<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
__________
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _______________
Commission File Number: 1-8073
CV REIT, INC.
(Exact name of registrant as specified in its charter)
Delaware 59-0950354
(State of Incorporation) (I.R.S. Employer Identification No.)
100 Century Boulevard, West Palm Beach, Florida 33417
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 407-640-3155
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
which registered
Common stock, par value New York Stock Exchange
$.01 per share
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports) and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
This report contains a total of 16 pages.
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CV REIT, INC. AND SUBSIDIARIES
PART I. Financial Information
Item 1. Financial Statements
The consolidated financial statements included herein
have been prepared by the registrant, without audit, pursuant to
the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been consolidated or
omitted pursuant to such rules and regulations; however, the
registrant believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that these
consolidated financial statements be read in conjunction with the
financial statements and the notes thereto included in the
registrant's annual report on Form 10-K for the fiscal year ended
December 31, 1993.
The consolidated financial statements for the interim
periods included herein, which are unaudited, include, in the
opinion of management, all adjustments (consisting only of normal
recurring accruals) necessary to present fairly the financial
position and results of operations of the registrant for the
periods presented. The results of operations for interim periods
should not be considered indicative of results to be expected for
the full year.
<PAGE> 3
CV REIT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
Mar.31, Dec.31,
ASSETS 1994 1993
------ --------- ---------
Investments:
Real estate mortgage notes $105,053 $105,863
Real estate acquired by foreclosure 9,018 8,688
Accrued interest receivable 938 470
-------- --------
115,009 115,021
Less allowance for losses (5,119) (5,119)
-------- --------
109,890 109,902
GNMA certificates (cost of $35,006
in 1994 and market value of
$36,000 in 1993) 33,215 35,781
Real estate and investments in real
estate partnerships, net of
accumulated depreciation 6,291 6,331
Investment in Hilcoast Development
Corp. 10% Cumulative Preferred Stock 5,000 5,000
-------- --------
Total investments 154,396 157,014
Cash (including $851 and $822 restricted) 1,511 5,050
Other 1,235 1,163
-------- --------
$157,142 $163,227
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities and other credits:
Borrowings $72,797 $77,201
Accounts payable, accruals and other
liabilities 880 901
Dividends payable 2,406 2,250
Deferred income taxes 7,505 8,179
-------- --------
Total liabilities and other credits 83,588 88,531
-------- --------
Stockholders' equity:
Common stock, $.01 par-shares authorized
10,000,000; outstanding 7,966,621 80 80
Additional paid-in capital 18,490 18,490
Retained earnings 56,102 56,126
Unrealized loss on GNMA certificates
available for sale (1,118) -
-------- --------
Total stockholders' equity 73,554 74,696
-------- --------
$157,142 $163,227
======== ========
See accompanying notes to consolidated financial statements
<PAGE> 4
CV REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended
March 31,
--------------------
1994 1993
--------- ---------
Income:
Interest, substantially from
mortgage notes $3,470 $3,492
Rent and other 253 224
Dividend on Hilcoast Development
Corp. Preferred Stock 125 125
Reversal of losses 200 _
--------- ---------
4,048 3,841
--------- ---------
Expenses:
Interest 1,417 1,551
Operating, general and administrative 464 696
Depreciation 40 33
--------- ---------
1,921 2,280
--------- ---------
Net income $2,127 $1,561
========= =========
Net income per common share $0.27 $0.22
========= =========
Dividends declared per common share $0.27 $0.25
========= =========
Average common shares outstanding 7,966,621 7,218,633
========= =========
See accompanying notes to consolidated financial statements
<PAGE> 5
CV REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
(in thousands)
Balance at December 31, 1993 $56,126
Net income for the three months
ended March 31, 1994 2,127
Dividends declared (2,151)
-------
Balance at March 31, 1994 $56,102
=======
See accompanying notes to consolidated financial statements.
<PAGE> 6
CV REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
------------------
1994 1993
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $2,127 $1,561
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation 40 33
Reversal of losses (200) -
Amortization of deferred financing costs 222 51
-------- --------
Funds from operations 2,189 1,645
Increase in accrued interest receivable
and other assets (762) (443)
(Decrease) increase in accounts payable,
accruals and other liabilities (21) 181
------- -------
Net cash provided by operating activities 1,406 1,383
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in real estate mortgage notes (7,305) (4,592)
Collections on real estate mortgage notes 7,994 4,113
Return of principal on GNMA certificates 774 66
Proceeds from sales of real estate
acquired by foreclosure and other (9) 516
------- -------
Net cash provided by investing activities 1,454 103
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 555
Repayments of borrowings (4,404) (383)
Cash dividends paid (1,995) (1,806)
Increase in restricted cash (29) -
------- -------
Net cash used in financing activities (6,428) (1,634)
------- -------
Net decrease in unrestricted cash (3,568) (148)
Unrestricted cash at beginning of quarter 4,228 3,283
------- -------
Unrestricted cash at end of quarter $660 $3,135
======= =======
Supplemental disclosure of cash flow information:
Cash paid during quarter for interest $1,419 $1,554
======= =======
See accompanying notes to consolidated financial statements.
<PAGE> 7
CV REIT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Investments
(a) Investments in real estate mortgage notes, substantially
all of which are collateralized by real estate located in southeast
Florida, consist of (in thousands):
Mar. 31, Dec. 31,
1994 1993
-------- --------
Hilcoast Development Corp.
("Hilcoast"):
Term Loan (Note 1(b)) $ 33,672 $ 34,504
Line of Credit (Note 1(b)) 8,175 6,525
Other 3,165 3,195
-------- --------
45,012 44,224
First mortgage installment notes,
with self-amortizing equal
monthly principal and interest
payments due through 2012, with
interest averaging 13%, collateral-
ized by recreation facilities at
three Century Village communities
in West Palm Beach, Boca Raton and
Deerfield Beach, Florida
("Recreation Notes") 44,692 44,808
First mortgage notes, maturing
through 1998, with interest
ranging primarily from
8% to 10.5%, collateralized
principally by real property in
Palm Beach and Broward
Counties, Florida:
Residential 9,137 10,643
Commercial 6,212 6,188
-------- --------
Totals $105,053 $105,863
======== ========
<PAGE> 8
(b) Hilcoast
The Lines of Credit consist of revolving construction loan
commitments in the amount of $6.5 million (the "$6.5 million Line
of Credit") and $3 million (the "$3 million Line of Credit"). The
Term Loan and the $6.5 million Line of Credit mature on July 31,
1998, except as described below with respect to the conversion of
the Term Loan, and bear interest, payable monthly, at prime (6.25%
at March 31, 1994) plus 3%, but in any event not less than 9% nor
more than 11%. The $3 million Line of Credit matures on March 31,
1995 and bears interest, payable monthly, at prime plus 3% with a
floor of 11%. The Term Loan and the Lines of Credit are
collateralized by first mortgages on certain residential and
commercial real estate at the Century Village at Pembroke Pines,
Florida adult condominium project ("Century Village"), a second
mortgage on the recreation facilities at Century Village
(subordinated to a first mortgage to The Daiwa Bank, Ltd. ("Daiwa")
in the amount of $5.1 million at March 31, 1994) and certain other
assets (the "Collateral"). Hilcoast is required to pay commitment
fees of 1.8% and .9% per annum on the unused portion of the $6.5
million Line of Credit and the $3 million Line of Credit,
respectively. The Term Loan requires minimum annual principal
payments, which include specific release prices for the Collateral,
and which will reduce the Term Loan to $25 million by July 31,
1998.
Provided that the Daiwa indebtedness (which matures on October
31, 1996) has been satisfied, when the Term Loan has been reduced
to $25 million, it will be converted to an 11%, fixed rate, 25 year
self-amortizing loan providing for equal monthly payments of
principal and interest (the "Permanent Loan"). The release prices
for the Collateral will then be applied to a permanent reduction of
amounts available under the Lines of Credit. The Permanent Loan
may not be prepaid by Hilcoast without a prepayment penalty and
will be collateralized by a first mortgage on the recreation
facilities at Century Village.
In connection with the acquisition by Hilcoast of the
Collateral and certain other assets in July 1992, Hilcoast issued
a $2.8 million promissory note (the "Purchase Note") to the seller,
guaranteed by the Company and collateralized by $4.2 million of the
Company's $5 million investment in Hilcoast Preferred Stock. The
Purchase Note bears interest at prime (6.25% at March 31, 1994)
plus 1/2%, and requires principal payments by Hilcoast of $.8
million on July 31, 1994 and the remaining balance on July 31,
1995. Upon satisfaction of the Purchase Note by Hilcoast and the
release of the Hilcoast Preferred Stock, the $6.5 million Line of
Credit may be increased by Hilcoast to $7.5 million.
<PAGE> 9
(c) Real estate acquired by foreclosure consists of (before
allowance for losses - in thousands):
Mar. 31, Dec. 31,
1994 1993
-------- --------
Commercial:
Broward County, Florida:
29 acre commercial site in
Miramar $ 2,563 $ 2,563
Nine acre office building
site in Dania 5,000 5,000
Other 600 600
------- -------
Total commercial 8,163 8,163
Residential 855 525
------- -------
Totals $ 9,018 $ 8,688
======= =======
(d) GNMA Certificates
In May 1993, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 115 (SFAS 115),
"Accounting for Certain Investments in Debt and Equity Securities",
effective for fiscal years beginning after December 15, 1993. SFAS
115 addresses the accounting and reporting for investments in
equity securities that have readily determinable fair values, and
for all investments in debt securities. Investments in securities
are to be classified as either held-to-maturity, trading or
available for sale.
The Company's investment in GNMA certificates has been
classified as available for sale and stated at market value at
March 31, 1994. Unrealized holding losses, representing the amount
required to reduce the GNMA certificates from cost to market value
on that date, amounted to $1,792,000. A charge of $1,118,000
(unrealized holding losses net of income tax effect) has been
reported as a separate component of stockholders' equity.
<PAGE> 10
The Company has used its GNMA certificates, which yielded an
average of 7% at March 31, 1994, as collateral to borrow short term
funds (three months or less) under reverse repurchase agreements.
As of March 31, 1994, the Company was paying an average of 3.5% on
the outstanding balance of these borrowings. On April 5, 1994, the
Company sold its GNMA certificate portfolio ($34.8 million cost)
for $32.4 million and repaid the $31.9 million of reverse
repurchase agreements outstanding on that date. The $2.4 million
loss realized on the sale will be included in the second quarter
statement of operations.
(e) Real estate and investments in real estate partnerships
are located in southeast Florida and consist of (in thousands):
Mar. 31, Dec. 31,
1994 1993
-------- --------
Days Inn Motel, West Palm Beach $ 3,654 $ 3,654
Administration Building, West Palm Beach 764 756
Other 522 520
------- -------
4,940 4,930
Accumulated depreciation (1,980) (1,940)
------- -------
2,960 2,990
45%-50% investments in self-storage
warehouse partnerships 3,331 3,341
------- -------
Totals $ 6,291 $ 6,331
======= =======
(2) Borrowings
(a) Borrowings consist of (in thousands):
Mar. 31, Dec. 31,
1994 1993
-------- --------
Collateralized Mortgage Obligations
("CMO's"), net of unamortized
discount of $1.2 million and $1.3
million based on an effective
interest rate of 8.84% (Note 2(b)) $40,175 $40,579
Short-term reverse repurchase
agreements (Note 1(d)) 32,622 32,622
Bank loans - 4,000
------- -------
Totals $72,797 $77,201
======= =======
<PAGE> 11
(b) The CMO's are collateralized by the Recreation Notes
(Note 1(a)), require quarterly self-amortizing principal and
interest payments and mature on March 15, 2007.
(3) Commitments and Contingencies - TGI Development, Inc. ("TGI")
On October 9, 1989, TGI filed a complaint against the Company,
H. Irwin Levy and certain unrelated parties alleging
misrepresentations by the defendants in connection with the
Plaintiff's purchase and development of land at Boca Grove
Plantation. The complaint, as subsequently amended, consisted of
counts of common law fraud and breach of contract and sought
compensatory damages of approximately $2 million in addition to
punitive damages. On October 3, 1990, the Company filed a
counterclaim against TGI in connection with an $800,000 promissory
note from TGI to the Company. The Company has also filed a
complaint for malicious prosecution against TGI and certain of its
principals. On February 9, 1994, the Court granted a Final
Judgment in favor of the Company as to the count of common law
fraud. The effect of the Court's ruling is to take away the fraud
count from the Plaintiff, and to strike the punitive damage claim.
On April 5, 1994, the parties entered into an agreement which
provides for the Plaintiff to immediately dismiss the breach of
contract count and to agree to the entry of a judgment in the
amount of $1.1 million in favor of the Company on the
aforementioned counterclaim. The Company has agreed not to execute
that judgment until completion of the Plaintiff's appeal of the
Final Judgment on the punitive damage claim. Although the Company
believes it has substantial defenses, the ultimate outcome of this
litigation cannot presently be determined. Accordingly, no
provision for any liability that may result upon final adjudication
has been made in the accompanying financial statements.
(4) Consulting and Advisory Agreement with Hilcoast
(the "Agreement")
Under the Agreement, Hilcoast provides certain investment
advisory, consulting and administrative services to the Company.
The Agreement expires on July 31, 1994, provides for the payment of
$10,000 per month to Hilcoast, plus reimbursement for all out of
pocket expenses, and may be terminated by Hilcoast upon 180 days
notice and by the Company upon 30 days notice. H. Irwin Levy, a
principal stockholder and the former Chairman of the Board of the
Company, Joseph D. Weingard, a former director of the Company and
Michael S. Rubin and Jack Jaiven, former officers of the Company,
presently serve as officers and/or directors of Hilcoast.
<PAGE> 12
Management's Discussion and Analysis of
Results of Operations and Financial Condition
Results of Operations
For the quarter ended March 31, 1994, net income was $2,127,000 as
compared to $1,561,000 in the corresponding quarter of 1993.
The $566,000 increase in quarterly earnings was principally
attributable to a $232,000 decrease in operating, general and
administrative expenses, a $200,000 reversal of losses previously
provided and a $112,000 increase in net interest income.
The decrease in operating, general and administrative expenses was
primarily due to the elimination of costs incurred in connection
with operating residential real estate acquired by foreclosure,
sold during 1993, and reduced legal fees. The increase in net
interest income reflects $268,000 of reduced interest expense,
partially offset by a charge of $133,000 representing unamortized
deferred financing costs incurred in 1993 in connection with a bank
loan repaid during the first quarter of 1994.
Liquidity and Capital Resources
At March 31, 1994, total assets were $157.1 million, including
$105.1 million in real estate mortgage notes. Approximately $44.7
million of the real estate mortgage notes provide for self-
amortizing, equal monthly installment payments through 2012 and are
collateralized by recreation facilities under long-term leases with
residents living in the approximately 22,000 apartments at Century
Village adult condominium communities at West Palm Beach, Deerfield
Beach and Boca Raton, Florida ("Recreation Notes"). The operations
of these facilities historically have been profitable and, in the
Company's opinion, are not likely to be affected by adverse
economic conditions.
The remaining $60.4 million of real estate mortgage notes
included $45 million due from Hilcoast Development Corp.
("Hilcoast"), principally collateralized by first mortgages on
certain real estate at the planned 7780 unit Century Village at
Pembroke Pines adult condominium community in Broward County,
Florida ("Century Village"), and a second mortgage on the
recreation facilities located at Century Village. Of this amount,
approximately $20 million is scheduled to be repaid through July
1998 and the remaining $25 million is scheduled to be converted by
July 1998 to a 25 year, self-amortizing loan providing for equal
monthly installment payments of principal and interest,
collateralized by a first mortgage on the recreation facilities at
Century Village. At March 31, 1994, 5,837 units had been sold and
delivered at Century Village and the backlog of units under
contract for future delivery was 318 units.
<PAGE> 13
Collections on the Company's real estate mortgage notes will
be affected by the future success of the projects which
collateralize these notes, which may, in turn, be affected by
conditions in the housing and commercial real estate markets and
interest rates.
Operating funds are currently generated from interest income
on mortgage notes, rentals from income producing properties,
distributions from self-storage warehouse partnerships and dividend
income on the Company's investment in Hilcoast Preferred Stock.
Dividend payments to stockholders, in accordance with the
provisions of the Internal Revenue Code, limit the Company from
utilizing significant amounts of income-generated funds for
investment purposes. Repayments received on mortgage notes and
proceeds from sales of real estate are expected to be reinvested in
outstanding real estate mortgage loan commitments, principally to
Hilcoast, and invested in new real estate investment opportunities
which may arise.
During the first quarter of 1994 and 1993, the Company
declared cash dividends of $.27 per share and $.25 per share,
aggregating $2.2 million and $1.8 million, respectively. During
the same period, the Company's funds from operations (cash flow
from operating activities before changes in operating assets and
liabilities) was $2.2 million or $.27 per share and $1.6 million or
$.23 per share, respectively (see Consolidated Statements of Cash
Flows). On April 25, 1994, the Board of Directors declared the
second quarter cash dividend of $.27 per share.
Total assets at March 31, 1994 included $35.0 million (at
cost) of long-term GNMA certificates, which yielded an average of
7% at March 31, 1994 and which were collateral for short-term
borrowings under reverse repurchase agreements ("reverse repos") of
$32.6 million at an average rate of 3.5%. During the current first
quarter, net interest income from the GNMA portfolio amounted to
$345,000. As a result of the recent precipitous downturn and
volatility in the bond market, on April 5, 1994 the Company sold
its GNMA certificate portfolio and repaid the reverse repos. The
$2.4 million loss realized on the sale will be included in the
second quarter statement of operations. The loss from the sale
does not impact funds from operations and will not affect the
remaining 1994 quarterly dividends. However, dependent upon the
Company's replacement investments, net interest income may decrease
slightly, which may have a relatively minor effect on quarterly
dividends. This decrease will be partially offset by increased
interest income on the Company's approximately $45 million of
variable rate mortgage notes receivable as a result of the recent
increase in the prime rate from 6% to 6.75%.
In connection with the retirement of the Company's 9.25%
senior subordinated notes, on October 26, 1993 the Company entered
into a loan agreement with Ohio Savings Bank (the "Ohio Savings
Loan") under which the Company borrowed $7.5 million. As of March
31, 1994, the Company had repaid the Ohio Savings Loan in full. On
<PAGE> 14
February 28, 1994, the Company completed an amendment to the Ohio
Savings Loan which provides for a $2.5 million revolving line of
credit. The revolving line of credit bears interest at prime plus
2% through October 31, 1994 and prime plus 1.5% thereafter through
the December 31, 1995 maturity date and is secured by a collateral
assignment of primarily all of the Company's mortgage notes
receivable from Hilcoast. As of March 31, 1994 there was no
outstanding balance on this loan.
At March 31, 1994, the outstanding balance of the Company's
Collateralized Mortgage Obligations (the "CMO's") amounted to
$40.1 million (net of unamortized discount of $1.2 million based on
an effective interest rate of $8.84%). The CMO's are
collateralized by the Recreation Notes and require self-amortizing
principal and interest payments through March 2007. During the
term of the CMO's, the Company's scheduled annual debt service
requirement approximates $5.2 million compared to annual principal
and interest payments scheduled to be received under the Recreation
Notes of $6.5 million.
At March 31, 1994, commitments on outstanding real estate
loans which the Company expects will require funding consisted of
Hilcoast Lines of Credit and amounted to $1.3 million. The Company
expects to be able to meet this commitment with internally
generated funds, including principal repayments on real estate
mortgage notes. During the quarter ended March 31, 1994, there
were no new loan commitments. There are currently no material
commitments for capital expenditures.
Inflation
The Company's interest-sensitive mortgage notes receivable
approximated $45 million, as of March 31, 1994, including $40.2
million from Hilcoast with interest at prime plus 3% (9.25% at
March 31, 1994). As a result, inflation may have a positive effect
on the Company's operations if such inflation is accompanied by
rising interest rates. However, interest on the Hilcoast loans
generally cannot be less than 9% nor more than 11%.
Other
The FASB has issued Statement No.106 "Employer's Accounting
for Postretirement Benefits Other than Pensions". The Company
expects that this Statement will not have any impact on its
financial statements.
<PAGE> 15
CV REIT, INC. AND SUBSIDIARIES
PART II. Other Information
Item 6 - Exhibits and Reports on Form 8-K:
Exhibit:
10(a) First Amendment to Loan Agreement, Security
Agreement and Collateral Assignment of Loans,
Notes, Mortgages and Security Documents with
Ohio Savings Bank dated February 25, 1994.
Reports on Form 8-K
The Company was not required to file Form 8-K
during the quarter for which this report is filed.
<PAGE> 16
CV REIT, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
CV REIT, INC.
________________________________
(Registrant)
May 10, 1994 /s/ Alvin Wilensky
_________________________________
Alvin Wilensky, President
May 10, 1994 /s/ Elaine Kahant
_________________________________
Elaine Kahant, Vice President
and Treasurer
EXHIBIT 10(a)
This Instrument Prepared By
and return to:
James Sadock, Jr., Esq.
5550 Glades Road, Suite 100
Boca Raton, Florida 33431
FIRST AMENDMENT TO
LOAN AGREEMENT, SECURITY AGREEMENT AND COLLATERAL
ASSIGNMENT OF LOANS, NOTES, MORTGAGES AND SECURITY DOCUMENTS
This First Amendment to Loan Agreement, Security Agreement and Collateral
Assignment of Loans, Notes, Mortgages and Security Documents ("First
Amendment") is executed and delivered as of the 25th day of February, 1994 by
and between CV REIT, INC., f/k/a Cenvill Investors, In West Palm Beach,
Florida 33417 (the "Assignor") and OHIO SAVINGS BANK, an Ohio
Street, Cleveland, Ohio 44114 ("Lender");
W I T N E S S E T H :
WHEREAS, in consideration for a loan from Lender to Assignor in the
amount of Seven Million Five Hundred Thousand and no/100 Dollars
($7,500,000.00) made on October 26, 1993 (the "Term Loan"), Assignor and
delivered to Lender its Secured Promissory Note dated October 26, 1993 in the
original amount of Seven Million Five Hundred Thousand and no/100 Dollars
($7,500,000.00) U.S. (the "Term Note");
WHEREAS, the Term Note is evidenced and secured by, among other things
a Loan Agreement, Security Agreement and Collateral Assignment of Loans,
Notes, Mortgages and Security Documents ("Assignment") executed and delivered
as of the 26th day of October, 1993 by Assignor to Lender and recorded on
October 27, 1993 in Official Records Book 21318, Page 648, of the Public
Records of Broward County, Florida, and on November 1, 1993 in Official
Records Book 3870, Page 3743, of the Public Records of Volusia County,
Florida; and
WHEREAS, Assignor and Lender have agreed that Lender shall make
available to Assignor a revolving line of credit not to exceed Four Million
and no/100 Dollars ($4,000,000.00) (U.S.) (the "Revolving Loan"), to be
evidenced by a Secured Revolving Promissory Note of even date herewith
the "Revolving Note") and secured by the Assignment as modified by
this First Amendment.
NOW THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound, the
Assignor and Lender hereby covenant and agree as follows:
1. Recitals. The aforementioned recitals are true and correct and are
hereby incorporated by this reference.
2. Existing Term Loan. As of the date hereof, the unpaid principal balance
of the Term Note is $2,500,000.00, and interest has been paid on the
Term Note through January 31, 1994. Assignor acknowledges that the
indebtedness evidenced by the Term Note is free of any and all
defenses, setoffs and counterclaims, and that Assignor has no claims against
Lender in connection with or related to the Term Loan or any Loan Document
as of the date hereof.
3. Modification of Assignment. The Assignment is hereby amended and
modified as follows:
(a) The indebtedness evidenced by the Revolving Note is and shall be secured
by the Assignment, in addition to the indebtedness evidenced by the Term Note.
From and after the date of this First Amendment, the aggregate principal
amount secured by the Assignment, as hereby amended and modified, shall never
exceed Eight Million and no/100 Dollars ($8,000,000.00).
(b) Definitions.
(i) The definition of the term "Default Rate" defined in Section 1(h) of the
Assignment is hereby replaced and superseded by the following: "An interest
rate equal to five percent (5%) per annum in excess of the interest rate
prescribed in the first paragraph of the Term Note or Revolving Note (as
applicable), as adjusted from time to time."
(ii) The definition of the term "Loan" defined in Section 1(k) of the
Assignment is hereby replaced and superseded by the following: "The Term
Loan and/or Revolving Loan."
(iii) The term "Loan Documents" defined in Section 1(l) of the Assignment
shall include the Revolving Note.
(iv) The terms listed below shall have the following meanings unless
otherwise required by context, and such definitions shall be added to and be a
part of Section 1 of the Assignment:
(r) Advance. An advance made by Lender to Assignor, subject to the
provisions and conditions of this Assignment, and payable in accordance with
the Revolving Note and this Assignment.
(s) Maturity date. December 31, 1995.
(t) Maximum Revolving Loan Amount. Four Million Dollars ($4,000,000.00).
(u) Maximum Revolving Sublimit. Two Million Five Hundred Thousand Dollars
($2,500,000.00).
(v) Note. The Term Note and/or the Revolving Note.
(w) Revolving Loan. The Revolving Loan in the maximum amount of Four
Million Dollars ($4,000,000.00) provided in Sections 2(d) through (k) hereof,
and evidenced by the Revolving Note and secured by this Assignment.
(x) Revolving Loan Account. An account maintained by Lender on its books,
which will evidence all Advances, accrued interest thereon, other amounts due
to Lender with respect to the Revolving Loan, and all payments thereof by
Assignor.
(y) Revolving Note. The Secured Revolving Promissory Note of even date
herewith executed and delivered to Lender by Assignor in the maximum
principal amount of Four Million Dollars ($4,000,000.00), including any
partial or total extension, restatement, renewal, amendment, modification or
substitution thereof or therefor.
(z) Term Loan. The loan in the original amount of Seven Million Five Hundred
Thousand Dollars ($7,500,000.00) made by Lender to Assignor on or about
October 26, 1993, and evidenced by the Term Note and secured by this
Assignment.
(aa) Term Note. The Secured Promissory Note dated October 26, 1993 in the
original amount of Seven Million Five Hundred Thousand Dollars
($7,500,000.00) from Assignor to Lender, evidencing the Term Loan.
(v) Capitalized terms used herein and not otherwise defined herein shall
have the meanings prescribed therefor in the Assignment to the extent
defined therein.
(c) Sections 2(a) and (b) of the Assignment shall be deemed to relate and
refer solely to the, Term Loan, and shall not be applicable to the Revolving
Note or the indebtedness evidenced thereby.
(d) Section 2. The following provisions are hereby added to Section 2 of
the Assignment:
(d) Advances. Subject to the terms and conditions hereof, and in reliance
on the representations and warranties herein contained, Lender shall make
Advances of the proceeds of the Revolving Loan from time to time during the
period commencing on the date hereof and ending on the Maturity Date to or
for the account of Assignor up to but not exceeding an aggregate principal
amount outstanding at any one time equal to the Maximum Revolving Sublimit,
all of which shall be part of the Revolving Loan, and shall be repaid
by Assignor to Lender with interest, as provided in the Revolving Note.
The Maximum Revolving Sublimit may be used by the Assignor for working capital;
no portion of the proceeds of the Revolving Loan may be used to prepay
the Term Note.
(e) Standby Letters of Credit. Not more than One Million Five Hundred
Thousand Dollars ($1,500,000.00) of the proceeds of the Revolving Loan shall
be allocated to provide funding for draws under Standby Letters of Credit
issued by Lender in favor of the Division of Florida Land Sales,Condominiums
and Mobile Homes of the Department of Business and Professional Regulation
of the State of Florida, and/or Levy, Kneen, Wiener, Kornfeld & del Russo,
P.A., as escrow agent, for the benefit of Hilcoast or its subsidiary Newcen
Communities, Inc. ("Newcen") on and subject to the following terms and
conditions:
i. Each Standby Letter of Credit shall be issued for the purpose of
enabling Hilcoast or Newcen to utilize earnest money deposits, made pursuant
to bona fide sales contracts, for the construction of Century Village Units,
and for no other purpose;
ii. The aggregate amount of Standby Letters of Credit outstanding at any one
time shall not exceed One Million Five Hundred Thousand Dollars
($1,500,000.00);
iii. The terms and conditions of the Standby Letters of Credit shall be
satisfactory to Lender and generally in accordance with the sample attached
hereto as Exhibit A;
iv. No Standby Letter of Credit shall be issued for a term of more than one
(1) year from the date of issue, and no Standby Letter of Credit may be renewed
or extended for a term of more than one (1) year at a time;
v. Assignor shall pay to Lender, in advance, for each Standby Letter of
Credit issued by Lender hereunder, an "Issuance Fee" of $250 and an initial
"Letter of Credit Fee" equal to one and one-half percent (1.50%) of the
maximum amount of each such Letter of Credit, regardless of the term or
expiration date thereof (which shall be subject to clause iv above) and,
if such Letter of Credit is renewed or extended in accordance herewith and
subject hereto, an extension fee equal to one percent (1.00%) of the maximum
amount of such Letter of Credit for each such renewal or extension, regardless
of the term or expiration date thereof (which shall be subject
to clause iv above); and
vi. Any and all amounts drawn pursuant to any such Letter of Credit shall be
a part of the Revolving Loan secured hereby, and shall be evidenced by and
payable in accordance with the Revolving Note, with interest as provided
therein, provided that any amount drawn on any Letter of Credit after the
Maturity Date shall be due and payable in full by Assignor to Lender within
five (5) days after being drawn, and if not then paid, shall thereafter bear
interest at the Default Rate under the Revolving Note.
(f) Loan Account. Lender shall debit to the Revolving Loan Account the
amount of each Advance, the amount of each draw on each Standby Letter of
Credit, and all interest, the Unused Commitment Fee (defined below), the
Letter of Credit Issuance Fees, and other compensation or fees, if any,
which are provided for in this Assignment and which are payable on or with
respect to any Advances and the Revolving Note, and shall credit to the
Revolving Loan Account by appropriate entries each payment of (i) principal
and interest on account of each Advance and (ii) any other amount paid.
The Revolving Loan Account shall constitute prima facie evidence of all
advances made by Lender hereunder and of all other entries contained therein.
(g) Manner of Borrowing. Not later than 10:00 AM, Cleveland, Ohio time, on
the date on which any Advance is sought (which date must be a Business Day)
Assignor shall give Lender oral or written notice requesting, and specifying
the date, amount (which shall not be less than $100,000) and manner of each
borrowing or reborrowing to be made pursuant to the Revolving Loan and, if
such request is not made in writing, Assignor shall confirm the same in
writing within twenty four (24) hours. Provided that all conditions to such
borrowing have then been satisfied in the reasonable judgment of Lender,
including without limitation the conditions of Section 4 of this Assignment,
Lender shall make the Advance from its office or such other place Lender may
select, payable to Assignor or to such other person as Assignor may have
specified in its notice.
(h) Unused Commitment Fee. On the first day of each calendar month during
the term of the Revolving Note, commencing with the first day of the first
calendar month after the Revolving Note is signed, Assignor shall pay to
Lender an "Unused Commitment Fee" equal to three-eighths of one percent
(0.375%) per annum (based on a 360 day year and calculated for the actual
number of days elapsed) of the daily unused portion during the preceding month
of the difference between the Maximum Revolving Loan Amount minus the
aggregate amount of outstanding Letters of Credit issued pursuant hereto.
(i) Payments and Repayments. Assignor shall make each payment hereunder and
under the Revolving Note in accordance with Section 2 (c) hereof. Assignor
may at any time repay the Revolving Note in whole or in part, without premium
or charge, provided that each partial repayment shall be in a principal amount
of not less than One Hundred Thousand Dollars ($100,000.00).
(j) Revolving Loan Reductions. Assignor shall have the right from time to
time to terminate any unused portion of the Revolving Loan, thereby permanently
reducing the Maximum Revolving Loan Amount, on and subject to the following
terms and conditions:
i. Assignor shall give Lender at least three (3) Business Days written
notice requesting the reduction, and specifying the amount (which shall be
in even multiples of $100,000) (the "Reduction Amount") and whether the
Reduction Amount shall apply to the Maximum Revolving Sublimit or the
aggregate amount allocated for Standby Letters of Credit;
ii. No reduction in the aggregate amount allocated for Standby Letters of
Credit shall be made which would result in the allocated amount being
less than the maximum amount of all outstanding Standby Letters of Credit
issued pursuant to this Assignment;
iii. The reduction in the Maximum Revolving Loan Amount shall take effect
upon the first day of the first calendar month commencing more than three (3)
Business Days from the date of Lender's receipt of Assignor's written
notice; and
iv. Once the Maximum Revolving Loan Amount has been reduced, the Reduction
Amount shall never again be available for Advances or issuance of Standby
Letters of Credit, as the case may be.
(k) Termination/Maturity. Lender's obligation to advance funds under the
Revolving Note shall automatically expire without any further notice or action
on the part of Lender, and the outstanding balance of the Revolving Note shall
be due and payable in full, on the Maturity Date, except for amounts thereafter
drawn pursuant to Standby Letters of Credit, which shall be due and payable
as provided above. Lender shall have the right to terminate immediately,
at any time, any and all of its obligations hereunder, including its
obligation to make Advances, pursuant to Section 9 of this Assignment.
(e) Section 7(b). Paragraph (b) of Section 7 is hereby superseded,
restated and replaced by the following:
(b) At all times during the Term of the Term Loan, all loan payments with
respect to the Assigned CV Loans shall be held as a trust fund as security
for Assignor's obligations hereunder, and shall be paid by Assignor to
Lender not later than five (5) days after the end of the calendar month in
which such payment was received by Assignor and, in the absence of an Event
of Default, all such loan payments shall be applied to the Term Loan, and not
to the Revolving Loan, until the Term Loan has been paid in full. After the
occurrence of an Event of Default, any license granted to the Assignor to
collect any and all sums or payments that may be due under the Assigned CV
Loans and/or Assigned VLX Loan shall thereupon terminate, and Lender may
collect, sue for and receive, in the name of Assignor and its own name, all
sums that are then due and unpaid, as well as any and all sums or payments
thereafter accruing and becoming payable; and to this end, Assignor
further will facilitate in all reasonable ways Lender's collection of said
sums, and will, upon request of Lender, execute a written notice to the
Borrowers and all other obligors on the Assigned Notes and all other
Assigned Loan Documents directing them to pay all sums due thereunder
directly to Lender, and Assignor hereby appoints Lender its attorney-in-fact
(which authority is coupled with an interest and is irrevocable by
Assignor) for the purpose of enabling Lender to take any and all action it
deems necessary or desirable to effectuate the foregoing.
(f) Section 8. Paragraph (a) of Section 8 of the Assignment is hereby
amended, replaced and superseded by the following: "The failure by
Assignor to make any payment within five (5) days after the same
is due and payable pursuant to either Note or this Assignment."
(g) Section 18(b). Paragraph (b) of Section 18 is hereby superseded,
restated and replaced by the following:
(b) Upon the payment in full of all indebtedness evidenced by the Term Note
and Revolving Note and all sums payable hereunder and secured hereby, including
with respect to any Standby Letters of Credit issued by Lender pursuant hereto,
and the return to Lender of any and all Standby Letters of Credit issued
pursuant to this Assignment (Lender and Assignor acknowledging that Standby
Letters of Credit secured by this Assignment may be outstanding past the
Maturity Date) and provided no obligation exists under any indemnity
hereunder, this Assignment shall cease and terminate (except for any rights
of indemnification that expressly survive such termination), and all right,
title and interest of Lender in and to the Assigned Loan Documents
shall revert to Assignor, and Lender shall, upon reasonable notice from and
at the expense of Assignor, cause the Assigned Loan Documents to be fully
released from any lien and charge imposed by this Assignment, endorse
the Assigned Notes to Assignor without recourse and deliver to Assignor the
original Assigned Loan Documents in the possession of Lender.
4. Representations and Warranties. Assignor represents and warrants that it
has full power, authority and legal right to execute, deliver and perform
the Revolving Note and this First Amendment, and that, as of the date hereof
(i) the warranties and representations of Assignor contained in the
Assignment are true, correct and complete in all material respects; (ii)
all the material covenants, terms and conditions of the Assignment remain
satisfied; and (iii) no Event of Default, or event which upon the lapse of
time, the giving of notice, or both, could become an Event of Default, has
occurred under the Assignment.
5. Ratification of Loan Documents. Assignor acknowledges that the Term
Note, the Assignment, as amended hereby, the UCC-1 and UCC-3 Financing
Statements delivered in conjunction therewith, and any other document or
instrument related thereto are valid and binding; that there are no defenses,
set offs or counterclaims thereto; nothing herein or in the Revolving Note
invalidates or shall impair or release any covenant, condition, agreement or
stipulation in the Loan Documents; and Assignor shall perform and comply with
and abide by each of the covenants, agreements, conditions and stipulations
of the Loan Documents as amended hereby.
6. Fees, Expenses and Other Payments. At the time of execution and delivery
of this First Amendment, Assignor shall pay to Lender a Commitment Fee in the
amount of Twenty Five Thousand Dollars ($25,000.00), and shall further pay all
reasonable costs, fees and expenses incurred by Lender in connection
with this First Amendment.
7. Amendment to Debt and Mortgage Subordination Agreement. The term
"Obligations" defined in Recital B on page 1 of the Debt and Mortgage
Subordination Agreement dated as of October 26, 1993, made by Assignor in
favor of Lender and recorded on October 27, 1993 in Official Records Book
21318, Page 731, of the Public Records of Broward County, Florida, shall
include the Revolving Loan.
8. Miscellaneous.
(a) Recording. Assignor shall promptly cause this First Amendment to be
filed or recorded in such manner and in such places as may be required by
any present or future law in order to publish notice of and fully to protect
the lien of the Assignment upon and the interest of Lender in, the Assigned
Loan Documents. Assignor will pay all filing and recording fees, and all
expenses incident to the preparation, execution and acknowledgement of this
First Amendment, and all Federal, state, county and municipal taxes, duties,
assessments and charges now or hereafter arising out of or in connection with
the filing, recording, execution and delivery of this First Amendment,
including without limitation any and all documentary stamps and/or intangible
taxes. If at any time any agency of the State of Florida shall determine
that the documentary stamps affixed to the Revolving Note or the intangible
personal property taxes affixed to this First Amendment are insufficient or
if no documentary stamps or intangible personal property taxes have been
affixed and that such stamps and taxes should thereafter be affixed, the
Assignor shall pay for the same, together with any interest or penalties
imposed in connection with such determination. Assignor may, at its expense
and after prior notice to Lender, by appropriate proceedings diligently
prosecuted, contest in good faith the validity or amount of any such taxes,
assessments and other charges and, during the period of such contest, permit
the items so contested to remain unpaid, however, if at any time Lender
shall notify Assignor that, in its opinion, by nonpayment of any such items
that the lien of any Assigned Mortgage, as to any part of the Mortgaged
Property or the validity or operation of the Assignment, as amended by this
First Amendment, will be adversely affected, or the nonpayment of any such
items will result in the creation of a lien of equal or superior priority to
any of the Assigned Mortgages upon any of the Mortgaged Property or of equal
or superior priority to the lien and security interest of the Assignment
on any Assigned Loan Document, Assignor shall promptly pay such taxes,
assessments or charges.
(b) Severability. If any one or more of the provisions of this First
Amendment is held to be invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision or
provisions in every other respect and of the remaining provisions of this First
Amendment shall not be in any way impaired, and each term or provision shall
be construed to be legal, valid, binding and enforceable to the maximum
extent permitted by law.
(c) Survival of Covenants, Agreements, Representations and Warranties. All
warranties, representations and covenants made by Assignor herein or in any
certificate or other instrument delivered by it or on its behalf under this
First Amendment shall be considered to have been relied upon by Lender and
shall survive regardless of any investigation made by Lender or on its
behalf. All such statements and any such certificate or other instrument
shall constitute warranties and representations by Assignor hereunder.
(d) Headings. Paragraph headings have been inserted in this First Amendment
as a matter of convenience of reference only; such paragraph headings are not
part of this First Amendment and shall not be used in the interpretation of
this First Amendment.
(e) Time of the Essence. Time is hereby expressly made of the essence with
respect to the performance and/or satisfaction of each of the provisions and
conditions of this First Amendment.
(f) Governing Law/Jurisdiction/Venue. This First Amendment is made and
entered into in the County of Cuyahoga, State of Ohio and shall, in all
respects, be interpreted, enforced and governed by and under the laws of Ohio,
and all parties consent to jurisdiction and venue in any State or Federal Court
in said County and State with respect to any claim, cause of action or
proceeding relating to this First Amendment, the Revolving Note or any
transaction contemplated hereby.
(g) Waiver of Trial by Jury. Each party hereby voluntarily and knowingly
waives its right to trial by jury in connection with any dispute, claim,
action, cause of action or proceeding between the parties hereto relating in
any way to the Revolving Note, this First Amendment or any transaction
contemplated hereby.
(h) Limited Modification/Conflicts. Except to the limited extent expressly
provided herein, the Term Note, Assignment and all other Loan Documents shall
emain in full force and effect. In the event of any inconsistency between the
terms and conditions of the Assignment and this First Amendment, the terms
and provisions of this First Amendment shall govern and control.
Signed, acknowledged and delivered ASSIGNOR:
in the presence of: CV REIT, INC.,
a Delaware corporation
/s/ Elaine Kahant By: /s/ Alvin Wilensky
Name Printed: Elaine Kahant Name Printed: Alvin Wilensky
Its: President
Name Printed: /s/ James Sadock, Jr.
Name Printed: James Sadock, Jr.
Witness as to Assignor
LENDER:
OHIO SAVINGS BANK,
an Ohio corporation
By: /s/ Robert Goldbert, President
By: /s/ Mark N. Freimuth, Sr. Vice President
STATE OF FLORIDA )
)ss:
COUNTY OF PALM BEACH )
Before me, a Notary Public in and for said County and State, on this
28th day of February , 1994 personally appeared the above-named Alvin
Wilensky, the President of CV Reit, Inc., a Delaware corporation, who
acknowledged to me that he did sign the foregoing instrument, and that such
signing was the free act and deed of said CV Reit, Inc. and his free act and
deed as such officer. Alvin Wilensky is personally known to me.
/s/ Terri L. Windle
Printed Name: Terri L. Windle
Notary Public, State of Florida
My Commission Expires: 2/22/98
(SEAL) TERRI L. WINDLE
MY COMMISSION #CC 343176
EXPIRES: February 22, 1998
Bonded Thru Notary Public Underwriters
STATE OF OHIO )
)ss:
COUNTY OF CUYAHOGA )
I hereby certify that on this day, before me, an officer duly authorized in
the State aforesaid and in the County aforesaid to take acknowledgements,
the foregoing instrument was acknowledged before me by Robert Goldberg and
Marc W. Freimuth, President and Sr. Vice President, respectively, of Ohio
Savings Bank, an Ohio corporation, freely and voluntarily under the authority
duly vested in them by said corporation. They are personally known to me.
WITNESS my hand and official seal in the County and State last aforesaid this
25th day of February, 1994.
/s/ R. L. LUGIBIHL
Notary Public, State of Ohio
R. L. Lugibihl, Notary Public
(SEAL) State of Ohio, Cuyahoga County
My commission expires 7/11/94
_________________________________
Typed, printed or stamped name of
Notary Public
EXHIBIT A
DRAFT
February 1, 1994
Levy, Kneen, Wiener, Kornfeld & del Russo, P.A.
("Escrow Agent")
_______________________________________________
_______________________________________________
and/or
Director, Division of Florida Land Sales, Condominiums
and Mobile Homes ("Division")
_______________________________________________
_______________________________________________
Re: Irrevocable Letter of Credit No. 1994-_____
Gentlemen:
You are hereby irrevocably authorized to draw on Ohio Savings Bank
pursuant to this Irrevocable Letter of Credit No. 1994-______, for the
account of NEWCEN COMMUNITIES, INC. by your draft at sight, upon the terms
and conditions hereinafter set forth, an aggregate amount not exceeding
One Million Five Hundred Thousand Dollars ($1,500,000.00) (U.S.), effective
immediately and expiring at the close of business on January 31, 1995 (the
"Expiration Date").
Funds under this Letter of Credit are available from time to time to the
Division or Escrow Agent, as payee, in an aggregate amount not to exceed the
amount of this Letter of Credit, upon presentation to us of a sight draft of
the Division or Escrow Agent referring on its face to this Letter of Credit
and accompanied by a written certificate signed by the Division or Escrow
Agent stating the following:
"The sum of (insert amount of sight draft) Dollars ($______) is due and
payable by NEWCEN COMMUNITIES, INC. as part of its obligation under its
contract(s) with the purchaser(s) of (a) condominium unit(s) at Century
Village at Pembroke Pines, Broward County, Florida, pursuant to a certain
Escrow Agreement dated (insert date of escrow agreement) by and among NEWCEN
COMMUNITIES, INC., as Developer, the Division of Florida Land Sales,
condominiums and Mobile Homes, and Levy, Kneen, Wiener, Kornfeld & Del Russo,
P.A., as Escrow Agent."
We shall have the right to rely upon the aforementioned statement and the
authority of any person signing the same on behalf of either the Escrow Agent
or the Division, and we shall have no obligation to inquire as to the accuracy
of the information set forth therein or the authority of any person signing
the sight draft, the statement or any other instrument or document on behalf
of the Escrow Agent or Division, or the authenticity of any signature on any
document presented to us. The Bank shall be entitled to rely upon the
representations of any person purporting to be an officer, agent or
representations of any person purporting to be an officer, agent or
representative of any addressee in determining the authority of any person
claiming to have rights hereunder, and the Bank shall not be responsible to
make any further inquiry or investigation.
Presentation of the sight draft and the foregoing documentation shall be
made at our Corporate Banking Department, Suite 200, Ohio Savings Plaza, 1801
East Ninth Street, Cleveland, Ohio 44114 or at AmTrust Bank, F.S.B., 5550
Glades Road, Boca Raton, Florida 33431, Attention: James Sadock, Jr. All
drafts drawn under and in compliance with the terms of this Letter of Credit
will be duly honored by us within fifteen (15) days after delivery of the
required documentation as specified if presented at either of such offices
on or before the Expiration Date.
This Letter of Credit shall be governed by the Uniform Customs and
Practice for Documentary Credits, International Chamber of Commerce
(the "Uniform Customs") in effect on the date of issuance of this Letter of
Credit. This Letter of Credit shall be deemed to be made under the laws of
the State of Ohio, including Article 5 of the Uniform Commercial Code as in
effect in the State of Ohio, and shall, as to matters not governed by
the Uniform Customs, be governed by and construed in accordance with the laws
of the State of Ohio. Communications with respect to this Letter of Credit
shall be in writing and shall be addressed to Ohio Savings Bank, Ohio
Savings Plaza, 1801 East Ninth Street, Cleveland, Ohio 44114, Attention:
Corporate Banking Department, specifically referring thereon to Ohio Savings
Bank Irrevocable Letter of Credit No. 1994-________.
This Credit is not transferable or negotiable and may only be drawn
against by either of the named addressees. Upon payment to any addressee or
to an addressee's account of the amount specified in a sight draft drawn
hereunder, we shall be fully discharged on our obligation under this Letter
of Credit to the extent of any such payment. Any attempted or purported
assignment, transfer, conveyance or negotiation of this Letter of Credit
shall be void.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement, except to the extent
explicitly referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except
to such extent.
Very truly yours,
OHIO SAVINGS BANK
D R A F T
By:______________________________________
Its:_____________________________________
D R A F T
And:_____________________________________
Its:_________________________________
