule, the broker-dealer must make a special suitability
determination for the purchaser and transaction prior to the
sale. Consequently, the rule may affect the ability of broker-
dealers to sell the Company's securities nad also may affect the
ability of purchasers of these securities to sell their shares in
the secondary market. It may also cause less broker-dealers
willing to make a market and it may affect the level of news
coverage the Company receives.
End page 15
- -----------
PART II
Item 1. Market Price of and Dividends on the Common Equity and Other
Shareholder Matters.
------------------------------------------------------------
The Company's Common Stock is traded on the OTC Bulletin
Board under the symbol "SUNE." The following table sets forth the
range of high and low bids for the Common Stock within the last
eleven quarters as reported by NASDAQ. These quotations reflect
inter-dealer prices that without retail mark-up, mark-down or
commission and may not represent actual transactions.
1st Quarter 2nd Quarter 3rd Quarter
4th Quarter
High Low High Low High Low High Low
Bid Bid Bid Bid Bid Bid Bid Bid
---- ---- ---- ---- ---- ---- ---- ----
1997 1 5/8 1 1/2 1 5/8 1 1/2 1 5/8 1 1/2 1 5/8 1 1/2
1998 2 1 3 5/8 2 1/2 2 1 4 1/4 1 1/4
1999 2 1/2 1/2 3 1 1/2 2 7/8 1 7/8 ----- -----
As of September 30, 1999, the Company had 431 shareholders
of record.
The Board of Directors has not declared and the Company has
not paid any dividends during the last eleven quarters.
Item 2. Legal Proceedings.
-----------------
The Company is not a party to, nor is any of its property the
subject of any material pending legal proceeding which is not
routine litigation that is incidental to its business or any
other material legal proceeding.
Item 3. Changes in and Disagreements With Accountants.
----------------------------------------------
The Company made no change in, and had no disagreements
with, its accountants.
Item 4. Recent Sales of Unregistered Securities.
----------------------------------------
On October 30, 1998, the Company issued 11,500 shares of
Common Stock to 115 individuals, all of whom were either
employees leased to the Company or consultants or advisors to the
Company and none of whom were members of the HB Group or their
immediate families. These shares were issued for no consideration
and under a one-time bonus plan. All of the recipients received
and executed a contract relating to the bonus plan. This offering
was made in reliance on the exemption from the registration
requirements under the Securities Act of 1933 set forth in Rule
701 to such Act.
On October 1, 1999, the Company issued, 122,468 shares of
Common Stock to four individuals in consideration of their
efforts in assisting the Company in identifying potential
opportunities for merger partners in the technology area. In
exchange for the shares, the individuals had foregone the receipt
of approximately $61,234 in consulting fees. All of these
END PAGE 16
- -----------
individuals qualified as "accredited investors" within the
meaning of Rule 501(a) of Regulation D and acquired such shares
for investment and not with the view to distribution. This
offering was made in reliance on the exemption from the
registration statements under the Securities Act of 1933 set
forth in Section 4(2) of such Act.
Item 5. Indemnification of Officers and Directors.
------------------------------------------
Under section 10.1 of the Company's Bylaws, the Company will
indemnify its directors and officers to the full extent permitted
under the Florida Business Corporation Act.
PART F/S
Following are:
1. Consolidated Financial Statements together with Independent
Auditor's Report of SunVest Resorts, Inc. for years ended
December 31, 1998 and 1997.
2. Consolidated Balance Sheets (unaudited) of SunVest Resorts, Inc.
as of September 30, 1999 and Consolidated Statements of Income and
Cash Flow (unaudited) for the nine months ended September 30, 1998
and the nine months ended September 30, 1999.
END PAGE 17
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
INDEPENDENT AUDITORS' REPORT
AND
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
END PAGE 18
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
YEARS ENDED DECEMBER 31, 1998 AND 1997
CONTENTS
PAGE
Independent auditors' report 1
Consolidated financial statements:
Consolidated balance sheets 2
Consolidated statements of operations 3
Consolidated statements of shareholders' deficit 4
Consolidated statements of cash flows 5 - 6
Summary of significant accounting policies 7 - 10
Notes to consolidated financial statements 11 - 19
End page 19
- -----------
HIXSON, MARIN, POWELL & DESANCTIS, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
DAVID L. HIXSON, C.P.A. * RAYMOND F. MARIN, C.P.A.
DONALD F. POWELL, C.P.A. * PETER V. DeSANCTIS, C.P.A.
16100 N. E. 10th AVENUE, SUITE B 3300 PGA BOULEVARD
NORTH MIAMI BEACH, FL 33162 GARDENS PLAZA, SUITE 601
DADE: (305) 944-7001 PALM BEACH GARDENS, FL 32410
BROWARD: (854) 920-1311 TEL: (561) 824-5700
FAX: (305) 944-6637 FAX: (561) 824-5702
RESPOND TO: [] RESPOND TO: []
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Sunvest Resorts, Inc. and Subsidiaries
Hollywood, Florida
We have audited the accompanying consolidated balance sheets of
Sunvest Resorts, Inc. and Subsidiaries as of December 31, 1998
and 1997, and the related consolidated statements of operations,
shareholders' deficit and cash flows for the years then ended.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Sunvest Resorts, Inc. and Subsidiaries, as of
December 31, 1998 and 1997, and the results of their operations
and their cash flows for the years then ended in conformity with
generally accepted accounting principles.
/s/ HIXSON, MARIN, POWELL & DESANCTIS, P.A.
North Miami Beach, Florida
June 15, 1999
END PAGE 20
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - DECEMBER 31,1998 AND 1997
ASSETS
1998 1997
________ ________
Cash and equivalents $852,800 $423,400
Deposits held in escrow 166,400 204,000
Mortgage notes receivable 1,096,100 1,947,100
Condominium units held for sale 1,602,200 2,963,700
Condominium units underdevelopment 2,958,200 -
Income producing property 3,747,800 914,400
Land held for future development 1,842,500 28,400
Deferred costs 313,000 455,700
Deferred tax asset 231,500 169,800
Other 154,900 121,900
----------- ----------
$12,965,400 $7,228,400
=========== ==========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Liabilities:
Notes and mortgages payable $11,298,200 $5,043,700
Accounts payable and accrued liabilities 590,000 466,100
Deposits on sales contracts 61,400 142,800
Due to condominium associations 56,300 63,800
Advances from shareholders 967,700 1,237,800
Due to related parties 718,800 793,600
Deferred tax liability - 79,000
----------- ----------
13,692,400 7,826,800
----------- ----------
Minority interest 114,900 50,100
----------- ----------
Shareholders' deficit:
Common stock, $.02 par, authorized 25,000,000 shares;
issued and outstanding 8,877,532 shares in 1998 and
8,866,032 shares in 1997 177,500 177,300
Capital in excess of par 579,600 568,300
Accumulated deficit (1,599,000) (1,394,100)
------------ ------------
(841,900) (648,500)
------------ ------------
$12,965,400 $7,228,400
============ ============
Read the accompanying summary of significant accounting policies
and notes to consolidated financial statements, both of which are
an integral part of this consolidated financial statement.
End page 21
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
________ ________
Revenues:
Condominium units $2,109,300 5,897,600
Timeshare interests 488,700 781,700
Rents 476,200 416,400
---------- ----------
3,074,200 7,095,700
---------- ----------
Cost of sales:
Condominium units 1,527,800 3,771,600
Timeshare interests 184,600 195,100
---------- ----------
1,712,100 3,966,700
---------- ----------
1,362,100 3,129,000
---------- ----------
Operating expenses:
Advertising 34,700 83,500
Selling and promotion 168,700 976,800
General and administrative 877,100 1,050,100
Depreciation and amortization 208,400 294,700
---------- ----------
1,288,900 2,405,100
---------- ----------
Income before other income (expenses),
minority interest and provision for
income taxes (benefit) 73,200 723,900
---------- ----------
Other income (expenses):
Interest income 219,300 341,600
Other 134,600 84,000
Interest expense (745,000) (1,114,300)
---------- ----------
(391,100) (688,700)
(Loss) income before minority interest and
provision for income taxes (benefit) (317,900) 35,200
Minority interest in (income)
losses of joint venture (27,700) 99,000
---------- ----------
(Loss) Income before provision for income
taxes (benefit) (345,600) 134,200
---------- ----------
Provision for Income taxes (benefit) (140,700) 39,400
---------- ----------
Net (loss) income $(204,900) $94,800
========== ==========
(Loss) income per share of common stock
Basic $ (0.02) $ 0.01
========== ==========
Diluted $ (0.02) $ 0.01
========== ==========
Weighted average common shares
outstanding 8,868,080 8,866,032
========== ==========
Read the accompanying summary of significant accounting policies
and notes to consolidated financial statements, both of which are
an integral part of this consolidated financial statement.
End page 22
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
YEARS ENDED DECEMBER 31, 1998 AND 1997
Year ending
Balance, Dec. 31, 1997 Balance
Beginning Net Income Dec. 31, 1997
--------- ------------- -------------
Total $ (743,300) $ 94,800 $(648,500)
Common Stock:
Shares 8,866,032 - 8,866,032
Amount $ 177,300 - 177,300
Capital in
excess of par $ 568,300 - 94,800
Accumulated
Deficit $(1,488,900) 94,800 $(1,394,100)
- ----------------------------
Year ended December 31, 1998:
- ----------------------------
Common stock
issued for
promotional Net Balance,
purposes (Loss) ending
------------ ------ ------------
Total 11,500 $(204,900) $ (841,900)
Common Stock
Shares 11,500 - 8,877,532
Amount 200 - $ 177,500
Capital in
excess of par 11,300 - $ 579,600
Accumulated
Deficit $(204,900) $(1,599,000)
Read the accompanying summary of significant accounting policies
and notes to consolidated financial statements, both of which are
an integral part of this consolidated financial statement.
End page 23
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
---------- ----------
Cash flows from operating activities:
Sources of cash:
Customers $ 2,684,700 $ 3,837,700
Proceeds from sale of mortgage
notes receivable 783,700 3,609,400
Interest and dividends 206,700 332,900
Other 597,800 534,000
---------- ---------
4,272,900 8,314,000
========== =========
Uses of Cash:
Condominium units 2,878,900 758,500
Suppliers and employees 1,424,400 1,797,200
Interest 701,600 1,123,800
---------- ---------
5,004,900 3,679,600
---------- ---------
Cash (used-in) provided by
operating activities (732,000) 4,634,500
========== =========
Cash flows (used-in) investing activities:
Uses of cash:
Payments for:
Related parties 74,800 560,000
Shareholders 270,100 450,800
Income producing property 2,802,600 28,200
Land held for future development 1,814,100 -
Other assets 168,600 -
---------- ---------
Cash (used-in) Investing activities (5,130,200) (1,039,000)
========== =========
Cash flows from financing activities:
Sources of cash:
Proceeds from:
Mortgages and notes 7,011,100 5,909,300
Mortgage, related party 2,500,000 -
Minority interests 37,100 57,100
---------- ---------
9,548,200 5,966,400
Uses of cash:
Payment of:
Mortgages and notes 3,256,600 9,235,800
---------- ---------
Cash provided by (used-in)
financing activities 6,291,600 (3,269,400)
========== =========
Increase in cash and equivalents 429,400 326,100
Cash and equivalents, beginning 423,400 97,300
---------- ---------
Cash and equivalents, ending $ 852,800 $423,400
========== =========
Read the accompanying summary of significant accounting policies
and motes to consolidated financial statements, both of which are
an integral part of this consolidated financial statement.
End page 24
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31,1998 AND 1997
1998 1997
---------- ---------
Reconcilliation of net (loss) income
to cash (used-in) provided by
Operating activities:
Net (loss) income $ (204,900) 94,800
---------- ---------
Adjustments to reconcile net income
(loss) to cash provided by (used-in)
operating activities:
Depreciation and amortization 208,400 294,700
Deferred income taxes (140,700) 39,400
Services paid in form of
common stock 11,500 -
Provision for losses on loans
Receivable 15,000 211,200
Minority interest in joint ventures'
Income (loss) 27,700 (99,000)
Changes in assets and liabilities:
Deposits held In escrow 37,600 (19,700)
Mortgages receivable 836,000 866,800
Condominium units (1,596,700) 3,297,300
Prepaid expenses and other (33,000) 170,900
Accounts payable and accrued
Liabilities 196,000 28,600
Due to condominium association (7,500) (91,900)
Deposits on sales contracts (81,400) (158,600)
---------- ---------
Total adjustments (527,100) 4,539,700
---------- ---------
Cash (used-in) provided by
operating activities $(732,000) $4,634,500
========== =========
Read the accompanying summary of significant accounting policies
and notes to consolidated financial statements, both of which are
an integral part of this financial statement.
End page 25
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
YEARS ENDED DECEMBER 31, 1998 AND 1997
Basis of accounting:
- -------------------
SunVest Resorts, Inc. and Subsidiaries (the Company) prepares its
financial statements in accordance with generally accepted
accounting principles. This basis of accounting involves the
application of accrual accounting; consequently, revenues and
gains are recognized when earned, and expenses and losses are
recognized when incurred. Financial statement items are recorded
at historical cost and may not necessarily represent current
values.
Principles of consolidation:
- ---------------------------
The consolidated financial statements include the accounts of
SunVest Resorts, Inc. and all subsidiaries. All significant
inter-company balances and transactions have been eliminated in
consolidation.
Management estimates:
- --------------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Certain amounts included in the financial statements are
estimated based on currently available information and
management's judgment as to the outcome of future conditions and
circumstances. Changes in the status of certain facts or
circumstances could result in material changes to the estimates
used in the preparation of the financial statements and actual
results could differ from those estimates. Every effort is made
to ensure the integrity of such estimates.
Fair value of financial instruments:
- -----------------------------------
The carrying amounts of cash and equivalents, receivables
(mortgage notes, trade, other and related parties), accounts
payable, accrued liabilities and due to related parties
approximate their fair values because of the short duration of
these instruments.
Impairment of long-lived assets:
- -------------------------------
Long-lived assets and certain identifiable intangibles held and
used by the Company are reviewed for possible impairment whenever
events or circumstances indicate the carrying amount of an asset
may not be recoverable.
Revenue recognition:
- -------------------
CONDOMINIUMS:
The Company utilizes the full accrual method when all of the
following conditions are met: (a) buyer/seller are bound by
contract, consideration exchanged after certain down payments and
other continuing investments tests are met (not less then 10% of
the sales price), financing is arranged and all conditions have
been met by closing; (b) investment is considered adequate; (c)
no future subordination of receivables and (d) ownership of the
unit has been transferred. Gain (revenue less related costs) is
then recognized when the collectibility is reasonably assured,
the process is substantially complete and the requisite
rescission period has expired. The agreement provides that the
condominium unit is collateralized to its mortgage note, payable
monthly with interest at 9.875% over a fifteen- 15) year period.
Timeshare units:
Revenues on sales of timeshare interests are recognized using the
full accrual method when a minimum of 10% of the sales prices has
been received in cash, the refund period has expired,
collectibility of the receivable representing the remainder Of
the sales price is reasonably assured and the Company has
completed substantially all of its obligations with respect to
the development related to the project. In cases where not all
development has been completed, the Company recognizes revenue in
accordance with the percentage of completion method of
accounting. For those units sold, all development has been
completed. When a unit Is sold, the Company may finance a
portion of the sales price with interest at eighteen percent
(18.0%) for a seven-(7) year period. Maintenance fees on said
units are paid to an independent association of the unit owners.
The sold units do not
End page 26
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
YEARS ENDED DECEMBER 31, 1998 AND 1997
Revenue recognition (continued)
- -------------------
Timeshare units (continued)
apply to a specific unit and the buyer retains a fee simple
ownership of rea1 estate. The timeshare unit owner has the right
use the type of unit for a one-week period annually.
Rentals:
Revenues from rentals is recognized using the straight line
method over the life of the lease.
Other information:
Profit is recognized on estimates of the average gross profit per
unit within such resort property after the allocation of
acquisition and development costs based upon average cost per
unit. Estimated profits are deferred unto sales meet the
requirements for revenue recognition. Certain sales with receipts
less than the minimum requisite of 10% are accounted for using
the installment method, under which, gain is recognized as
principal payments on the related notes are collected.
The sales price, less provisions for loan losses and
cancellations (not of retained payments), is recorded as revenue
and the estimated average cost of the resort condominium units
and timeshare interest is charged against income in the year of
revenue recognition. Estimated profits may be deferred until the
sale meets the requirements for sales of real estate. All
payments received prior to revenue recognition are accounted for
as deposits on sales contracts. Installment notes receivable
(resulting from sales) are deemed cancelled when a delinquency is
greater than ninety days (90). If the cancellation occurs in the
year of sale, revenue on those sales are reversed. If the
cancellation occurs subsequent to a year end, the cancellation
will be charged to the allowance for cancellation.
Sales of resort condominium units and timeshare interest units
generally are accounted for under the full accrual method, after
certain down payments and other continuing investment tests are
met. Gain (revenue less related costs) is not recognized until
the collectibility of the sales price is reasonably assured and
the process is substantially complete. Revenues are recognized
after the requisite rescission period has expired and the Company
has collected total receipts of a pre-determined minimum but not
less than 10% of the sales price. The agreement for sale
provides for a down payment and a note collateralized by the
condominium unit or timeshare interest, payable in monthly
installments including interest over periods up to 15 years.
Cash and equivalents:
- --------------------
The Company considers all highly liquid investments purchased
with original maturities of three months or less to be cash
equivalents.
Real property:
- -------------
Condominium units held for sale and other real property are
stated at the lower of cost or market. Costs include the
original acquisition, carrying costs capitalized during the
development period and the cost of improvements.
Costs incurred for the timeshare condominiums are capitalized and
include costs of acquisition, renovation and carrying costs.
Income producing property retained by the Company is stated at
cost, less accumulated depreciation. Depreciation is computed on
the straight-line method over estimated useful lives of the
assets. Estimated useful lives are as follows:
Estimated
Useful Lives
(in years)
---------
Land improvements 15
Buildings and improvements 30
Furniture, fixtures and equipment 5 - 10
The cost of the land, buildings and equipment was allocated from
the original purchase price for that portion that is being
retained by the Company.
Repairs and maintenance are charged to operations as incurred,
and expenditures for significant betterments and renewals are
capitalized. The cost of property and equipment retired or sold,
together
End page 27
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
YEARS ENDED DECEMBER 31, 1998 AND 1997
Real Property (continued):
- -------------
with the related accumulated depreciation, are removed from the
appropriate asset and depreciation accounts, and the resulting
gain or loss is included in operations.
Land held for future development:
- --------------------------------
Land held for future development consists of undeveloped and
partially developed land and is carried at the lower of cost or
net realizable value.
Capitalized costs:
- -----------------
Interest and real estate taxes incurred and applicable to
property being developed are capitalized to the property. These
amounts are stated at cost not in excess of market value.
Amortization:
- ------------
Loan and organizational costs are being amortized using the
straight-line method over a period not exceeding five (5) years.
Deferred condominium conversion costs are amortized based upon
the sale of condominium units and deferred management agreement
costs are amortized over the terms of the agreements, not
exceeding 15 years.
Advertising:
- -----------
The Company expenses advertising costs incurred.
Income taxes:
- ------------
The Company files a consolidated tax return and adheres to the
asset/liability approach for financial accounting and reporting
for income taxes. Income tax expense is provided for the tax
effects of transactions reported in the financial statements and
consists of taxes currently due plus deferred taxes related
primarily to differences between the bases of the balance sheet
for financial and income tax reporting. The deferred tax assets
and liabilities represent the future tax consequences of those
differences, which will either be taxable or deductible when they
are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable
income and tax credits that are available to offset future income
taxes. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the period that includes the
enactment date. A valuation allowance is provided on deferred
tax assets when it is more likely than not that the asset will
not be realized.
Per share amounts:
- -----------------
Income (loss) per share is computed by dividing net income (loss)
by the weighted average number of shares outstanding throughout
the year.
Stock based compensation:
- ------------------------
The Company applies the intrinsic value method for accounting for
stock based compensation described by Accounting Principles Bound
Opinion No. 25, "Accounting for Stock Issued to Employees." Had
the Company applied the fair value method described by the
Statement of Financial Accounting Standards Board (SFAS) No. 123,
"Accounting for Stock-Based Compensation," it would report the
effect of compensation expense for stock based compensation as
pro-forma effects on income and earnings per share, if material.
Accounting for transfer of financial asset:
- ------------------------------------------
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities provides accounting and reporting
standards for transfers and servicing of financial assets and
extinguishments of liabilities. The standard provides for
distinguishing transfers of financial assets that are sales from
transfers that are collateralized borrowings. The standards
would require that servicing assets be measured by allocating the
carrying amount between the assets sold and retained interests
based on
End page 28
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
YEARS ENDED DECEMBER 31, 1998 AND 1997
Accounting for transfer of financial asset (continued):
- ------------------------------------------
their relative fair value. Implementation of the new standard
does not have a material impact on the consolidated financial
statements, as the book values of receivables approximate fair
value.
Accounting Pronouncements:
- -------------------------
The Company adopted Statement of Financial Accounting Standards
Board (SFAS) No. 130, "Reporting Comprehensive Income," issued in
June 1997. Comprehensive income includes net income and all
changes in an enterprise's other comprehensive income including,
among other things, foreign currency translation adjustments and
unrealized gains and losses on certain investments in debt equity
securities. There were no differences between net (loss) income
and comprehensive income (loss) for each year. The Company also
adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." This Statement establishes
standards for reporting information about operating segments in
annual financial statements, and requires that an enterprise
report selected information about operating segments in interim
reports issued to shareholders. The Company does not expect the
adoption of these statements to have a material impact on its
financial condition or results of operations.
The American Institute of Certified Public Accountants (AICPA)
issued Statement of Position 98-5 (SOP), "Reporting on the Costs
of Start-Up Activities," which requires that costs incurred for
start-up activities, be expensed as incurred. This SOP, is
effective in the first quarter of 1999 and is not expected to
have a material impact on the consolidated financial statements.
The Company adopted SOP 98-1, Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use. The
SOP defines the types of computer software project costs that may
be capitalized. All other costs must be expensed in the period
incurred. For costs to be capitalized, the computer software
project must be intended to create a new system or add
identifiable functionality to an existing system. The SOP did
not have an impact on the Company's consolidated financial
statements.
Reclassification:
- ----------------
In order to facilitate the comparison of financial data, certain
amounts reported in the prior periods have been reclassified to
conform with the current year's reporting format.
End page 29
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLILDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
1. Organization, business and strategic planning:
---------------------------------------------
SunVest Resorts, Inc. (SunVest Delaware), formerly TelShare
International, Inc. was incorporated in the State of Delaware on
March 5, 1985. Prior to August 2, 1996, SunVest Delaware was a
shell corporation with no active business operations. On July
16, 1996, SunVest Delaware's shareholders approved a proposal to
acquire two Florida corporations, Colony Plaza Development, Inc.
(Colony) and Cove Development, Inc. (Cove), in exchange for
shares of SunVest Delaware's common stock. The shareholders also
approved the change in corporate name and authorized
capitalization to consist of 25,000,000 shares of common stock,
$.02 par value per share.
SunVest Resorts, Inc. (the Company), a Florida corporation was
organized on August 2, 1996 under the laws of the State of
Florida. SunVest and subsidiaries (the Company) purchases and
converts hotel properties in or near tourist destinations and
resort areas (resort properties) to condominiums and develops,
markets, operates and finances whole ownership interests
(condominiums) and vacation ownership interests (timeshares) in
condominiums in Company-owned resort properties. Condominiums
are generally purchased as a second home or vacation getaway;
whereas, timeshare units provide buyers with the exclusive right
to use a condominium unit in perpetuity, typically for a one-week
period of time each year.
SunVest Delaware issued 8,000,000 shares of its common stock,
$.02 par value in exchange for all the outstanding common stock
of Colony and Cove. On August 6, 1996, a wholly owned Florida
subsidiary also named SunVest Resorts, Inc. was created and a
downstream merger was effected in order to change the Company's
corporate domicile to Florida. The acquisitions have been
accounted for in a manner similar to the pooling of interests
method in accordance with Accounting Principles Board Opinion No.
16, Accounting For Business Combinations, since it represents an
exchange of entities under common control. Accordingly, the
Company's consolidated financial statements include the accounts
of the companies transferred, all at historical costs. No inter-
company transactions existed between the companies during the
periods presented and no adjustments were necessary to conform
the accounting policies of the companies. Costs associated with
consummating the transaction amounted to approximately $45,000
had been charged to operations in 1996.
The Company's subsidiaries and percentage owned are as follows:
Percentage State Date
Company Owned Organized Organization
Colony Plaza
Development, Inc. 100% Florida April 11, 1995
Cove Development, Inc. 100% Florida July 20, 1995
Holiday Vacation
Ventures, G.P. 66% Florida April 26, 1996
Cove Vacation Ventures, G.P. 100% Florida April 26, 1996
The Company presently owns two resort properties, Colony Plaza
Resort Condominium in Ocoee, Florida (302 units) and Pirates Cove
Resort Condominium in Daytona Beach Shores, Florida (174 units).
Each of the resort properties has been converted from a hotel
into a resort condominium in which the Company sells condominium
units. Timeshare units are not sold at the Colony Plaza Resort.
The Company and its assignees maintain an easement to the
condominium property to facilitate hotel operations.
In June 1996, Colony sold ninety-four (94) whole interest
condominium units to Holiday Vacation Ventures (HVV), a general
partnership in which Colony had a 50% interest and subsequently
increased to 66% (related party). HVV has since renovated and
combined twenty-five (25) of the condominium units into thirteen
(13) condominium units for sale as six hundred seventy-six (676)
timeshare units and is actively marketing them. Through 1998, HVV
sold back 47 of the remaining sixty-nine (69) condominium units
to
End page 30
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLILDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
1. Organization, business and strategic planning (continued):
---------------------------------------------------------
Colony leaving a balance of 22 units which may be sold as whole
interests or renovated in the future into units for sale as
timeshare units. The Company acquired Lakeshore Club Villas, a
500-unit 110-acre rental complex plus 420 acres of undeveloped
adjoining land. The plan is to convert the units and add 200 new
units. The project will be marketed as an active adult
community. The undeveloped land has a development capacity of
2,000 additional units and a golf course.
Certain portions of the resort properties have been retained by
the Company and are not being conveyed to the buyers of either
whole interests or timeshare units nor to the condominium
associations. Retained portions consist of the resort property's
recreational and commonly used facilities such as pools, parking
areas, lobbies and restaurants, which are contiguous to the
condominium units. Owners and their guests will have rights of
access and use of such facilities subject to certain terms and
conditions. The condominium associations will be responsible for
all costs associated with the maintenance and operations of such
facilities. The Company also acquired two parcels of land
noncontiguous to the Pirates Cove Resort Condominium, which have
been recorded as land held for future development.
The costs of the property less amounts allocated to the various
components of the property acquired are based in part upon
appraisals by independent property appraisers at the time of
purchase.
2. Concentration of credit risk:
----------------------------
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash and
equivalents, mortgage notes receivable and amounts due from
related parties. During the year, the Company had deposits with
financial institutions which exceeded federally insured limits
covered by the Federal Deposit Insurance Corporation and other
agencies. Management regularly monitors their balances and
attempts to keep this potential risk to a minimum by maintaining
their accounts with financial institutions that they believe are
of good quality.
The Company may have a concentration of credit risk with respect
to mortgage notes receivable and amounts due from related
parties. The Company has a large number of geographically
dispersed customers on which it performs ongoing credit
evaluations and has not experienced significant losses. The
Company maintains an allowance for loan losses based upon the
expected collectibility of all receivables. Therefore, no
additional credit risk beyond amounts provided for collection
losses is believed inherent in the Company's mortgage notes and
accounts receivable and to date have been within management's
expectations.
3. Mortgage notes receivable:
-------------------------
The Company provides mortgage financing to its customers in
connection with the sale of condominium and timeshare units.
Such mortgages, which are collateralized by the unit or interest
sold, bear interest at rates ranging from 9.50% to 18% a year and
are payable in monthly installments over periods ranging from 2
to 15 years. Substantially all mortgage notes receivable are
collateralized to the Company's borrowings of approximately
$1,128,500. The Company reflects its mortgage notes receivable
less an allowance for loan losses, discounts and deferred profit
on installment sales.
End Page 31
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLILDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
3. Mortgage notes receivable (continued):
-------------------------------------
Subsequent to December 31, 1998, the Company sold, without
recourse, mortgage notes receivable for approximately $225,600
after giving effect to a discount of $11,900. The discount on
the sale of the mortgages will be charged to the allowances for
loan losses and discount. The Company utilized the proceeds from
the sale of the mortgages to pay down financing notes of $190,000
and the balance ($35,600) was utilized as working capital.
Collections of mortgage notes receivable subsequent to December
31, 1998 after giving effect to the subsequent sale of mortgage
notes are as follows:
Years Ending
December 31, Amount
------------ ------
1999 $ 382,400
2000 163,300
2001 186,300
2002 197,100
2003 162,000
Thereafter 104,000
-------
1,195,100
Less allowance for loan losses and discount 99,000
---------
$ 1,096,100
=========
4. Details of financial statement components:
-----------------------------------------
Condominium units held for sale:
1998
--------------------------------
Condominium Timeshare
Total Units Units
----- ----- -----
Land $ 83,900 $ 48,000 $ 35,900
Building, improvements,
furniture and equipment 762,700 416,700 346,000
Development costs 755,600 472,300 283,300
--------- --------- ---------
$1,602,200 $ 937,000 $ 665,200
========= ========= =========
1997
--------------------------------
Condominium Timeshare
Total Units Units
----- ----- -----
Land $ 104,800 $ 55,100 $ 49,700
Building, improvements,
furniture and equipment 1,264,100 785,100 479,000
Development costs 1,594,800 906,300 688,500
--------- --------- ---------
$2,963,700 $1,746,500 $1,217,200
========= ========= =========
All condominium units held for sale are collateralized to
mortgage notes payable.
End Page 32
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLILDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
4. Details of financial statement components (continued):
-----------------------------------------------------
Condominium units under development:
1998
----
Land $ 231,400
Building, improvements,
furniture and equipment 2,372,200
Development costs 354,200
----------
$ 2,958,200
==========
Income producing property:
1998 1997
------ ------
Land $ 578,500 $ 347,100
Building 2,684,200 313,700
Land improvements 64,700 64,700
Building improvements 461,100 183,200
Furniture and equipment 43,700 43,700
------------ ----------
3,832,200 952,400
Less accumulated depreciation 84,400 38,000
------------ ----------
$3,747,800 $ 914,400
============ ==========
All income producing property is collateralized to mortgage notes
payable.
Deferred costs:
Loan costs $ 458,000 $ 483,800
Conversion costs 40,600 40,600
Leasing costs 52,800 121,900
Organizational costs 900 900
------------ ----------
552,300 647,200
------------ ----------
Less accumulated amortization 239,300 191,500
------------ ----------
$ 313,000 $ 455,700
============ ==========
Other:
Interest, mortgages receivable $ 31,600 $ -
Other receivables 93,100 121,600
Prepaids and other 30,200 300
------------ ----------
$ 154,900 $ 121,900
============ ==========
End Page 33
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLILDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
5. Notes and mortgages payable: 1998 1997
--------------------------- ---- ----
Mortgage note, bank, interest at 2%
above the bank's prime lending rate
(8.5%) payable monthly, revolving
principal balance, matures June 3, 2000,
collateralized by real property, and
assignment of Cove's rents and leases
and guaranteed by the Company's officers
and their spouses. $ 317,200 $ 1,258,000
Second mortgage note, related party,
controlled by the Company's principal
shareholders, interest at 18% until
May 1, 1998, 12% after that date
collateralized by real property. 200,000 200,000
Financing note, bank, under a $2,000,000
credit line to an affiliate, collateralized
by certain mortgages receivable of the
Company and affiliates. Interest at the
bank's prime rate (8.5%) plus 1%; principal
is payable from collections of the Company's
mortgages serviced by the bank at 80% of
the reduction of such mortgages, maturing
on February 1, 1998. Loan was paid in
January, 1998 from proceeds from the
sale of certain mortgages receivable. - 178,800
Mortgage note, bank, interest at 2% above
the bank's prime lending note (8.5%)
payable monthly, maturing September 6, 1998,
collateralized by real property at Colony
and all leases affecting Colony and
guaranteed by the Company's officers
and their spouses. - 12,000
Financing note, bank, under a $1,000,000
revolving loan. Outstanding balance at
December 31, 1998 aggregates $204,000;
interest at 1% above the bank's prime
rate (8.5%); collateralized by certain
mortgages receivable; principal is
payable from collections of specific
mortgages serviced by the bank at 80%
of the reduction of such mortgages;
paid in full January 4, 1999, from
proceeds derived from sales of mortgages. 204,000 650,100
Financing note, bank, credit facility to
the Company and certain affiliates,
maturing June, 2003, interest at 8.75%
payable monthly; joint and several
liability with affiliates and
collateralized by the Company's income
producing property
and property of certain affiliates 621,600 631,500
Construction loan, bank, under a
$6,900,000 credit facility, interest
at 1.5% above bank's prime rate (7.75%)
payable monthly, matures September, 2001,
collateralized by Lakeshore property
and guarantees by the Company's officers
and their spouses. 4,800,000 -
End Page 34
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLILDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
5. Notes and mortgages payable (continued): 1998 1997
--------------------------------------- ---- ----
Mortgage note, interest at 8% starting
April, 1999, payable monthly, thereafter
principle and interest of $27,300 starting
May, 2004. Collateralize by Lakeshore
unimproved land. 1,350,000 -
Second mortgage note, related party,
interest at 18%, payable monthly.
Collateralized by real property. 2,500,000 -
Credit facility, financial institution
providing $2,500,000 to HVV to acquire
certain condominium units from Colony;
$715,000 revolving loan to convert and
renovate condominium units for sale as
timeshare units and up to $7,500,000
for a revolving credit loan to finance
receivables generated by the sale of
timeshare units. Outstanding balances
at December 31, 1998 and 1997 amount to
$835,400 and $1,641,400, respectively
under the acquisition loan $470,000
and $471,900, respectively under the
receivable loan. Interest at the greater
of 10.75% a year or the prime rate (8.5%)
plus 3%. Interest payable monthly, for
the revolving credit loan portion is
based on collections of the specific
mortgages generated through the sale of
timeshare units. The outstanding principal
on the acquisition and renovation portions
of the facility are due and payable based
upon the closing of sales of timeshare
units with a minimum of $1,675 for each
timeshare unit sold with the entire
outstanding principal on the acquisition
and renovation loans due and payable by
the earlier of the date that 80% of the
timeshare units are sold or December 31,
The final maturity date of the
revolving credit loan is June 30, 2001. 1,305,400 2,113,300
--------- ---------
$11,298,200 $5,043,700
=========== ==========
All outstanding mortgage notes and the acquisition portion of the
credit facility are collateralized by real estate. Lines of
credit and receivable loans are collateralized by specific
mortgages receivable collateralized by real estate.
Substantially all borrowings are guaranteed by certain principal
shareholders and officers of the Company and their spouses.
Certain principals of Colony's venture partner also guarantee the
credit facility loan.
During 1998 and 1997, the Company incurred interest costs of
$745,000 and $1,114,300, respectively, of which $84,300 in 1998
was capitalized. No interest was capitalized in 1997.
End Page 35
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLILDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
5. Notes and mortgages payable (continued):
---------------------------------------
Principal payments due on the notes and mortgages payable for the
five years subsequent to December 31, 1998 after giving effect to
the use of proceeds from the sale of certain mortgaged
receivables disclosed in Note 4 are as follows:
Years Ending
December 31, Amount
------------ ------
1999 $ 1,643,500
2000 4,629,700
2001 2,126,500
2002 28,900
2003 519,600
Thereafter 1,350,000
-----------
$11,298,200
===========
6. Income taxes:
------------
Components of the net deferred tax asset as reflected on the
Company's consolidated balance sheets are as follows:
1998 1997
---- ----
Deferred tax assets:
Loan losses $ 168,000 $ 52,900
Net operating loss
carryforwards 343,700 360,900
-------- --------
511,700 413,800
Less valuation allowance 280,200 244,000
-------- --------
Deferred tax asset 231,500 169,800
-------- --------
Deferred tax liabilities:
Other assets - 73,400
Other - 5,600
Deferred tax liability - 79,000
-------- --------
Deferred taxes, Net $ 231,500 $ 90,800
-------- --------
The components of the provision for income tax expense (benefit)
for the years ended December 31, 1998 and 1997 are as follows:
Deferred:
Federal $ (122,600) $ 35,700
State ( 18,100) 3,700
----------- -----------
$ (140,700) $ 39,400
=========== ===========
Income taxes (benefit) for the years ended December 31, 1998 and
1997 differ from that which would result from applying statutory
tax rates primarily due to certain operating expenses which are
not tax deductible. The provision for income taxes is reconciled
to the amount obtained by applying the federal statutory income
tax rate to income before provision for income taxes as follows:
Provision at statutory rate $ (121,000) $ 47,000
State taxes, net of federal
benefits ( 12,000) 4,800
Graduated tax rates and others ( 7,700) ( 12,400)
---------- -----------
$ (140,700) $ 39,400
========= ==========
End Page 36
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
6. Income taxes (continued):
At December 31, 1998, the Company had available federal net
operating loss carryforwards of approximately $1,005,000 which
will generally expire between 2001 and 2012.
The net operating loss carryforward of SunVest Resorts, Inc,
formerly Telshare International, Inc, of approximately $696,800
expires in varying years to 2009, which prior management had
provided a valuation allowance ($280,200) equal to any benefits
since it is more likely than not that any benefits may not be
realized.
If available evidence suggests that it is more likely than not
that some portion or all of deferred tax assets will not be
realized, a valuation allowance is required to reduce the
deferred tax assets to the amount that is more likely than not to
be realized. Management has established a valuation allowance
equal to net deferred tax assets on the net operating loss
carryforward. Future changes in such a valuation would be
included in the provision for deferred income taxes in the period
of change.
7. Transactions with related parties, commitments and
contingencies:
In 1997, the Company made net advances amounting to approximately
$47,000 to companies owned and controlled by the Company's
principal shareholders and officers ("affiliated companies").
During 1998 the Company received net advances of $260,200 and
made net advances of approximately $335,000. Advances made and
received were unsecured. Interest of 12% per annum was charged
on inter-company advances. Interest incurred by the Company on
advances from affiliated companies amounted to approximately
$135,800 and $144,500 for the years ended December 31, 1998 and
1997, respectively.
The Company incurred interest expense of approximately $112,500
and $217,500 during 1998 and 1997, respectively, on second
mortgages held by limited partnerships in which the general
partner is an affiliated company. The outstanding balances due
under these second mortgages aggregated $2,500,000 and $200,000
at December 31, 1998 and 1997, respectively.
The Company received unsecured net advances from shareholders
aggregating $1,237,800 through 1997. The outstanding balance of
such advances approximated $967,700 at December 31, 1998.
Interest of 12% per annum is charged on shareholder advances and
during 1998 and 1997 the Company incurred interest expense of
approximately $127,600 and $175,700, respectively, on such
advances.
In 1998, general and administrative expenses include
approximately $229,000 overhead charged by an affiliated company.
The affiliated company provided, among other services, the
overall management, purchasing, accounting and record keeping
functions for the Company, as well as its corporate office
premises. During 1998 and 1997, centralized payroll and
personnel services were provided to Colony Cove and Lakeshore by
another affiliated company. Overhead charges are determined by
management.
A summary of transactions and/or balances with related parties is
as follows:
1998
1997
Advances from shareholders $ 967,700 $ 1,237,800
Due to related parties 718,800 793,600
Second mortgage payable - 200,000
Interest expense 423,400 537,700
General, administrative and
marketing 322,000 322,000
----------- ----------
$ 2,338,900 $ 3,091,100
=========== ===========
End page 37
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997
7. Transactions with related parties, commitments and contingencies:
In the opinion of management, the realization and payment of
related party amounts will occur in the normal course of
business.
Colony and Cove have each entered fifteen-year lease agreements
with unrelated parties for management ("management companies") of
their hotel and restaurant operations. The management companies
operate rental programs, which allow participating owners of
whole interests to rent their condominium units to hotel guests.
Additionally, the Company's unsold condominium and timeshare
units are rented to transients by the management companies on a
rotational basis. The lease agreements for Colony and Cove
extend through February, 2011 and September 2010, respectively.
The lease agreements provide that the Company will receive three
percent of the management companies' revenue from hotel
operations and five percent of restaurant revenues (as defined).
Additionally, the management companies remit to the Company a
percentage of the gross rental revenues earned on Company owned
units (Colony-45% and Cove-50%). Colony has waived the three
percent rent through February 28, 1997.
Colony and Cove have recorded the Declarations of Condominium
("Declaration") with respect to the 302 units and 174 units
converted to condominium effective March 4, 1996 and February 7,
1996, respectively. Cove guaranteed the condominium
associations' estimated operating budgets through February 4,
1997. Thereafter, Cove paid its prorate share of the condominium
associations' estimated operating budget on its unsold units in
the same manner as other unit owners. Colony continued to
guarantee its association's budget through December 31, 1997
("the guarantee periods"). During the guarantee periods, Colony
and Cove were not obligated to pay regular monthly assessments on
their unsold units; instead they pay common expenses incurred in
excess of maintenance assessments billed to individual unit
owners ("shortfall"). Colony, at its option, elected to extend
its guarantee period beyond December 31, 1997. The associations'
shortfalls, together with maintenance assessments accrued on
HVV's unsold timeshare units, aggregating approximately $714,000,
have been capitalized as a cost of condominium units held for
sale. The Company estimates that no additional shortfall will be
funded by Colony and that rental income will offset any
additional maintenance assessments incurred by HVV.
At December 31, 1998, property improvement and development costs
include amounts accrued for developer funded converter reserves
($165,400), capitalized interest and taxes during the development
stage ($552,300) and the condominium associations' shortfalls
($681,000). The Company has received approximately $22,500 of
deposits on sales contracts for five (5) of the whole interest
units representing an aggregate sales price of approximately
$170,000. Additionally, HVV has received approximately $38,900
of deposits on 48 timeshare units of which 21 are non-cancelable
sales contracts representing an aggregate sales price of
approximately $95,000.
End Page 38
- -----------
Consolidated Balance Sheets(unaudited)
of SunVest Resorts, Inc.
as of September 30, 1998
and
as of September 30, 1999
and
Consolidated Statements of Income and Cash Flow (unaudited)
for the nine months ended
September 30, 1998
and
the nine months ended
September 30, 1999.
End page 39
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET- SEPTEMBER 30,1999 & 1998
ASSETS
1999 1998
---- ----
Cash and equivalents $305,400 $133,000
Deposit held in escrow 216,000 191,500
Mortgage notes receivable 1,398,100 2,737,100
Project costs 7,179,000 1,693,600
Income producing property 3,785,300 912,500
Land held for future development 1,842,400 28,400
Deferred cost 140,400 446,000
Deferred income taxes 186,400 168,900
Other 65,000 110,300
---------- ---------
$15,118,000 $6,421,300
========== =========
LIABILITIES AND SHAREHOLDERS DEFICIT
Liabilities
Notes and mortgages payable personally
guaranteed by shareholders $12,790,200 $4,744,000
Accounts payable and
accrued liabilities 1,462,300 560,100
Deposits on sales contracts 49,700 162,800
Due to condominium associations 49,100 55,400
Advances from shareholders 679,000 843,600
Due to related parties 813,500 760,200
---------- ---------
15,843,800 7,126,100
---------- ---------
Minority interest 104,900 99,800
---------- ---------
Shareholders deficit
Common stock,$.02 par, authorized
25,000,000 shares; issued and
outstanding 8,877,532 shares in 1998
8,866,032 in 1997 177,500 177,500
Capital in excess of par 579,600 579,600
Accumulated deficit (1,587,800) (1,561,700)
---------- ---------
(830,700) (804,600)
$14,118,000 $5,421,300
========== =========
End page 40
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30,1999 & 1998
1999 1998
---- ----
Revenue-Condominium units & timeshare $1,546,000 $2,182,300
Rents 795,600 333,300
--------- ---------
2,341,600 2,516,600
--------- ---------
Cost of sales: 1,143,000 1,527,600
--------- ---------
Gross Profit 1,198,600 988,000
--------- ---------
Operating expenses:
Advertising 31,500 24,800
Selling and promotion 214,300 140,000
General and administrative 671,400 595,800
Depreciation and amortization 185,700 132,200
--------- ---------
1,102,900 892,800
--------- ---------
Income before other income (expenses)
and income taxes 95,700 95,200
--------- ---------
Other income(expenses)
Interest income 77,600 65,100
Other 88,600 78,900
Interest expense (216,300) (503,400)
--------- ---------
(50,100) (359,400)
--------- ---------
(Loss) Income before minority interest
and income taxes 45,600 (264,200)
Minority Interest (18,400) (15,100)
--------- ---------
Income before income tax expense (benefit) 29,200 (279,300)
Income tax expense 18,000 (111,700)
--------- ---------
Net (loss) income 11,200 (167,600)
========= =========
Accumulated deficit, opening (1,599,000) (1,394,100)
--------- ---------
Accumulated deficit, ending ($1,587,800) ($1,561,700)
========= =========
(Loss) Income per share of common stock:
Basic $0.00 ($0.02)
========= =========
Diluted $0.00 ($0.02)
========= =========
End page 41
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998
---- ----
Cash flows from operating activities:
Sources of cash:
Customers $ 375,400 $ 2,162,400
Proceeds from sale of mortgage
notes receivable 550,600 783,700
Interest 148,500 179,400
Rents and other 961,800 446,900
---------- ---------
2,038,300 3,591,400
========== =========
Uses of Cash:
Condominium units 1,666,100 1,716,900
Suppliers and employees 993,800 1,106,300
Interest 210,100 485,000
---------- ---------
2,860,000 3,316,200
---------- ---------
Cash (used-in) provided by
operating activities (823,700) 275,200
========== =========
Cash flows (used-in) investing activities:
Uses of cash:
Payments for:
Related parties 243,000 227,800
Shareholders 0 51,000
Income producing property 0 2,802,000
Land held for future investment 0 2,814,100
Other assets 134,100 149,500
---------- ---------
Cash (used-in) Investing activities (377,100) (5,044,800)
========== =========
Cash flows from financing activities:
Sources of cash:
Proceeds from:
Mortgages and notes 1,775,000 4,800,000
Mortgage, related party 500,000 2,500,000
Minority interests 5,100 24.200
---------- ---------
2,280,100 7,324,200
Uses of cash:
Payment of:
Mortgages and notes 1,626,700 2,845,000
---------- ---------
Cash provided by (used-in)
financing activities 653,400 4,479,200
---------- ---------
Decrease in cash and equivalents (547,400) (290,400)
Cash and equivalents, beginning 852,800 423,400
---------- ---------
Cash and equivalents, ending $ 305,400 $133,000
========== =========
End page 42
- -----------
SUNVEST RESORTS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1999 & 1998
The unaudited consolidated financial statements include all
adjustments which are necessary, in the opinion of management, to
fairly reflect the Company's financial position and results of
operations. All such adjustments are of a normal recurring
nature. The financial statements have been prepared using the
accounting policies described in the Company's audited
Consolidated Financial Statements for the year ended December 31,
1998, contained in the Company's Form 10-SB.
End page 43
PART III
Item 1. Index to Exhibits
-----------------
2.1 Articles of Incorporation of Registrant, dated August 6, 1996.
2.2 Bylaws of Registrant
6(a).1 Mortgage and Security Agreement between Lakeshore Club
Development, Inc. (predecessor in interest to Lakeshore
Club LC) and Mortgage Investment Group 20, Ltd., dated
September 30, 1998.
6(a).2 Mortgage and Security Agreement between Lakeshore Club
Development, LC and Mortgage Investment Group 24, Ltd.,
dated June 30, 1999.
6(a).3 Consolidation Promissory Note made by Lakeshore Club LC to
the order of BankAtlantic, FSB, dated June 30, 1999.
6(a).4 Purchase Mortgage between Lakeshore Club Development, LC
and Cary Lightsey and Layne Lightsey, dated December 31, 1998.
6(a).5 Agreement for Purchase and Sale between Colony Plaza
Development, Inc. and Cypress Hotel Management Company,
dated October 8, 1999.
6(c).1 Sample of Stock Agreement relating to the October 30, 1998,
bonus plan offering.
10.1 Consent of Hixson, Marin, Powell & DeSanctis, P.A., CPA's.
27 Financial Data Schedule
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant caused this amendment to its registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized.
SUNVEST RESORTS, INC.
(Registrant)
January 28, 2000 By: /S/ Herbert Hirsch
---------------------------------------
Herbert Hirsch
President and Chief Executive Officer
End page 44
________________________________________________________________
EXHIBIT 2.1 ARTICLES OF INCORPORATION OF REGISTRANT, DATED
AUGUST 6, 1996
_____________________________________________________________________________
ARTICLES OF INCORPORATION
OF
SUNVEST RESORTS, INC.
The undersigned, for the purposes of forming a corporation
for profit under the laws of Florida, adopts the following
Articles of Incorporation:
ARTICLE 1
NAME AND ADDRESS
Section 1.1 Name. The name of the Corporation is SunVest
Resorts, Inc.
Section 1.2 Address of Principal Office. The address of
the principal office of the corporation is 307 S. 21st Avenue,
Hollywood, Florida 33020.
Section 1.3 Mailing Address. The mailing address of the
corporation is Korn & Korn, P.C., P. O. Box 8020, Hallandale,
Florida 33008.
ARTICLE 2
DURATION
Section 2.1 Duration. This corporation shall exist
perpetually. Corporate existence shall commence on the date these
Articles are executed, except that if they are not filed by the
Department of State of Florida within five business days after
they are executed, corporate existence shall commence upon filing
by the Department of State.
ARTICLE 3
PURPOSES
Section 3.1 Purposes. this corporation is organized for
the purposes of transacting any or all lawful business permitted
under the laws of the United States and of the State of Florida.
ARTICLE 4
CAPTIAL
Section 4.1 Authorized Capital. The maximum number of
shares of stock which this corporation is authorized to have
outstanding at any one time is 25,,000,000 shares of voting
common stock having a par value of $.02 per share.
ARTICLE 5
INITIAL REGISTERED OFFICE AND AGENT
Section 5.1 Name and Address. the street address of the
initial registered office of this corporation is 200 Laura
Street, Jacksonville, Florida 32202, and the name of the initial
registered agent of this corporation at that address is F&L Corp.
ARTICLE 6
DIRECTORS
Section 6.1 Number. This corporation shall have four (4)
director(s) initially, The number of directors may be increased
or diminished from time to time by the bylaws, but shall never be
less than one.
Section 6.2 Initial Directors. the name and address of
the members of the first board of directors of the corporation
are:
NAME ADDRESS
____ _______
Harvey Birdman 307 S. 21st Avenue
Hollywood, Florida 33020
Diane Birdman 307 S. 21st Avenue
Hollywood, Florida 33020
Louis Birdman 307 S. 21st Avenue
Hollywood, Florida 33020
Herbert Hirsch 307 S. 21st Avenue
Hollywood, Florida 33020
ARTICLE 7
BYLAWS
Section 7.1 Bylaws. the initial bylaws of this
corporation shall be adopted by the board of directors. Bylaws
may be amended or repealed from time to time by either the board
of directors or the shareholders, but the board of directors
shall not alter, amend or repeal any bylaw adopted by the
shareholders if the shareholders specifically provide that such
bylaw is not subject to amendment or repeal by the board of
directors.
ARTICLE 8
INCORPORATOR
Section 8.1 Name and Address. The name and street
address of the incorporator of this corporation is:
NAME ADDRESS
____ _______
Harvey Birdman 307 S. 21st Avenue
Hollywood, Florida 33020
ARTICLE 9
INDEMNIFICATION
Section 9.1 Indemnification. The board of directors is
specifically authorized to make provision for indemnification of
directors, officers, employees and agents to the full extent
permitted by law.
ARTICLE 10
AMENDMENT
Section 10.1 Amendment. this corporation reserves the
right to amend or repeal any provision contained in these
Articles of Incorporation, and any right conferred upon the
shareholders is subject to this reservation.
IN WITNESS WHEREOF, the incorporator has executed these
Articles on August 6, 1996..
/S/ Harvey Birdman
-----------------------------------
Harvey Birdman, Incorporator
ACCEPTANCE OF APPOINTMENT AS REGISTERED AGENT
Having been named to accept service of process for the above
stated corporation, at the place designated in the above Articles
of Incorporation, I hereby agree to act in this capacity, and I
further agree to comply with the provisions of all statutes
relative to the proper and complete performance of my duties. I
am familiar with and accept the obligations of a registered
agent.
F&L CORP., Registered Agent
/S/ Charles V. Hedrick
____________________________________________
By: Charles V. Hedrick, Authorized Signatory
Date: August 13, 1996
________________________________________________________________
EXHIBIT 2.2 BYLAWS OF REGISTRANT
________________________________________________________________
BYLAWS
OF
SUNVEST RESORTS, INC.
(a Florida corporation)
TABLE OF CONTENTS
ARTICLE I
Definitions
-----------
Section 1.1 Definitions................................1
ARTICLE 2
Offices
-------
Section 2.1 Principal and Business Offices.............1
Section 2.2 Registered Office..........................1
ARTICLE 3
Shareholders
------------
Section 3.1 Annual Meeting.............................2
Section 3.2 Special Meetings...........................2
Section 3.3 Place of Meetings..........................2
Section 3.4 Notice of Meeting..........................2
Section 3.5 Waiver of Notice...........................3
Section 3.6 Fixing of Record Date......................3
Section 3.7 Shareholders' List for Meetings............4
Section 3.8 Quorum.....................................5
Section 3.9 Voting of Shares...........................5
Section 3.10 Vote Required..............................5
Section 3.11 Conduct of Meeting.........................6
Section 3.12 Inspectors of Election.....................6
Section 3.13 Proxies....................................6
Section 3.14 Action by Shareholders Without Meeting.....7
Section 3.15 Acceptance of Instruments Showing
Shareholder Action.........................8
ARTICLE 4
Board of Directors
------------------
Section 4.1 General Powers and Number..................8
Section 4.2 Qualifications.............................9
Section 4.3 Term of Office.............................9
Section 4.4 Removal....................................9
Section 4.5....Resignation................................9
Section 4.6....Vacancies..................................9
Section 4.7....Compensation...............................9
Section 4.8....Regular Meetings...........................9
Section 4.9....Special Meetings..........................10
Section 4.10...Notice....................................10
Section 4.11...Waiver of Notice..........................10
Section 4.12...Quorum and Voting.........................10
Section 4.13...Conduct of Meetings.......................10
Section 4.14...Committees................................11
Section 4.15...Action Without Meeting....................12
ARTICLE 5
Officers
--------
Section 5.1 Number....................................12
Section 5.2....Election and Term of Office...............12
Section 5.3....Removal...................................12
Section 5.4....Resignation...............................12
Section 5.5....Vacancies.................................12
Section 5.6....President.................................13
Section 5.7....Vice Presidents...........................13
Section 5.8....Secretary.................................13
Section 5.9....Treasurer.................................14
Section 5.10...Assistant Secretaries and Assistant
Treasurers................................14
Section 5.11...Other Assistants and Acting Officers......14
Section 5.12...Salaries..................................14
ARTICLE 6
Contracts, Checks and Deposits; Special Corporate Acts
------------------------------------------------------
Section 6.1....Contracts.................................14
Section 6.2....Checks, Drafts, etc.......................15
Section 6.3....Deposits..................................15
Section 6.4....Voting of Securities Owned by Corporation.15
ARTICLE 7
Certificates for Shares; Transfer of Shares
-------------------------------------------
Section 7.1....Consideration for Shares..................15
Section 7.2....Certificates for Shares...................16
Section 7.3....Transfer of Shares........................16
Section 7.4....Restrictions on Transfer..................17
Section 7.5....Lost, Destroyed, or Stolen Certificates...17
Section 7.6....Stock Regulations.........................17
ARTICLE 8
Seal
----
Section 8.1....Seal......................................17
ARTICLE 9
Books and Records
-----------------
Section 9.1....Books and Records.........................17
Section 9.2....Shareholders' Inspection Rights...........18
Section 9.3....Distribution of Financial Information.....18
Section 9.4....Other Reports.............................18
ARTICLE 10
Indemnification
---------------
Section 10.1 Provision of Indemnification 18
ARTICLE 11
Amendments
----------
Section 11.1...Power to Amend............................19
Section 11.2...Implied Amendments........................19
ARTICLE 1
Definitions
-----------
Section 1.1 Definitions. The following terms shall have
the following meanings for purposes of these bylaws:
"Act" means the Florida Business Corporation Act, as it may
be amended from time to time, or any successor legislation
thereto.
"Deliver" or "delivery" includes delivery by hand; United
States mail; facsimile, telegraph, teletype or other form of
electronic transmission; and private mail carriers handling
nationwide mail services.
"Distribution" means a direct or indirect transfer of money
or other property (except shares in the corporation) or an
incurrence of indebtedness by the corporation to or for the
benefit of shareholders in respect of any of the corporation's
shares. A distribution may be in the form of a declaration or
payment of a dividend; a purchase, redemption, or other
acquisition of shares; a distribution of indebtedness; or
otherwise.
"Principal office" means the office (within or without the
State of Florida) where the corporation's principal executive
offices are located, as designated in the articles of
incorporation or other initial filing until an annual report has
been filed with the Florida Department of State, and thereafter
as designated in the annual report.
ARTICLE 2
Offices
-------
Section 2.1 Principal and Business Offices. The
corporation may have such principal and other business offices,
either within or without the State of Florida, as the Board of
Directors may designate or as the business of the corporation may
require from time to time.
Section 2.2 Registered Office. The registered office of
the corporation required by the Act to be maintained in the State
of Florida may but need not be identical with the principal
office if located in the State of Florida, and the address of the
registered office may be changed from time to time by the Board
of Directors or by the registered agent. The business office of
the registered agent of the corporation shall be identical to
such registered office.
ARTICLE 3
Shareholders
------------
Section 3.1 Annual Meeting. The annual meeting of
shareholders shall be held within four months after the close of
each fiscal year of the corporation on a date and at a time and
place designated by the Board of Directors, for the purpose of
electing directors and for the transaction of such other business
as may come before the meeting. If the election of directors
shall not be held on the day fixed as herein provided for any
annual meeting of shareholders, or at any adjournment thereof,
the Board of Directors shall cause the election to be held at a
special meeting of shareholders as soon thereafter as is
practicable.
Section 3.2 Special Meetings.
(a) Call by Directors or President. Special
meetings of shareholders, for any purpose or purposes, may be
called by the Board of Directors, the Chairman of the Board (if
any) or the President.
(b) Call by Shareholders. The corporation shall
call a special meeting of shareholders in the event that the
holders of at least ten percent of all of the votes entitled to
be cast on any issue proposed to be considered at the proposed
special meeting sign, date, and deliver to the Secretary one or
more written demands for the meeting describing one or more
purposes for which it is to be held. The corporation shall give
notice of such a special meeting within sixty days after the date
that the demand is delivered to the corporation.
Section 3.3 Place of Meeting. The Board of Directors
may designate any place, either within or without the State of
Florida, as the place of meeting for any annual or special
meeting of shareholders. If no designation is made, the place of
meeting shall be the principal office of the corporation.
Section 3.4 Notice of Meeting.
(a) Content and Delivery. Written notice
stating the date, time, and place of any meeting of shareholders
and, in the case of a special meeting, the purpose or purposes
for which the meeting, is called, shall be delivered not less
than ten days nor more than sixty days before the date of the
meeting by or at the direction of the President or the Secretary,
or the officer or persons duly calling the meeting, to each
shareholder of record entitled to vote at such meeting and to
such other persons as required by the Act. Unless the Act
requires otherwise, notice of an annual meeting need not include
a description of the purpose or purposes for which the meeting is
called. if mailed, notice of a met,-ting of shareholders shall be
deemed to be delivered when deposited in the United States mail,
addressed to the shareholder at his or her address as it appears
on the stock record books of the corporation, with postage
thereon prepaid.
(b) Notice of Adjourned Meeting. If an annual
or special meeting of shareholders is adjourned to a different
date, time, or place, the corporation shall not be required to
give notice of the new date, time, or place if the new date,
time, or place is announced at the meeting before adjournment;
provided, however, that if a new record date for an adjourned
meeting is or must be fixed, the corporation shall give notice of
the adjourned meeting to persons who are shareholders as of the
new record date who are entitled to notice of the
meeting.
(c) No Notice Under Certain Circumstances.
Notwithstanding the other provisions of this Section, no notice
of a meeting of shareholders need be given to a shareholder if:
(a) an annual report and proxy statement for two consecutive
annual meetings of shareholders, or (b) all, and at least two
checks in payment of dividends or interest on securities during a
twelve-month period, have been sent by first-class, United States
mail, addressed to the shareholder at his or her address as it
appears on the share transfer books of the corporation, and
returned undeliverable. The obligation of the corporation to
give notice of a shareholders' meeting to any such shareholder
shall be reinstated once the corporation has received a new
address for such shareholder for entry on its share transfer
books.
Section 3.5 Waiver of Notice.
(a) Written Waiver. A shareholder may waive any
notice required by the Act or these bylaws before or after the
date and time stated for the meeting in the notice. The waiver
shall be in writing and signed by the shareholder entitled to the
notice, and be delivered to the corporation for inclusion in the
minutes or filing with the corporate records. Neither the
business to be transacted at nor the purpose of any regular or
special meeting of shareholders need be specified in any written
waiver of notice.
(b) Waiver by Attendance. A shareholder's
attendance at a meeting, in person or by proxy, waives objection
to all of the following: (a) lack of notice or defective notice
of the meeting, unless the shareholder at the beginning of the
meeting objects to holding the meeting or transacting business at
the meeting; and (b) consideration of a particular matter at the
meeting that is not within the purpose or purposes described in
the meeting, notice, unless the shareholder objects to
considering the matter when it is presented.
Section 3.6 Fixing of Record Date.
(a) General. The Board of Directors may fix in
advance a date as the record date for the purpose of determining
shareholders entitled to notice of a shareholders' meeting,
entitled to vote, or take any other action. In no event may a
record date fixed by the Board of Directors be a date preceding
the date upon which the resolution fixing the record date is
adopted or a date more than seventy days before the date of
meeting or action requiring a determination of shareholders.
(b) Special Meeting. The record date for
determining shareholders entitled to demand a special meeting
shall be the close of business on the date the first shareholder
delivers his or her demand to the corporation.
(c) Shareholder Action by Written Consent. If
no prior action is required by the Board of Directors pursuant to
the Act, the record date for determining shareholders entitled to
take action without a meeting shall be the close of business on
the date the first signed written consent with respect to the
action in question is delivered to the corporation, but if prior
action is required by the Board of Directors pursuant to the Act,
such record date shall be the close of business on the date on
which the Board of Directors adopts the resolution taking such
prior action unless the Board of Directors otherwise fixes a
record date.
(d) Absence of Board Determination for
Shareholders' Meeting.. If the Board of Directors does not
determine the record date for determining shareholders entitled
to notice of and to vote at an annual or special shareholders'
meeting, such record date shall be the close of business on the
day before the first notice with respect thereto is delivered to
shareholders.
(e) Adjourned Meeting. A record date for
determining shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the
meeting unless the Board of Directors fixes a new record date,
which it must do if the meeting is adjourned to a date more than
120 days after the date fixed for the original meeting.
(f) Certain Distributions. If the Board of
Directors does not determine the record date for determining
shareholders entitled to a distribution (other than one involving
a purchase, redemption, or other acquisition of the corporation's
shares or a share dividend), such record date shall be the close
of business on the date on which the Board of Directors
authorizes the distribution.
Section 3.7 Shareholders' List for Meetings.
(a) Preparation and Availability. After a
record date for a meeting of shareholders has been fixed, the
corporation shall prepare an alphabetical list of the names of
all of the shareholders entitled to notice of the meeting. The
list shall be arranged by class or series of shares, if any, and
show the address of and number of shares held by each
shareholder. Such list shall be available for inspection by any
shareholder for a period of ten days prior to the meeting or such
shorter time as exists between the record date and the meeting
date, and continuing through the meeting, at the corporation's
principal office, at a place identified in the meeting notice in
the city where the meeting will be held, or at the office of the
corporation's transfer agent or registrar, if any. A shareholder
or his or her agent may, on written demand, inspect the list,
subject to the requirements of the Act, during regular business
hours and at his or her expense, during the period that it is
available for inspection pursuant to this Section. The
corporation shall make the shareholders' list available at the
meeting and any shareholder or his or her agent or attorney may
inspect the list at any time during the meeting or any
adjournment thereof.
(b) Prima Facie Evidence. The shareholders'
list is prima facie evidence of the identity of shareholders
entitled to examine the shareholders' list or to vote at a
meeting of shareholders.
(c) Failure to Comply. If the requirements of
this Section have not been substantially complied with, or if the
corporation refuses to allow a shareholder or his or her agent or
attorney to inspect the shareholders' list before or at the
meeting, on the demand of any shareholder, in person or by proxy,
who failed to get such access, the meeting shall be adjourned
until such requirements are complied with. Refusal or failure to
prepare or make available the shareholders' list shall not affect
the validity of any action taken at a meeting of shareholders.
(d) Sale or Distribution of Information
Prohibited. A shareholder may not sell or otherwise distribute
Any information or records inspected under this Section, except
to the extent permitted by the Act.
Section 3.8 Quorum.
(a) What Constitutes a Quorum. Shares entitled
to vote as a separate voting group may take action on a matter at
a meeting only if a quorum of those shares exists with respect to
that matter. If the corporation has only one class of stock
outstanding, such class shall constitute a separate voting group
for purposes of this Section. Except as otherwise provided in
the Act, a majority of the votes entitled to be cast on the
matter shall constitute a quorum of the voting group for action
on that matter.
(b) Presence of Shares. Once a share is
represented for any purpose at a meeting, other than for the
purpose of objecting to holding the meeting or transacting
business at the meeting, it is considered present for purposes of
determining whether a quorum exists for the remainder of the
meeting and for any adjournment of that meeting unless a new
record date is or must be set for the adjourned meeting.
(c) Adjournment in Absence of Quorum. Where a
quorum is not present, the holders of a majority of the shares
represented and who would be entitled to vote at the meeting if a
quorum were present may adjourn such meeting from time to time.
Section 3.9 Voting of Shares. Each outstanding share,
regardless of class, is entitled to one vote on each matter voted
on at a meeting of shareholders.
Section 3.10 Vote Required.
(a) Matters Other Than Election of Directors.
If a quorum exists, except in the case of the election of
directors, action on a matter shall be approved if the votes cast
within the voting group favoring the action exceed the votes cast
opposing the action, unless the Act requires a greater number of
affirmative votes.
(b) Election of Directors. Each director shall
be elected by a plurality of the votes cast by the shares
entitled to vote in the election of directors at a meeting at
which a quorum is present. Each shareholder who is entitled to
vote at an election of directors has the right to vote the number
of shares owned by him or her for as many persons as there are
directors to be elected. Shareholders do not have a right to
cumulate their votes for directors.
Section 3.11 Conduct of Meeting. The Chairman of the
Board of Directors, and if there be none, or in his or her
absence, the President, and in his or her absence, any person
chosen by the shareholders present shall call a shareholders'
meeting to order and shall act as presiding officer of the
meeting, and the Secretary of the corporation shall act as
secretary of all meetings of the shareholders, but, in the
absence of the Secretary, the presiding officer may appoint any
other person to act as secretary of the meeting. The presiding
officer of the meeting shall have broad discretion in determining
the order of business at a shareholders' meeting. The presiding
officer's authority to conduct the meeting shall include, but in
no way be limited to, recognizing shareholders entitled to speak,
calling for the necessary reports, stating questions and putting
them to a vote, calling for nominations, and announcing the
results of voting. The presiding officer also shall take such
actions as are necessary and appropriate to preserve order at the
meeting. The rules of parliamentary procedure need not be
observed in the conduct of shareholders' meetings; however,
meetings shall be conducted in accordance with accepted usage and
common practice with fair treatment to all who are entitled to
take part.
Section 3.12 Inspectors of Election. Inspectors of
election may be appointed by the Board of Directors to act at any
meeting, of shareholders at which any vote is taken. If
inspectors of election are not so appointed, the presiding
officer of the meeting may, and on the request of any shareholder
shall, make such appointment. The inspectors of election shall
determine the number of shares outstanding, the voting rights
with respect to each the shares represented at the meeting, the
existence of a quorum, and the authenticity, validity, and effect
of proxies; receive votes, ballots, consents, and waivers; hear
and determine all challenges and questions arising in connection
with the vote; count and tabulate all votes, consents, and
waivers; determine and announce the result; and do such acts as
are proper to conduct the election or vote with fairness to all
shareholders. No inspector, whether appointed by the Board of
Directors or by the person acting as presiding officer of the
meeting, need be a shareholder.
Section 3.13 Proxies.
(a) Appointment. At all meetings of
shareholders, a shareholder may vote his or her shares in person
or by proxy. A shareholder may appoint a proxy to vote or
otherwise act for the shareholder by signing an appointment form,
either personally or by his or her attorney-in-fact. If an
appointment form expressly provides, any proxy holder may
appoint, in writing, a substitute to act in his or her place. A
telegraph, telex, or a cablegram, a facsimile transmission of a
signed appointment form, or a photographic, photostatic, or
equivalent reproduction of a signed appointment form is a
Sufficient appointment form.
(b) When Effective. An appointment of a proxy
is effective when received by the Secretary or other officer or
agent of the corporation authorized to tabulate votes. An
appointment is valid for up to eleven months unless a longer
period is expressly provided in the appointment form. An
appointment of a proxy is revocable by the shareholder unless the
appointment form conspicuously states that it is irrevocable and
the appointment is coupled with an interest.
Section 3.14 Action by Shareholders Without Meeting.
(a) Requirements for Written Consents. Any
action required or permitted by the Act to be taken at any annual
or special meeting of shareholders may be taken without a
meeting, without prior notice, and without a vote if one or more
written consents describing the action taken shall be signed and
dated by the holders of outstanding stock entitled to vote
thereon having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting
at which all shares entitled to vote thereon were present and
voted. Such consents must be delivered to the principal office
of the corporation in Florida, the corporation's principal place
of business, the Secretary, or another officer or agent of the
corporation having custody of the books in which proceedings of
meetings of shareholders are recorded. No written consent shall
be effective to take the corporate action referred to therein
unless, within sixty days of the date of the earliest dated
consent delivered in the manner required herein, written consents
signed by the number of holders required to take action are
delivered to the corporation by delivery as set forth in this
Section.
(b) Revocation of Written Consents. Any
written consent may be revoked prior to the date that the
corporation receives the required number of consents to authorize
the proposed action. No revocation is effective unless in writing
and until received by the corporation at its principal office in
Florida or its principal place of business, or received by the
Secretary or other officer or agent having custody of the books
in which proceedings of meetings of shareholders are recorded.
(c) Notice to Nonconsenting Shareholders.
Within ten days after obtaining such authorization by written
consent, notice must be given in writing to those shareholders
who have not consented in writing or who are not entitled to vote
on the action. The notice shall fairly summarize the material
features of the authorized action and, if the action be such for
which dissenters' rights are provided under the Act, the notice
shall contain a clear statement of the right of shareholders
dissenting therefrom to be paid the fair value of their shares
upon compliance with the provisions of the Act regarding the
rights of dissenting shareholders.
(d) Same Effect as Vote at Meeting. A consent
signed under this Section has the effect of a meeting vote and
may be described as such in any document. Whenever action is
taken by written consent pursuant to this Section, the written
consent of the shareholders consenting thereto or the written
reports of inspectors appointed to tabulate such consents shall
be filed with the minutes of proceedings of shareholders.
Section 3.15 Acceptance of Instruments Showing
Shareholder Action. If the name signed on a vote, consent,
waiver, or proxy appointment corresponds to the name of a
shareholder, the corporation, if acting in good faith, may accept
the vote, consent, waiver, or proxy appointment and give it
effect as the act of a shareholder. If the name signed on a
vote, consent, waiver, or proxy appointment does not correspond
to the name of a shareholder, the corporation, if acting in good
faith, may accept the vote, consent, waiver, or proxy appointment
and give it effect as the act of the shareholder if any of the
following apply:
(a) The shareholder is an entity and the name
signed purports to be that of an officer or agent of the entity;
(b) The name signed purports to be that of a
administrator, executor, guardian, personal representative, or
conservator representing the shareholder and, if the corporation
requests, evidence of fiduciary status acceptable to the
corporation is presented with respect to the vote, consent,
waiver, or proxy appointment;
(c) The name signed purports to be that of a
receiver or trustee in bankruptcy, or assignee for the benefit of
creditors of the shareholder and, if the corporation requests,
evidence of this status acceptable to the corporation is
presented with respect to the vote, consent, waiver, or proxy
appointment;
(d) The name signed purports to be that of a
pledgee, beneficial owner, or attorney-in-fact of the shareholder
and, if the corporation requests, evidence acceptable to the
corporation of the signatory's authority to sign for the
shareholder is presented with respect to the vote, consent,
waiver, or proxy appointment; or
(e) Two or more persons are the shareholder as
co-tenants or fiduciaries and the name signed purports to be the
name of at least one of the co-owners and the person signing
appears to be acting on behalf of all co-owners.
The corporation may reject a vote, consent, waiver, or proxy
appointment if the Secretary or other officer or agent of the
corporation who is authorized to tabulate votes, acting, in good
faith, has reasonable basis for doubt about the validity of the
signature on it or about the signatory's authority to sign for
the shareholder.
ARTICLE 4
Board of Directors
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Section 4.1 General Powers and Number. All corporate
powers shall be exercised by or under the authority of, and the
business and affairs of the corporation managed under the
direction of, the Board of Directors. The corporation shall have
five (5) directors initially. The number of directors may be
increased or decreased from time to time by vote of the
shareholders, but shall never be less than one nor more than ten.
Section 4.2 Qualifications. Directors must be natural
persons who are eighteen years of age or older but need not be
residents of this state or shareholders of the corporation.
Section 4.3 Term of Office. Each director shall hold
office until the next annual meeting of shareholders and until
his or her successor shall have been elected and, if necessary,
qualified, or until there is a decrease in the number of
directors which takes effect after the expiration of his or her
term, or until his or her prior death, resignation or removal.
Section 4.4 Removal. The shareholders may remove one or
more directors with or without cause. A director may be removed
by the shareholders at a meeting of shareholders, provided that
the notice of the meeting states that the purpose, or one of the
purposes, of the meeting is such removal.
Section 4.5 Resignation. A director may resign at any
time by delivering written notice to the Board of Directors or
its Chairman (if any) or to the corporation. A director's
resignation is effective when the notice is delivered unless the
notice specifies a later effective date.
Section 4.6 Vacancies.
(a) Who May-Fill Vacancies. Whenever any
vacancy occurs on the Board of Directors, including a vacancy
resulting from an increase in the number of directors, it may be
filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors, or
by the shareholders. If the directors first fill a vacancy, the
shareholders shall have no further right with respect to that
vacancy, and if the shareholders first fill the vacancy, the
directors shall have no further rights with respect to that
vacancy.
(b) Prospective Vacancies. A vacancy that will
occur at a specific later date, because of a resignation
effective at a later date or otherwise, may be filled before the
vacancy occurs, but the new director may not take office until
the vacancy occurs.
Section 4.7 Compensation. The Board of Directors,
irrespective of any personal interest of any of its members, may
establish reasonable compensation of all directors for services
to the corporation as directors, officers, or otherwise, or may
delegate such authority to an appropriate committee. The Board
of Directors also shall have authority to provide for or delegate
authority to an appropriate committee to provide for reasonable
pensions, disability or death benefits, and other benefits or
payments, to directors, officers, and employees and to their
families, dependents, estates, or beneficiaries on account of
prior services rendered to the corporation by such directors,
officers, and employees.
Section 4.8 Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than this
bylaw immediately after the annual meeting of shareholders and
each adjourned session thereof. The place of such regular
meeting shall be the same as the place of the meeting of
shareholders which precedes it, or such other suitable place as
may be announced at such meeting of shareholders. The Board of
Directors may provide, by resolution, the date, time, and place,
either within or without the State of Florida, for the holding of
additional regular meetings of the Board of Directors without
other notice than such resolution.
Section 4.9 Special Meetings. Special meetings of the
Board of Directors may be called by the Chairman of the Board (if
any) the President or one-third of the members of the Board of
Directors. The person or persons calling the meeting may fix any
place, either within or without the State of Florida, as the
place for holding any special meeting of the Board of Directors,
and if no other place is fixed, the place of the meeting shall be
the principal office of the corporation in the State of Florida.
Section 4.10 Notice. Special meetings of the Board of
Directors must be preceded by at least two days' notice of the
date, time, and place of the meeting. The notice need not
describe the purpose of the special meeting.
Section 4.11 Waiver of Notice. Notice of a meeting of
the Board of Directors need not be given to any director who
signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver
of notice of such meeting and waiver of any and all objections to
the place of the meeting, the time of the meeting, or the manner
in which it has been called or convened, except when a director
states, at the beginning of the meeting or promptly upon arrival
at the meeting, any objection to the transaction of business
because the meeting is not lawfully called or convened.
Section 4.12 Quorum and Voting. A quorum of the Board of
Directors consists of a majority of the number of directors
prescribed by these bylaws. If a quorum is present when a vote
is taken, the affirmative vote of a majority of directors present
is the act of the Board of Directors. A director who is present
at a meeting of the Board of Directors or a committee of the
Board of Directors when corporate action is taken is deemed to
have assented to the action taken unless: (a) he or she objects
at the beginning of the meeting (or promptly upon his or her
arrival) to holding it or transacting specified business at the
meeting; or (b) he or she votes against or abstains from the
action taken.
Section 4.13 Conduct of-Meetings.
(a) Presiding Officer. The Board of Directors
may elect from among its members a Chairman of the Board of
Directors, who shall preside at meetings of the Board of
Directors. The Chairman, and if there be none, or in his or her
absence, the President, and in his or her absence, a Vice
President in the order provided under the Section of these bylaws
titled "Vice Presidents," and in their absence, any director
chosen by the directors present, shall call meetings of the Board
of Directors to order and shall act as presiding officer of the
meeting.
(b) Minutes. The Secretary of the corporation
shall act as secretary of all meetings of the Board of Directors
but in the absence of the Secretary, the presiding officer may
appoint any other person present to act as secretary of the
meeting. Minutes of any regular or special meeting of the Board
of Directors shall be prepared and distributed to each director.
(c) Adjournments. A majority of the directors
present, whether or not a quorum exists, may adjourn any meeting
of the Board of Directors to another time and place. Notice of
any such adjourned meeting, shall be given to the directors who
are not present at the time of the adjournment and, unless the
time and place of the adjourned meeting are announced at the time
of the adjournment, to the other directors.
(d) Participation by Conference Call or Similar
Means. The Board of Directors may permit any or all directors to
participate in a regular or a special meeting by, or conduct the
meeting through the use of, any means of communication by which
all directors participating may simultaneously hear each other
during the meeting. A director participating in a meeting by
this means is deemed to be present in person at the meeting.
Section 4.14 Committees. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors,
may designate from among its members an executive committee and
one or more other committees each of which, to the extent
provided in such resolution, shall have and may exercise all the
authority of the Board of Directors, except that no such
committee shall have the authority to:
(a) approve or recommend to shareholders actions
or proposals required by the Act to be approved by shareholders;
(b) fill vacancies on the Board of Directors or
any committee thereof;
(c) adopt, amend, or repeal these bylaws;
(d) authorize or approve the reacquisition of
shares unless pursuant to a general formula or method specified
by the Board of Directors; or
(e) authorize or approve the issuance or sale or
contract for the sale of shares, or determine the designation and
relative rights, preferences, and limitations of a voting group
except that the Board of Directors may authorize a committee (or
a senior executive officer of the corporation) to do so within
limits specifically prescribed by the Board of Directors.
Each committee must have two or more members, who shall serve at
the pleasure of the Board of Directors. The Board of Directors,
by resolution adopted in accordance with this Section, may
designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent
member or members at any meeting of such committee. The
provisions of these bylaws which govern meetings, notice and
waiver of notice, and quorum and voting requirements of the Board
of Directors apply to committees and their members as well.
Section 4.15 Action Without Meeting. Any action required
or permitted by the Act to be taken at a meeting of the Board of
Directors or a committee thereof may be taken without a meeting
if the action is taken by all members of the Board or of the
committee. The action shall be evidenced by one or more written
consents describing the action taken, signed by each director or
committee member and retained by the corporation. Such action
shall be effective when the last director or committee member
signs the consent, unless the consent specifies a different
effective date. A consent signed under this Section has the
effect of a vote at a meeting and may be described as such in any
document.
ARTICLE 5
Officers
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Section 5.1 Number. The principal officers of the
corporation shall be a President, the number of Vice Presidents,
as authorized from time to time by the Board of Directors, a
Secretary, and a Treasurer, each of whom shall be elected by the
Board of Directors. Such other officers and assistant officers
as may be deemed necessary may be elected or appointed by the
Board of Directors. The Board of Directors may also authorize
any duty appointed officer to appoint one or more officers or
assistant officers. The same individual may simultaneously hold
more than one office.
Section 5.2 Election and Term of Office. The officers
of the corporation to be elected by the Board of Directors shall
be elected annually by the Board of Directors at the first
meeting of the Board of Directors held after each annual meeting
of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon
thereafter as is practicable. Each officer shall hold office
until his or her successor shall have been duly elected or until
his or her prior death, resignation, or removal.
Section 5.3 Removal. The Board of Directors may remove
any officer and, unless restricted by the Board of Directors, an
officer may remove any officer or assistant officer appointed by
that officer, at any time, with or without cause and
notwithstanding the contract rights, if any, of the officer
removed. The appointment of an officer does not of itself create
contract rights.
Section 5.4 Resignation. An officer may resign at any
time by delivering notice to the corporation. The resignation
shall be effective when the notice is delivered, unless the
notice specifies a later effective date and the corporation
accepts the later effective date. If a resignation is made
effective at a later date and the corporation accepts the future
effective date, the pending vacancy may be filled before the
effective date but the successor may not take office until the
effective date.
Section 5.5 Vacancies. A vacancy in any principal
office because of death, resignation, removal, disqualification,
or otherwise, shall be filled as soon thereafter as practicable
by the Board of Directors for the unexpired portion of the term.
Section 5.6 President. The President shall be the chief
executive officer of the corporation and, subject to the
direction of the Board of Directors, shall in general supervise
and control all of the business and affairs of the corporation.
The President shall, when present, preside at all meetings of the
shareholders and, if no Chairman of the Board has been elected,
shall preside at all meetings of the Board of Directors. The
President shall have authority, subject to such rules as may be
prescribed by the Board of Directors, to appoint such agents and
employees of the corporation as he or she shall deem necessary,
to prescribe their powers, duties and compensation, and to
delegate authority to them. Such agents and employees shall hold
office at the discretion of the President. The President shall
have authority to sign certificates for shares of the corporation
the issuance of which shall have been authorized by resolution of
the Board of Directors, and to execute and acknowledge, on behalf
of the corporation, all deeds, mortgages, bonds, contracts,
leases, reports, and all other documents or instruments necessary
or proper to be executed in the course of the corporation's
regular business, or which shall be authorized by resolution of
the Board of Directors; and, except as otherwise provided by law
or the Board of Directors, the President may authorize any Vice
President or other officer or agent of the corporation to execute
and acknowledge such documents or instruments in his or her place
and stead. In general he or she shall perform all duties
incident to the off-ice of President and such other duties as may
be prescribed by the Board of Directors from time to time.
Section 5.7 Vice Presidents. In the absence of the
President or in the event of the President's death, inability or
refusal to act, or in the event for any reason it shall be
impracticable for the President to act personally, the Vice
President, if any (or in the event there be more than one Vice
President, the Vice Presidents in the order designated by the
Board of Directors, or in the absence of any designation, then in
the order of their election), shall perform the duties of the
President, and when so actin-, shall have all the powers of and
be subject to all the restrictions upon the President. Any Vice
President may sign certificates for shares of the corporation the
issuance of which shall have been authorized by resolution of the
Board of Directors; and shall perform such other duties and have
such authority as from time to time may be delegated or assigned
to him or her by the President or by the Board of Directors. The
execution of any instrument of the corporation by any Vice
President shall be conclusive evidence, as to third parties, of
his or her authority to act in the stead of the President.
Section 5.8 Secretary. The Secretary shall: (a) keep,
or cause to be kept, minutes of the meetings of the shareholders
and of the Board of Directors (and of committees thereof in one
or more books provided for that purpose (including records of
actions taken by the shareholders or the Board of Directors (or
committees thereof without a meeting); (b) be custodian of the
corporate records and of the seal of the corporation, if any, and
if the corporation has a seal, see that it is affixed to all
documents the execution of which on behalf of the corporation
under its seal is duly authorized; (c) authenticate the records
of the corporation; (d) maintain a record of the shareholders of
the corporation, in a form that permits preparation of a list of
the names and addresses of all shareholders, by class or series
of shares and showing the number and class or series of shares
held by each shareholder; (e) have general charge of the stock
transfer books of the corporation; and (f) in general perform all
duties incident to the office of Secretary and have such other
duties and exercise such authority as from time to time may be
delegated or assigned by the President or by the Board of
Directors.
Section 5.9 Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and
securities of the corporation; (b) maintain appropriate
accounting records; (c) receive and give receipts for moneys due
and payable to the corporation from any source whatsoever, and
deposit all such moneys in the name of the corporation in such
banks, trust companies, or other depositories as shall be
selected in accordance with the provisions of these bylaws; and
(d) in general perform all of the duties incident to the office
of Treasurer and have such other duties and exercise such other
authority as from time to time may be delegated or assigned by
the President or by the Board of Directors. If required by the
Board of Directors, the Treasurer shall give a bond for the
faithful discharge of his or her duties in such sum and with such
surety or sureties as the Board of Directors shall determine.
Section 5.10 Assistant Secretaries and Assistant
Treasurers. There shall be such number of Assistant Secretaries
and Assistant Treasurers as the Board of Directors may from time
to time authorize. The Assistant Treasurers shall respectively,
if required by the Board of Directors, give bonds for the
faithful discharge of their duties in such sums and with such
sureties as the Board of Directors shall determine. The
Assistant Secretaries and Assistant Treasurers, in general, shall
perform such duties and have such authority as shall from time to
time be delegated or assigned to them by the Secretary or the
Treasurer, respectively, or by the President or the Board of
Directors.
Section 5.11 Other Assistants and Acting Officers. The
Board of Directors shall have the power to appoint, or to
authorize any duly appointed officer of the corporation to
appoint, any person to act as assistant to any officer, or as
agent for the corporation in his or her stead, or to perform the
duties of such officer whenever for any reason it is
impracticable for such officer to act personally, and such
assistant or acting officer or other agent so appointed by the
Board of Directors or an authorized officer shall have the power
to perform all the duties of the office to which he or she is so
appointed to be an assistant, or as to which he or she is so
appointed to act, except as such power may be otherwise defined
or restricted by the Board of Directors or the appointing
officer.
Section 5.12 Salaries. The salaries of the principal
officers shall be fixed from time to time by the Board of
Directors or by a duly authorized committee thereof, and no
officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a director of the corporation.
ARTICLE 6
Contracts, Checks and Deposits; Special Corporate Acts
------------------------------------------------------
Section 6.1 Contracts. The Board of Directors may
authorize any officer or officers, or any agent or agents to
enter into any contract or execute or deliver any instrument in
the name of and on behalf of the corporation, and such
authorization may be general or confined to specific instances.
In the absence of other designation, all deeds, mortgages, and
instruments of assignment or pledge made by the corporation shall
be executed in the name of the corporation by the President or
one of the Vice Presidents, if any; the Secretary or an Assistant
Secretary, when necessary or required, shall attest and affix the
corporate seal, if any, thereto; and when so executed no other
party to such instrument or any third party shall be required to
make any inquiry into the authority of the signing officer or
officers.
Section 6.2 Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes, or other evidences
of indebtedness issued in the name of the corporation, shall be
signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time be
determined by or under the authority of a resolution of the Board
of Directors.
Section 6.3 Deposits. All funds of the corporation not
other-wise employed shall be deposited from time to time to the
credit of the corporation in such banks, trust companies, or
other depositories as may be selected by or under the authority
of a resolution of the Board of Directors.
Section 6.4 Voting of Securities Owned by Corporation.
Subject always to the specific directions of the Board of
Directors, (a) any shares or other securities issued by any other
corporation and owned or controlled by this corporation may be
voted at any meeting of security holders of such other
corporation by the President of this corporation if he or she be
present, or in his or her absence, by any Vice President of this
corporation who may be present, and (b) whenever, in the judgment
of the President, or in his or her absence, of any Vice
President, it is desirable for this corporation to execute a
proxy or written consent in respect of any such shares or other
securities, such proxy or consent shall be executed in the name
of this corporation by the President or one of the Vice
Presidents, if any, of this corporation, without necessity of any
authorization by the Board of Directors, affixation of corporate
seal, if any, or countersignature or attestation by another
officer. Any person or persons designated in the manner above
stated as the proxy or proxies of this corporation shall have
full fight, power, and authority to vote the shares or other
securities issued by such other corporation and owned or
controlled by this corporation the same as such shares or other
securities might be voted by this corporation.
ARTICLE 7
Certificates for Shares; Transfer of Shares
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Section 7.1 Consideration for Shares. The Board of
Directors may authorize shares to be issued for consideration
consisting of any tangible or intangible property or benefit to
the corporation, including cash, promissory notes, services
performed, promises to perform services evidenced by a written
contract, or other securities of the corporation. Before the
corporation issues shares, the Board of Directors shall determine
that the consideration received or to be received for the shares
to be issued is adequate. The determination of the Board of
Directors is conclusive insofar as the adequacy of consideration
for the issuance of shares relates to whether the shares are
validly issued, fully paid, and nonassessable. The corporation
may place in escrow shares issued for future services or benefits
or a promissory note, or make other arrangements to restrict the
transfer of the shares, and may credit distributions in respect
of the shares against their purchase price, until the services
are performed, the note is paid, or the benefits are received.
If the services are not performed, the note is not paid, or the
benefits are not received, the corporation may cancel, in whole
or in part, the shares escrowed or restricted and the
distributions credited.
Section 7.2 Certificates for Shares. Every holder of
shares in the corporation shall be entitled to have a certificate
representing all shares to which he or she is entitled unless the
Board of Directors authorizes the issuance of some or all shares
without certificates. Any such authorization shall not affect
shares already represented by certificates until the certificates
are surrendered to the corporation. If the Board of Directors
authorizes the issuance of any shares without certificates,
within a reasonable time after the issue or transfer of any such
shares, the corporation shall send the shareholder a written
statement of the information required by the Act to be set forth
on certificates, including any restrictions on transfer.
Certificates representing shares of the corporation shall be in
such form, consistent with the Act, as shall be determined by the
Board of Directors. Such certificates shall be signed (either
manually or in facsimile) by the President or any Vice President
or any other persons designated by the Board of Directors and may
be sealed with the seal of the corporation or a facsimile
thereof. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the
person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the
stock transfer books of the corporation. Unless the Board of
Directors authorizes shares without certificates, all
certificates surrendered to the corporation for transfer shall be
canceled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been
surrendered and canceled, except as provided in these bylaws with
respect to lost, destroyed, or stolen certificates. The validity
of a share certificate is not affected if a person who signed the
certificate (either manually or in facsimile) no longer holds
office when the certificate is issued.
Section 7.3 Transfer of Shares. Prior to due
presentment of a certificate for shares for registration of
transfer, the corporation may treat the registered owner of such
shares as the person exclusively entitled to vote, to receive
notifications, and otherwise to have and exercise all the rights
and power of an owner. Where a certificate for shares is
presented to the corporation with a request to register a
transfer, the corporation shall not be liable to the owner or any
other person suffering loss as a result of such registration of
transfer if (a) there were on or with the certificate the
necessary endorsements, and (b) the corporation had no duty to
inquire into adverse claims or has discharged any such duty. The
corporation may require reasonable assurance that such
endorsements are genuine and effective and compliance with such
other regulations as may be prescribed by or tinder the authority
of the Board of Directors.
Section 7.4 Restrictions on Transfer. The face or
reverse side of each certificate representing shares shall bear a
conspicuous notation as required by the Act of any restriction
imposed by the corporation upon the transfer of such shares.
Section 7.5 Lost, Destroyed, or Stolen Certificates.
Unless the Board of Directors authorizes shares without
certificates, where the owner claims that certificates for shares
have been lost, destroyed, or wrongfully taken, a new certificate
shall be issued in place thereof if the owner (a) so requests
before the corporation has notice that Such shares have been
acquired by a bona fide purchaser, (b) files with the corporation
a sufficient indemnity bond if required by the Board of Directors
or any principal officer, and (c) satisfies such other reasonable
requirements as may be prescribed by or under the authority of
the Board of Directors.
Section 7.6 Stock Regulations. The Board of Directors
shall have the power and authority to make all such further rules
and regulations not inconsistent with law as they may deem
expedient concerning the issue, transfer, and registration of
shares of the corporation.
ARTICLE 8
Seal
----
Section 8.1 Seal. The Board of Directors may provide
for a corporate seal for the corporation.
ARTICLE 9
Books and Records
-----------------
Section 9.1 Books and Records.
(a) The corporation shall keep as permanent
records minutes of all meetings of the shareholders and Board of
Directors, a record of all actions taken by the shareholders or
Board of Directors without a meeting, and a record of all actions
taken by a committee of the Board of Directors in place of the
Board of Directors on behalf of the corporation.
(b) The corporation shall maintain accurate
accounting records.
(c) The corporation or its agent shall maintain
a record of the shareholders in a form that permits preparation
of a list of the names and addresses of all shareholders in
alphabetical order by class of shares showing the number and
series of shares held by each.
(d) The corporation shall keep a copy of all
written communications within the preceding three years to all
shareholders generally or to all shareholders of a class or
series, including the financial statements required to be
furnished by the Act, and a copy of its most recent annual report
delivered to the Department of State.
Section 9.2 Shareholders' Inspection Rights.
Shareholders are entitled to inspect and copy records of the
corporation as permitted by the Act.
Section 9.3 Distribution of Financial Information. The
corporation shall prepare and disseminate financial statements to
shareholders as required by the Act.
Section 9.4 Other Reports. The corporation shall
disseminate such other reports to shareholders as are required by
the Act, including reports regarding indemnification in certain
circumstances and reports regarding the issuance or authorization
for issuance of shares in exchange for promises to render
services in the future.
ARTICLE 10
Indemnification
---------------
Section 10.1 Provision of Indemnification. The
corporation shall, to the fullest extent permitted or required by
the Act, including any amendments thereto (but in the case of any
such amendment, only to the extent such amendment permits or
requires the corporation to provide broader indemnification
rights than prior to such amendment), indemnify its Directors or
Officers against any and all Liabilities, and advance any and all
reasonable Expenses incurred in any Proceeding to which any such
Director or Officer is or is threatened to be made a Party or a
witness because he or she is or was a Director or Officer of the
corporation. The rights to indemnification granted hereunder
shall not be deemed exclusive of any other rights to
indemnification against Liabilities or the advancement of
Expenses which a Director or Officer may be entitled under any
written agreement, Board resolution, vote of shareholders, the
Act, or otherwise. The corporation may, but shall not be
required to, supplement the foregoing rights to indemnification
against Liabilities and advancement of Expenses by the purchase
of insurance on behalf of any one or more of its Directors or
Officers whether or not the corporation would be obligated to
indemnify or advance Expenses to such Director or Officer under
this Article. For purposes of this Article, the terms
"Directors" and "Officers" includes former directors or officers
and any directors or officers who are or were serving at the
request of the corporation as directors, officers, employees, or
agents of another corporation, partnership, joint venture, trust,
or other enterprise, including,, without limitation, any employee
benefit plan (other than in the capacity as agents separately
retained and compensated for the provision of goods or services
to the enterprise, including, without limitation, attorneys-at-
law, accountants, and financial consultants). All other
capitalized terms used in this Article and not otherwise defined
herein shall have the meaning set forth in Section 607.0850,
Florida Statutes, as amended. The provisions of this Article are
intended solely for the benefit of the indemnified parties
described herein, their heirs and personal representatives and
shall not create any rights in favor of third parties. No
amendment to or repeal of this Article shall diminish the rights
of indemnification provided for herein prior to such amendment or
repeal.
ARTICLE 11
Amendments
----------
Section 11.1 Power to Amend. These bylaws may be amended
or repealed by either the Board of Directors or the shareholders,
unless the Act reserves the power to amend these bylaws generally
or any particular bylaw provision, as the case may be,
exclusively to the shareholders or unless the shareholders, in
amending or repealing these bylaws generally or any particular
bylaw provision, provide expressly that the Board of Directors
may not amend or repeal these bylaws or such bylaw provision, as
the case may be.
Section 11.2 Implied Amendments. Any action taken or
authorized by the shareholders or by the Board of Directors which
would be inconsistent with the bylaws then in effect but which is
taken or authorized by affirmative vote of not less than the
number of shares or the number of directors required to amend the
bylaws so that the bylaws would be consistent with such action
shall be given the same effect as though the bylaws had been
temporarily amended or suspended so far, but only so far, as is
necessary to permit the specific action so taken or authorized.
_____________________________________________________________________________
EXHIBIT 6(a).1 MORTGAGE AND SECURITY AGREEMENT BWETWEEN
LAKESHORE CLUB DEVELOPMENT, INC. (PREDECESSOR IN INTEREST TO
LAKESHORE CLUB DEVELOPMENT, LC) AND MORTGAGE INVESTMENT GROUP 20,
LTD., DATED SEPTEMBER 30, 1998
_____________________________________________________________________________
This document prepared by and return to: :
GARY A. KOR.N, ESQ. :
BEDZOW, KORN, BROWN & LIPTON, P.A. :
Suite 200 :
20803 Biscayne Boulevard :
Aventura, Florida 33180 :
Mailing Address: :
P.O. Box 8020 :
Hallandale, Florida 33006-8020 :
Phone (305) 935-6888 (Dade) :
(305) 523-6001 (Broward) :
Fax No. (305) 936-9SO2 : (Reserved for Use by the Clerk)
=================================================================+============
MORTGAGE AND SECURITY AGREEMENT
-------------------------------
THIS MORTGAGE is made as of the 30 day of September, 1998,
between LAKESHORE CLUB DEVELOPMENT, INC., a Florida corporation
(hereinafter called the "Mortgagor"), and MORTGAGE INVESTMENT
GROUP 20, LTD., a Florida Limited Partnership, with offices at
307 South 21st Avenue, Hollywood, Florida 33020, as Mortgagee and
Secured Party (hereinafter called the "Mortgagee").
WITNESSETH:
----------
WHEREAS, the Mortgagor is justly indebted to Mortgagee in
the principal sum of TWO MILLION FIVE HUNDRED THOUSAND AND N0/100
($2,500,000.00) DOLLARS as evidenced by that certain promissory
note ("Note") of even date herewith, executed by Mortgagor and
delivered to Mortgagee, payable according, to the terms therein
provided, with a maturity date of October 1, 2001, and by
reference being a part hereof to the same extent as though set
out in full herein.
NOW THIS INDENTURE WITNESSETH, to secure the performance and
observance by the Mortgagor of all of the covenants and
conditions contained within this Mortgage, to secure the timely
and complete payment of the indebtedness evidenced by the Note,
and in order to charge the properties, interests and rights
hereinafter described with such payment, performance and
observance, and for and in consideration of the sum of TEN AND
NO/100 ($10.00) DOLLARS paid by the Mortgagee to the Mortgagor,
and for other valuable considerations, the receipt and
sufficiency of which is hereby acknowledged, the Mortgagor does
hereby grant, bargain, sell, alien,, transfer, mortgage,
hypothecate, pledge, deliver, set over, warrant and confirm unto
the Mortgagee, its successors and assigns forever:
THE MORTGAGED PROPERTY
----------------------
That certain piece, parcel or tract of land in which the
Mortgagor has a fee simple interest, situate in the County of
Polk and State of Florida (hereinafter called the "Land")
described within Exhibit "A" attached hereto.
TOGETHER WITH all lands, buildings, structures and improvements
of every nature whatsoever now or hereafter situated on the Land,
and all fixtures, machinery, equipment, furniture and other
personal property of every nature whatsoever now or hereafter
owned by the Mortgagor and located in or on the Land, buildings.
structures or other improvements, betterments, renewals and
replacements to any of the foregoing; and all of the right, title
and interest of the Mortgagor in any such personal property or
fixtures subject to a conditional sales contract, chattel
mortgage or similar lien or claim to-ether with the benefit of
any deposits or payments now or hereafter made by the Mortgagor
or on Mortgagor's behalf.
TOGETHER WITH all easements, rights of way, strips and gores
of land, streets, ways, alleys, passages, sewer rights, rights,
titles, interest, privileges, liberties, tenements, hereditaments
and appurtenances whatsoever, in any way belonging, relating or
appertaining to any of the property hereinabove described, or
which hereafter shall in any way belong, relate or be appurtenant
thereto, whether now owned or hereafter acquired by Mortgagor,
and the reversion and reversions, remainder and remainders,
rents, issues, profits thereof, and all the estate, right, title,
interest, property, possession, claim and demand whatsoever, at
law as well as in equity, of Mortgagor of, in and to the same,
including, but not limited to, all judgments, awards of damages
and settlements hereafter made resulting from condemnation
proceedings or the taking, of the Mortgaged Property or any part
thereof under the power of eminent domain, the alteration of the
grade of any street, or for any damage (whether caused by such
taking or otherwise to the Mortgaged Property or any part
thereof, or to any rights appurtenant thereto, and all proceeds
of any sales or other dispositions of the Mortgaged Property or
any part thereof;
TOGETHER WITH all rents, royalties, issues, profits,
revenue, income and other benefits from the Mortgaged Property to
be applied against the indebtedness secured hereby, provided
however, that permission is hereby given to Mortgagor so long as
no default has occurred hereunder, to collect, receive, take, use
and enjoy such rents, royalties. issues, profits, revenue,
income, licenses, foreclosures, concessions and other benefits as
they become due and payable, but not in advance thereof. The
foregoing assignment shall be fully operative without any further
action on the part of either party and specifically Mortgagee
shall be entitled, at its option upon the occurrence of a default
hereunder, to all rents, royalties, issues, profits, revenue,
income and other benefits from the Mortga2ed Property, whether or
not Mortgagee takes possession of the Mortgaged Property. Upon
any such notice or default hereunder, the permission hereby given
to Mortgagor to collect such rents, royalties, issues, profits,
revenue, income and other benefits from the Mortgaged Property
shall terminate and such permission shall not be reinstated upon
a cure of the default without Mortgagee's specific written
consent. Exercise of rights under this paragraph and the
application of any such rights, royalties, issues, profits,
revenue, income or other benefits to such Indebtedness, shall not
cure or waive any default or notice of default hereunder or
invalidate any act done pursuant hereto, but shall be cumulative
and in addition to all other rights and remedies to Mortgagee;
TOGETHER WITH a security interest in (i) all property,
equipment and fixtures affixed to or located on the Mortgaged
Property which, to the fullest extent permitted by law, shall be
deemed fixtures and a part of the Mortgaged Property, (ii) all
articles of personal property and all materials delivered to the
Mortgaged Property for the use and operation of said property or
for use in any construction being conducted thereon, and owned by
Mortgagor; (iii) all contract rights, owned by the Mortgagor and
utilized in connection with the Mortgaged Property, including
construction contracts, service contracts, advertising contracts,
purchase orders, equipment leases, all other contract rights
associated with the Mortgaged Property, general intangibles,
actions and rights of action, all deposits, prepaid expenses,
permits, licenses, including all rights to insurance proceeds.
(iv) all right, title and interest of the Mortgagor in all trade
names and trademarks hereinafter used in connection with the use
of the Mortgaged Property, and (v) all proceeds, products,
replacements, additions, substitutions, renewals and accessions
of any of the foregoing. Mortgagor (Debtor) hereby grants to
Mortgagee (Creditor) a security interest in all fixtures, rights
of action and personal property described herein. This Mortgage
is a self operative security agreement with respect to such
property, but Mortgagor agrees to execute and deliver on demand
such other security agreements, financing statements and other
instruments as Mortgagee may request in order to perfect its
security interest or to impose the lien hereof more specifically
upon any of such property. Mortgagee shall have all the rights
and remedies in addition to those specified herein of a secured
party under the Uniform Commercial Code; which, together with any
and all of the aforedescribed additional property and rights, now
or hereafter acquired by Mortgagor, shall sometimes herein be
collectively referred to as the "Mortgaged Property".
PROVIDED, HOWEVER, that these presents are upon the
condition that, if the Mortgagor shall pay, or cause to be paid
to the Mortgagee the principal and interest payable in respect to
the Note, at the times and in the manner stipulated therein and
herein, all without any deduction or credit for taxes or other
similar charges paid by the Mortgagor, and shall keep, perform
and observe all and singular the covenants and promises in the
Note, and any renewal, extension, consolidation or modification
thereof, and in this Mortgage expressed to be kept, performed and
observed by and on the part of the Mortgagor, all without fraud
or delay then this Mortgage, and all the properties, interest and
rights granted, bargained, sold, aliened, remised, released,
conveyed, assigned, transferred, mortgaged, hypothecated,
pledged, delivered, set over, warranted and confirmed, shall
cease, terminate and be void, but shall otherwise remain in full
force and effect.
ARTICLE I.
----------
1.1 Performance of Note and Mortgage.
--------------------------------
The Mortgagor will perform, observe and comply with all
the provisions hereof and of the Note secured hereby, and will
promptly pay to the Mortgagee the sum of money expressed in the
Note with interest thereon and all other sums required to be paid
by the Mortgagor pursuant to the provisions of the Note and the
Mortgage on the day or days when payment shall become due, all
without deduction or credit for taxes or other similar charges
paid by the Mortgagor, time being of the essence for such
payments.
1.2 Warranty of Title.
-----------------
The Mortgagor covenants that it is the owner of the
fee simple interest in and to the Mortgaged Property, has good
and absolute title to all existing personal property hereby
mortgaged and has full power and lawful right to convey and
mortgage the same in the manner and form aforesaid. That the
Mortgaged Property is free from all encumbrances except taxes for
the current year and encumbrances set forth in the title policy
issued simultaneously this date to the Mortgagor by ATTORNEYS'
TITLE INSURANCE FUND, INC. The Mortgagor hereby agrees to make
such further assurances to perfect the fee simple title to the
Mortgaged Property in the Mortgagee as may reasonably be
required. The Mortgagor does hereby fully warrant the title to
the Mortgaged Property against the lawful claims for all persons
whomsoever.
1.3 Taxes, Liens, and Utility Charges.
---------------------------------
a. The Mortgagor covenants and agrees to pay by
December 1st of each year and to deliver to the Mortgagee, on or
before December 31st of each year, tax receipts evidencing the
payment of all lawfully imposed taxes upon the Mortgaged Property
for the immediately preceding calendar year; to deliver to the
Mortgagee receipts evidencing the payment of all liens, levies,
and assessments for public improvements within thirty-(30) days
after same shall become due and payable; and to pay or discharge
within thirty (30) days after the due date, any and all
governmental levies that may be made on the Mortgaged Property,
on this Mortgage or the Note or in any other way resulting from
the mortgage indebtedness secured by this Mortgage. Mortgagor
shall have the right to contest the payment of ad valorem real
property taxes pursuant to and in accordance with applicable
state and local law, provided Mortgagor delivers to Mortgagee
sufficient security, as solely determined by Mortgagee, to pay
all such taxes and all interest and/or penalties that may accrue
thereon.
b. The Mortgagor shall not permit any mechanics',
laborer's, statutory or other lien to be created or to remain
outstanding upon any of the Mortgaged Property and shall, within
ten (10) days from the date of the filing thereof, cause same to
be released and discharged, or transferred to bond as permitted
by law.
C. The Mortgagor will pay when due and will not suffer
to remain outstanding, any charges for utilities, whether public
or private, with respect to the Mortgaged Property.
1.4 Insurance.
---------
a. The Mortgagor shall obtain, maintain and keep in
full force and effect during the term of this Mortgage, with all
premiums paid thereon, and without notice or demand, the
following insurance with respect to the Mortgaged Property:
(i) All-Risk (Special) Hazard Insurance ("All-
Risk Hazard Insurance") reflecting coverage in such amounts as
Mortgagee may require, but in no event less than 100% of the full
replacement cost of the Mortgaged Property that includes: (A) a
mortgage clause naming the Mortgagee as mortgagee, which clause
shall be a "standard union" (also known as a "New York") mortgage
clause which provides that the mortgagee's coverage will not be
invalidated by a foreclosure or the acquisition of the Mortgage
Property by a deed in lieu thereof, a change in ownership of the
Mortgaged Property, a more hazardous use of the Mortgaged
Property or a loss caused by the neglect of the owner of the
Mortgaged Property, provided that the mortgagee pays any premium
demanded should the owner of the Mortgaged Property fail to do
so; in the event that the aforesaid mortgage clause (which
creates a separate agreement between the insurance company and
the mortgagee does not apply to that portion of the Mortgaged
Property constituting personal property, the All-Risk Hazard
Insurance Policy shall also contain a "Lender's Loss Payable
Endorsement", which Endorsement shall, with respect to the
personal property, create a similar separate agreement between
the insurance company and the mortgagee as is created by the
"standard union"/"New York" Mortgage clause; (B) a replacement
cost endorsement, (C) a stipulated value/agreed amount
endorsement, (D) boiler explosion coverage, if applicable, (E)
sprinkler leakage coverage, if applicable, (F) vandalism and
malicious mischief coverage, (G) twelve (12) months rent loss and
business interruption coverage, and (H) flood insurance, if the
Mortgaged Property is in a designated flood plain area. Such
policy shall provide that any and all loss payments thereunder
shall be payable to Mortgagee alone and not jointly with
Mortgagor. In addition, consequential and resulting losses from
an insured peril shall also be covered;
(ii) General Comprehensive Public Liability
Insurance ("Liability Insurance") against claims for bodily
injury, death and property damage, occurring in, on, or about the
Mortgaged Property, in such amounts as may be required by
Mortgagee, but in no event less than $1,000,000.00 per occurrence
for bodily injury and property damage. Such policy shall include
an additional insured endorsement naming the Mortgagee;
(iii) Workers' Compensation Insurance ("Workers'
Compensation") in the statutory amount, naming the Mortgagor as
the owner of the Mortgaged Property; and
(iv) Insurance in such amounts and against such
other casualties and contingencies as may from time to time be
required by Mortgagee ("Other Insurance").
b. All policies of insurance required hereunder shall:
(i) be written by carriers which are licensed or authorized to
transact business in the State of Florida, and are rated "A" or
higher, Class XII or higher, according to the latest published
Best's Key Rating Guide and which shall be otherwise acceptable
to Mortgagee in all other respects, (ii) provide that the
Mortgagee shall receive thirty (30) days' prior written notice
from the insurer before a cancellation, modification, material
chance or non-renewal of the policy becomes effective, (iii) be
written with a deductible of not more than Sl,000.00 and for such
amounts as are sufficient to prevent the Mortgagor from becoming
a co-insurer thereunder, and (iv) be otherwise satisfactory to
Mortgagee.
1.5 Restoration Following Casualty.
------------------------------
(a) (i) If all or any part of the Mortgaged Property
shall be damaged or destroyed by a casualty covered by insurance
under Paragraph 1.4 hereof, Mortgagor shall immediately give
written notice thereof to Mortgagee and the appropriate insurer,
and Mortgagee is authorized and empowered(but not obligated or
required) to make proof of loss and to settle, adjust or
compromise any claims for loss, damage or destruction under any
policies of insurance required under this Mortgage. All proceeds
of insurance as provided in Paragraph 1.4, shall be paid to
Mortgagee and shall be applied first to the payment of all costs
and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by Mortgagee in obtaining
such proceeds, and Second. at the option of Mortgagee, either to
the payment of the indebtedness secured by this Mortgage, whether
or not due, in such order as Mortgagee may elect, or to the
restoration, repair, or replacement of the Mortgaged Property.
If Mortgagee elects to apply the insurance proceeds to the
restoration, repair or replacement of the Mortgaged Property,
such proceeds shall be disbursed to Mortgagor as work progresses
pursuant to a construction and disbursing agreement in form and
content satisfactory to Mortgagee in its sole discretion, and
Mortgagor shall promptly and diligently, regardless of whether
there shall be sufficient insurance proceeds therefor, restore,
repair and rebuild the Mortgaged Property to the equivalent of
its condition immediately prior to the casualty. During the
period of restoration and repair, Mortgagor shall continue to
duly and promptly pay, perform, observe and comply with all of
the terms, provisions and conditions of the Note and this
Mortgage. The election by Mortgagee to apply the insurance
proceeds to the restoration, repair or replacement of the
Mortgaged Property shall not affect the lien of this Mortgage or
affect or reduce the indebtedness secured hereby.
(ii) Notwithstanding anything to the contrary
contained in paragraph 1.5 (a)(i) hereof, Mortgagor may elect to
restore, rebuild or replace the Mortgaged Property damaged or
destroyed upon satisfaction in full of the following conditions:
(A) Mortgagee has determined in its discretion that such
rebuilding will not impair the value of its collateral; (B)
Mortgagor deposits with Mortgagee any funds in excess of
available insurance necessary, in Mortgagee's discretion, to
rebuild the Mortgaged Property; (C) Mortgagor rebuilds in
accordance with plans approved by Mortgagee; and (D) the proceeds
are disbursed to Mortgagor pursuant to a construction and
disbursing agreement in form and content satisfactory to
Mortgagee in its sole discretion, and (E) Mortgagor shall comply
with the provisions of paragraph 1.5 (a)(i) hereof.
(b) If all or any of the Mortgaged Property shall be
damaged or destroyed by a casualty not covered by insurance
required pursuant to the terms of this Mortgage or, if so
covered, the insurer fails or refuses to pay the claim within
thirty (30) days following the filing thereof, Mortgagor shall
immediately give written notice thereof to Mortgagee and
Mortgagor shall promptly and diligently, at Mortgagor's sole cost
and expense, restore, repair and rebuild the Mortgaged Property
to the equivalent of its condition immediately prior to the
casualty. During the period of restoration and repair, Mortgagor
shall continue to duly and promptly pay, perform, observe and
comply with all of the terms, provisions and conditions of the
Note and this Mortgage.
(c) If any work required to be performed under
subsections (a) or (b) above, or both, shall involve an estimated
expenditure of more than $25,000.00, no such work shall be
undertaken until plans and specifications therefor, prepared by
an architect satisfactory to Mortgagee, have been submitted to
and approved by Mortgagee.
1.6 Condemnation.
------------
If all or any part of the Mortgaged Property shall be
damaged or taken through Condemnation (which term when used in
this Mortgage shall include any damage or taking by any
governmental authority, and any transfer by private sale in lieu
thereof, either temporarily or permanently), the entire
indebtedness secured hereby shall, at the option of the
Mortgagee, become immediately due and payable if the Mortgagee in
its sole discretion determines that its security under this
Mortgage is impaired. The Mortgagee shall be entitled to all
compensation, awards, and any other payments of relief therefore
and is hereby authorized,. at its option, to commence, appear in
and prosecute, in its own or the Mortgagor's name, any action or
proceeding relating to any Condemnation, and to settle or
compromise any claim in connection therewith. All such
compensation, awards, damages, claims, rights of action and
proceeds and the rights thereto are hereby assigned by the
Mortgagor to the Mortgagee which, after deduction therefrom of
all its expenses, including attorneys' fees, may release any
monies so received by it without affecting the lien of this
Mortgage or may apply the same in such manner as the Mortgagee
shall determine, to the reduction of the sums secured hereby and
any balance of such monies then remaining shall be paid to the
Mortgagor. The Mortgagor agrees to execute such further
assignments of any compensations, awards, damages, claims, rights
of action and proceeds as the Mortgagee may require.
1.7 Care of Property.
----------------
a. The Mortgagor shall preserve and maintain the
Mortgaged Property in good condition and repair. The Mortgagor
shall not alter, chance remove or demolish any building presently
on or hereafter existing on the Land with out the written consent
of the Mortgagee; provided, however, that no consent of the
Mortgagee shall be required with respect to: (i) any tenant
improvements; or (ii) any alterations or changes costing less
than, TWENTY FIVE THOUSAND AND NO/100 ($25,000.00) DOLLARS
(excluding any costs of demolition). Mortgagor shall not permit,
commit or suffer any waste, impairment or deterioration of the
Mortgaged Property or of any part thereof, and will not take any
action which will increase the risk of fire or other hazard to
the Mortgaged Property or to any part thereof.
b. Except as may be otherwise provided herein, no
buildings, fixtures, personal property, or other part of the
Mortgaged Property shall be removed, demolished or substantially
altered without the prior written consent of the Mortgagee. The
Mortgagor may sell or otherwise dispose of, free from the lien of
the Mortgage, furniture, furnishings, equipment, tools,
appliances, machinery, fixtures or appurtenances, subject to the
lien hereof, which may become worn out, undesirable, obsolete,
disused or unnecessary for use in the operation of the Mortgaged
Property, not exceeding in value at the time of disposition
thereof the sum of FIVE THOUSAND AND NO/100 ($5,000.00) DOLLARS
for any single transaction, or a total of TEN THOUSAND AND NO/1OO
($10,000.00) DOLLARS in any one year, upon replacement of same
by, substituting for the same, other furniture, equipment, tools,
appliances, machinery fixtures or appurtenances not necessarily
of the same character, but of at least equal value to the
Mortgagor and costing not less than the amount realized from the
property sold or otherwise disposed of, which shall forthwith
become, without further action, subject to the lien of this
Mortgage.
c. If the Mortgaged Property or any part thereof is
damaged by fire or any other cause, the Mortgagor shall give
immediate written notice of same of Mortgagee.
d. The Mortgagee is hereby authorized to enter upon
and to inspect the Mortgaged Premises at any time during normal
business hours during the life of this Mortgage.
e. The Mortgagor will promptly comply with all present
and future laws, ordinances, rules and regulations of any
governmental authority affecting the Mortgaged Property or any
part thereof.
f. If all or any part of the Mortgaged Property shall
be damaged by fire or other casualty, the Mortgagor shall
promptly restore the Mortgaged Property to the equivalent of its
original condition regardless Of whether or not there shall be
any insurance proceeds therefor. If a part of the Mortgaged
Property shall be physically damaged through condemnation, the
Mortgagor shall promptly restore, repair or alter the remaining
property in a manner satisfactory to the Mortgagee.
g. If any work required to be performed under this
Paragraph 1.7 of Article I shall involve an estimated expenditure
of more than TWENTY FIVE THOUSAND AND NO/100 ($25,000.00)
DOLLARS, no such work shall be undertaken until plans and
specifications therefor, prepared by an architect and/or engineer
satisfactory to the Mortgagee, have been submitted to and
approved by the Mortgagee.
1.8 Mortgagee's Performance of Defaults.
-----------------------------------
If the Mortgagor shall be in default in the payment of any
tax assessment, encumbrance or other imposition, or in its
obligation to furnish insurance hereunder or performance or
observance of any other covenant, condition or term in this
Mortgage, the Mortgagee, may, at its option, without waiving or
affecting its option to foreclose or any other rights to which
the Mortgagee may be entitled hereunder, upon written notice to
Mortgagor perform or observe the same, and all payments made or
costs or expenses incurred by the Mortgagee in connection
therewith, shall be secured hereby and shall be immediately
repaid by the Mortgagor to the Mortgagee. with interest thereon
at the Default Rate as hereinafter defined. Nothing contained
herein shall be construed as requiring Mortgagee to advance or
expend monies for any purposes mentioned in this Paragraph. The
Mortgagee is hereby empowered to enter and to authorize others to
enter upon the Mortgaged Property or any part thereof for the
purpose of performing or observing any such defaulted covenant,
condition or terms, without thereby becoming liable to the
Mortgagor or to any person in possession holding the Mortgaged
Property.
1.9 Compliance With Hazardous Waste Law.
-----------------------------------
Mortgagor warrants and represents to Mortgagee after
thorough investigations:
a. That neither Mortgagor nor any other person to the
Mortgagor's knowledge, after reasonable inquiry, has ever used
the Mortgaged Property as a facility for the storage, treatment
or disposal of any "Hazardous Substances", as that term is
hereinafter defined, and
b. That the Mortgaged Property is now and at all times
hereafter will continue to be in full compliance with all
federal, state and local "Environmental Laws" (as that term is
defined hereinafter) including but not limited to, the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"), 42 USC 9601, et seq., the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), Public Law
99-499, 100 Stat. 1613, the Resource Conservation and Recovery
Act ("RCRA"), 42 USC 6901, et seq., the Florida Resource
Recovery and Management Act, Section 403.701, et seq.; Florida
Statutes, the Pollutant Spill Prevention and Control Act, Section
376.011-376.17 and 376.19-376.21 Florida Statutes, as the same
may be amended from time to time and all ordinances, regulations,
codes, plans, orders and decrees now existing or in the future
enacted, promulgated. adopted, entered or issued, both within and
outside present contemplation of the Mortgagor and Mortgagee.
ARTICLE II.
DEFAULTS
--------
2.1 Event of Default.
----------------
The term "Event of Default", wherever used in the Mortgage,
shall mean any one or more of the following events:
a. Failure by the Mortgagor to pay, within fifteen
(15) days of the due date for such payment, all installments of
principal and/or interest due under the Note, or any required
deposits for taxes and assessments or insurance premiums due
hereunder, or any other sums to be paid by Mortgagor hereunder or
under any other instrument securing the Note.
b. Failure by Mortgagor to duly keep, perform and
observe any other covenant, condition or agreement in the Note,
this Mortca2e, any other instrument securing the Note or any
other instrument collateral to the Note or executed in connection
with the sums secured hereby for a period of thirty (30) days
after Mortgagee gives written notice specifying the breach. If
the default cannot be cured within such thirty (30) day period,
the commencement of appropriate action to cure the default and
the diligent and continuing effort to cure the default shall
operate to extend the curative period.
c. In the event the financial condition of the
Mortgagor materially and adversely changes from the Mortgagor's
financial condition in effect as of the date hereof, and/or if
Mortgagor fails to provide and, financial statements, tax returns
and/or revenue and expense statements as required by this
Mortgage.
d. If Mortgagor (including any shareholder or partner
of the Mortgagor) shall file a voluntary petition in bankruptcy
or shall be adjudicated a bankrupt or insolvent, or shall file
any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, wage earner's plan,
assignment for the benefit of creditors, receivership,
dissolution or similar relief under any present or future Federal
Bankruptcy Act or any other present or future applicable federal,
state or other statute or law, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver or
liquidator of Mortgagor or of all or any part of the properties
of Mortgagor; or if within sixty (60) days after commencement of
any proceeding against Mortgagor. seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution,
debtor relief or similar relief under any present or future
Federal Bankruptcy Act, or of any other present or future
federal, state or other statute or law, such proceeding shall not
have been dismissed, or stayed on appeal; or if, within sixty
(60) days after the appointment, without the consent or
acquiescence of Mortgagor, of any trustee, receiver, or
liquidator of Mortgagor, or of all or any portion of the
Mortgaged Property, such appointment shall not have been vacated
or stayed on appeal or otherwise; or if within ten (10) days
after the expiration of any such stay, such appointment shall not
have been vacated.
e. If foreclosure proceedings should be instituted on
any mortgage superior or inferior to the Mortgage, or if any
foreclosure proceeding is instituted on any lien of any kind
which is not dismissed or transferred to bond within thirty (30)
days of the service of foreclosure proceedings on the Mortgagor.
f. Any default under any mortgage superior or inferior
to this Mortgage not cured within the applicable cure periods
therein contained.
2.2 Acceleration of Maturity.
------------------------
If an Event of Default shall have occurred and be continuing
after the expiration of any applicable curative period, the
Mortgagee may, at its sole option. declare the entire principal
amount of the Note then unpaid, and the interest accrued thereon
to be due and payable immediately, and upon such declaration such
principal and interest shall forthwith become and be due and
payable, as fully and to the same effect as if the date of such
declaration were the date ori2inallv specified for the maturity
of the unpaid balance of the Note.
2.3 Mortgagee's Right to Enter and Take Possession, Operate and Apply
Income.
-----------------------------------------------------------------
a. If an Event of Default shall have occurred, the
Mortgagor, upon demand of the Mortgagee shall forthwith surrender
to the Mortgagee the actual possession of the Mortgaged Property,
and to the extent permitted by law the Mortgagee itself, or such
officers or agents as it may appoint, may enter and take
possession of all the Mortgaged Property, and may exclude the
Mortgagor and its agents and employees wholly therefrom, and may
have joint access with the Mortgagor to the books, papers and
accounts of the Mortgagor.
b. If the Mortgagor shall, for any reason, fail to
surrender or deliver any such Mortgaged Property or any part
thereof after such demand by the Mortgagee, the Mortgagee may
obtain a judgment or decree conferring on the Mortgagee the right
to immediate possession or requiring the Mortgagor to deliver
immediate possession of all or part of such Mortgaged Property to
the Mortgagee, the entry of which such judgment or decree the
Mortgagor hereby specifically consents to.
c. The Mortgagor will pay to the Mortgagee, upon
demand, all expenses of obtaining such judgment or decree and
reasonable compensation to the Mortgagee, its attorneys and
agents; and all such expenses and compensation shall, until paid,
be secured by the lien of this Mortgage.
2.4 Principal and Interest Become Due on Foreclosure.
------------------------------------------------
Upon commencement of suit or foreclosure of this Mortgage,
the unpaid principal of the Note, if not previously declared due,
and the interest accrued thereon, shall at once become and be
immediately due and payable.
2.5 Application of Indebtedness Toward Purchase Price.
-------------------------------------------------
Upon any such foreclosure sale, pursuant to judicial
proceedings, the Mortgagee may, if permitted by law, after
allowing for the proportion of the total purchase price required
to be paid in cash for the costs and expenses of the sale,
compensation and other charges, in paying the purchase price,
apply to the purchase price any portion of or all sums due to the
Mortgagee under the Note and this Mortgage, in lieu of cash, to
the amount which shall, upon distribution of the net proceeds of
such sale, be payable thereon.
2.6 Waiver of Appraisement, Valuation, Stay, and Extension.
------------------------------------------------------
The Mortgagor agrees to the full extent permitted by law,
that in case of a default on its part hereunder, neither the
Mortgagor nor anyone claiming through or under it shall or will
set up, claim or seek to take advantage or any appraisement,
valuation, stay, or extension now or hereafter in force, in order
to prevent or hinder the enforcement or foreclosure of this
Mortgage, or the absolute sale of the property hereby conveyed,
to the final and absolute putting into possession thereof,
immediately after such sale; the purchasers thereof, and the
Mortgagor, for itself and all who may at any time claim through
or under it, hereby waives to the full extent that it may
lawfully do so, the benefit of all such laws, and any and all
right to have the assets comprised in the security intended to be
created hereby marshalled upon any foreclosure of the lien hereof
and agrees that the Mortgagee or any court having jurisdiction to
foreclose such lien may sell the Mortgaged Property as an
entirety.
2.7 Receiver.
--------
If an Event of Default shall occur, then upon the filing of
a bill in equity or other commencement of judicial proceedings to
enforce the rights of the Mortgagee. the Mortgagee to the extent
permitted by law and without regard to the value or adequacy of
the security shall be entitled to apply for the appointment of a
receiver to enter upon and take possession of the Mortgaged
Property. The receiver shall collect all rents, revenues,
issues, income, products and profits thereof, pending such
proceedings and apply the same as the court may direct. The
receiver shall have all rights and powers permitted under the
laws of the state wherein the Real Property is situate and such
other powers as the court making such appointment shall confer.
The expenses, including receiver's fees, counsel fees, costs and
agent's compensation, incurred pursuant to the powers herein
contained shall be secured by this Mortgage. The right to enter
and take possession of, to manage and operate, the Mortgaged
Property, to collect the rents, issues and profits thereof,
whether by a receiver or otherwise, shall be cumulative to any
other right or remedy hereunder or afforded by law, and may be
exercised concurrent therewith or independently thereof.
Mortgagee shall be liable to account only for such rents, issues
and profits actually received by Mortgagee, whether received
pursuant to this Paragraph 2.7 or Paragraph 2.3 above.
Notwithstanding the appointment of any receiver, trustee or other
custodian, the Mortgagee shall be entitled as pledgee to the
possession and control of any cash, or other instruments at the
time held by, or payable or deliverable under the terms of this
Mortgage to the Mortgagee.
2.8 Suits to Protect the Mortgaged Property.
---------------------------------------
The Mortgagee shall have power (a) to constitute and
maintain such suits and proceedings as it may deem expedient to
prevent any waste or impairment of the Mortgaged Property by any
acts which be unlawful or any violation of the Mortgage, (b) to
preserve or protect its interest in the Mortgaged Property and in
the income, revenues, rents and profits arising therefrom, and
(c) to restrain the enforcement of or compliance with any
legislation or other governmental enactment, rule or order that
may be unconstitutional or otherwise invalid, if the enforcement
of or compliance with, such enactment, rule or order would impair
the security hereunder or be prejudicial to the interest of the
Mortgagee.
2.9 Acceleration; Application of Monies by Mortgagee.
------------------------------------------------
a. If default shall be made in the payment of any
amount due under the Mortgage or the Note secured hereby, then,
upon demand of the Mortgagee, the Mortgagor will pay to the
Mortgagee the entire amount due and payable under the Note. If
Mortgagor shall fail to pay the same forthwith upon such demand,
the Mortgagee shall be entitled to sue for and to recover a
judgment for the whole amount so due and unpaid together with
costs, which shall include the reasonable compensation, expenses
and disbursements of the Mortgagee's agents and attorneys either
before, after or during the pendency of any proceedings for the
enforcement of this Mortgage, including appellate proceedings.
The right of the Mortgagee to recover such judgment shall not be
affected by any taking, possession, or foreclosure sale
hereunder, or by the exercise of any other right, power or remedy
for the enforcement of the terms of this Mortgage, or the
foreclosure of the lien hereof.
b. In case of a foreclosure sale of any of the
Mortgaged Property and of the application of the proceeds of sale
to the payment of the debt hereby secured, the Mortgagee shall be
entitled to enforce payment of and to receive all amounts then
remaining due and unpaid upon the Note, and the Mortgagee shall
be entitled to recover a judgment for any portion of the debt
remaining unpaid, with interest.
c. The Mortgagor agrees, to the full extent that it
may lawfully so agree, that no recovery of any such judgment by
the Mortgagee and no attachment or levy of any execution upon any
such judgment upon any of the Mortgaged Property or upon any
other property shall in any manner or to any extent affect the
lien of this Mortgage upon the Mortgaged Property or any part
thereto for any liens, rights, powers or remedies of the
Mortgagee hereunder, but such lien, rights, powers and remedies
shall continue unimpaired as before.
d. Any monies thus collected by the Mortgagee or
received by the Mortgagee under this Paragraph 2.9 shall be
applied as follows:
First to the payment of the reasonable attorneys' fees and
expenses incurred by Mortgagee, its agents and attorneys,
including but not limited to taxes paid, insurance premiums
paid, receivers fees, etc.
Second, toward payment of the amounts due and unpaid upon the
Note.
2.10 Delay or Omission No Waiver.
---------------------------
No delay or omission of the Mortgagee or of any holder of
the Note to exercise any right, power or remedy accruing upon any
default shall exhaust or impair any such right, power or remedy
nor shall be construed to be waiver of any such default, or
acquiescence, herein; and every right, power and remedy given by
this Mortgage to the Mortgagee may be exercised by Mortgagee from
time to time and as often as may be deemed expedient by the
Mortgagee.
2.11 Remedies Cumulative.
-------------------
No right, power or remedy conferred upon or reserved by the
Mortgagee by this Mortgage, is intended to be exclusive of any
right, power or remedy, but each and every such right, power and
remedy shall be cumulative and current and shall be in addition
to any other right, power and remedy given hereunder or now or
hereafter existing at law or in equity or by statute.
ARTICLE III.
MISCELLANEOUS PROVISIONS
------------------------
3.1 No Transfer.
-----------
It is understood and agreed by Mortgagor that as part of the
inducement to Mortgagee to make the loan evidenced by the Note,
Mortgagee has considered and relied on the creditworthiness and
reliability of Mortgagor. Subject to the provisions contained
within paragraph 3.10 of this Mortgage, Mortgagor covenants and
agrees not to sell, convey, transfer, lease, or encumber
(including but not limited to, wrap-around mortgages) any
interest in or any part of the Mortgaged Property without the
prior written consent of the Mortgagee, and any such sale,
conveyance, transfer, lease or encumbrance made without
Mortgagee's prior written consent of the Mortgagee shall
constitute an Event of Default hereunder. A contract to deed or
agreement for deed, any issuance of additional corporate stock of
the Mortgagor, or a transfer of any portion of the corporate
stock of the Mortgagor (if a corporation) or any transfer of the
partnership interests of the Mortgagor (if a Partnership)
directly or indirectly (whether such attempted transfer shall be
by direct transfer from such stockholder or partner, by
encumbrance of such corporate stock or partnership interest by
such stockholder or partner, or be the result of action by any
party against such stockholder or partner) shall constitute a
transfer pursuant to the provisions of this Paragraph. if any
person should obtain an interest in all or any part of the
Mortgaged Property, pursuant to the execution or enforcement of
any lien, security interest or other right, whether superior,
equal or subordinate to this Mortgage or the lien hereof, such
event (absent the express approval of Mortgagee) shall be deemed
to be a transfer by Mortgagor and an Event of Default hereunder.
The provisions of this paragraph shall apply to each and every
such encumbrance, conveyance, assignment, sale, transfer, or
other disposition, regardless of whether or not the Mortgagee has
consented to, or waived by its action or inaction its rights
hereunder with respect to any such previous encumbrance,
conveyance, assignment, sale, transfer or other disposition.
3.2 Uniform Commercial Code.
-----------------------
The parties agree that this Mortgage is a security agreement
under the Uniform Commercial Code for the purpose of creating a
lien on the personal property and fixtures described herein.
3.3 Maximum Rate of Interest.
------------------------
Nothing herein contained nor in the Note secured hereby or
any instrument or transaction related thereto, shall be construed
or so operate as to require the Mortgagor, Maker, or any person
liable for the payment of the Loan made pursuant to said Note, to
pay interest in an amount or at a rate greater than the maximum
allowed by law. Should any interest or other charges in the
nature of the interest paid by the Mortgagor, Maker or any
parties liable for the payment of the loan made pursuant to said
Note, result in the computation of earning of interest in excess
of the maximum rate of interest allowed by applicable law, then
any and all such excess shall be and the same is hereby waived by
the holder hereof, and all such excess shall be automatically
credited against and in reduction of the principal balance. and
any portion of said excess which exceeds the principal balance
shall be paid by the holder hereof to the Mortgagor, Maker or any
parties liable for the payment of the loan made pursuant to said
Note, it being the intent of the parties hereto that under no
circumstances shall the Mortgagor. Maker or any parties liable
for the payment of the loan hereunder, be required to pay
interest in excess of the maximum rate allowed by law.
3.4 Default Rate.
------------
The Default Rate of interest shall be applicable subsequent
to an Event of Default as defined in Paragraph 2.1 and where
elsewhere provided for in this Mortgage. If he Default Rate
shall be at the rate of eighteen percent (18.00%) per annum.
3.5 Time is of the Essence.
----------------------
It is specifically agreed that time is of the essence of
this Mortgage and that no waiver of any obligation hereunder or
of the obligation secured hereby shall at any time thereafter be
held to be a waiver of the terms hereof or of the instrument
secured hereby.
3.6 Attorney's Fee and Expenses.
---------------------------
Wherever provision is made herein for payment for reasonable
attorney's or counsel's fees or expenses incurred by the
Mortgagee, said provision shall include, but not be limited to,
reasonable attorneys' or counsel's fees or expenses incurred in
any and all judicial, bankruptcy, reorganization, administrative,
or other proceedings, including appellate proceedings, whether
such proceedings arise before or after entry of a final judgment.
3.7 Florida Contract.
----------------
This Mortgage is made by the Mortgagor and accepted by
Mortgagee in the State of Florida, with reference to the laws of
such State, and shall be construed, interpreted, enforced and
governed by and in accordance with such laws (excluding the
principles thereof and governing conflicts of law), and Federal
Law, in the event (and only in the event) Federal Law pre-empts
State Law.
3.8 Successors, Assigns Included in Parties.
---------------------------------------
Whenever in this Mortgage one of the parties hereto is named
or referred to, the successors and assigns of such party shall be
included and all covenants and agreements contained in this
Mortgage by or on behalf of the Mortgagor or by or on behalf of
Mortgagee, shall bind and inure to the benefit of their
respective successors and assigns whether so expressed or not.
Whenever the singular or plural number, masculine or feminine or
neuter gender is used herein, it shall equally include the other.
3.9 Notice.
------
a. Mortgagor. Any notice, demand or other instrument
authorized by this Mortgagee to be served on or given to the
Mortgagor may be served on or given to the Mortgagor, at:
307 South 21st Avenue
Hollywood, FL 33020
or at such other address as may have been furnished in writing to
the Mortgagee by the Mortgagor.
b. Mortgagee. Any notice, demand or other instrument
authorized by this Mortgage to be served on or given to the
Mortgagee may be served on or given to the Mortgagee, at:
307 South 21st Avenue
Hollywood, FL 33020
or at such other address as may have been furnished in writing to
the Mortgagor by the Mortgagee.
3.10 Partial Release of Condominium Units.
------------------------------------
The Mortgagor, provided this Mortgage and the Note secured
hereby are current and not in default, shall be entitled to
release individual condominium units from the lien and operation
of this Mortgage in conjunction with the sale of individual
condominium units by the Mortgagor as follows:
a. If a prior mortgage (the "Prior Mortgage") remains
open and outstanding against the Mortgaged Property, then the
Mortgagee shall release individual condominium units from the
lien and operation of this Mortgage for no consideration,
provided the net sales proceeds derived from the sale of the
individual condominium units by the Mortgagor are tendered to the
holder of the Prior Mortgage in order to secure the release of
such individual condominium units from the lien and operation of
the Prior Mortgage; and
b. Subsequent to the date that the within Mortgage
becomes a first mortgage upon the Mortgaged Property, individual
condominium units shall be released from the lien and operation
of the within Mortgage upon the tender to the Mortgagee of a
release price equal to THIRTY THOUSAND AND NO/100 ($30,000.00)
DOLLARS for each condominium unit to be so released.
3.11 Special Provisions.
------------------
a. The Mortgagee, notwithstanding any event of default
under this Mortgage and/or under the Note, shall be prohibited
from: (i) foreclosing this Mortgage; or (ii) accelerating the
unpaid indebtedness evidenced by the Note, as long as the Prior
Mortgage (and the Promissory Note secured thereby) is current and
in good standing; and
b. In the event the Prior Mortgage (and/or the
Promissory Note secured thereby) shall be in default, the
Mortgagee shall not accept any principal or interest payments due
pursuant to the terms and provisions of the Note.
c. In the event that a foreclosure action is
instituted by the holder of the Prior Mortgage, Mortgagee agrees
that Mortgagee shall not interpose any cross claims against
Mortgagor in such action and any such claims shall be brought in
a separate action by Mortgagee and Mortgagee further agrees that
Mortgagee waives any and all defenses with regard to the
foreclosure action of the Prior Mortgage other than the right to
receive any overage in net proceeds in the event of a foreclosure
sale.
3.12 WAIVER OF TRIAL BY JURY.
-----------------------
EXCEPT AS PROHIBITED BY LAW, NEITHER THE MORTGAGOR NOR THE
MORTGAGEE SHALL SEEK A JURY TRIAL ON ANY LAWSUIT, PROCEEDING, OR
COUNTERCLAIM BASED UPON, OR ARISING OUT OF THIS MORTGAGE, THE
NOTE SECURED HEREBY OR THE RELATIONSHIP BETWEEN THE MORTGAGOR AND
THE MORTGAGEE. IF THE SUBJECT MATTER OF ANY SUCH LAWSUIT IS ONE
IN WHICH THE WAIVER OF A JURY TRIAL IS PROHIBITED, NEITHER THE
MORTGAGOR NOR THE MORTGAGEE SHALL PRESENT AS A PERMISSIVE
COUNTERCLAIM IN SUCH A LAWSUIT, ANY CLAIM ARISING OUT OF THIS
MORTGAGE OR THE NOTE SECURED HEREBY. FURTHERMORE, NEITHER THE
MORTGAGOR NOR THE MORTGAGEE SHALL SEEK TO CONSOLIDATE ANY SUCH.
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY SUCH
ACTION IN WHICH A JURY TRIAL CANNOT BE WAIVED.
IN WITNESS WHEREOF, the undersigned has hereunto set its
hand and seal the day and year first above written.
Signed, Sealed and Delivered
in the presence of: LAKESHORE CLUB
DEVELOPMENT, INC., a
Florida corporation
/S/ Cary Greenberg
- -------------------------------------- By: /S/ Harvey Birdman
HARVEY BIRDMAN, Vice-President
Print Name: Cary Greenberg
/S/ Pam Ford Address: 307 South 21st Avenue
- -------------------------------------- Hollywood, Florida 33020
Print Name: Pam Ford
STATE OF FLORIDA )
) SS:
COUNTY OF BROWARD )
The execution of the foregoing instrument was acknowledged
before me this 30th day of August, 1998, by HARVEY BIRDMAN, as
Vice-President of LAKESHORE CLUB DEVELOPMENT, INC., a Florida
corporation, who is personally known to me and who did not take
an oath.
My Commission Expires: /S/ Irene M. Alvarez
Notary Public, State of Florida
Print Name: Irene M. Alvarez
_____________________________________________________________________________
EXHIBIT 6(a).2 MORTGAGE AND SECURITY AGREEMENT BETWEEN LAKESHORE
CLUB DEVELOPMENT, LC, AND MORTGAGE INVESTMENT GROUP 24, LTD.,
DATED JUNE 30, 1999
_____________________________________________________________________________
This document prepared by and return to:
GARY A. KORN, ESQ.
Bedzow, Korn, Brown, Miller & Zemel, P.A.
P.O. Box 8020
Hallandale, Florida 33008-8020
Phone: (305) 935-6888 (Dade)
(800) 935-6889 (Outside Dade)
Fax No. (305) 936-9502 (Reserved for Use by the Clerk)
==============================================================================
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE is made as of the 30th day of June, 1999,
between LAKESHORE CLUB DEVELOPMENT, L.C., a Florida limited
liability company (hereinafter called the "Mortgagor"), and
MORTGAGE INVESTMENT GROUP 24, LTD., a Florida Limited Partnership
with offices at 307 South 21st Avenue, Hollywood, Florida 33020,
as Mortgagee and Secured Party (hereinafter called the
"Mortgagee").
WITNESSETH:
----------
WHEREAS, the Mortgagor is justly indebted to Mortgagee in
the principal sum of FIVE HUNDRED THOUSAND AND N0/100
($500,000.00) DOLLARS as evidenced by that certain promissory
note ("Note") of even date herewith, executed by Mortgagor and
delivered to Mortgagee, payable according, to the terms therein
provided, with a maturity date of July 1, 2001, and by reference
being a part hereof to the same extent as though set out in full
herein.
NOW THIS INDENTURE WITNESSETH, to secure the performance and
observance by the Mortgagor of all of the covenants and
conditions contained within this Mortgage, to secure the timely
and complete payment of the indebtedness evidenced by the Note,
and in order to charge the properties, interests and rights
hereinafter described with such payment, performance and
observance, and for and in consideration of the sum of TEN AND
NO/100 ($10.00) DOLLARS paid by the Mortgagee to the Mortgagor,
and for other valuable considerations, the receipt and
sufficiency of which is hereby acknowledged, the Mortgagor does
hereby grant, bargain, sell, alien,, transfer, mortgage,
hypothecate, pledge, deliver, set over, warrant and confirm unto
the Mortgagee, its successors and assigns forever:
THE MORTGAGED PROPERTY
----------------------
Those certain pieces, parcels or tracts of land in which the
Mortgagor has a fee simple interest, situate in the County of
Polk and State of Florida (hereinafter called the "Land")
described within Exhibit "A" attached hereto.
TOGETHER WITH all lands, buildings, structures and
improvements of every nature whatsoever now or hereafter situated
on the Land, and all fixtures, machinery, equipment, furniture
and other personal property of every nature whatsoever now or
hereafter owned by the Mortgagor and located in or on the Land,
buildings. structures or other improvements, betterments,
renewals and replacements to any of the foregoing; and all of the
right, title and interest of the Mortgagor in any such personal
property or fixtures subject to a conditional sales contract,
chattel mortgage or similar lien or claim to-ether with the
benefit of any deposits or payments now or hereafter made by the
Mortgagor or on Mortgagor's behalf.
TOGETHER WITH all easements, rights of way, strips and gores
of land, streets, ways, alleys, passages, sewer rights, rights,
titles, interest, privileges, liberties, tenements, hereditaments
and appurtenances whatsoever, in any way belonging, relating or
appertaining to any of the property hereinabove described, or
which hereafter shall in any way belong, relate or be appurtenant
thereto, whether now owned or hereafter acquired by Mortgagor,
and the reversion and reversions, remainder and remainders,
rents, issues, profits thereof, and all the estate, right, title,
interest, property, possession, claim and demand whatsoever, at
law as well as in equity, of Mortgagor of, in and to the same,
including, but not limited to, all judgments, awards of damages
and settlements hereafter made resulting from condemnation
proceedings or the taking, of the Mortgaged Property or any part
thereof under the power of eminent domain, the alteration of the
grade of any street, or for any damage (whether caused by such
taking or otherwise to the Mortgaged Property or any part
thereof, or to any rights appurtenant thereto, and all proceeds
of any sales or other dispositions of the Mortgaged Property or
any part thereof;
TOGETHER WITH all rents, royalties, issues, profits,
revenue, income and other benefits from the Mortgaged Property to
be applied against the indebtedness secured hereby, provided
however, that permission is hereby given to Mortgagor so long as
no default has occurred hereunder, to collect, receive, take, use
and enjoy such rents, royalties. issues, profits, revenue,
income, licenses, foreclosures, concessions and other benefits as
they become due and payable, but not in advance thereof. The
foregoing assignment shall be fully operative without any further
action on the part of either party and specifically Mortgagee
shall be entitled, at its option upon the occurrence of a default
hereunder, to all rents, royalties, issues, profits, revenue,
income and other benefits from the Mortga2ed Property, whether or
not Mortgagee takes possession of the Mortgaged Property. Upon
any such notice or default hereunder, the permission hereby given
to Mortgagor to collect such rents, royalties, issues, profits,
revenue, income and other benefits from the Mortgaged Property
shall terminate and such permission shall not be reinstated upon
a cure of the default without Mortgagee's specific written
consent. Exercise of rights under this paragraph and the
application of any such rights, royalties, issues, profits,
revenue, income or other benefits to such Indebtedness, shall not
cure or waive any default or notice of default hereunder or
invalidate any act done pursuant hereto, but shall be cumulative
and in addition to all other rights and remedies to Mortgagee;
TOGETHER WITH a security interest in (i) all property,
equipment and fixtures affixed to or located on the Mortgaged
Property which, to the fullest extent permitted by law, shall be
deemed fixtures and a part of the Mortgaged Property, (ii) all
articles of personal property and all materials delivered to the
Mortgaged Property for the use and operation of said property or
for use in any construction being conducted thereon, and owned by
Mortgagor; (iii) all contract rights, owned by the Mortgagor and
utilized in connection with the Mortgaged Property, including
construction contracts, service contracts, advertising contracts,
purchase orders, equipment leases, all other contract rights
associated with the Mortgaged Property, general intangibles,
actions and rights of action, all deposits, prepaid expenses,
permits, licenses, including all rights to insurance proceeds.
(iv) all right, title and interest of the Mortgagor in all trade
names and trademarks hereinafter used in connection with the use
of the Mortgaged Property, and (v) all proceeds, products,
replacements, additions, substitutions, renewals and accessions
of any of the foregoing. Mortgagor (Debtor) hereby grants to
Mortgagee (Creditor) a security interest in all fixtures, rights
of action and personal property described herein. This Mortgage
is a self operative security agreement with respect to such
property, but Mortgagor agrees to execute and deliver on demand
such other security agreements, financing statements and other
instruments as Mortgagee may request in order to perfect its
security interest or to impose the lien hereof more specifically
upon any of such property. Mortgagee shall have all the rights
and remedies in addition to those specified herein of a secured
party under the Uniform Commercial Code; which, together with any
and all of the aforedescribed additional property and rights, now
or hereafter acquired by Mortgagor, shall sometimes herein be
collectively referred to as the "Mortgaged Property".
PROVIDED, HOWEVER, that these presents are upon the
condition that, if the Mortgagor shall pay, or cause to be paid
to the Mortgagee the principal and interest payable in respect to
the Note, at the times and in the manner stipulated therein and
herein, all without any deduction or credit for taxes or other
similar charges paid by the Mortgagor, and shall keep, perform
and observe all and singular the covenants and promises in the
Note, and any renewal, extension, consolidation or modification
thereof, and in this Mortgage expressed to be kept, performed and
observed by and on the part of the Mortgagor, all without fraud
or delay then this Mortgage, and all the properties, interest and
rights granted, bargained, sold, aliened, remised, released,
conveyed, assigned, transferred, mortgaged, hypothecated,
pledged, delivered, set over, warranted and confirmed, shall
cease, terminate and be void, but shall otherwise remain in full
force and effect.
ARTICLE I.
----------
1.1 Performance of Note and Mortgage.
--------------------------------
The Mortgagor will perform, observe and comply with all
the provisions hereof and of the Note secured hereby, and will
promptly pay to the Mortgagee the sum of money expressed in the
Note with interest thereon and all other sums required to be paid
by the Mortgagor pursuant to the provisions of the Note and the
Mortgage on the day or days when payment shall become due, all
without deduction or credit for taxes or other similar charges
paid by the Mortgagor, time being of the essence for such
payments.
1.2 Warranty of Title.
-----------------
The Mortgagor covenants that it is the owner of the
fee simple interest in and to the Mortgaged Property, has good
and absolute title to all existing personal property hereby
mortgaged and has full power and lawful right to convey and
mortgage the same in the manner and form aforesaid. That the
Mortgaged Property is free from all encumbrances except taxes for
the current year and encumbrances set forth in the title policy
issued simultaneously this date to the Mortgagor by ATTORNEYS'
TITLE INSURANCE FUND, INC. The Mortgagor hereby agrees to make
such further assurances to perfect the fee simple title to the
Mortgaged Property in the Mortgagee as may reasonably be
required. The Mortgagor does hereby fully warrant the title to
the Mortgaged Property against the lawful claims for all persons
whomsoever.
1.3 Taxes, Liens, and Utility Charges.
---------------------------------
a. The Mortgagor covenants and agrees to pay by
December 1st of each year and to deliver to the Mortgagee, on or
before December 31st of each year, tax receipts evidencing the
payment of all lawfully imposed taxes upon the Mortgaged Property
for the immediately preceding calendar year; to deliver to the
Mortgagee receipts evidencing the payment of all liens, levies,
and assessments for public improvements within thirty-(30) days
after same shall become due and payable; and to pay or discharge
within thirty (30) days after the due date, any and all
governmental levies that may be made on the Mortgaged Property,
on this Mortgage or the Note or in any other way resulting from
the mortgage indebtedness secured by this Mortgage. Mortgagor
shall have the right to contest the payment of ad valorem real
property taxes pursuant to and in accordance with applicable
state and local law, provided Mortgagor delivers to Mortgagee
sufficient security, as solely determined by Mortgagee, to pay
all such taxes and all interest and/or penalties that may accrue
thereon.
b. The Mortgagor shall not permit any mechanics',
laborer's, statutory or other lien to be created or to remain
outstanding upon any of the Mortgaged Property and shall, within
ten (10) days from the date of the filing thereof, cause same to
be released and discharged, or transferred to bond as permitted
by law.
C. The Mortgagor will pay when due and will not suffer
to remain outstanding, any charges for utilities, whether public
or private, with respect to the Mortgaged Property.
1.4 Insurance.
---------
a. The Mortgagor shall obtain, maintain and keep in
full force and effect during the term of this Mortgage, with all
premiums paid thereon, and without notice or demand, the
following insurance with respect to the Mortgaged Property:
(i) All-Risk (Special) Hazard Insurance ("All-
Risk Hazard Insurance") reflecting coverage in such amounts as
Mortgagee may require, but in no event less than 100% of the full
replacement cost of the Mortgaged Property that includes: (A) a
mortgage clause naming the Mortgagee as mortgagee, which clause
shall be a "standard union" (also known as a "New York") mortgage
clause which provides that the mortgagee's coverage will not be
invalidated by a foreclosure or the acquisition of the Mortgage
Property by a deed in lieu thereof, a change in ownership of the
Mortgaged Property, a more hazardous use of the Mortgaged
Property or a loss caused by the neglect of the owner of the
Mortgaged Property, provided that the mortgagee pays any premium
demanded should the owner of the Mortgaged Property fail to do
so; in the event that the aforesaid mortgage clause (which
creates a separate agreement between the insurance company and
the mortgagee does not apply to that portion of the Mortgaged
Property constituting personal property, the All-Risk Hazard
Insurance Policy shall also contain a "Lender's Loss Payable
Endorsement", which Endorsement shall, with respect to the
personal property, create a similar separate agreement between
the insurance company and the mortgagee as is created by the
"standard union"/"New York" Mortgage clause; (B) a replacement
cost endorsement, (C) a stipulated value/agreed amount
endorsement, (D) boiler explosion coverage, if applicable, (E)
sprinkler leakage coverage, if applicable, (F) vandalism and
malicious mischief coverage, (G) twelve (12) months rent loss and
business interruption coverage, and (H) flood insurance, if the
Mortgaged Property is in a designated flood plain area. Such
policy shall provide that any and all loss payments thereunder
shall be payable to Mortgagee alone and not jointly with
Mortgagor. In addition, consequential and resulting losses from
an insured peril shall also be covered;
(ii) General Comprehensive Public Liability
Insurance ("Liability Insurance") against claims for bodily
injury, death and property damage, occurring in, on, or about the
Mortgaged Property, in such amounts as may be required by
Mortgagee, but in no event less than $1,000,000.00 per occurrence
for bodily injury and property damage. Such policy shall include
an additional insured endorsement naming the Mortgagee;
(iii) Workers' Compensation Insurance ("Workers'
Compensation") in the statutory amount, naming the Mortgagor as
the owner of the Mortgaged Property; and
(iv) Insurance in such amounts and against such
other casualties and contingencies as may from time to time be
required by Mortgagee ("Other Insurance").
b. All policies of insurance required hereunder shall:
(i) be written by carriers which are licensed or authorized to
transact business in the State of Florida, and are rated "A" or
higher, Class XII or higher, according to the latest published
Best's Key Rating Guide and which shall be otherwise acceptable
to Mortgagee in all other respects, (ii) provide that the
Mortgagee shall receive thirty (30) days' prior written notice
from the insurer before a cancellation, modification, material
chance or non-renewal of the policy becomes effective, (iii) be
written with a deductible of not more than Sl,000.00 and for such
amounts as are sufficient to prevent the Mortgagor from becoming
a co-insurer thereunder, and (iv) be otherwise satisfactory to
Mortgagee.
1.5 Restoration Following Casualty.
------------------------------
(a) (i) If all or any part of the Mortgaged Property
shall be damaged or destroyed by a casualty covered by insurance
under Paragraph 1.4 hereof, Mortgagor shall immediately give
written notice thereof to Mortgagee and the appropriate insurer,
and Mortgagee is authorized and empowered(but not obligated or
required) to make proof of loss and to settle, adjust or
compromise any claims for loss, damage or destruction under any
policies of insurance required under this Mortgage. All proceeds
of insurance as provided in Paragraph 1.4, shall be paid to
Mortgagee and shall be applied first to the payment of all costs
and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by Mortgagee in obtaining
such proceeds, and Second. at the option of Mortgagee, either to
the payment of the indebtedness secured by this Mortgage, whether
or not due, in such order as Mortgagee may elect, or to the
restoration, repair, or replacement of the Mortgaged Property.
If Mortgagee elects to apply the insurance proceeds to the
restoration, repair or replacement of the Mortgaged Property,
such proceeds shall be disbursed to Mortgagor as work progresses
pursuant to a construction and disbursing agreement in form and
content satisfactory to Mortgagee in its sole discretion, and
Mortgagor shall promptly and diligently, regardless of whether
there shall be sufficient insurance proceeds therefor, restore,
repair and rebuild the Mortgaged Property to the equivalent of
its condition immediately prior to the casualty. During the
period of restoration and repair, Mortgagor shall continue to
duly and promptly pay, perform, observe and comply with all of
the terms, provisions and conditions of the Note and this
Mortgage. The election by Mortgagee to apply the insurance
proceeds to the restoration, repair or replacement of the
Mortgaged Property shall not affect the lien of this Mortgage or
affect or reduce the indebtedness secured hereby.
(ii) Notwithstanding anything to the contrary
contained in paragraph 1.5 (a)(i) hereof, Mortgagor may elect to
restore, rebuild or replace the Mortgaged Property damaged or
destroyed upon satisfaction in full of the following conditions:
(A) Mortgagee has determined in its discretion that such
rebuilding will not impair the value of its collateral; (B)
Mortgagor deposits with Mortgagee any funds in excess of
available insurance necessary, in Mortgagee's discretion, to
rebuild the Mortgaged Property; (C) Mortgagor rebuilds in
accordance with plans approved by Mortgagee; and (D) the proceeds
are disbursed to Mortgagor pursuant to a construction and
disbursing agreement in form and content satisfactory to
Mortgagee in its sole discretion, and (E) Mortgagor shall comply
with the provisions of paragraph 1.5 (a)(i) hereof.
(b) If all or any of the Mortgaged Property shall be
damaged or destroyed by a casualty not covered by insurance
required pursuant to the terms of this Mortgage or, if so
covered, the insurer fails or refuses to pay the claim within
thirty (30) days following the filing thereof, Mortgagor shall
immediately give written notice thereof to Mortgagee and
Mortgagor shall promptly and diligently, at Mortgagor's sole cost
and expense, restore, repair and rebuild the Mortgaged Property
to the equivalent of its condition immediately prior to the
casualty. During the period of restoration and repair, Mortgagor
shall continue to duly and promptly pay, perform, observe and
comply with all of the terms, provisions and conditions of the
Note and this Mortgage.
(c) If any work required to be performed under
subsections (a) or (b) above, or both, shall involve an estimated
expenditure of more than $25,000.00, no such work shall be
undertaken until plans and specifications therefor, prepared by
an architect satisfactory to Mortgagee, have been submitted to
and approved by Mortgagee.
1.6 Condemnation.
------------
If all or any part of the Mortgaged Property shall be
damaged or taken through Condemnation (which term when used in
this Mortgage shall include any damage or taking by any
governmental authority, and any transfer by private sale in lieu
thereof, either temporarily or permanently), the entire
indebtedness secured hereby shall, at the option of the
Mortgagee, become immediately due and payable if the Mortgagee in
its sole discretion determines that its security under this
Mortgage is impaired. The Mortgagee shall be entitled to all
compensation, awards, and any other payments of relief therefore
and is hereby authorized,. at its option, to commence, appear in
and prosecute, in its own or the Mortgagor's name, any action or
proceeding relating to any Condemnation, and to settle or
compromise any claim in connection therewith. All such
compensation, awards, damages, claims, rights of action and
proceeds and the rights thereto are hereby assigned by the
Mortgagor to the Mortgagee which, after deduction therefrom of
all its expenses, including attorneys' fees, may release any
monies so received by it without affecting the lien of this
Mortgage or may apply the same in such manner as the Mortgagee
shall determine, to the reduction of the sums secured hereby and
any balance of such monies then remaining shall be paid to the
Mortgagor. The Mortgagor agrees to execute such further
assignments of any compensations, awards, damages, claims, rights
of action and proceeds as the Mortgagee may require.
1.7 Care of Property.
----------------
a. The Mortgagor shall preserve and maintain the
Mortgaged Property in good condition and repair. The Mortgagor
shall not alter, chance remove or demolish any building presently
on or hereafter existing on the Land with out the written consent
of the Mortgagee; provided, however, that no consent of the
Mortgagee shall be required with respect to: (i) any tenant
improvements; or (ii) any alterations or changes costing less
than, TWENTY FIVE THOUSAND AND NO/100 ($25,000.00) DOLLARS
(excluding any costs of demolition). Mortgagor shall not permit,
commit or suffer any waste, impairment or deterioration of the
Mortgaged Property or of any part thereof, and will not take any
action which will increase the risk of fire or other hazard to
the Mortgaged Property or to any part thereof.
b. Except as may be otherwise provided herein, no
buildings, fixtures, personal property, or other part of the
Mortgaged Property shall be removed, demolished or substantially
altered without the prior written consent of the Mortgagee. The
Mortgagor may sell or otherwise dispose of, free from the lien of
the Mortgage, furniture, furnishings, equipment, tools,
appliances, machinery, fixtures or appurtenances, subject to the
lien hereof, which may become worn out, undesirable, obsolete,
disused or unnecessary for use in the operation of the Mortgaged
Property, not exceeding in value at the time of disposition
thereof the sum of FIVE THOUSAND AND NO/100 ($5,000.00) DOLLARS
for any single transaction, or a total of TEN THOUSAND AND NO/1OO
($10,000.00) DOLLARS in any one year, upon replacement of same
by, substituting for the same, other furniture, equipment, tools,
appliances, machinery fixtures or appurtenances not necessarily
of the same character, but of at least equal value to the
Mortgagor and costing not less than the amount realized from the
property sold or otherwise disposed of, which shall forthwith
become, without further action, subject to the lien of this
Mortgage.
c. If the Mortgaged Property or any part thereof is
damaged by fire or any other cause, the Mortgagor shall give
immediate written notice of same of Mortgagee.
d. The Mortgagee is hereby authorized to enter upon
and to inspect the Mortgaged Premises at any time during normal
business hours during the life of this Mortgage.
e. The Mortgagor will promptly comply with all present
and future laws, ordinances, rules and regulations of any
governmental authority affecting the Mortgaged Property or any
part thereof.
f. If all or any part of the Mortgaged Property shall
be damaged by fire or other casualty, the Mortgagor shall
promptly restore the Mortgaged Property to the equivalent of its
original condition regardless Of whether or not there shall be
any insurance proceeds therefor. If a part of the Mortgaged
Property shall be physically damaged through condemnation, the
Mortgagor shall promptly restore, repair or alter the remaining
property in a manner satisfactory to the Mortgagee.
g. If any work required to be performed under this
Paragraph 1.7 of Article I shall involve an estimated expenditure
of more than TWENTY FIVE THOUSAND AND NOIIOO ($25,000.00)
DOLLARS, no such work shall be undertaken until plans and
specifications therefor, prepared by an architect and/or engineer
satisfactory to the Mortgagee, have been submitted to and
approved by the Mortgagee.
1.8 Mortgagee's Performance of Defaults.
-----------------------------------
If the Mortgagor shall be in default in the payment of any
tax assessment, encumbrance or other imposition, or in its
obligation to furnish insurance hereunder or performance or
observance of any other covenant, condition or term in this
Mortgage, the Mortgagee, may, at its option, without waiving or
affecting its option to foreclose or any other rights to which
the Mortgagee may be entitled hereunder, upon written notice to
Mortgagor perform or observe the same, and all payments made or
costs or expenses incurred by the Mortgagee in connection
therewith, shall be secured hereby and shall be immediately
repaid by the Mortgagor to the Mortgagee. with interest thereon
at the Default Rate as hereinafter defined. Nothing contained
herein shall be construed as requiring Mortgagee to advance or
expend monies for any purposes mentioned in this Paragraph. The
Mortgagee is hereby empowered to enter and to authorize others to
enter upon the Mortgaged Property or any part thereof for the
purpose of performing or observing any such defaulted covenant,
condition or terms, without thereby becoming liable to the
Mortgagor or to any person in possession holding the Mortgaged
Property.
1.9 Compliance With Hazardous Waste Law.
-----------------------------------
Mortgagor warrants and represents to Mortgagee after
thorough investigations:
a. That neither Mortgagor nor any other person to the
Mortgagor's knowledge, after reasonable inquiry, has ever used
the Mortgaged Property as a facility for the storage, treatment
or disposal of any "Hazardous Substances", as that term is
hereinafter defined, and
b. That the Mortgaged Property is now and at all times
hereafter will continue to be in full compliance with all
federal, state and local "Environmental Laws" (as that term is
defined hereinafter) including but not limited to, the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA"), 42 USC 9601, et seq., the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), Public Law
99-499, 100 Stat. 1613, the Resource Conservation and Recovery
Act ("RCRA"), 42 USC 6901, et seq., the Florida Resource
Recovery and Management Act, Section 403.701, et seq.; Florida
Statutes, the Pollutant Spill Prevention and Control Act, Section
376.011-376.17 and 376.19-376.21 Florida Statutes, as the same
may be amended from time to time and all ordinances, regulations,
codes, plans, orders and decrees now existing or in the future
enacted, promulgated. adopted, entered or issued, both within and
outside present contemplation of the Mortgagor and Mortgagee.
ARTICLE II.
DEFAULTS
--------
2.1 Event of Default.
----------------
The term "Event of Default", wherever used in the Mortgage,
shall mean any one or more of the following events:
a. Failure by the Mortgagor to pay, within fifteen
(15) days of the due date for such payment, all installments of
principal and/or interest due under the Note, or any required
deposits for taxes and assessments or insurance premiums due
hereunder, or any other sums to be paid by Mortgagor hereunder or
under any other instrument securing the Note.
b. Failure by Mortgagor to duly keep, perform and
observe any other covenant, condition or agreement in the Note,
this Mortca2e, any other instrument securing the Note or any
other instrument collateral to the Note or executed in connection
with the sums secured hereby for a period of thirty (30) days
after Mortgagee gives written notice specifying the breach. If
the default cannot be cured within such thirty (30) day period,
the commencement of appropriate action to cure the default and
the diligent and continuing effort to cure the default shall
operate to extend the curative period.
c. In the event the financial condition of the
Mortgagor materially and adversely changes from the Mortgagor's
financial condition in effect as of the date hereof, and/or if
Mortgagor fails to provide and, financial statements, tax returns
and/or revenue and expense statements as required by this
Mortgage.
d. If Mortgagor (including any shareholder or partner
of the Mortgagor) shall file a voluntary petition in bankruptcy
or shall be adjudicated a bankrupt or insolvent, or shall file
any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, wage earner's plan,
assignment for the benefit of creditors, receivership,
dissolution or similar relief under any present or future Federal
Bankruptcy Act or any other present or future applicable federal,
state or other statute or law, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver or
liquidator of Mortgagor or of all or any part of the properties
of Mortgagor; or if within sixty (60) days after commencement of
any proceeding against Mortgagor. seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution,
debtor relief or similar relief under any present or future
Federal Bankruptcy Act, or of any other present or future
federal, state or other statute or law, such proceeding shall not
have been dismissed, or stayed on appeal; or if, within sixty
(60) days after the appointment, without the consent or
acquiescence of Mortgagor, of any trustee, receiver, or
liquidator of Mortgagor, or of all or any portion of the
Mortgaged Property, such appointment shall not have been vacated
or stayed on appeal or otherwise; or if within ten (10) days
after the expiration of any such stay, such appointment shall not
have been vacated.
e. If foreclosure proceedings should be instituted on
any mortgage superior or inferior to the Mortgage, or if any
foreclosure proceeding is instituted on any lien of any kind
which is not dismissed or transferred to bond within thirty (30)
days of the service of foreclosure proceedings on the Mortgagor.
f. Any default under any mortgage superior or inferior
to this Mortgage not cured within the applicable cure periods
therein contained.
2.2 Acceleration of Maturity.
------------------------
If an Event of Default shall have occurred and be continuing
after the expiration of any applicable curative period, the
Mortgagee may, at its sole option. declare the entire principal
amount of the Note then unpaid, and the interest accrued thereon
to be due and payable immediately, and upon such declaration such
principal and interest shall forthwith become and be due and
payable, as fully and to the same effect as if the date of such
declaration were the date ori2inallv specified for the maturity
of the unpaid balance of the Note.
2.3 Mortgagee's Right to Enter and Take Possession, Operate and Apply
Income.
-----------------------------------------------------------------
a. If an Event of Default shall have occurred, the
Mortgagor, upon demand of the Mortgagee shall forthwith surrender
to the Mortgagee the actual possession of the Mortgaged Property,
and to the extent permitted by law the Mortgagee itself, or such
officers or agents as it may appoint, may enter and take
possession of all the Mortgaged Property, and may exclude the
Mortgagor and its agents and employees wholly therefrom, and may
have joint access with the Mortgagor to the books, papers and
accounts of the Mortgagor.
b. If the Mortgagor shall, for any reason, fail to
surrender or deliver any such Mortgaged Property or any part
thereof after such demand by the Mortgagee, the Mortgagee may
obtain a judgment or decree conferring on the Mortgagee the right
to immediate possession or requiring the Mortgagor to deliver
immediate possession of all or part of such Mortgaged Property to
the Mortgagee, the entry of which such judgment or decree the
Mortgagor hereby specifically consents to.
c. The Mortgagor will pay to the Mortgagee, upon
demand, all expenses of obtaining such judgment or decree and
reasonable compensation to the Mortgagee, its attorneys and
agents; and all such expenses and compensation shall, until paid,
be secured by the lien of this Mortgage.
2.4 Principal and Interest Become Due on Foreclosure.
------------------------------------------------
Upon commencement of suit or foreclosure of this Mortgage,
the unpaid principal of the Note, if not previously declared due,
and the interest accrued thereon, shall at once become and be
immediately due and payable.
2.5 Application of Indebtedness Toward Purchase Price.
-------------------------------------------------
Upon any such foreclosure sale, pursuant to judicial
proceedings, the Mortgagee may, if permitted by law, after
allowing for the proportion of the total purchase price required
to be paid in cash for the costs and expenses of the sale,
compensation and other charges, in paying the purchase price,
apply to the purchase price any portion of or all sums due to the
Mortgagee under the Note and this Mortgage, in lieu of cash, to
the amount which shall, upon distribution of the net proceeds of
such sale, be payable thereon.
2.6 Waiver of Appraisement, Valuation, Stay, and Extension.
------------------------------------------------------
The Mortgagor agrees to the full extent permitted by law,
that in case of a default on its part hereunder, neither the
Mortgagor nor anyone claiming through or under it shall or will
set up, claim or seek to take advantage or any appraisement,
valuation, stay, or extension now or hereafter in force, in order
to prevent or hinder the enforcement or foreclosure of this
Mortgage, or the absolute sale of the property hereby conveyed,
to the final and absolute putting into possession thereof,
immediately after such sale; the purchasers thereof, and the
Mortgagor, for itself and all who may at any time claim through
or under it, hereby waives to the full extent that it may
lawfully do so, the benefit of all such laws, and any and all
right to have the assets comprised in the security intended to be
created hereby marshalled upon any foreclosure of the lien hereof
and agrees that the Mortgagee or any court having jurisdiction to
foreclose such lien may sell the Mortgaged Property as an
entirety.
2.7 Receiver.
--------
If an Event of Default shall occur, then upon the filing of
a bill in equity or other commencement of judicial proceedings to
enforce the rights of the Mortgagee. the Mortgagee to the extent
permitted by law and without regard to the value or adequacy of
the security shall be entitled to apply for the appointment of a
receiver to enter upon and take possession of the Mortgaged
Property. The receiver shall collect all rents, revenues,
issues, income, products and profits thereof, pending such
proceedings and apply the same as the court may direct. The
receiver shall have all rights and powers permitted under the
laws of the state wherein the Real Property is situate and such
other powers as the court making such appointment shall confer.
The expenses, including receiver's fees, counsel fees, costs and
agent's compensation, incurred pursuant to the powers herein
contained shall be secured by this Mortgage. The right to enter
and take possession of, to manage and operate, the Mortgaged
Property, to collect the rents, issues and profits thereof,
whether by a receiver or otherwise, shall be cumulative to any
other right or remedy hereunder or afforded by law, and may be
exercised concurrent therewith or independently thereof.
Mortgagee shall be liable to account only for such rents, issues
and profits actually received by Mortgagee, whether received
pursuant to this Paragraph 2.7 or Paragraph 2.3 above.
Notwithstanding the appointment of any receiver, trustee or other
custodian, the Mortgagee shall be entitled as pledgee to the
possession and control of any cash, or other instruments at the
time held by, or payable or deliverable under the terms of this
Mortgage to the Mortgagee.
2.8 Suits to Protect the Mortgaged Property.
---------------------------------------
The Mortgagee shall have power (a) to constitute and
maintain such suits and proceedings as it may deem expedient to
prevent any waste or impairment of the Mortgaged Property by any
acts which be unlawful or any violation of the Mortgage, (b) to
preserve or protect its interest in the Mortgaged Property and in
the income, revenues, rents and profits arising therefrom, and
(c) to restrain the enforcement of or compliance with any
legislation or other governmental enactment, rule or order that
may be unconstitutional or otherwise invalid, if the enforcement
of or compliance with, such enactment, rule or order would impair
the security hereunder or be prejudicial to the interest of the
Mortgagee.
2.9 Acceleration; Application of Monies by Mortgagee.
------------------------------------------------
a. If default shall be made in the payment of any
amount due under the Mortgage or the Note secured hereby, then,
upon demand of the Mortgagee, the Mortgagor will pay to the
Mortgagee the entire amount due and payable under the Note. If
Mortgagor shall fail to pay the same forthwith upon such demand,
the Mortgagee shall be entitled to sue for and to recover a
judgment for the whole amount so due and unpaid together with
costs, which shall include the reasonable compensation, expenses
and disbursements of the Mortgagee's agents and attorneys either
before, after or during the pendency of any proceedings for the
enforcement of this Mortgage, including appellate proceedings.
The right of the Mortgagee to recover such judgment shall not be
affected by any taking, possession, or foreclosure sale
hereunder, or by the exercise of any other right, power or remedy
for the enforcement of the terms of this Mortgage, or the
foreclosure of the lien hereof.
b. In case of a foreclosure sale of any of the
Mortgaged Property and of the application of the proceeds of sale
to the payment of the debt hereby secured, the Mortgagee shall be
entitled to enforce payment of and to receive all amounts then
remaining due and unpaid upon the Note, and the Mortgagee shall
be entitled to recover a judgment for any portion of the debt
remaining unpaid, with interest.
c. The Mortgagor agrees, to the full extent that it
may lawfully so agree, that no recovery of any such judgment by
the Mortgagee and no attachment or levy of any execution upon any
such judgment upon any of the Mortgaged Property or upon any
other property shall in any manner or to any extent affect the
lien of this Mortgage upon the Mortgaged Property or any part
thereto for any liens, rights, powers or remedies of the
Mortgagee hereunder, but such lien, rights, powers and remedies
shall continue unimpaired as before.
d. Any monies thus collected by the Mortgagee or
received by the Mortgagee under this Paragraph 2.9 shall be
applied as follows:
First to the payment of the reasonable attorneys' fees and
expenses incurred by Mortgagee, its agents and attorneys,
including but not limited to taxes paid, insurance premiums
paid, receivers fees, etc.
Second, toward payment of the amounts due and unpaid upon the
Note.
2.10 Delay or Omission No Waiver.
---------------------------
No delay or omission of the Mortgagee or of any holder of
the Note to exercise any right, power or remedy accruing upon any
default shall exhaust or impair any such right, power or remedy
nor shall be construed to be waiver of any such default, or
acquiescence, herein; and every right, power and remedy given by
this Mortgage to the Mortgagee may be exercised by Mortgagee from
time to time and as often as may be deemed expedient by the
Mortgagee.
2.11 Remedies Cumulative.
-------------------
No right, power or remedy conferred upon or reserved by the
Mortgagee by this Mortgage, is intended to be exclusive of any
right, power or remedy, but each and every such right, power and
remedy shall be cumulative and current and shall be in addition
to any other right, power and remedy given hereunder or now or
hereafter existing at law or in equity or by statute.
ARTICLE III.
MISCELLANEOUS PROVISIONS
------------------------
3.1 No Transfer.
-----------
It is understood and agreed by Mortgagor that as part of the
inducement to Mortgagee to make the loan evidenced by the Note,
Mortgagee has considered and relied on the creditworthiness and
reliability of Mortgagor. Subject to the provisions contained
within paragraph 3.10 of this Mortgage, Mortgagor covenants and
agrees not to sell, convey, transfer, lease, or encumber
(including but not limited to, wrap-around mortgages) any
interest in or any part of the Mortgaged Property without the
prior written consent of the Mortgagee, and any such sale,
conveyance, transfer, lease or encumbrance made without
Mortgagee's prior written consent of the Mortgagee shall
constitute an Event of Default hereunder. A contract to deed or
agreement for deed, any issuance of additional corporate stock of
the Mortgagor, or a transfer of any portion of the corporate
stock of the Mortgagor (if a corporation) or any transfer of the
partnership interests of the Mortgagor (if a Partnership)
directly or indirectly (whether such attempted transfer shall be
by direct transfer from such stockholder or partner, by
encumbrance of such corporate stock or partnership interest by
such stockholder or partner, or be the result of action by any
party against such stockholder or partner) shall constitute a
transfer pursuant to the provisions of this Paragraph. if any
person should obtain an interest in all or any part of the
Mortgaged Property, pursuant to the execution or enforcement of
any lien, security interest or other right, whether superior,
equal or subordinate to this Mortgage or the lien hereof, such
event (absent the express approval of Mortgagee) shall be deemed
to be a transfer by Mortgagor and an Event of Default hereunder.
The provisions of this paragraph shall apply to each and every
such encumbrance, conveyance, assignment, sale, transfer, or
other disposition, regardless of whether or not the Mortgagee has
consented to, or waived by its action or inaction its rights
hereunder with respect to any such previous encumbrance,
conveyance, assignment, sale, transfer or other disposition.
3.2 Uniform Commercial Code.
-----------------------
The parties agree that this Mortgage is a security agreement
under the Uniform Commercial Code for the purpose of creating a
lien on the personal property and fixtures described herein.
3.3 Maximum Rate of Interest.
------------------------
Nothing herein contained nor in the Note secured hereby or
any instrument or transaction related thereto, shall be construed
or so operate as to require the Mortgagor, Maker, or any person
liable for the payment of the Loan made pursuant to said Note, to
pay interest in an amount or at a rate greater than the maximum
allowed by law. Should any interest or other charges in the
nature of the interest paid by the Mortgagor, Maker or any
parties liable for the payment of the loan made pursuant to said
Note, result in the computation of earning of interest in excess
of the maximum rate of interest allowed by applicable law, then
any and all such excess shall be and the same is hereby waived by
the holder hereof, and all such excess shall be automatically
credited against and in reduction of the principal balance. and
any portion of said excess which exceeds the principal balance
shall be paid by the holder hereof to the Mortgagor, Maker or any
parties liable for the payment of the loan made pursuant to said
Note, it being the intent of the parties hereto that under no
circumstances shall the Mortgagor. Maker or any parties liable
for the payment of the loan hereunder, be required to pay
interest in excess of the maximum rate allowed by law.
3.4 Default Rate.
------------
The Default Rate of interest shall be applicable subsequent
to an Event of Default as defined in Paragraph 2.1 and where
elsewhere provided for in this Mortgage. If he Default Rate
shall be at the rate of eighteen percent (18.00%) per annum.
3.5 Time is of the Essence.
----------------------
It is specifically agreed that time is of the essence of
this Mortgage and that no waiver of any obligation hereunder or
of the obligation secured hereby shall at any time thereafter be
held to be a waiver of the terms hereof or of the instrument
secured hereby.
3.6 Attorney's Fee and Expenses.
---------------------------
Wherever provision is made herein for payment for reasonable
attorney's or counsel's fees or expenses incurred by the
Mortgagee, said provision shall include, but not be limited to,
reasonable attorneys' or counsel's fees or expenses incurred in
any and all judicial, bankruptcy, reorganization, administrative,
or other proceedings, including appellate proceedings, whether
such proceedings arise before or after entry of a final judgment.
3.7 Florida Contract.
----------------
This Mortgage is made by the Mortgagor and accepted by
Mortgagee in the State of Florida, with reference to the laws of
such State, and shall be construed, interpreted, enforced and
governed by and in accordance with such laws (excluding the
principles thereof and governing conflicts of law), and Federal
Law, in the event (and only in the event) Federal Law pre-empts
State Law.
3.8 Successors, Assigns Included in Parties.
---------------------------------------
Whenever in this Mortgage one of the parties hereto is named
or referred to, the successors and assigns of such party shall be
included and all covenants and agreements contained in this
Mortgage by or on behalf of the Mortgagor or by or on behalf of
Mortgagee, shall bind and inure to the benefit of their
respective successors and assigns whether so expressed or not.
Whenever the singular or plural number, masculine or feminine or
neuter gender is used herein, it shall equally include the other.
3.9 Notice.
------
a. Mortgagor. Any notice, demand or other instrument
authorized by this Mortgagee to be served on or given to the
Mortgagor may be served on or given to the Mortgagor, at:
307 South 21st Avenue
Hollywood, FL 33020
or at such other address as may have been furnished in writing to
the Mortgagee by the Mortgagor.
b. Mortgagee. Any notice, demand or other instrument
authorized by this Mortgage to be served on or given to the
Mortgagee may be served on or given to the Mortgagee, at:
307 South 21st Avenue
Hollywood, FL 33020
or at such other address as may have been furnished in writing to
the Mortgagor by the Mortgagee.
3.10 Special Provisions.
------------------
a. The Mortgagee, notwithstanding any event of default
under this Mortgage and/or under the Note, shall be prohibited
from: (i) foreclosing this Mortgage; or (ii) accelerating the
unpaid indebtedness evidenced by the Note, as long as the Prior
Mortgage (and the Promissory Note secured thereby) is current and
in good standing; and
b. In the event the Prior Mortgage (and/or the
Promissory Note secured thereby) shall be in default, the
Mortgagee shall not accept any principal or interest payments due
pursuant to the terms and provisions of the Note.
c. In the event that a foreclosure action is
instituted by the holder of the Prior Mortgage, Mortgagee agrees
that Mortgagee shall not interpose any cross claims against
Mortgagor in such action and any such claims shall be brought in
a separate action by Mortgagee and Mortgagee further agrees that
Mortgagee waives any and all defenses with regard to the
foreclosure action of the Prior Mortgage other than the right to
receive any overage in net proceeds in the event of a foreclosure
sale.
3.11 WAIVER OF TRIAL BY JURY.
-----------------------
EXCEPT AS PROHIBITED BY LAW, NEITHER THE MORTGAGOR NOR THE
MORTGAGEE SHALL SEEK A JURY TRIAL ON ANY LAWSUIT, PROCEEDING, OR
COUNTERCLAIM BASED UPON, OR ARISING OUT OF THIS MORTGAGE, THE
NOTE SECURED HEREBY OR THE RELATIONSHIP BETWEEN THE MORTGAGOR AND
THE MORTGAGEE. IF THE SUBJECT MATTER OF ANY SUCH LAWSUIT IS ONE
IN WHICH THE WAIVER OF A JURY TRIAL IS PROHIBITED, NEITHER THE
MORTGAGOR NOR THE MORTGAGEE SHALL PRESENT AS A PERMISSIVE
COUNTERCLAIM IN SUCH A LAWSUIT, ANY CLAIM ARISING OUT OF THIS
MORTGAGE OR THE NOTE SECURED HEREBY. FURTHERMORE, NEITHER THE
MORTGAGOR NOR THE MORTGAGEE SHALL SEEK TO CONSOLIDATE ANY SUCH.
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY SUCH
ACTION IN WHICH A JURY TRIAL CANNOT BE WAIVED.
IN WITNESS WHEREOF, the undersigned has hereunto set its
hand and seal the day and year first above written.
Signed, Sealed and Delivered
in the presence of: LAKESHORE CLUB
DEVELOPMENT, INC., a
Florida corporation
/s/ Cary Greenberg
- -------------------------------------- By: /S/ Harvey Birdman
HARVEY BIRDMAN, Vice-President
Print Name: Cary Greenberg
/S/ Pam Ford Address: 307 South 21st Avenue
- -------------------------------------- Hollywood, Florida 33020
Print Name: Pam Ford
STATE OF FLORIDA )
) SS:
COUNTY OF BROWARD )
The execution of the foregoing instrument was acknowledged
before me this 30th day of June, 1999, by HARVEY BIRDMAN, as Vice-
President of LAKESHORE CLUB DEVELOPMENT, INC., a Florida
corporation, who is personally known to me and who did not take
an oath.
My Commission Expires: /S/ Irene M. Alvarez
June 22, 2003 Notary Public, State of Florida
Print Name: Irene M. Alvarez
_____________________________________________________________________________
EXHIBIT 6(a).3 CONSOLIDATION PROMISSORY NOTE MADE BY LAKESHORE
CLUB DEVELOPMENT, LC, TO THE ORDER OF BANKATLANTIC, FSB, DATED
JUNE 30, 1999
_____________________________________________________________________________
CONSOLIDATION PROMISSORY NOTE
-----------------------------
$6,900,000.00 Fort Lauderdale, Florida
June 30 , 1999
The undersigned, LAKESHORE CLUB DEVELOPMENT L. C., a Florida
limited liability company, successor by merger with Lakeshore
Club Development, Inc., a Florida corporation (hereinafter called
"Maker"), promises to pay to the order of BankAtlantic, a Federal
Savings Bank (hereinafter, together with any holder hereof,
called "Payee"), at its office at 100 North Biscayne Boulevard,
Second Floor, Miami, Florida 33132 or at such other place as
Payee may from time to time designate, the principal sum of Six
Million Nine Hundred Thousand and no/ 1 00 Dollars
($6,900,000.00), together with interest thereon from the date
hereof at the interest rate set forth below, which sums are to be
repaid as follows:
This Note shall bear interest at a floating rate equal to 1.5%
above the "Prime Rate" as hereinafter defined, adjusted daily
with any changes in the Prime Rate. Monthly payments of interest
only shall be due and payable on the first day of each month from
and after the date of execution of this Note beginning July 1,
1999 and continuing until October 1, 2001 (the "Maturity Date")
at which time the entire principal balance of this Note together
with all accrued and unpaid interest thereon shall be due and
payable in full.
Minimum principal payments shall be due hereunder during each
calendar quarter commencing with the 3 month period beginning
July 1, 1999. Such minimum principal payments shall be no less
than the amounts set forth in the Schedule of Minimum Quarterly
Principal Payments attached as Exhibit A hereto and made a part
hereof. In the event that Maker does not make such minimum
principal payments within any quarterly period, Maker shall have
a period of 120 days from the end of such quarter within which to
make such principal reductions. In the event that in any quarter
Maker makes principal reductions in excess of the required
minimum principal payments (" Excess Payments "), such Excess
Payments shall be credited against the minimum principal payments
due for the subsequent quarter(s). Any principal payments which
are credited towards a prior quarter shall not be credited
towards the quarter in which received.
Maker shall have an option to extend the Maturity Date to October
1, 2002 (the "Extended Maturity Date") provided, however, that
Maker satisfies the following conditions precedent : (i) Maker
shall have paid all of the required minimum principal payments
due hereunder; (ii) there shall have been no default by Maker
under this Note or any of the related Loan Documents; and (iii)
Maker shall give Payee written notice electing to exercise such
extension option, which notice must be given no earlier than 90
days prior to the Maturity Date and no later than 30 days prior
to the Maturity Date. In the event of any such extension,
monthly payments of interest only shall continue to be due and
payable at the floating interest rate determined in the same
manner as set forth above. The entire principal balance together
with all accrued and unpaid interest thereon shall be due and
payable in full on the Extended Maturity Date.
Interest shall be computed on the basis of a 360-day year for the
actual number of days elapsed. All payments hereunder shall be
made in such coin or currency of the United States of America as
at the time of payment shall be legal tender for the payment of
public and private debts, and shall be applied first to interest
and lawful charges and expenses then accrued and then to
principal.
"Prime Rate" shall mean that certain rate of interest announced
from time to time by Payee as its Prime Rate, which rate is
purely discretionary and is not necessarily the best or lowest
rate charged to borrowing customers of Payee. Payee shall not be
required to notify Maker of any changes in the Prime Rate, which
shall be reflected solely by the billing thereof to Maker.
Regardless of the above, said interest rate shall never exceed
the maximum rate permitted by applicable law.
In order to compensate Payee for loss and expense occasioned by
handling the delinquent payments, which include but are not
limited to the cost of processing and collecting delinquencies,
Maker shall pay to Payee, in addition to any interest or other
sums payable under this Note, a service charge equal to five
percent (5 %) of the amount of any payment received by Payee ten
(10) days or more after the due date thereof.
This Note may be prepaid in whole or in part at any time without
premium or penalty.
From and after the date upon which any payment of principal or
interest hereunder becomes due and payable (whether by
acceleration or otherwise) if the same is not timely paid, or
upon the occurrence of any other default under this Note or any
default under any of the Loan Documents, interest shall be
payable on all sums outstanding hereunder, at the maximum rate
permitted by applicable law, and shall be due and payable ON
DEMAND.
This Note is secured by certain security documents encumbering
the property described therein including, without limitation, the
following:
A. Mortgage Deed and Security Agreement.
B. UCC-1 Financing Statements.
C. Assignment of Rents, Leases and Deposits.
D. Collateral Assignment of Rights and Agreements Affecting Real Estate.
E. Collateral Assignment of Sales Contracts.
F. Construction Loan Agreement.
G. Associated affidavits, disclosures and miscellaneous loan documentation.
This Note, all documents listed above and any other documents
executed in connection with this Note are hereinafter
collectively referred to as the "Loan Documents".
In the event of the continuation of any default in the
payment of any interest or principal under this Note for a period
of ten (10) days after such payment becomes due, or upon the
occurrence of any other event of default under the terms and
provisions of this Note or any of the Loan Documents, or any
other documents delivered to Payee in connection with this loan,
or any other obligation of Maker to Payee, then Payee may declare
the entire unpaid principal amount outstanding hereunder,
together with interest accrued thereon and any other lawful
charges accrued hereunder, immediately due and payable.
Maker and any endorsers, sureties, guarantors, and all
others who are or at some future date may become liable for the
payments required hereunder, grant a continuing first lien
security interest in and to, and authorize Payee, in its sole
discretion at any time after an event of default hereunder, in
such order as Payee may elect, to apply to the payment of
obligations due and owing hereunder, or to the payment of any and
all indebtedness, liabilities and obligations of such parties to
Payee, whether now existing or hereafter created, any and all
monies, general or specific deposits, or collateral of whatsoever
nature of any of the above noted parties, now or hereafter in the
possession of Payee. All property described in this paragraph
above, along with all property secured by the Loan Documents,
including all proceeds thereof and rights in connection
therewith, together with additions and substitutions, are
hereinafter collectively referred to as the "Collateral".
Additions to, releases, reductions or exchanges of or
substitutions for the Collateral, payments on account of this
loan or increases of the same, or other loans made partially or
wholly upon the Collateral, may from time to time be made without
affecting the provisions of this Note or the liabilities of any
party hereto. If any of the Collateral is personal property,
Payee shall exercise reasonable care in the custody and
preservation of the Collateral in its possession, and shall be
deemed to have exercised reasonable care if it takes such action
for that purpose as Maker shall reasonably request in writing,
but no omission to comply with any request of Maker shall of
itself be deemed a failure to exercise reasonable care. Payee
shall not be bound to take any steps necessary to preserve any
rights in the Collateral against prior parties, and Maker shall
take all necessary steps for such purposes. Payee or its nominee
need not collect interest on or principal of any Collateral or
give any notice with respect thereto.
In the event Payee deems itself insecure or upon the
happening of any of the following events, each of which shall
constitute a default hereunder, all sums due hereunder shall
thereupon or thereafter, at Payee's option, without notice or
demand, become immediately due and payable: (a) failure of any
Obligor (which term shall mean and include each Maker, Endorser,
Surety, Guarantor or other party liable for payment of or
pledging collateral or security under this Note) to pay any sum
due hereunder or due by any Obligor to Payee under any other
promissory note or under any security instrument or written
obligation of any kind now existing or as to Maker, hereafter
created; (b) occurrence of default under any of the Loan
Documents or any other loan agreement or security instrument now
or hereafter in effect which by its terms covers this Note or the
indebtedness evidenced hereby; (c) death of either of the
following two Obligors: Harvey Birdman or Herbert Hirsch; (d)
filing of any petition under the Bankruptcy Code or any similar
federal or state statute by or against any Obligor or the
insolvency of any Obligor; (e) making of a general assignment by
any Obligor for the benefit of creditors, appointment of or
taking possession by a receiver, trustee or custodian or similar
official for any Obligor or for any assets of any such Obligor or
institution by or against any Obligor of any kind of insolvency
proceedings or any proceeding for dissolution or liquidation of
any Obligor; (f) entry of a judgment against any Maker or entry
of ajudgment for an amount in excess of $25,000.00 as to either
Harvey Birdman or Herbert Hirsch; (g) material falsity in any
certificate, statement, representation, warranty or audit at any
time furnished to Payee by or on behalf of any Obligor pursuant
to or in connection with this Note, the Loan Documents or any
loan agreement or security agreements now or hereafter in effect,
which by its terms covers this Note for the indebtedness
evidenced hereby or otherwise including any omission to disclose
any substantial contingent or liquidated liabilities or any
material adverse change in any facts disclosed by any
certificate, statement, representation, warranty or audit
furnished to Payee; (h) issuance of any writ of attachment or
writ of garnishment or filing of any lien against any Collateral
or the property of any Obligor; (i) taking of possession of any
material Collateral or of any substantial part of the property of
any Obligor at the instance of any governmental authority; 0)
dissolution, merger, consolidation, or reorganization of any
Obligor; (k) assignment or sale by any Obligor of any equity in
any collateral securing payment of this Note without the prior
written consent of Payee; (l) cancellation of any guaranty with
respect hereto without the prior written consent of Payee hereof;
(in) the determination by Payee that a material adverse change
has occurred in the financial condition of any Obligor from the
condition set forth in the most recent financial statements of
such Obligor heretofore furnished to Payee or from the condition
of such Obligor as heretofore most recently disclosed to Payee in
any manner; or (n) occurrence of any default under any of the
Loan Documents or obligation of Maker or of any Obligor to Payee
arising in connection with the Loan.
Payee shall have all of the rights and remedies of a
creditor, mortgagee and secured party under all applicable law.
Without limiting the generality of the foregoing, upon the
occurrence of any default hereunder, or, in the event Payee at
any time deems itself insecure, Payee may, at its option, and
without notice or demand (i) declare the entire unpaid principal
and accrued interest accelerated and due and payable at once,
together with any and all other liabilities of Maker or any of
such liabilities selected by Payee; and (ii) set-off against this
Note all monies owed by Payee in any capacity to Maker, whether
or not due, and also set-off against all other liabilities of
Maker to Payee all monies owed by Payee in any capacity to Maker,
and Payee shall be deemed to have exercised such right of set-
off, and to have made a charge against any such money immediately
upon the occurrence of such default, although made or entered on
the books subsequent thereto. To the extent that any of the
Collateral is personal property and Payee elects to proceed with
respect to it in accordance with the Uniform Commercial Code,
then, unless that collateral, is perishable or threatens to
decline speedily in value, or is of a type customarily sold o'n a
recognized market, Payee will give Maker reasonable notice of the
time and place of any public or private sale thereof. The
requirement of reasonable notice shall be met if such notice is,
at the option of Payee, hand delivered, sent via expedited
courier, or mailed, postage pre-paid to Maker, at the address
given to Payee by Maker, or at any other address shown on the
records of Payee at least five (5) days before the time of sale.
Upon disposition of any Collateral after the occurrence of any
default hereunder, Maker shall be and shall remain liable for any
deficiency; and Payee shall account to Maker for any surplus, but
Payee shall have the right to apply all or part of such surplus
(or to hold the same as reserve) against any and all other
liabilities of Maker to Payee.
Payee may, at any time, whether or not this Note is due: (i)
pledge or transfer this Note and its interest in the Collateral,
and pledgee or transferee shall, for all purposes, stand in the
place of Payee hereunder and have all the rights of Payee
hereunder; (ii) transfer the whole or any part of the Collateral
into the name of itself or its nominee; (iii) vote the
Collateral; (iv) notify Maker to make payment to Payee of any
amounts due or to become due thereon; (v) demand, sue for,
collect, or make any compromise or settlement it deems desirable
with reference to the Collateral; (vi) take possession or control
of any proceeds of the Collateral; and (vii) exercise all other
rights necessary or required, in Payee's discretion, in order to
protect its interests hereunder.
In no event shall Payee be entitled to unearned or unaccrued
interest or other charges or rebates, except as may be authorized
by law, and should any interest or other charges paid by Maker or
other parties liable for the payment of this Note result in the
computation or earning of interest in excess of the maximum rate
of interest that is legally permitted under applicable law, then
any and all such excess shall be and the same is hereby waived by
Payee, and any and all such excess shall be automatically
credited against and reduce the balance due under this
indebtedness, and the portion of said excess which exceeds the
balance due under this indebtedness, shall be paid by Payee to
Maker and parties liable for the payment of this Note. Payee
may, in determining the maximum rate permitted under applicable
law in effect from time to time, take advantage of (i) the rate
of interest permitted by Chapter 665, Florida Statutes (Florida
Savings Association Act), by reason of both 687.12, Florida
Statutes (Interest Rates; Parity Among Licensed Lenders or
Creditors), and 12 USC 85 and 86; and (ii) any other law, rule
or regulation in effect from time to time available to Payee,
which exempts Payee from any limit upon the rate of interest it
may charge, or grants to Lender the right to charge a higher rate
of interest than that permitted by Chapter 687, Florida Statutes.
The provisions of this Note and the Loan Documents shall be
construed according to the internal laws (and not the law of
conflicts) of the State of Florida; except as set forth above, if
Federal law would allow the payment of interest hereunder at a
higher maximum rate than would be applicable under Florida law,
in which case such Federal law shall apply to the determination
of the highest applicable lawful rate of interest hereunder.
No delay or omission on the part of Payee in exercising any
right hereunder shall operate as a waiver of such right or of any
other rights under this Note. Presentment, demand, protest,
notice of dishonor and all other notices are hereby waived by
Maker. Maker promises and agrees to pay all costs of collection
and attorney's fees, which shall include reasonable attorneys'
fees in connection with any suit, out of court, in trial, on
appeal, in bankruptcy proceedings or otherwise, incurred or paid
by Payee in enforcing this Note or preserving any right or
interest of Payee hereunder. Any notice to Maker shall be
sufficiently served for all purposes if placed in the mail,
postage prepaid, addressed to, or left upon the premises at the
address of Maker as provided to Payee.
This Note is not assumable without Payee's prior written
consent, which consent may be granted by Payee or denied by
Payee, in Payee's sole and absolute discretion.
Maker agrees that at Payee's option, Broward County or Dade
County, Florida shall be the proper venue for any and all legal
proceedings arising out of this Note or any of the Loan
Documents.
THIS PROMISSORY NOTE CONSTITUTES A CONSOLIDATION OF THE
FOLLOWING PROMISSORY NOTES (COLLECTIVELY, THE "EXISTING NOTES"):
(A) THAT CERTAIN MODIFICATION PROMISSORY NOTE DATED OF EVEN DATE
HEREWITH EXECUTED BY MAKER IN FAVOR OF PAYEE IN THE PRINCIPAL
AMOUNT OF $6,000,000.00 AND (B) THAT CERTAIN FUTURE ADVANCE
PROMISSORY NOTE DATED OF EVEN DATE HEREWITH, EXECUTED BY MAKER IN
FAVOR OF PAYEE IN THE PRINCIPAL AMOUNT OF $900,000.00. PROPER
DOCUMENTARY STAMP TAXES HAVE PREVIOUSLY BEEN PAID IN CONNECTION
WITH THE EXECUTION OF THE EXISTING NOTES (AND THE PROMISSORY
NOTES MODIFIED THEREBY, AS APPLICABLE), AND NO ADDITIONAL
DOCUMENTARY STAMP TAX IS DUE IN CONNECTION WITH THE EXECUTION OF
THIS PROMISSORY NOTE. THE ORIGINALS OF THE FOREGOING EXISTING
NOTES ARE ATTACHED TO THIS PROMISSORY NOTE.
Waiver of Trial by Jury. MAKER AND PAYEE HEREBY MUTUALLY,
KNOWINGLY, WILLINGLY AND VOLUNTARILY WAIVE THEIR RIGHT TO TRIAL
BY JURY, AND, NO PARTY, NOR ANY ASSIGNEE, SUCCESSOR, HEIR, OR
LEGAL REPRESENTATIVE OF THE PARTIES (ALL OF WHOM ARE HEREINAFTER
REFERRED TO AS THE "PARTIES ") SHALL SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION
PROCEEDING BASED UPON OR ARISING OUT OF THIS NOTE OR THE LOAN
DOCUMENTS, OR ANY INSTRUMENT EVIDENCING, SECURING, OR RELATING TO
THE INDEBTEDNESS AND OTHER OBLIGATIONS EVIDENCED HEREBY OR ANY
RELATED AGREEMENT OR INSTRUMENT, ANY OTHER COLLATERAL FOR THE
INDEBTEDNESS EVIDENCED HEREBY OR ANY COURSE OF ACTION, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
RELATING TO THE LOAN OR TO THIS NOTE. THE PARTIES ALSO WAIVE ANY
RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN
WAIVED, WITH ANY OTHER ACTION IN WHFCH A JURY TRIAL HAS NOT BEEN
WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY
NEGOTIATED BY THE PARTIES. THE WAIVER CONTAINED HEREIN IS
IRREVOCABLE, CONSTITUTES A KNOWING AND VOLUNTARY WAIVER, AND
SHALL BE SUBJECT TO NO EXCEPTIONS. PAYEE HAS IN NO WAY AGREED
WITH OR REPRESENTED TO MAKER OR ANY OTHER PARTY THAT THE
PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
LAKESHORE CLUB DEVELOPMENT L.C.,
a Florida limited liability company, successor by
merger with Lakeshore Club Development, Inc.,
a Florida corporation
By: /S/ Harvey Birdman
---------------------------------------------
Harvey Birdman, Managing Member
(Corporate Seal)
STATE OF FLORIDA
COUNTY OF BROWARD
The foregoing instrument was acknowledged before me this
30th day of June, 1999, by Harvey Birdman, as Managing Member of
and on behalf of LAKESHORE CLUB DEVELOPMENT L. C., a Florida
limited liability company, successor by merger with Lakeshore
Club Development, Inc., a Florida corporation, who is personally
known to me or who has produced a -------- driver's license as
identification.(personally known is circled on original)
/S/ Stacey A. Hernandez
Typed/Printed Name:
Notary Public - State of Florida
My Commission Expires:
Commission Number:
[Stamp appears as follows] OFFICIAL NOTARY SEAL
STACEY ANN HERNANDEZ
NOTARY PUBLIC STATE OF FLORIDA
COMMISSION NO. CC758307
MY COMMISSION EXP. JULY 14, 2002
Schedule of Minimum Quarterly Principal Payments
Quarter Amount Due
7/l/99-9/30/99 $225,000.00
10/l/99-12/31/99 $787,500.00
1/l/00-3/31/00 $1,012,500.00
4/l/00-6/30/00 $675,000.00
7/l/00-9/30/00 $675,000.00
10/l/00-12/31/00 $1,350,000.00
1/l/01-3/31/01 $1,462,500.00
4/l/01-6/30/01 $1,350,000.00
7/l/01-9/30/01 $1,350,000.00
EXHIBIT A TO CONSOLIDATION PROMISSORY NOTE
_____________________________________________________________________________
EXHIBIT 6(a).4 purchase mortgage between lakeshore club
development, lc, and cary lightsey and layne lightsey, dated
december 31, 1998
_____________________________________________________________________________
INSTR # 990000342
OR BX 04159 PG 0595
RECORDED 01/04/99 11:56 AM
Prepared by and return to: RICHARD M. WEISS CLERK OF COURT
Jacob C. Dykxhoom Esquire POLK COUNTY
Peterson & Myers, P.O. Box 1079 DOC TAX PD(F.S.201.08) 4,725.00
Lake Wales, FL 33859-1079 INT. FAX PD (F. S.199) 2,700.00
DEPUIY CLERK L Mujtaba
PURCHASE MORTGAGE
THIS PURCHASE MORTGAGE ("Mortgage") is made and given this
December 31, 1998, by LAKESHORE CLUB DEVELOPMENT, L.C., a Florida
limited liability company, ("Mortgagor"), whose mailing address
is 307 South 21st Avenue, Hollywood, Florida 33020, to CARY
LIGHTSEY and LAYNE LIGHTSEY ("Mortgagee"), whose mailing address
is 1401 Tiger Lake Road, Lake Wales, Florida 33853
("Mortgagor" and "Mortgagee" are used for singular or plural, as
context requirs.)
WHEREAS, Mortgagor is indebted to Mortgagee in the principal
amount of ONE MILLION THREE HUNDRED FIFRY THOUSAND
($1,350,000.00) DOLLARS, together with interest thereon, as
evidenced by the Promissory note of even date herewith ("Note"),
executed by Mortgagor and delivered to Mortgagee, the final
payment of which is due on or before April 1, 2009, which by
reference is made a part hereof to the same extent as though set
out in fill herein.
NOW, THEREFORE, in order to secure (a) the prompt and
punctual repayment of the debt evidenced by the Note, with
interest, and all advances, renewals, extensions and
modifications; (b) the payment of all other sums, with interest,
advanced under this Mortgage to protect the security of this
Mortgage; (c) the performance by Mortgagor of all covenants and
conditions in the Note, including any advances, renewals,
extensions and modifications; and (d) the performance by
Mortgagor of all covenants and conditions in this Mortgage, and
all other instruments securing the Note; and in order to charge
the properties, interests, and rights hereinafter described with
such payment and performance; and for and in consideration of the
sum of Ten Dollars and other valuable consideration, Mortgagor
does hereby mortgage, pledge and assign to Mortgagee all of
Mortgagor's estate, right title, and interest in, to and under
all of the following described real property located in Polk
County, Florida, to wit:
See Exhibit "A" attached hereto and made a part hereof
hereinafter "Land", to have and to hold the same; together with:
A. All the improvements now or hereafter located on the
Land; all fixtures now or hereafter affixed or attached to the
Land; all licenses and permits used or required in connection
with use of the Land; all leases of the Land now or hereafter
entered into and all right, title and interest of Mortgagor
thereunder; each and every tenement, hereditament, easement,
right, power, privilege, immunity, and appurtenance thereunto
belonging or in anywise appertaining; and all the right, title,
interest, and claim whatsoever in late as well as in equity of
Mortgagor of, in, and to the same, and any part thereof, and
B. All rents, issues, profits, revenue, income, and other
benefits accruing from the Land, provided, however, that
permission is hereby given to Mortgagor so long as no default has
occurred hereunder to collect, receive, and use such benefits
from the Land as they become due and payable, but not in advance
thereof.
The foregoing described Land and tangible and intangible
personal property shall hereinafter be collectively referred to
as the "Mortgaged Property". Mor4Mor hereby grants to Mortgagee
a security interest in the foregoing described tangible and
intangible personal property.
PROVIDED ALWAYS, that if Mortgagor shall pay to Mortgagee
the indebtedness evidenced by the Note at the times and in the
manner stipulated therein, by this Mortgage, and by all other
instruments securing the Note, including any renewal, extension,
or modification thereof, and shall perform all obligations in the
Note, this Mortgage, and 0 other instruments securing the Note,
including any renewal, extension, or modification thereof, to be
kept, performed, or observed by Mortgagor, then this Mortgage
shall cease and be void, but shall otherwise remain in full force
and effect.
Mortgagor covenants and agrees with Mortgagee as follows:
1. Compliance with Note and Mortgage:
----------------------------------
Mortgagor shall comply with all provisions of the Note,
this Mortgage, and every other instrument securing the Note, and
will promptly pay to Mortgagee all sums, including interest,
required to be paid by Mortgagor under the Note, this Mortgage,
and every other instrument securing the Note, when due and as
provided in such instrument.
2. Warranty of Title:
------------------
Mortgagor warrants that Mortgagor owns and has a good
and marketable title to an indefeasible fee simple estate in the
Land, subject to no lien, charge, or encumbrance; except the
liens, exceptions and other matters set forth in the owner's
title insurance policy insuring the Mortgagor's title to the
Land, to be issued pursuant to the title insurance commitment
issued by Commonwealth Land Title Insurance Company, under
Commitment #BA981301, effective 12/22/98. Mortgagor covenants
that this Mortgage is and will remain a valid and enforceable
mortgage on the Mortgaged Property, subject only to the
exceptions herein provided, and that Mortgagor has lawful
authority to convey, mortgage, and encumber Mortgagor's interest
in the Land as provided herein. Mortgagor will preserve such
title and will forever warrant and defend the same to Mortgagee
and will forever warrant and defend the validity and priority of
the lien of this Mortgage against the claims of all persons and
parties whomsoever, subject only to the exceptions herein
provided.
3. Payment of Taxes and Liens:
---------------------------
Mortgagor shall pay all the taxes, assessments, levies,
liens, liabilities, obligations, and encumbrances of every nature
now or hereafter imposed, levied, or assessed upon this Mortgage,
the Mortgaged Property, or the indebtedness secured hereby, and
shall produce evidence of such payment(s) upon Mortgagee's
request, All such payments shall be made when due and payable
according to law before they become delinquent and before any
interest attaches or any penalty is incurred. Mortgagor shall
not permit any mechanic's or materialman's lien to be created or
to remain outstanding upon any of the Mortgaged Property and
shall cause any such lien to be released or transferred by a
surety bond. Mortgagor shall immediately pay and discharge any
claim, lien, or encumbrance against the Mortgaged Property which
may be or become superior to this Mortgage, except for the
claims, liens and encumbrances set forth in Paragraph 2 above to
which this Mortgage is expressly made subject, and Mortgagor
shall not permit any default or delinquency on any other lien,
encumbrance, or charge against the Mortgaged Property.
4. Care of Mortgaged Property:
---------------------------
Mortgagor shall not remove or demolish any building or
other property forming a part of the Mortgaged Property without
the prior written consent of Mortgagee. Mortgagor shall not
permit, commit, or suffer any waste, impairment, or deterioration
of the Mortgaged Property or any' part thereof, and shall
maintain the Mortgaged Property in good condition and repair.
Mortgagee shall have the right to inspect the Mortgaged Property
on reasonable notice to Mortgagor. Mortgagor shall comply with
all laws, ordinances, regulations, covenants, conditions, and
restrictions affecting the Mortgaged Property, and shall not
cause or permit any violation thereof.
5. Mortgagee's Right to Make Certain Payments:
-------------------------------------------
If Mortgagor fails to pay or discharge any tax,
assessment, lien, levy, liability, obligation, or encumbrance, as
required by this Mortgage, or fails to maintain and repair the
Mortgaged Property as herein agreed, or shall commit or permit
waste; or if there shall be commenced any action or proceeding
affecting the Mortgaged Property or the title thereto, or the
interest of Mortgagee therein, including, but not limited to
bankruptcy and reorganization proceedings; then Mortgagee may, at
its option, pay or discharge the tax, assessment, lien, levy,
liability, obligation, or encumbrance, or any part thereof, or
make and pay for such repairs and take such steps as it deems
advisable to prevent or cure such waste, and may appear in any
such action or proceeding and retain counsel therein, and take
such action therein as Mortgagee shall deem advisable, and for
any such purposes Mortgagee may advance such sums of money,
including all costs, reasonable attorney's fees, and other
expenses as it deems necessary. Any such payment shall not waive
or affect any option, lien, equity, or right of Mortgagee under
or by virtue of this Mortgage. The full amount of each and every
such payment shall be immediately due and payable, without
demand, and shall bear interest at the rate set forth in the Note
from the date thereof until paid and, together with such
interest, shall be secured by the lien of this Mortgage. Nothing
herein contained shall be construed as requiring Mor-tgagee to
advance or expend monies for any of the purposes mentioned in
this paragraph.
6. Payment of Expenses:
--------------------
Mortgagor shall pay all the costs, charges, and
expenses, including reasonable attorneys' fees, disbursements,
and cost of title examination incurred or paid at any time by
Mortgagee due to the failure on the part of Mortgagor promptly
and fully to perform, comply with, and abide by each and every
stipulation, agreement condition, and covenant of the Note and
this Mortgage. Such costs, charges, and expenses shall be
immediately due and payable, whether or not there be notice,
demand, attempt to collect, or suit pending. The full amount of
each and every such payment shall bear interest at the rate set
forth in the Note from the date thereof until paid. All such
costs, charges, and expenses so incurred or paid, together with
such interest, shall be secured by the lien of this Mortgage and
any other instrument securing the Note.
7. Event of Default:
-----------------
Any one of the following shall constitute an event of
default: (a) Failure by Mortgagor to pay, as and when due, any
part of the indebtedness secured by this Mortgage; (b)
nonperformance by the Mortgagor, or any guarantor of the Note, of
any agreement with, or any term or condition of, the Note, this
Mortgage, or any other instrument securing the Note; (c) the
appointment of a receiver or liquidator, whether voluntary or
involuntary, for the Mortgagor or any guarantor of the Note, or
for any of their property; (d) the filing of a petition by or
against the Mortgagor or any guarantor of the Note under the
provisions of any state insolvency law or under the provisions of
any Federal bankruptcy statute; (e) the making by the Mortgagor
or any guarantor of the Note of an assignment for the benefit of
creditors, and (o the reorganization or merger or consolidation
of Mortgagor (or the making of any agreement therefor) without
the prior written consent of Mortgagee.
8. Acceleration:
-------------
If an event of default shall have occurred, Mortgagee
may declare the outstanding principal amount of the Note, the
interest accrued thereon, and all other sums secured hereby to be
immediately due and payable, and upon such declaration, such
principal, interest, and other sums shall immediately be
accelerated and become due and payable in their entirety without
demand or notice; provided, however, acceleration will not occur
and shall not be invoke unless a default in any payment shall
continue for a period of thirty (30) days (with or without
notice) or a default in any other manner shall continue uncured
for a period of fifteen (1 5) days after notice or, in any event,
for a period of thirty (3 0) days without notice..'
9. Remedies after Default:
-----------------------
Upon an event of default, Mortgagee may proceed by suit
or suits at law or in equity or by any other appropriate
proceeding or remedy to: (a) foreclose this Mortgage and sell, in
whole or in separate lots or parcels, the Mortgaged Property
under the judgment or decree of a court or courts of competent
jurisdiction; (b) collect all rents, issues, profits, revenue,
income, and other benefits from the Mortgaged Property; and (c)
appoint a receiver to enter upon and take possession of the
Mortgaged Property and to collect all rents, issues, profits,
revenue, income, and other benefits thereof and apply the same as
a court may direct and such receiver shall have all rights and
powers permitted under law. The expenses (including receiver's
fees, reasonable attorneys fees, and costs) incurred by Mortgagee
pursuant to the remedies herein contained shall be secured by
this Mortgage. Mortgagee shall (after the payment of all costs
and expenses incurred) apply such rents, issues, profits,
revenue, income and other benefits of the Mortgaged Property to
reduce the indebtedness secured by this Mortgage. The remedies
conferred upon or reserved to Mortgagee by this Mortgage shall be
Mortgagor's only remedies upon an event of default.
10. No Waiver:
----------
No delay or omission of Mortgagee to exercise any right,
power, or remedy accruing upon any event of default shall exhaust
or impair any such right, power, or remedy or shall be construed
to waive any event of default or to constitute acquiescence
therein.
11. Successors and Assigns Bound:
----------------------------
Whenever one of the par-ties hereto is named or referred
to herein, the heirs, successors, and assigns of such party shall
be included. All covenants and agreements contained in this
Mortgage, by or on behalf of Mortgagor or Mortgagee, shall bind
and inure to the benefit of their respective heirs, successors,
and assigns, whether or not so expressed,
12. Miscellaneous:
-------------
In the event that any of the covenants, agreements,
terms, or provisions contained in the Note, this Mortgage, or any
other instrument securing the Note shall be invalid, illegal, or
unenforceable in -any respect, the validity of the remaining
covenants, agreements, terms, or provisions contained herein, in
the Note, and in any other instrument securing the Note shall be
in no way affected, prejudiced, or disturbed thereby.
13. Attorneys' Fees:
----------------
The term attorneys' fees as used in this Mortgage
includes any and all legal fees of whatever nature including but
not limited to fees resulting from any appeal of an interlocutory
order or final judgment or any other appellate proceeding arising
out of any litigation.
14. Partial Release Provision:
--------------------------
During the term of this Mortgage, Mortgagor may request
in writing the release of portions of the Land (a parcel or
parcels) from the lien of this Mortgage. Mortgagee hereby agrees
to release any such parcels from the lien of this Mortgage and
deliver a partial release of this Mortgage in connection
therewith (a "Release") within five (5) days of Mortgagor's
request therefore; provided, however, Mortgagee shall receive
payment of an amount calculated as follows in consideration for
Mortgagee's delivery of the Release (the "Partial Release
Payment'):
Remaining principal balance of Note x 1.25 x
gross acreage of parcel to be released
----------------------------------------------
Remaining gross acreage of Land encumbered
by the Mortgage (before the Release)
The Partial Release Payment shall be delivered to Mortgagee prior
to the recording of the Release in the public records of Polk
County, Florida. The parcels shall be released in the following
chronological order: (a) Beginning with that part of Section 22,
Township 30 South, Range 29 East, Polk County, Florida,
contiguous to Leisure Lane or Fedhaven Circle; and (b) then
northerly in Section 22 and into Section 15, or easterly and
southerly in Section 22 and into Section 27; said parcel or
parcels to be released to be determined by Mortgagor, provided,
however, all parcels to be released hereunder shall be
contiguous.
15. Non-Recourse:
-------------
Notwidistanding any other provision of this Mortgage or
the Note, Mortgagee agrees to look solely to the Mortgaged
Property encumbered by this Mortgage for the satisfaction of the
indebtedness represented by the Note, and shall not seek to
impose liability upon the Mortgagor or the principals of
Mortgagor for the sums owed under the Note or this Mortgage by
way of a deficiency judgment or otherwise in the event of default
under the terms of the Note or this Mortgage.
IN WITNESS WHEREOF, this instrument has been executed on the
date first above written.
Signed in the presence of:
/S/ Stacey Hernandez LAKESHORE CLUB DEVELOPMENT, L.C.
- -------------------------------
Print Name: Stacey Hernandez
/S/ Anne Burke By: /S/Harvey Birdman
- ------------------------------- ---------------------------------
Print Name: Anne Burke Harvey Birdman, as managing member
STATE OF FLORIDA COUNTY
OF BROWARD
The foregoing instrument was acknowledged before me this
December 30th 1998, by Harvey Birdman, as managing member of
LAKESHORE CLUB DEVELOPMENT, L.C., a Florida limited liability
company, on behalf of said company. He is personally known to me
or he produced a driver's license as identification.
/S/ Irene M. Roberts
----------------------------
Notary Public, State of Florida
(seal) IRENE M ROBERTS My Commission expires: June 22, 1999
My Commission CC478068
Expires Jun. 22, 1999
Bonded by HAI
800-422-1555
- ---------------------------------------------
EXHIBIT "A"
MORTGAGE LEGAL
Parcel 2:
- ---------
Begin on the south boundary of Section 15, Township 30 South,
Range 29 East, Polk County, Florida, at a point which lies
4311.27 feet West of the Southeast Corner thereof, said point
lying on the East boundary of Lot 37 of LAKE HAVEN ACRES
SUBDIVISION, as recorded in Plat Back 71, Page l2 , of the Public
Records of Polk County, Florida; thence run N 0 degrees 27' 02"
E, along said boundary, 1323.58 feet to the Northeast Corner of
said Lot 37; thence run S 89 degrees 27' 40" E, along the South
boundary of Lake Haven Estates-Phase Three (Plat Book 72, Page
46) and Lake Haven Estates-Phase Two (Plat Book 73, Page 6) of
said Public Records, 1764.39 feet to a point; thence S 0 degrees
01' 05" E. 299.99 feet to the most Northerly Corner of the
existing Spray Field site; thence S 46 degrees 52' 14" W, along
the Northwesterly boundary of said site, 1480.62 feet to the
South boundary of Section 15; thence N 89 degrees 32' 34" W,
along said boundary, 694.25 feet to the Point of Beginning.
Parcel 3:
- ---------
All that part of Section 22, Township 30 South, Range 29 East,
Polk County, Florida, lying West of Walk-In-Water Creek more
particularly described as follows:
Begin at the Southeast Corner of Section 22, and run N 89 degrees
33' 51" W, along the South boundary of Section 22, 3493.31 feet
to the East boundary of the lands of Fedhaven Apartments
Associates, Ltd.; thence N 2 degrees 58' 40" E, along said
boundary, 740.76 feet to the South boundary of the Fedhaven
Circumferential Road; thence Easterly on the arc of a curve to
the left (Radius 1530.00 feet, Central Angle 71 degrees 53' 26",
Chord 210.54 feet, Chord Bearing N 76 degrees 37' 23" E) 210.71
feet to a Point of Compound Curve; thence Northeasterly on the
arc of a curve to the left (Radius 1180.00 feet, Central Angle 40
degrees 28' 30") 833.58 feet to a Point of Compound Curve; thence
Northerly an the arc of a curve to the left (Radius 1830.00 feet,
Central Angle 45 degrees 47' 30") 1462.56 feet to a Point of
Compound Curve; thence Northwesterly on the arc of a curve to the
left (Radius 1290.00 feet, Central Angle 29 degrees 30' 50")
664.50 feet to a Point of Tangent; thence N 43 degrees 06' 10" W,
180.46 feet to a Point of Curve; thence Westerly on the arc of a
curve to the left (Radius 660.00 feet, Central Angle 51 degrees
45' 20") 596.18 feet to a Point of Compound Curve; thence
Southwesterly on the arc of a curve to the left. (Radius 1150.00
feet, Central Angle 24 degrees 09' 53") 485.02 feet to a Point of
Intersection with the North boundary of Leisure Lane East; thence
N 31 degrees 01' 00" W, along said North boundary, 35.60 feet;
thence Northwesterly, on said boundary, on the arc of a curve to
the left (Radius 690.00 feet, Central Angle 36 degrees 47' 00")
442.97 feet to a Point of Compound Curve; thence Northwesterly,
on said North boundary , on the arc of a curve to the left
(Radius 6040.00 feet, Central Angle l degrees 32' 58") 163.34
feet to the southeast Corner of Lot 37 of LAKE HAVEN ACRES
SUBDIVISION, as recorded in Plat Book 71, Page 12 , of the Public
Records of Polk County, Florida, and run N O degrees 01' 50" E,
along the East boundary of said Lot, 1484.26 feet to the North
boundary of Section 22; thence run S 89 degrees 32' 24" E, along
the North boundary of Section 22, 694.25 feet to the
Northwesterly boundary of an existing Spray Field; thence S 46
degrees 52' 14" W, along said boundary, 439.33 feet; thence S 43
degrees 08' 03" E, along said boundary, 1814.05 feet; thence N 45
degrees 28' 00" E, along said boundary, 1347.87 feet; thence S 89
degrees 32' 34" E, along the boundary of the Sewage Treatment
Plant Site, 1734.84 feet to the East boundary of Section 22;
thence S 0 degrees 03' 05" W, along the East boundary of said
Section, 4653.90 feet to the Point of Beginning.
LESS AND EXCEPT Fire Station Site described as follows:
Commence at the Point of Intersection of the North boundary of
Leisure Lane East with the Northwesterly boundary of the Fedhaven
Circumferential Road; thence run along said Northwesterly
boundary on the arc of a curve to the right (Radius 1150.00 feet,
Central Angle 6 degrees 47' 46", Chord Bearing N 64 degrees 22'
30" E) 136.41 feet to the Point of Beginning. From the Point of
Beginning run N 18 degrees 58' 56" W, 150.00,feet; thence N 71
degrees 09' 47" E, 180.00 feet; thence S 18 degrees 58' 56" E,
155.46 feet the North boundary of the Circumferential Road;
thence Westerly, along said boundary on the arc of a curve to the
left (Radius 1150.00 feet, Central Angle 8 degrees 58' 46", Chord
Bearing S 72 degrees 15' 46" W) 180.23 feet to the Point of
Beginning,
Parcel 5:
- ---------
Part Of U.S. Gov't Lots 1 and 3, and all of Gov't Lot 2 (in
Section 27, Township 30 South, Range 29 East, Polk County,
Florida, lying West of Walk-In-Water Creek, and East of the lands
of Fedhaven Apartments lake access, said access boundary being
described art follows:
Begin on the North boundary (said North boundary bearing N 89
degrees 33' 5" W), at a point which lies 3493.31 feet West of the
Northeast Corner of said Section 27, Township 30 South, Range 29
East, Polk County, Florida, and run S 2 degrees 08' 40" W, with
the boundary of the Fedhaven lands, 420.00 feet, more or less ,
to the waters of Lake Weoyakapka.
LESS AND EXCEPT THE FOLLOWING DESCRIBED PARCEL:
All that Part of Section 22, Township 30 South, Range 29 East,
Polk County, Florida, lying North of Leisure Lane East and West
of the Fedhaven Circumferential Road more particularly described
as follows:
Commence at the Northwest Corner of Section 22, and run S 0
degrees 01' 33" W, along the Section Line, 1250.00 feet to a
point an the Centerline of the Sanitary Sewer Force Main
Easement, as recorded in O.R. Book 630, Page 74, of the Public
Records of Polk County Florida; and run S 89 degrees 32' 00" E,
994.83 feet to the Point of Beginning.
From the Point of Beginning, continue along the Centerline of the
Sanitary Sewer Force Main Easement, 575.25 feet; thence S 0
degrees 01' 50" W, parallel with the East Boundary of Lot 37 of
Lake Haven Acres Subdivision, 402.07 feet, to the Northwest
Corner of the Fire Station; thence S 18 degrees 58' 56" E, along
the Fire Station's West Boundary, 150.00 feet to a Point on the
Northwesterly Boundary of the Fedhaven Circumferential Road;
thence run along said Boundary an the arc of a curve to the left
(Radius 1150.00 feet, Central Angle 6 degrees 47' 47"), 136.41
feet to a Point of Intersection with the North Boundary of
Leisure Lane East, thence N 31 degrees 01' 00" W, along said
North Boundary of Leisure Lane East, 35.60 feet; thence Westerly
along said North Boundary, on the arc of a curve to the left
(Radius 690.00 feet, Central Angle 36 degrees 47' 00"), 442.97
feet to a Point of Compound Curve, thence continue, along said
Boundary, on the arc of a curve to the left (Radius 6040.00 feet,
Central Angle 1 degrees 32' 58") 163.33 feet to a Point on the
East Boundary of Lot 37 of Lake Haven Acres Subdivision; thence N
0 degrees 01' 50" E, along said East Boundary, 234.09 feet to the
Point of Beginning.
and is subject to an Easement 5.00 feet wide along its North
Boundary for Sanitary Sewer Force Main.
_____________________________________________________________________________
EXHIBIT 6(a).5 AGREEMENT FOR PURCHASE AND SALE BETWEEN COLONY
PLAZA DEVELOPMENT, INC. AND CYPRESS HOTEL MANAGEMENT COMPANY,
DATED OCTOBER 8, 1999
_____________________________________________________________________________
AGREEMENT FOR PURCHASE AND SALE
-------------------------------
THIS AGREEMENT (the "Agreement") is made and entered into
this 8th day of October, 1999, by and between COLONY PLAZA
DEVELOPMENT, INC., a, Florida corporation (hereinafter referred
to as the "Seller") and CYPRESS HOTEL MANAGEMENT COMPANY and/or
its assigns (hereinafter referred to as the "Buyer").
W I T N E S S E T H:
--------------------
WHEREAS, Seller is the owner, in fee simple, of that certain
parcel of real property situate, lying and being in Orange
County, Florida, more particularly described within Exhibit "A"
attached hereto to form a part hereof (the "Real Property");
WHEREAS, the Buyer desires to purchase the Real Property
from the Seller and the Seller desires to sell the Real Property
to the Buyer, all subject to, the terms and conditions set forth
herein;
NOW, THEREFORE, in consideration of the mutual covenants,
stipulations and agreements hereinafter made and for other good
and valuable considerations, the Seller and the Buyer hereby
agree as follows:
SECTION I. - RECITALS. The recitals shall form a part hereof as
if herein fully recited at length.
SECTION II. - SALE-PURCHASE
2.1. The Seller agrees to sell and convey to the Buyer and
the Buyer agrees to purchase from the Seller, the following
described property, for the price and under the terms and
conditions provided in this Agreement:
2.1.1. The fee simple title to the Real Property;
2.1.2. All contract rights, riparian rights,
casements, privileges, servitudes, appurtenances and other rights
belonging to or inuring to the benefit of the Seller and
pertaining to the Real Property;
2.1.3. Seller's interest, if any, in and to any strips
of land or roadways adjoining the Real Property;
2.1.4. All tangible and/or intangible property and
property rights owned by Seller pertaining to the Real Property
(the "Tangible and Intangible Personal Property") including, but
not limited to, any rights to water and sewer allocations,
development rights, plat or temporary, plat or any other
governmental approvals, credits for impact fees, payment for
street lighting and other special taxing district credits or
benefits;
2.1.5. All of the right, title and interest of Seller
in and to all permits and licenses pertaining to the Real
Property (hereinafter collectively referred to as the "Permits");
2.1.6. All of the right, title and interest of Seller
in and to any approved site plans, temporary plat approvals,
architectural plans, development orders, soil tests, engineering
drawings, specifications, drawings, studies, and other
information that relate to, or have been prepared for, the Real
Property (the "Documents");
All of the foregoing is herein collectively referred to as
the "Property".
SECTION III. - PURCHASE PRICE.
- ------------------------------
3.1. The purchase price (the "Purchase Price") for the
Property shall be SIX HUNDRED TWENTY FIVE THOUSAND AND NO/100
($625,000.00) DOILLARS.
SECTION IV. - TERMS OF SALE.
4.1. Deposit. Within three (3) days from the date of the
complete execution of this Agreement by the Seller and the Buyer
(the "Effective Date"), the Buyer shall deliver a deposit, into
escrow with the law firm of BEDZOW, KORN, BROWN, MILLER & ZEMEL,
P.A.(the "Escrow Agent"), in the amount of SEVEN THOUSAND FIVE
HUNDRED AND NO/1OO ($7,500.00) DOLLARS. All funds deposited with
the Escrow Agent in accordance with this Agreement, together with
all interest earned thereon, shall collectively be referred to
herein as the "Deposit". Unless Seller receives the Deposit with
interest thereon as a result of Buyer's default under this
Agreement all interest earned upon the Deposit shall inure to the
benefit of the Buyer and shall be paid to the Buyer at the
closing of the within transaction.
4.2. At Closing, the Buyer shall execute a Purchase Money
Promissory Note (the "Purchase Money Promissory Note") in favor
of the Seller in the original principal amount of FIVE HUNDRED
TWENTY FIVE THOUSAND AND NO/1OO ($525,000,00) DOLLARS, bearing
interest at the rate of seven percent (7.00 %) per annum. The
Purchase Money Promissory Note shall be secured by a First
Purchase Money Mortgage (the "Purchase Money Mortgage")
encumbering the Property. Quarterly principal reduction payments
in the amount of ONE HUNDRED THIRTY ONE THOUSAND TWO HUNDRED
FIFTY AND N0/100 ($131,250.00) DOLLARS each, together with all
interest which has accrued upon the unpaid principal balance of
the Promissory Note, shall be due and payable throughout the term
of the Purchase Money Promissory Note. The unpaid principal
balance of the Purchase Money Promissory Note, together with all
Interest accrued thereon, shall be due and payable on the date
which will be one (1) year from the date of the execution of the
Purchase Money Promissory Note.
4.3. Balance of Purchase Price. The balance of the
Purchase Price shall be due and payable by Buyer, at Closing, in
the form of a cashier's check or by federally wire transferred
funds, subject to all adjustments, prorations and credits
provided for in this Agreement.
SECTION V. - EVIDENCE OF TITLE.
- -------------------------------
Within ten (10) days (the "Title Delivery Period") from
the Effective Date, the Seller shall, at its sole cost and
expense, furnish the Buyer with: (i) an owner's title insurance
commitment (the "Commitment") from a title insurance company
licensed to do business in the State of Florida; and (ii) legible
copies of all instruments referred to in the Commitment as
conditions and/or exceptions to title to the Property, including
liens. For each day beyond the Title Delivery Period that the
Seller fails to furnish the Commitment to the Buyer, the date of
closing shall be extended for two (2) days. Buyer shall have
twenty (20) days (the "Title Review Period") from the date of
receipt of the Commitment to review the Commitment. If the
Commitment reveals that title to the Real Property is not good,
marketable and insurable in accordance with the standards adopted
by The Florida Bar then Buyer shall, prior to the expiration of
the Title Review Period, notify Seller, in writing, specifying
the title defect(s). If the title defect(s) render title to the
Real Property not good and unmarketable, Seller shall have sixty
(60) days from receipt of such notice within which to remove said
title defects, and if Seller is unsuccessful in removing the
title defects within said sixty (60) day period, the Buyer shall
have the option to either: (1) accept the title to the Real
Property as it then is without reduction in the Purchase Price or
claim against Seller therefor; or (2) demand a refund of the
Deposit, with all interest earned thereon, which shall forthwith
be returned to Buyer by the Escrow Agent and thereafter Buyer and
Seller shall be released from all further obligations under this
Agreement; or (3) grant to Seller two (2) successive thirty (30)
day extensions to cure title to the Real Property, in which event
Seller shall proceed with diligence and use its best efforts to
cure such title defects. (The Buyer has reviewed the terms and
provisions contained within the Easement and Maintenance
Agreement for Access, Ingress, Egress and Recreational Use dated
February 17, 1996 (the "Easement Agreement"), entered into by and
between COLONY PLAZA CONDOMINIUM ASSOCIATION, INC., a not-for-
profit Florida corporation and the Seller, which Easement
Agreement was filed for record on March 4, 1996 in official
records Book 5021, at Page 1696, of the Public Records of Orange
County, Florida. The Buyer acknowledges that the terms and
provisions contained within the Easement Agreement are acceptable
to the Buyer and that the Easement Agreement shall not constitute
a defect in the title to the Real Property.) If, however, title
to the Real Property is unmarketable because of liens and/or
encumbrances in a liquidated amount that can be released or
satisfied by the payment of money alone then, at the time of
Closing, such liens shall be paid from the cash to close and the
amount due Seller shall be reduced by such amount.
SECTION VI. - SURVEY.
- ---------------------
The Seller, within ten (10) days from the Effective Date
(the "Survey Delivery Period") shall, at Seller's expense,
furnish the Buyer with a currently dated survey (the "Survey") of
the, Real Property. If the Survey shows any encroachments on the
Real Property, the same shall be treated as a defect in the title
to the Real Property, and such title defect shall be governed by
the provisions contained within Section V of this Agreement.
SECTION VII. - INSPECTION PERIOD.
- ---------------------------------
7.1. Inspection Period. The Seller agrees that the Buyer
shall have a period of thirty (30) days commencing from and after
the Effective Date (the "Inspection Period") within which to
conduct such investigations with respect to the Property, with
respect to the feasibility of the proposed development of the
Property, and with respect to the environmental condition of the
Property, as the Buyer deems to be prudent and appropriate, in
the Buyer's sole and unbridled judgment and discretion. If the
Buyer determines, for any reason whatsoever, in the Buyer's sole
and unbridled judgment and discretion, that the Buyer does not
wish to acquire and develop the Property, then the Buyer shall
have the right, at the Buyer's sole option, to terminate this
Agreement by giving written notice of termination to the Seller
and to the Escrow Agent prior to the expiration of the Inspection
Period, whereupon the Buyer shall be entitled to receive the
return of the Deposit, together with all interest earned thereon,
and upon return of same, this Agreement shall be deemed
terminated and of no further force and effect, and the Seller,
Buyer and Escrow Agent shall be released and relieved from any
liability or obligation hereunder, If, however, the Buyer does
n6t timely exercise its right to rescind the within transaction,
pursuant to the provisions contained within this Section VII,
then the Buyer shall not, thereafter, be permitted to rescind
this transaction pursuant to the provisions contained with this
Section VII. Further, in the event the Buyer does not elect to
rescind this transaction Pursuant to the provisions contained
,within this Section VII, then the Buyer shall: (i) be deemed to
be Purchasing the Property in an "AS IS" "WHERE IS" condition
without relying upon any representation or warranty made on the
part of the. Seller, except as specifically provided for in this
Agreement; and (ii) within three (3) days from the date of the
expiration of the Inspection Period tender an additional deposit
to the Escrow Agent in the amount of SEVEN THOUSAND FIVE HUNDRED
AND NO/1OO ($7,500,00) DOLLARS.
7.2. During the Inspection Period and thereafter, the
Buyer, its architects, surveyors, agent, and engineers shall have
the right to go upon the Property and conduct any and all
surveys, soil tests, soil borings and similar investigations as
the Buyer shall require, provided that the Buyer shall indemnify
and save the Seller harmless with respect to any liabilities,
obligations, suits and demands arising out of or in connection
with such activities, All such entry onto the Property shall be
at the sole risk of Buyer and its engineers, architects or other
agents and Seller shall have no liability for any injury
sustained by Buyer or its engineers, architects or other agents
nor shall Seller be liable for any damage to any equipment or
other items used to perform any such physical inspections and
investigations. The Buyer will immediately repair or cause to be
repaired, any damage to the Property occasioned by such
activities.
SECTION VII. - CLOSING DOCUMENTS.
- ---------------------------------
At Closing, Seller shall execute and/or deliver to Buyer
executed originals of the following documents:
8.1. Warranty Deed, in recordable form, conveying and
delivering to the Buyer the fee simple title of the Seller in and
to the Property, free and clear of all liens, charges,
encumbrances, clouds and defects whatsoever, with the exception
of all easements and restrictive covenants of record and real
property taxes for the year 1999 and thereafter.
8.2. Mechanic's lien affidavit to the effect that, as of
the date of Closing, there exist no unpaid bills for repair or
materials furnished to the Property or any portion thereof by
Seller which could be the subject matter of a mechanic's or
materialmen's lien and further certifying that as of the date of
Closing, no person, firm or entity is in possession of the
Property or is entitled to possession thereof, except Seller.
Said affidavit shall contain the following representation and
warranty: "That there are no matters pending against Seller nor
will Seller execute any instruments or do any act whatsoever
which would or might give rise to a lien which would attach to
the Property or which might, in any way, affect title to the
Property to the detriment of Buyer from and after the date of
Closing, or at any time thereafter."
8.3. Closing Statement.
8.4. "Gap" Affidavit in form sufficient to allow the title
agent to delete the "gap" exception from the Commitment.
8.5. Assignment of the Tangible and Intangible Personal
Property
8.6. Assignment of the Permits.
8.7. A Non-Foreign Affidavit of the Seller confirming that
Seller is not a foreign person or foreign entity within the
meaning of Section 1445(f) of the Internal Revenue Code.
8.8. Assignment of all of Seller's right, title and
interest in and to the Documents.
8.9. Any other documents reasonably necessary to consummate
the transactions contemplated by this Agreement.
At the time of Closing, Buyer shall execute and/or deliver
to Seller executed originals of the following documents:
8.10. Closing Statement.
8.11. Purchase Money Promissory Note and Purchase Money
Mortgage.
8.12. Any other documents reasonably necessary to
consummate the transactions contemplated by this Agreement.
SECTION IX. - CLOSING AND POSSESSION.
- -------------------------------------
The transaction contemplated by this Agreement shall be
closed (the "Closing") by express mail delivery, with all closing
documents being delivered to the offices of BEDZOW, KORN, BROWN,
MILLER & ZEMFL, P.A., commencing at 10:00 am, on the date which
shall be thirty (30) days from the date of expiration of the
Inspection Period, unless otherwise extended by other terms of
this Agreement.
SECTION X. - REPRESENTATIONS OF SELLER.
- ---------------------------------------
The Seller hereby warrants and represents the following to
the Buyer with the full understanding that the Buyer will rely
upon said representations and warranties in closing the
transaction contemplated by this Agreement:
10.1. That the Real Property is not in violation of, and
the Seller has received no notice of, any violation of laws or
municipal ordinances or of federal, state, county or municipal or
other governmental agency regulations, orders or requirements
relating to the Real Property and Seller has no reason to believe
that any such notice may or will be received. Seller agrees that,
if any such notice(s) is received by the Seller, prior to
Closing, copies of such notice(s) will be immediately delivered
to the Buyer and such notice(sO shall be regarded as a defect in
the title to the Real Property.
10.2. Seller has received no notice of any default or
breach of any covenants, conditions, restrictions or easements
affecting the Real Property and has no reason to believe that any
such notice may or will be received. If notice of such default
or breach is filed for record and/or is received by the Seller or
the Buyer, pending Closing, such notice shall be regarded as a
defect in the title to the Real Property.
10.3. The Seller has the full right, power and authority to
own and convey the Real Property without the need for further
consents or authorizations, All necessary authorizations and
approvals have been obtained authorizing the Seller to execute
this Agreement and to consummate the transactions contemplated
hereby. At Closing, the Seller will deliver certified copies of
resolutions as may be necessary to evidence such authority.
10.4. There are no suits (including, without limitation,
condemnation or eminent domain proceedings) or other legal
proceedings pending or threatened with respect to the Real
Property. In this regard, the Seller hereby discloses that the
Seller has received verbal inquiry from the City of Ocoee,
Florida regarding a possible taking of the Property by the City
of Ocoee.
10.5. Seller is neither a foreign person nor a foreign
corporation, as those terms are defined in Section 7701 of the
Internal Revenue Code of 1054, as amended, and at Closing, the
Seller will execute an affidavit evidencing same.
10.6. Seller represents that Seller has received no written
notice as to any pending special assessments which would affect
the Real Property other than as set forth herein.
10.7. Between the Effective Date and the date of Closing,
the Seller wll not, without Buyer's prior written consent, create
or permit to be created any new encumbrances on the Real
Property. For the purposes of this subparagraph, the term
"encumbrance" shall mean any liens, claims, options, mortgages,
encroachments, leases, easements, covenants, conditions or
restrictions.
In the event that the Buyer becomes aware prior to Closing
that any of the warranties or representations set forth in this
Section X, inclusive, are untrue (either at the time made or as
the result of some change in facts occurring after the execution
of this Agreement but prior to Closing), then the Buyer shall
promptly give written notice thereof to Seller and, after receipt
of such notice, Seller shall utilize its best efforts, including
the institution and diligent prosecution of appropriate suits, to
render such representation true and correct. Seller shall have
thirty (30) days to render such representation true and correct
and the Closing Date shall be extended by the number of days
necessary to give Seller such time to perform. If Seller is
unable to render all such representations true and correct by
Closing, as same may have been extended as aforesaid, the Buyer
may either: (i) terminate this Agreement and in such event all
deposits, together with all interest earned thereon, placed
hereunder by the Buyer shall forthwith be returned to the Buyer
by the Escrow Agent and the Seller and the Buyer shall be
relieved of all further obligations; or (ii) elect to close the
contemplated transaction, notwithstanding the failure of such
representation and warranty, in which event the Closing shall be
deemed as a waiver by the Buyer of the failure
of such representation and warranty.
SECTION XI. - REPRESENTATIONS BY BUYER.
- ---------------------------------------
The Buyer hereby represents and warrants that the Buyer has
the. fall right, power and authority to purchase the Property
without the need for further consents or authorizations, All
necessary authorization and approvals have been obtained
authorizing the Buyer to execute this Agreement and to consummate
the transactions contemplated hereby. At Closing, the Buyer will
deliver certified copies of resolutions as may be necessary to
evidence such authority.
SECTION XII. - CALCULATION OF TIME.
- -----------------------------------
Any reference herein to time periods of less than six (6)
days shall, in the computation thereof, exclude Saturdays,
Sundays and legal holidays and any time period provided for
herein which shall end on a Saturday, Sunday or legal holiday,
shall extend to 5:00 P.M. of the next business day.
SECTION XIII. - PRORATIONS AND ADJUSTMENTS.
- -------------------------------------------
Real property taxes and assessments affecting the Real
Property shall be prorated at Closing, based upon the current
year's assessment and if the exact amount of the tax is unknown
at the time of Closing, the same shall be based upon the previous
year's maximum discount amount and thereafter reprorated and
adjusted within ten (10) days written notice by any party hereto
to the other when the actual tax bills are issued (based on
November tax payment);
SECTION XIV. - EXPENSES.
- ------------------------
The following expenses associated with the closing of the
transaction contemplated by this Agreement shall be paid for by
the Seller:
14.1. The cost of obtaining the Commitment;
14.2. The premium for issuance of the Owner's Policy of
Title Insurance in favor of the Buyer; and
14.3. Seller's attorneys' fees.
The following expenses associated with the closing of the
transaction contemplated by this Agreement shall be paid for by
the Buyer:
14.4. Documentary stamps upon the Warranty Deed; and
14.5. Documentary stamps upon the Purchase Money Promissory
Note, intangible tax upon the Purchase Money Mortgage and the
cost of recordation of the Purchase Money Mortgage; and
14.6. Buyer's attorneys' fees.
SECTION XV. - SPECIAL ASSESSMENT LIENS.
- ---------------------------------------
Certified. confirmed and ratified special assessment liens
as of the date of Closing are to be paid by Seller. Pending
liens as of the date of Closing shall be assumed by the Buyer,
provided, however, that where the improvement has been
substantially completed as of the date of Closing such pending
lien shall be considered as certified, confirmed or ratified and
Seller shall, at Closing, be charged an amount equal to the last
estimate by the public body of the assessment for the
improvement. Such estimate shall, at the request of either party
to the transaction, be readjusted upon receipt of the actual
billing.
SECTION XVI. - CONDEMNATION.
- ----------------------------
In the event that the Real Property, or any portion thereof,
is taken by eminent domain prior to Closing, or any governmental
authority shall have notified Seller that it proposes to take the
Real Property, or any portion thereof, by eminent domain
proceedings, then and in that event, the following shall apply:
16.1. In the event that the eminent domain proceeding shall
affect only a minor portion of the Real Property then, and in
that event, the Closing shall take place in accordance with the
provisions of this Agreement and, at the time of Closing, Seller
shall execute and deliver to Buyer an assignment of the
condemnation award, in form and content reasonably satisfactory
to the attorneys for the Buyer and deliver to Buyer any portion
of the award already received by Seller.
16.2. In the event that the eminent domain proceeding shall
affect a major part of the Real Property (for the purposes
hereof, a "major part of the Real Property" shall mean a taking
which would, in Buyer's reasonable judgment, materially affect
the future development and/or operation of the Real Property for
the specific use intended by the Buyer) the and in that event,
the Buyer of the Real Property shall have the option of either
canceling this Agreement and receiving the return of the Deposit,
together with all interest earned thereon, or proceeding with the
Closing, in which event, at the time of Closing, Seller shall
execute and deliver an assignment of the condemnation award to
the Buyer in form and content reasonably satisfactory to the
Buyer and deliver to Buyer any portion of the award already
received by Seller.
SECTION XVII. - ATTORNEY'S FEES AND CONSTS.
- -------------------------------------------
In connection with any litigation, including appellate
proceedings, arising out of this Agreement, the prevailing party
shall be entitled to recover from the non-prevailing party all
attorney's fees and costs which have been incurred by the
prevailing party.
SECTION XVIII. - DEFAULT
- ------------------------
18.1. If the Buyer shall default with respect to its
obligations hereunder and such default shall not be cured by
Buyer within ten (10) days after receipt of written notice from
Seller specifying the nature of the default, then the Deposit,
together with all interest earned thereon, shall be retained by
the Seller as full and complete liquidated damages, Consideration
for the execution of this Agreement and in fall settlement of any
claims; whereupon all parties shall be relieved of all further
obligations under this Agreement. In the event the Seller
refuses to perform this Agreement and such failure and/or refusal
shall not be cured by Seller within ten (10) days after receipt
of written notice from Buyer specifying the nature of such
failure or refusal, then Buyer shall have the right to seek
specific performance of the Seller's obligations under this
Agreement. In no event shall the Buyer have the right to seek to
recover damages from the Seller in the event the Seller shall
default with respect to Seller's obligation under this Agreement.
18.2. The Provisions of this Section XVIII are not intended
to preclude or eliminate any other rights and/or recourses as
elsewhere set forth in this Agreement.
SECTION XIX. - NOTICES.
- -----------------------
Notice (the "Notice") to either party hereto shall be in
writing and shall be deemed duly given if sent (i) by United
States mail, certified or registered, return receipt requested,
with postage prepaid and such notice shall be deemed received
three (3) days after mailing (ii) by a reputable courier service
(such as Federal Express) and such notice shall be deemed
received the day delivered, or (iii) by telex or telecopy, in
which event a photocopy of the Notice shall be sent by first
class, registered or certified mail within twenty-four (24) hours
after the telex or telecopy and such notice shall be deemed
received the day sent by telex or telecopy, In each event, the
Notice shall be addressed or sent by facsimile as follows:
SELLER: COLONY PLAZA DEVELOPMENT, INC.
307 South 21st Avenue
Hollywood, Florida 33020
Telephone No. (954) 922-6070
Facsimile No. (954) 921-5080
Attention: HARVEY BIRDMAN, Vice-President
With a Copy to: BEDZOW, KORN, BROWN, MILLER & ZEMEL, P.A.
20803 Biscayne Boulevard, Suite 200
Aventura, Florida 33180
Telephone No. (305) 935-6888
Facsimile No. (305) 936-9501
Attention: GARY A, KORN, Esquire
BUYER: CYPRESS HOTEL MANAGEMENT COMPANY
2750 North Orange Blossom Trail
Orlando, Florida 32804
Telephone No. (407) 839-3939
Facsimile No. (407) 649-4315
Attention: THOMAS E. McINTYRE, President
With a Copy to: CYPRESS COMPANIES
2250 North Orange Blossom Trail
Orlando, Florida 32804
Telephone No. (407) 839-3939
Facsimile No. (407) 649-4315
Attention: CATHERINE BUHALY IBOLD, Esquire
SECTION XX. - BROKERS.
- ----------------------
The parties each represent and warrant to the other that no
real estate broker, salesman or finder has been involved in this
transaction. If a claim for brokerage in connection with the
transaction is made by any broker, salesman or finder, claiming
to have dealt through or on behalf of one of the parties hereto
(the "Indemmitor"), said Indemnitor shall indemnify, defend and
hold the other party hereunder, and such other party's officers,
directors, partners, agents and representatives (collectively the
"Indemnitee") harmless from all liabilities, damages, claims,
costs, fees and expenses whatsoever (including reasonable
attorney's fees and court costs) with respect to said claim for
brokerage, The provisions of this paragraph shall survive the
closing of the transactions contemplated by this Agreement.
SECTION XXI. - ESCROW AGENT.
- ----------------------------
The Escrow Agent shall immediately deposit for collection
and shall hold all Deposits delivered to Escrow Agent. The
Escrow Agent shall not be accountable for the yield earned on
such escrow account.
If there is any dispute as to whether the Escrow Agent is
obligated to deliver any monies which it holds or to whom said
monies are to be delivered, the Escrow Agent shall not be
obligated to make any delivery, but in such event the Escrow
Agent may hold same until receipt by the Escrow Agent of an
authorization in writing signed by all of the parties having an
interest in such dispute directing the disposition of same; or,
in the, absence of such authorization,. the Escrow Agent may hold
such monies with interest thereon until the final determination
of the rights of the parties pursuant to appropriate legal
proceedings. If such written authorization is not given or such
legal proceeding for determination not commenced and diligently
continued, the Escrow Agent may bring an appropriate action or
proceeding for leave to deposit the monies it holds in escrow in
court, pending such determination. In the event the Escrow Agent
places the monies it holds in escrow in the registry of the Court
having jurisdiction with regard to this transaction and files an
action of interpleader naming the parties hereto, the Escrow
Agent shall be released and relieved from any and all further
obligations and liability hereunder. The Escrow Agent shall not
be responsible for any acts Or omissions except for willful
misconduct or gross negligence. In the event of any dispute with
regard to the monies which are being held by Escrow Agent, then
with respect to the costs and expenses incurred by Escrow Agent
in connection with the filing of an interpleader action
(including, but not limited to, reasonable attorneys, and
paralegals' fee for Escrow Agent's attorneys) the non-prevailing
party hereby indemnities and holds Escrow Agent harmless from all
loss, cost or expense including, but not limited to, attorneys'
fees and court costs through all trial and appellate levels
incurred by Escrow Agent in connection with this Agreement. The
parties hereby recognize that the Escrow Agent is also
representing the Seller with regard to this transaction and the
Buyer hereby agrees that Escrow Agent may continue to represent
the Seller following a dispute and in connection therewith and
the Buyer shall not and is hereby estopped from objecting to the
Escrow Agent representing the Seller with respect to this
Agreement or with respect to any litigation with regard to this
Agreement.
SECTION XXII. - MISCELLANEOUS
- -----------------------------
22.1. This Agreement constitutes the entire agreement and
understanding between the parties with respect to the subject
matter hereof and may not be amended, modified, altered or
changed in any respect whatsoever except by further agreement in
writing duly executed by the parties hereto.
22.2. The captions and headings of this Agreement are for
convenience and reference only and in no way define, describe,
extend or limit the scope or intent of this Agreement or the
intent of any provision hereof.
22.3. This Agreement is to be deemed to be a confidential
document and is not to be distributed by the Seller to any party
without the consent of the Buyer. If this Agreement is not
accepted by the Seller, then all copies of this Agreement are to
be returned to the Buyer.
22.4. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective
successors and personal representatives. Wherever the context
permits, singular shall include the plural and vice versa and one
gender shall include all genders.
22.5. This Agreement shall be governed in its enforcement
and construction and interpretation by the laws of the State of
Florida.
22.6. This Agreement may be executed in counterparts by the
parties hereto and each shall be considered an original Insofar
as the parties hereto are concerned but together said
counterparts shall comprise only one agreement.
22.7. The rights of the Buyer hereunder shall be freely
assignable; provided that the assignee from the Buyer assumes all
of the Buyer's duties and obligations under this Agreement by
separate assumption agreement reasonably acceptable to the
Seller.
22.8. All of the Exhibits attached to this Agreement are
incorporated herein by reference, and made a part of, this
Agreement.
22.9. In the, event any term or provision of this Agreement
shall be determined by appropriate judicial authority to be
illegal or otherwise invalid, such provision shall be given its
nearest legal meaning or construed as deleted as such authority
determines, and the remainder of this Agreement shall be
construed to be in full force and effects.
22.10. Wherever reference is made in this Agreement to
money or sums of money, or to dollars or amounts thereof, such
reference shall be deemed to mean reference to United States
currency and United States dollars, acceptable as legal tender
within the United States of America.
22.11. This Agreement shall not be construed more strictly
against one party than against the other, merely by virtue of the
fact that it may have been prepared by counsel for one of the
parties, it being recognized that both the Buyer and the Seller
have contributed substantially and materially to the preparation
of this Agreement.
22.12. No waiver or any provision of this Agreement shall
be effective unless it is in writing and signed by the party
against whom it is inserted and any such written waiver shall
only be applicable to the specific instance to which it relates
and shall not be deemed to be a continuing or future waiver.
Signed, Sealed and Delivered SELLER:
in the Presence of: COLONY PLAZA DEVELOPMENT, INC., a
Florida corporation
/s/ Cary Greenberg
- ----------------------------- By: /S/ Harvey Birdman
Print Name: Cary Greenberg HARVEY BIRDMAN, Vice-President
/S/ Pam Ford
- -----------------------------
Print Name: Pam Ford
BUYER:
CYPRESS HOTEL MANAGEMENT COMPANY
/S/ Byron N. Carter By: /S/ Thomas E. McInTyre
Print Name: Byron N. Carter THOMAS E. McINTYRE, President
/S/ Mindy R. Klein
Print Name: MINDY R. KLEIN
AMMENDMENT TO AGREEMENT FOR PURCHASE AND SALE
THIS AMENDMENT TO AGREEMENT FOR PURCHASE AND SALE (the
"Amendment") is made and entered into this 12 day of November,
1999, by and between OLONY PLAZA DEVELOPMENT, INC., a Florida
corporation (hereinafter referred to as the "Seller") and CYPRESS
HOTEL MANAGEMENT COMPANY and/or its assigns (hereinafter referred
to as the "Buyer").
W I T N E S S E T H:
--------------------
WHEREAS, the, Seller and the Buyer entered into and executed
an Agreement for Purchase and Sale dated October 8, 1999 (the
"Agreement"), pursuant to which the, Seller agreed to sell to the
Buyer, and the Buyer agreed to purchase from the Seller, the
Developer Retained Area owned by the Seller which is adjacent to
COLONY PLAZA, a Condominium situate in the City of Ocoee, State
of Florida; and
WHEREAS, the Seller and the Buyer have agreed to amend and
modify certain of the terms and provisions contained within the
Agreement, in the manner hereinafter set forth;
NOW, THEREFORE, for and in consideration of the sum of TEN
AND NO/100 ($10.00) DOLLARS and other good and valuable
consideration, the receipt of which is hereby acknowledged, it is
hereby agreed as follows:
1. It is hereby agreed that the duration of the
Inspection Period, as said term is described within Paragraph 7.1
of the Agreement, shall be extended and shall continue through
and including 4:00 p.m. on Tuesday, November 30, 1999.
2. The Buyer acknowledges receipt of the Commitment, as
said term is described within Section V of the Agreement, on
Tuesday, November 2, 1999.
3. Paragraph 10.4 of the Agreement is hereby amended to
read as follows:
"There are no suits (including, without limitation
condemnation or eminent domain proceedings) or other legal
proceedings pending or threatened with respect to the Real
Property, Seller bas not received any written or oral notice
from any public or quasi-public authority having power of
eminent domain or condemnation over the Real Property and
has no reason to believe, that any such notice my or will
be received.
4. Except as herein modified and amended, each and every
one of the terms, provisions, covenants and agreements contained
within the Agreement shall remain unmodified and shall continue
in full force and effect.
IN WITNESS WHEREOF, this Amendment has been entered into as
of the date. first set forth hereinabove.
Signed, Sealed and Delivered SELLER:
in the Presence of: COLONY PLAZA DEVELOPMENT, INC., a
Florida corporation
/S/ Cary Greenberg
- ----------------------------- By: /S/ Harvey Birdman
Print Name: Cary Greenberg HARVEY BIRDMAN, Vice-President
/S/ Pam Ford
- -----------------------------
Print Name: Pam Ford
BUYER:
CYPRESS HOTEL MANAGEMENT COMPANY
/S/ Catherine Iheld By: /S/ Thomas E. McInTyre
Print Name: Catherine Iheld THOMAS E. McINTYRE,
President
/S/ Mindy R. Klein
Print Name: MINDY R. KLEIN
_____________________________________________________________________________
EXHIBIT 6(c).1 SAMPLE OF STOCK AGREEMENT RELATING TO THE OCTOBER 30,
1998 BONUS PLAN OFFERING
_____________________________________________________________________________
STOCK AGREEMENT
This Stock Agreement is entered into effective the 30th day
of October, 1998, by and between SunVest Resorts, Inc. (the
"Company"), and the undersigned individual more particularly
described as "Recipient" on Exhibit "A" attached hereto and
incorporated herein by reference (the "Recipient").
Now, therefore, based on the mutual covenants, conditions
and restrictions contained herein, the parties hereto agree as
follows:
1. Stock. The Company shall pay, as soon as practicable upon
signing this Stock Agreement, the Stock to the Recipient.
2. Nature of Stock. The Stock shall be paid, in kind, in the
form of common stock of the Company (the "Shares"). Any Shares
transferred pursuant to this Stock Agreement are intended to be
issued pursuant to Rule 701 under the Securities Act of 1933 (the
"Act").
3. Tax Effect. Recipient acknowledges to Company that (a) he/she
shall seek independent advice regarding the income tax effects of
the Stock and (b) he/she understands that the Shares received by
him/her are restricted and may be resold primarily pursuant to
Rule 144 under the Act.
4. Transfer of Shares. All Shares issued by the Company pursuant
to this Stock Agreement shall be duly authorized, fully paid and
non-assessable.
In witness whereof, the parties have caused this Stock
Agreement to be signed effective October 30, 1998.
Company: Recipient:
SunVest Resorts, Inc. ________________________________
by: ________________________________
__________________________ Print Name
Title:
_______________________
Address:
________________________________
________________________________
________________________________
Exhibit A
Recipient Stock
100 Shares of Common Stock of
SunVest Resorts, Inc.
________________________________________________________________
EXHIBIT 10.1 CONSENT OF HIXSON, MARIN, POWELL & DESANCTIS, P.A.,
CPA'S
________________________________________________________________
HIXSON, MARIN, POWELL & DESANCTIS, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
DAVID L. HIXSON, C.P.A. * RAYMOND F. MARIN, C.P.A.
DONALD F. POWELL, C.P.A. * PETER V. DeSANCTIS, C.P.A.
16100 N. E. 10th AVENUE, SUITE B 3300 PGA BOULEVARD
NORTH MIAMI BEACH, FL 33162 GARDENS PLAZA, SUITE 601
DADE: (305) 944-7001 PALM BEACH GARDENS, FL 32410
BROWARD: (854) 920-1311 TEL: (561) 824-5700
FAX: (305) 944-6637 FAX: (561) 824-5702
RESPOND TO: [] RESPOND TO: []
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
SunVest Resorts, Inc.
Hollywood, Florida
We hereby consent to the use in this Registration Statement on
Form 10-SB of our report dated June 15, 1999, relating to the
financial statements of SunVest Resorts, Inc., Hollywood,
Florida, and to the reference to our Firm under the caption
"Experts" in such Registration Statement.
/s/ Hixson, Marin, powell & DeSanctis, P.A.
- --------------------------------------------
HIXSON, MARIN, POWELL & DESANCTIS, P.A.
November 19, 1999
North Miami Beach, Florida
_____________________________________________________________________________
EXHIBIT 27 - Financial Data Schedule
_____________________________________________________________________________
Item Number Item Description September 30
1999 1998
5-02(1) Cash and cash items 305,400 133,000
5-02(2) Marketable securities 0 0
5-02(3)(a)(1) Notes and accounts receivable - trade 1,398,100 2,737,100
5-02(4) Allowances for doubtful accounts 99,000 99,000
5-02(6) Inventory 8,974,500 2,634,500
5-02(9) Total current assets 10,894,000 5,696,100
5-02(13) Property, plant and equipment 3,832,200 975,400
5-02(14) Accumulated depreciation 145,000 63,000
5-02(18) Total Assets 15,118,000 6,421,300
5-02(21) Total current liabilities 1,561,100 778,300
5-02(22) Bonds, mortgages and similar debt 12.790,200 4,744,000
5-02(28) Preferred stock - mandatory redemption 0 0
5-02(29) Preferred stock - no mandatory redemption 0 0
5-02(30) Common stock 177,500 177,500
5-02(31) Other stockholder's equity 579,600 579,600
5-02(32) Total liabilities and
stockholders' equity (830,700)(1,561,700)
5-03(b)1(a) Net sales of tangible products 1,546,000 2,182,300
5-03(b)1 Total revenues 2,341,600 2,515,600
5-03(b)2(a) Cost of tangible goods sold 1,143,000 1,527,600
5-03(b)2 Total costs and expenses applicable
to sales and revenues 245,800 164,800
5-03(b)(3) Other costs and expenses 857,100 609,000
5-03(b)(5) Provision for doubtful accounts
and notes 10,000 10,000
5-03(b)(8) Interest and amortization of debt discount 0 0
5-03(b)(10) Income before taxes and other items 45,600 (264,200)
5-03(b)(11) Income tax expense 18,000 (111,700)
5-03(b)(14) Income/loss continuing operations 11,200 (167,600)
5-03(b)(15) Discontinued operations 0 0
5-03(b)(17) Extraordinary items 0 0
5-03(b)(18) Cumulative effect - changes in
accounting principles 0 0
5-03(b)(19) Net income or loss 11,200 (167,600)
5-03(b)(20) Earnings per share - primary 0.00 (0.02)
5-03(b)(20) Earnings per share - fully diluted 0.00 (0.02)
