<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 September 30, 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 17 pages.
<PAGE> 2
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)
Sept.30, Dec.31,
ASSETS 1994 1993
- - ------ --------- ----------
Investments:
Real estate mortgage notes $96,939 $105,863
Real estate acquired by foreclosure 8,517 8,688
Accrued interest receivable 928 470
--------- ---------
106,384 115,021
Less allowance for losses (4,836) (5,119)
--------- ---------
101,548 109,902
Marketable Securities:
GNMA certificates (market value of
$36,000 in 1993) -- 35,781
Other 2,920 --
Real estate and investments in real
estate partnerships, net of
accumulated depreciation 6,173 6,331
Investment in Hilcoast Development Corp.
10% Cumulative Preferred Stock 5,000 5,000
--------- ---------
Total investments 115,641 157,014
Cash (including $865 and $822 restricted) 6,035 5,050
Other 1,020 1,163
--------- ---------
$122,696 $163,227
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
- - ------------------------------------
Liabilities and other credits:
Borrowings 39,339 $77,201
Accounts payable, accruals and other
liabilities 561 901
Dividends payable 2,404 2,250
Deferred income taxes 8,179 8,179
--------- ---------
Total liabilities and other credits 50,483 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 53,643 56,126
--------- ---------
Total stockholders' equity 72,213 74,696
--------- ---------
$122,696 $163,227
========= =========
See accompanying notes to consolidated financial statements
<PAGE> 4
CV REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per sharedata)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1994 1993 1994 1993
-------- -------- -------- -------
Income:
Interest, substantially
from mortgage notes $2,932 $3,477 $9,388 $10,420
Rent and other 433 349 1,192 1,050
Reversal of losses 200 90 400 190
-------- -------- -------- -------
3,565 3,916 10,980 11,660
-------- -------- -------- -------
Expenses:
Interest 902 1,528 3,264 4,602
Operating, general and
administrative 382 544 1,232 1,783
Depreciation 41 33 122 99
-------- -------- -------- -------
1,325 2,105 4,618 6,484
-------- -------- -------- -------
Income before loss on sale of
GNMA certificates 2,240 1,811 6,362 5,176
Loss on sale of GNMA
certificates -- -- 2,392 --
-------- -------- -------- -------
Net income $2,240 $1,811 $3,970 $5,176
======== ======== ======== =======
Net income per common share $0.28 $0.25 $0.50 $0.72
======== ======== ======== =======
Dividends declared per common
share $0.27 $0.25 $0.81 $0.75
======== ======== ======== =======
Average common shares
outstanding 7,966,621 7,218,633 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 nine months
ended September 30, 1994 3,970
Cash dividends declared (6,453)
--------
Balance at September 30, 1994 $53,643
========
See accompanying notes to consolidated financial statements.
<PAGE> 6
CV REIT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
---------------------
1994 1993
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $3,970 $5,176
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation 122 99
Reversal of losses (400) (190)
Loss on sale of GNMA certificates 2,392 -
Increase in accrued interest receivable
and other assets (327) (426)
(Decrease) increase in accounts payable,
accruals and other liabilities (339) 25
-------- --------
Net cash provided by operating activities 5,418 4,684
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in real estate mortgage notes (18,051) (16,807)
Collections on real estate mortgage notes 26,845 17,533
Sale of GNMA certificates 32,412 -
Return of principal on GNMA certificates 977 966
Purchase of marketable securities (2,920) -
Proceeds from sales of real estate
acquired by foreclosure and other 418 1,536
Distributions from unconsolidated partner-
ships in excess of equity in earnings 48 131
-------- --------
Net cash provided by investing activities 39,729 3,359
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings - 555
Repayments of borrowings (37,862) (1,199)
Cash dividends paid (6,300) (5,419)
Increase in restricted cash (43) -
-------- --------
Net cash used in financing activities (44,205) (6,063)
-------- --------
Net decrease in unrestricted cash 942 1,980
Unrestricted cash at beginning of period 4,228 3,283
-------- --------
Unrestricted cash at end of period $5,170 $5,263
======== ========
Supplemental disclosure of cash flow information:
Cash paid during period for interest $3,417 $4,314
======== ========
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):
Sept.30, Dec.31,
1994 1993
-------- --------
Hilcoast Development Corp.
("Hilcoast"):
Term Loan (Note 1(b)) $ 29,492 $ 34,504
Lines of Credit (Note 1(b)) 9,690 6,525
Other 3,075 3,195
-------- --------
42,257 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" - Note (2)) 44,329 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 4,092 10,643
Commercial 6,261 6,188
-------- --------
Totals $ 96,939 $105,863
======== ========
<PAGE> 8
(b) Hilcoast
At September 30, 1994, the Lines of Credit consisted of
revolving construction loan commitments up to a maximum of $13
million. The Term Loan and the first $6.5 million of the Lines 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 (7.75% at September 30, 1994) plus 3%,
but in any event not less than 9% nor more than 11%. Upon
satisfaction of the Purchase Note (as described below), the $6.5
million Line of Credit may be increased by Hilcoast to $7.5
million. The next $3 million of the Lines of Credit mature on
March 31, 1996 and bear interest, payable monthly, at prime plus 3%
with a floor of 11%. The final $2.5 million of the Lines of Credit
is limited to the amount by which $30 million exceeds the
outstanding principal balance of the Term Loan, bears interest,
payable monthly, at 12.5% and matures on January 31, 1996.
The Term Loan and the Lines of Credit are principally
collateralized by first mortgages on certain residential and
commercial real estate at the Century Village at Pembroke Pines,
Florida adult condominium project ("Century Village"), and 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 $3.6 million at September 30, 1994) (the
"Collateral"). Hilcoast is required to pay commitment fees ranging
from .9% to 1.8% per annum on the unused portion of the Lines of
Credit. The Term Loan requires minimum annual principal payments,
which include specific release prices for the Collateral.
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 promissory note (the "Purchase Note") to the seller, with an
outstanding balance of $2 million at September 30, 1994, guaranteed
by the Company and collateralized by $3 million of the Company's $5
million investment in Hilcoast Preferred Stock. The Purchase Note
bears interest at prime (7.75% at September 30, 1994) plus 1/2%,
and is payable by Hilcoast on July 31, 1995.
<PAGE> 9
(c) Real estate acquired by foreclosure consists of (before
allowance for losses - in thousands):
Sept.30, 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 354 525
------- -------
Totals $ 8,517 $ 8,688
======= =======
(d) GNMA Certificates
On April 5, 1994, the Company sold its GNMA certificate
portfolio for $32.4 million and realized a $2.4 million loss on the
sale.
(e) Real estate and investments in real estate partnerships
are located in southeast Florida and consist of (in thousands):
Sept.30, Dec.31,
1994 1993
-------- --------
Days Inn Motel, West Palm Beach $ 3,654 $ 3,654
Administration Building, West Palm Beach 764 756
Other 524 520
------- -------
4,942 4,930
Accumulated depreciation (2,062) (1,940)
------- -------
2,880 2,990
45%-50% investments in self-storage
warehouse partnerships 3,293 3,341
------- -------
Totals $ 6,173 $ 6,331
======= =======
<PAGE> 10
(2) Borrowings
(a) Borrowings consist of (in thousands):
Sept.30, Dec.31,
1994 1993
-------- -------
Collateralized Mortgage Obligations
("CMO's"), net of unamortized
discount of $1.1 million and $1.3
million based on an effective
interest rate of 8.84% (Note 2(b)) $39,339 $40,579
Short-term reverse repurchase
agreements -- 32,622
Bank loans -- 4,000
------- -------
Totals $39,339 $77,201
======= =======
(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 (Note (4)) and certain unrelated parties alleging
misrepresentations by the defendants in connection with the
Plaintiff's purchase and development of land from a previous
borrower of the Company. 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. On February 9, 1994, the Court
granted a Final Judgment in favor of the Company as to the count of
common law fraud, which strikes the punitive damage claim. In
accordance with an agreement between the parties, on August 23,
1994, the Court dismissed the breach of contract count with
prejudice and entered 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.
<PAGE> 11
(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, 1995, 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, and certain former officers and a former director 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
During the third quarter ended September 30, 1994, net income
was $2,240,000 as compared to $1,811,000 in the corresponding
quarter of 1993.
The $429,000 increase in quarterly earnings was principally
attributable to a $162,000 decrease in operating, general and
administrative expenses, a $81,000 increase in net interest income,
and a $200,000 reversal of losses versus $90,000 in 1993.
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 $81,000 increase in net interest income was principally
attributable to an approximately $400,000 reduction in interest
expense principally due to the repayment in November 1993 of the
Company's subordinated notes, and an approximately $140,000
increase in interest income on the Company's variable rate mortgage
notes receivable due to the rise in the prime rate during 1994.
These items were partially offset by a reduction of $360,000 in net
interest income resulting from the sale of the Company's leveraged
GNMA portfolio (see below) and a $100,000 reduction of interest
income resulting from a decrease in the Company's mortgage note
receivable portfolio.
On April 5, 1994, the Company sold its GNMA certificate
portfolio for $32.4 million and realized a $2.4 million loss on the
sale. For the nine months ended September 30, 1994, income before
the loss on sale of GNMA certificates was $6,362,000 compared to
$5,176,000 for the same period of 1993.
The $1,186,000 increase was principally due to a $551,000
reduction in operating, general and administrative expenses, a
$306,000 increase in net interest income and a $400,000 reversal of
losses versus $190,000 in 1993.
The increase in net interest income principally reflects a
decrease of $1,136,000 in interest expense resulting from the
aforementioned reduction in borrowings, partially offset by
$717,000 in reduced net interest income due to the sale of the GNMA
certificates.
<PAGE> 13
Liquidity and Capital Resources
At September 30, 1994, total assets were $122.7 million,
including $96.9 million in real estate mortgage notes.
Approximately $44.3 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 $52.6 million of real estate mortgage notes
included $42.3 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 $17.3 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 September 30, 1994, 6,107 units had been sold
and delivered at Century Village and the backlog of units under
contract for future delivery was 282 units with a sales value of
$22 million.
Collections on the Company's real estate mortgage notes may 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.
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 invested in
new real estate investment opportunities which may arise.
<PAGE> 14
During the nine months ended September 30, 1994 and 1993, the
Company declared cash dividends of $.81 per share and $.75 per
share, aggregating $6.5 million and $5.4 million, respectively.
During the same period, the Company's Funds From Operations was
$6.4 million or $.80 per share and $5.2 million or $.72 per share,
respectively. The Company's Funds From Operations generally
consisted of net income, excluding the reversal of losses and the
loss on sale of GNMA certificates, plus depreciation of real
property (including the Company's share of depreciation in
connection with its equity in earnings of unconsolidated
partnerships).
The Company had been using its long-term GNMA certificates as
collateral to borrow short term funds (three months or less). In
connection with the sale of its GNMA certificate portfolio on April
5, 1994 for $32.4 million, the Company repaid the $31.9 million
outstanding balance of its short-term borrowings and realized a
$2.4 million loss on the sale. The loss from the sale did not
impact Funds From Operations nor the 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 is expected to
be partially offset by increased interest income on the Company's
variable rate mortgage notes receivable (approximately $39 million
at September 30, 1994) as a result of the recent increases in the
prime rate.
At September 30, 1994, the outstanding balance of the
Company's Collateralized Mortgage Obligations (the "CMO's")
amounted to $39.3 million (net of unamortized discount of $1.1
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.
Commitments on outstanding real estate loans consists of $3.3
million under the Hilcoast Lines of Credit. The Company expects to
be able to meet this commitment with internally generated funds,
including principal repayments on real estate mortgage notes. The
Company has a $2.5 million revolving line of credit with a
financial institution which matures on December 31, 1995. As of
September 30, 1994, there was no outstanding balance on this line.
There are currently no material commitments for capital
expenditures.
<PAGE> 15
Inflation
The Company's interest-sensitive mortgage notes receivable
approximated $39 million, as of September 30, 1994, which consisted
of amounts due from Hilcoast with interest at prime plus 3% (10.75%
at September 30, 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%.
<PAGE> 16
PART II. Other Information
Item 6 - Exhibits and Reports on Form 8-K:
Exhibits:
10 (a) $2.5 million Future Advance Promissory Note,
dated September 15, 1994, from NewCen
Communities, Inc. ( a subsidiary of Hilcoast
Development Corp.) to CV Reit, Inc.; Notice
and Agreement of Future Advance and side
letters between CV Reit, Inc and NewCen
Communities, Inc.
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> 17
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)
/s/ Alvin Wilensky
November 7, 1994 _________________________________
Alvin Wilensky, President
November 7, 1994 /s/ Elaine Kahant
_________________________________
Elaine Kahant, Vice President
and Treasurer
FUTURE ADVANCE PROMISSORY NOTE
U.S. $2,500,000.00 September 15, 1994
West Palm Beach, Florida
FOR VALUE RECEIVED, the undersigned (the "Borrower") does hereby
covenant and promise to pay to the order of CV REIT, INC., a
Delaware corporation, or to its successors or assigns (collectively
the "Lender") at Century Village Administrative Building, 100
Century Boulevard, West Palm Beach, Florida 33417, or at such
other place or places as the Lender may designate to the Borrower
in writing from time to time, in legal tender of the United States
of America, the principal sum of TWO MILLION FIVE HUNDRED THOUSAND
AND NO/100 DOLLARS ($2,500,000.00) or so much thereof as shall have
been advanced and/or readvanced by Lender to Borrower and shall
then be outstanding, together with interest thereon computed from
the date hereof until paid at the rate of Twelve and One-Half
Percent (12 1/2%) per annum; such principal and interest being
payable as follows:
(a) Interest only shall be due and payable monthly on the
first business day of each and every month hereafter,
commencing on the first business day of the first
calendar month after the execution hereof and continuing
thereafter to and including January 2, 1996; and
(b) The remaining unpaid principal balance hereof together
with all accrued but unpaid interest thereon shall be due
and payable on January 31, 1996 ("Maturity Date").
It is expressly agreed that this Promissory Note evidences a TWO
MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($2,500,000.00)
revolving line of credit. The principal sum which may be
outstanding at any time under such line of credit shall not exceed
TWO MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($2,500,000.00), however, this limitation shall not be deemed to
prohibit Lender from advancing any sum which may, in Lender's sole
and exclusive discretion, be necessary or desirable in order to
protect and preserve the lien, charge, effect and enforceability of
the Mortgage securing this Promissory Note. Within the limits and
subject to the terms and conditions hereof and of the Mortgage
securing this Promissory Note, the Borrower may borrow, repay or
reborrow under the revolving line of credit evidenced by this
Promissory Note, and all shall be subject to the terms and
conditions of this Promissory Note and said Mortgage.
This Promissory Note is secured by a certain Mortgage encumbering
certain real property located in Broward County, Florida.
The Borrower reserves the privilege of prepaying the whole or any
part of the principal balance owed hereunder at any time without
penalty.
This Promissory Note shall be in default and the entire outstanding
unpaid principal balance hereof shall, at the option of the Lender,
become immediately due and payable in the event Borrower fails to
make any payment required hereunder within ten (10) days from the
due date thereof, or in the event Borrower fails to duly observe or
perform any covenant, obligation, or agreement on Borrower's part
to be observed or performed under the terms of the aforesaid
Mortgage.
Subject to the next succeeding Paragraph hereof with respect to the
"Maximum Rate," Borrower does hereby agree to pay to Lender, in
addition to all other payments required by this Promissory Note, a
commitment fee ("Commitment Fee") in the amount of nine-tenths of
one percent (.9%) per annum of the unused portion of the remaining
available funds (being the amount which the Maker hereof would be
entitled to draw hereunder after giving effect to any limitations
on the right to draw such funds set forth in that certain letter
agreement of even date herewith between Borrower and Lender). By
the close of the first (1st) business day of each month, commencing
with the first day of the first calendar month after the execution
hereof, that portion of the Commitment Fee attributable to the
prior month must have been paid to Lender. The Commitment Fee
shall not apply to any sums no longer available to be drawn under
this Promissory Note. By way of example, if the average
outstanding amount which could have been drawn under this
Promissory Note during a given month, but which was not so drawn,
was $2,000,000.00, then the Commitment Fee due on the first
business day of the next succeeding month would be $1,500.00 (i.e.,
$2,000,000 multiplied by .009 = $18,000 divided by 12 = $1,500.00).
The Borrower shall have the right, at any time, and from time to
time upon written notice to Lender to permanently reduce the
maximum principal amount which may thereafter be borrowed under
this Promissory Note. Once such notice is given, Borrower shall
not be entitled to thereafter borrow any sums pursuant to this
Promissory Note if the aggregate unpaid principal amount due
hereunder would exceed said maximum principal amount set forth in
such notice from the Borrower to the Lender and the Commitment Fee
shall no longer be applicable to the amount(s) in excess of the
maximum principal amount which may be borrowed hereunder as set
forth in such notice(s).
Subject to the maximum amount which may be borrowed hereunder,
Lender shall disburse such sums to Borrower as Borrower shall from
time to time request in writing (which request may be hand
delivered, sent via telecopier, sent via overnight delivery service
such as, but not limited to, Federal Express, or sent U.S. mail and
shall be effective when received by Lender) provided that, Lender
shall only be obligated to provide one (1) advance per week and
provided further, that Lender shall only be obligated to advance
such funds within forty-eight (48) hours after its receipt of such
notice from Borrower, the time period of forty-eight hours
referring to business days only.
After the Maturity Date or other event of default under this
Promissory Note or said Mortgage, interest shall accrue at the
lower of: (a) the greater of (i) five percent (5%) above the "Prime
Rate" (as hereinafter defined) or (ii) fifteen percent (15%) per
annum or (b) the "Maximum Rate" (as hereinafter defined); provided
that, if any such event of default is cured within any applicable
cure or grace period, the excess interest charged by virtue of such
event of default shall be waived. As used herein, the term "Prime
Rate" shall mean and refer to the rate of interest published in The
Wall Street Journal as the Prime Rate, as such rate may change from
time to time. In the event such Prime Rate is no longer published,
Lender shall designate a comparable substitute index. In the event
that more than one Prime Rate is published in the Wall Street
Journal, Prime Rate shall be deemed the average of all such prime
rates published.
Notwithstanding any provision in this Promissory Note or said
Mortgage, or in any instrument now or hereafter relating to or
securing the within indebtedness, the total liability for payments
of interest and payments in the nature of interest, including all
charges, fees, exactions, or other sums which may at any time be
deemed to be interest, shall not exceed the limit imposed by the
usury laws of the State of Florida or the applicable laws of the
United States of America, whichever shall be higher (the "Maximum
Rate"). In the event the total liability for payments of interest
and payments in the nature of interest, including, without
limitation, all charges, fees, exactions or other sums which may at
any time be deemed to be interest, which for any month or other
interest payment period exceeds the Maximum Rate, all sums in
excess of those lawfully collectible as interest for the period in
question (and without further agreement or notice by, between, or
to any party hereto) shall, at Borrower's option, either be applied
to the reduction of the principal balance immediately upon receipt
of such sums by the Lender as a premium-free payment of principal,
or be immediately reimbursed to Borrower. It is the intention of
the parties that the undersigned does not intend or expect to pay
nor does the Lender intend or expect to charge, accept or collect
any interest under this Promissory Note, or under said Mortgage
greater than the Maximum Rate.
If this Promissory Note is placed in the hands of an attorney for
collection by suit at law or in equity or otherwise, Borrower shall
pay all costs, together with reasonable attorney's fees.
The remedies provided by this Promissory Note are cumulative and
concurrent with, and not in lieu of, any and all other remedies
provided by any other instrument, by statute, at law or in equity.
No delay, failure or omission on the part of the Lender in
exercising any right or remedy shall operate as a waiver of such
right and remedy. No waiver of a right or remedy shall be
effective unless in writing signed by the Lender, nor shall waiver
on any one occasion be construed or operate as a bar to, or waiver
of, such right or remedy or any other right or remedy on any future
occasion. This Promissory Note may not be modified or amended
orally, but only by an agreement in writing signed by the party
against whom enforcement of such modification or amendment is
sought.
This Promissory Note is subject to the terms, provisions and
conditions of the Mortgage securing this Promissory Note.
This Promissory Note shall be the joint and several obligation of
each of the parties named as Borrower herein, and all sureties,
guarantors and endorsers of this Promissory Note.
This instrument shall be governed by and construed and enforced
according to the laws of the State of Florida, except where
specifically preempted by federal law to the extent applicable.
Venue with respect to any litigation on this Promissory Note shall
be Broward County, Florida.
Whenever used, the singular shall include the plural, the plural
shall include the singular, the use of any gender shall be
applicable to all genders, and the words "Borrower" and "Lender"
shall be deemed to include the respective heirs, legal
representatives, successors and assigns of the Borrower and the
Lender.
BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION (INCLUDING, BUT NOT LIMITED TO, ANY CLAIMS,
CROSSCLAIMS OR THIRD-PARTY CLAIMS) ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS PROMISSORY NOTE, THE MORTGAGE SECURING THIS
PROMISSORY NOTE OR THE TRANSACTIONS CONTEMPLATED HEREIN OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY OF THEM. BORROWER HEREBY CERTIFIES THAT
NO REPRESENTATIVE OR AGENT OF THE LENDER OR THE LENDER'S COUNSEL
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD NOT,
IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF
RIGHT TO JURY TRIAL PROVISION. BORROWER ACKNOWLEDGES THAT THE
LENDER HAS BEEN INDUCED TO MAKE THE LOAN EVIDENCED BY THIS
PROMISSORY NOTE BY, INTER ALIA, THE PROVISIONS OF THIS PARAGRAPH.
WITNESS the due execution hereof the day and year first above
written.
NEWCEN COMMUNITIES, INC.,
a Florida corporation
By: /s/ Jack Jaiven, V.P.
Jack Jaiven, Vice President
(Corporate Seal)
Borrower Address:
Century Village Administration Building
100 Century Boulevard
West Palm Beach, Florida 33417
Payment guaranteed:
Hilcoast Development Corp.,
a Delaware corporation
By: /s/ Jack Jaiven, V.P.
Jack Jaiven, Vice Prisident
(Corporate Seal)
Return to:
(enclose self-addressed stamped envelope)
Name:
Address:
This Instrument Prepared By:
Bruce D. Goorland, Esq.
Address:
P.O. Box 1900
Fort Lauderdale, Florida 33302
Property Appraisers Parcel I.D.
(Folio) Numbers(s):
NOTICE AND AGREEMENT OF FUTURE ADVANCE
THIS NOTICE AND AGREEMENT OF FUTURE ADVANCE, dated this
15th day of September, 1994 given by NEWCEN COMMUNITIES, INC., a
corporation organized and existing under the laws of the State of
Florida, with an office and place of business at 100 Century
Boulevard, West Palm Beach, Florida 33417 (hereinafter called
"Mortgagor"), to C.V. REIT, INC., a corporation organized and
existing under the laws of the State of Delaware, having its
permanent post office address at 100 Century Boulevard, West Palm
Beach, Florida 33417 (hereinafter called "Mortgagee");
W I T N E S S E T H:
WHEREAS, the Mortgagor, made, executed and delivered to the
Mortgagee a Promissory Note ("Note"), and Mortgage securing same
(hereinafter called "Mortgage") encumbering certain real property
situated in Broward County, Florida as more particularly described
in Exhibit A, attached hereto and made a part hereof, which
Mortgage is recorded in Official Records Book 21247, at Page 768,
of the Public Records of Broward County, Florida and which Mortgage
was given to secure the original principal sum of THREE MILLION
DOLLARS ($3,000,000), upon which the principal sum of TWO MILLION
NINE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($2,925,000) and interest
thereon is due and payable as of the date hereof; and
WHEREAS, Paragraph 7 of the Rider to the Mortgage provided,
among other things, that any sum or sums which may be loaned or
advanced by the Mortgagee to the Mortgagor at any time within
twenty (20) years from the date of the Mortgage, together with
interest thereon, shall be equally secured with and have the same
priority as the original indebtedness and be subject to all of the
terms and provisions of the Mortgage; provided that the aggregate
amount of principal outstanding at any time shall not exceed the
principal sum of SIX MILLION DOLLARS ($6,000,000) and other charges
described in the Mortgage; and
WHEREAS, pursuant to Paragraph 7 of the Rider to the Mortgage,
Mortgagee has agreed to advance additional principal sums to the
Mortgagor as evidenced by the Promissory Note ("Advance Note") of
the Mortgagor of even date herewith in the original principal sum
of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000);
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt of which is hereby
acknowledged, the Mortgagor does hereby acknowledge and agree as
follows:
(1) That the indebtedness evidenced by both the Note and the
Advance Note is secured by the lien of the Mortgage, together with
interest thereon, which total sum is secured by and has the same
priority as the original principal indebtedness, and which total
indebtedness is now subject to all of the terms and provisions of
the Mortgage.
(2) All of the terms, covenants and conditions of the
Mortgage are hereby ratified, approved and confirmed.
(3) A default in the payment of the Note and/or the Advance
Note shall, in each instance at the option of the Mortgagee,
constitute a default under the Note and the Advance Note and the
Mortgage.
IN WITNESS WHEREOF, Mortgagor has caused this Notice to be
duly executed as of the day and year first above written.
WITNESSES: MORTGAGOR:
NEWCEN COMMUNITIES, INC.
/s/ Terri L. Windle By: /s/ Jack Jaiven, V.P
/s/ Donna K. Wist
(CORPORATE SEAL)
STATE OF FLORIDA )
) SS:
COUNTY OF Palm Beach )
I HEREBY CERTIFY that on this day before me, a Notary Public
duly authorized in the State and County named above to take
acknowledgments, personally appeared, Jack Jaiven, to me known and
known to me to be the person described as the Vice President of
NEWCEN COMMUNITIES, INC., a Florida corporation, who signed the
foregoing instrument as such person, and acknowledged the execution
thereof to be his free act and deed as such person for the uses and
purposes therein mentioned, and he affixed thereto the official
seal of said corporation, and that the said instrument is the act
and deed of said corporation. He is personally known to me.
WITNESS my hand and official seal in the State and County last
aforesaid this 13th day of October, 1994.
/s/ Marie LaMazza (SEAL)
Notary Public
State of Florida at Large
My Commission # CC 230990
My Commission Expires:
September 24, 1996
Bonded Thru Notary Public
Underwriters
EXHIBIT A
Tract "G" of FLAMINGO WEST, according to the Plat thereof, as
recorded in Plat Book 78, Page 36 of the Public Records of Broward
County, Florida, LESS AND EXCEPT all that portion thereof included
within Phase I of GARFIELD AT CENTURY VILLAGE according to the
Declaration of Condominium thereof recorded in Official Records
Book 20911, at Page 344 of the Public Records of Broward County,
Florida and
LESS THEREFROM: (Pools and Recreation Area)
COMMENCE AT THE EAST ONE QUARTER (E 1/4) CORNER OF SECTION 23,
TOWNSHIP 51 SOUTH, RANGE 40 EAST; THENCE ON A GRID BEARING OF SOUTH
89 35' 23" WEST ALONG THE SOUTH LINE OF NORTH ONE-HALF (N 1/2) OF
SAID SECTION 23 AND ALONG THE CENTERLINE OF PEMBROKE ROAD, A
DISTANCE OF 1319.07 FEET;
THENCE NORTH 01 45' 42" WEST, A DISTANCE OF 50.01 FEET TO A POINT
ON SAID NORTHERLY RIGHT-OF-WAY LINE OF SAID PEMBROKE ROAD, SAID
POINT BEING THE SOUTHEAST CORNER OF SAID TRACT "G";
THENCE SOUTH 89 35' 23" WEST ALONG THE SOUTHERLY BOUNDARY OF TACT
"G" AND SAID NORTHERLY RIGHT-OF-WAY LINE OF PEMBROKE ROAD, A
DISTANCE OF 560.69 FEET;
THENCE NORTH 00 24' 37" WEST, A DISTANCE OF 202.68 FEET;
THENCE NORTH 32 42' 38" EAST, A DISTANCE OF 169.52 FEET TO THE
POINT OF BEGINNING;
THENCE NORTH 47 41' 51" EAST, A DISTANCE OF 107.31 FEET;
THENCE SOUTH 57 17' 23" EAST, A DISTANCE OF 164.42 FEET;
THENCE SOUTH 47 41' 51" WEST, A DISTANCE OF 107.31 FEET;
THENCE NORTH 57 17' 23" WEST, A DISTANCE OF 164.42 FEET TO THE
POINT OF BEGINNING (CONTAINING 0.391 ACRE, MORE OR LESS).
SAID LANDS SITUATE IN THE CITY OF PEMBROKE PINES, BROWARD COUNTY,
FLORIDA, CONTAINING 10.51 ACRES, MORE OR LESS.
TOGETHER WITH
TRACT "P" OF FLAMINGO WEST, ACCORDING TO THE PLAT THEREOF, AS
RECORDED IN PLAT BOOK 78, PAGE 36, OF THE PUBLIC RECORDS OF BROWARD
COUNTY, FLORIDA, LESS AND EXCEPTING THAT PORTION MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
(PUMP STATION NO. 1)
A 16 FOOT STRIP OF LAND LYING WITHIN SECTION 22, TOWNSHIP 51 SOUTH,
RANGE 40 EAST AND ALSO A PORTION OF TRACT "P" OF FLAMINGO WEST, AS
RECORDED IN PLAT BOOK 78, PAGE 36 OF THE PUBLIC RECORDS OF BROWARD
COUNTY, FLORIDA, THE CENTERLINE OF SAID STRIP BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCE AT THE NORTHEAST CORNER OF SAID SECTION 22;
THENCE S 01 45' 43" E, ALONG THE EAST LINE OF SAID SECTION 22, A
DISTANCE OF 249.28 FEET;
THENCE S 88 14' 17" W, A DISTANCE OF 255.00 FEET TO THE POINT OF
BEGINNING;
THENCE CONTINUE S 88 14' 17" W, A DISTANCE OF 27.42 FEET TO THE
POINT OF TERMINATION;
TOGETHER WITH
TRACT "S" OF FLAMINGO WEST ACCORDING TO THE PLAT THEREOF, AS
RECORDED IN PLAT BOOK 78, PAGE 36, OF THE PUBLIC RECORDS OF BROWARD
COUNTY, FLORIDA, LESS AND EXCEPTING THAT PORTION MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
A PARCEL OF LAND BEING A PORTION OF TRACT "S" FLAMINGO WEST AS
RECORDED IN PLAT BOOK 78, PAGE 36 OF THE PUBLIC RECORDS OF BROWARD
COUNTY, FLORIDA, SAID PARCEL BEING MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
BEGIN AT THE SOUTHWEST CORNER OF SAID TRACT "S";
THENCE ON A GRID BEARING OF N 01 45' 24" W ALONG THE WEST LINE OF
SAID TRACT "S", A DISTANCE OF 500.00 FEET;
THENCE DEPARTING FROM SAID WEST LINE N 89 43' 10" E, A DISTANCE
OF 220.00 FEET;
THENCE S 36 52' 15" E, A DISTANCE OF 323.43 FEET;
THENCE S 00 18' 08" E, A DISTANCE OF 17.72 FEET TO A POINT ON A
LINE 222.28 FEET NORTH OF AND PARALLEL WITH THE SOUTH LINE, OF SAID
TRACT "S";
THENCE N 89 41' 52" E, ALONG SAID PARALLEL LINE A DISTANCE OF
625.00 FEET;
THENCE S 00 18' 08" E, A DISTANCE OF 222.28 FEET TO A POINT ON THE
SAID SOUTH LINE OF SAID TRACT "S";
THENCE S 89 41' 52" W, ALONG SAID SOUTH LINE, A DISTANCE OF
1025.00 FEET TO THE POINT OF BEGINNING.
September 15, 1994
Newcen Communities, Inc.
Century Village Administration Building
100 Century Boulevard
West Palm Beach, Florida 33417
Attention: Mr. Michael S. Rubin, President
RE: Mortgage ("Mortgage") including the Rider ("Rider") thereto
from Newcen Communities, Inc. ("Newcen") to CV Reit, Inc. ("CV
Reit") recorded in Official Records Book 21247, at Page 768 of the
Public Records of Broward County, Florida securing that certain
Promissory Note ("Note") in the original principal amount of
$3,000,000.00/"Mortgages" as referred to in that certain Second
Modification of Existing Notes and Mortgages recorded in Official
Records Book 19737, at Page 647 of the Public Records of Broward
County, Florida ("Second Modification") (said Mortgages as referred
to in the Second Modification being hereinafter referred to as the
"Prior Mortgages")/"Restated Loan Agreement" as referred to in the
Second Modification/Future Advance Promissory Note ("Advance Note")
from Newcen to CV Reit in the original principal amount of
$2,500,000.00 secured by the Mortgage
Dear Michael:
This letter is to confirm CV Reit's agreement as to the
matters hereinafter set forth.
CV Reit agrees to fund the loan evidenced by the Advance Note
based upon Newcen's requests for draws thereunder as contemplated
by the Advance Note subject to the following:
(a) No sums shall be borrowed under the Advance Note if
either:
(i) the unpaid principal amount outstanding under the
"Construction Note" evidencing the "Construction Loan" (as such
terms are set forth in the Restated Loan Agreement) is less than
Six Million Five Hundred Thousand Dollars ($6,500,000.00) or Seven
Million Five Hundred Thousand Dollars ($7,500,000.00) at such time
as the "Purchase Price Note" (as defined in the Restated Loan
Agreement) is repaid in full and the "Funding Limit" (as set forth
in Paragraph D of Article 4 of the Restated Loan Agreement) has
been increased to Seven Million Five Hundred Thousand Dollars
($7,500,000.00) as contemplated by Article 5 of the Restated Loan
Agreement; or
(ii) the unpaid principal amount outstanding under the
Note is less than Three Million Dollars ($3,000,000.00).
(b) The entire unpaid principal amount of the Advance Note
shall be repaid in full prior to making any principal repayments
under the Construction Note or the Note.
(c) The amount of funds available ("Advance Note Funding
Limit") to be drawn pursuant to the Advance Note shall be the lower
of (i) Two Million Five Hundred Thousand Dollars ($2,500,000.00) or
(ii) fifty percent (50%) of the amount by which Thirty Million
Dollars ($30,000,000.00) exceeds the then (at the time the Advance
Note Funding Limit is being determined) outstanding principal
balance of the "Term Loan" (as defined in the Restated Loan
Agreement) or (iii) the amount by which the sum of the following
exceeds Nine Million Five Hundred Thousand Dollars ($9,500,000.00)
or Ten Million Five Hundred Thousand Dollars ($10,500,000.00) at
such time as the Purchase Price Note is repaid in full and the
"Funding Limit" (as set forth in Paragraph D of Article 4 of the
Restated Loan Agreement) has been increased to Seven Million Five
Hundred Thousand Dollars ($7,500,000.00) as contemplated by Article
5 of the Restated Loan Agreement:
"Net" (as defined in Paragraph D of Article 4 of the
Restated Loan Agreement) condominium building inventory, plus Net
on-site land improvements, plus Net "Community Wide Improvements"
(as defined in Paragraph D of Article 4 of the Restated Loan
Agreement) west of S.W. 136th Avenue plus Three Thousand Dollars
($3,000.00) per Unit remaining to be delivered east of S.W. 136th
Avenue (based on the number of Units as set forth in said Paragraph
D of Article 4 of the Restated Loan Agreement) and One Thousand
Five Hundred Dollars ($1,500.00) per Unit remaining to be delivered
west of S.W. 136th Avenue (based upon the number of Units as set
forth in said Paragraph D of Article 4 of the Restated Loan
Agreement). Reference to S.W. 136th Avenue is, of course, a
reference to S.W. 136 Avenue through "Century Village" (as set
forth in the Restated Loan Agreement) and, of course, the Units
referred to are Units in Century Village.
(d) The same conditions precedent to CV Reit's obligations to
fund under the Construction Note shall also be conditions precedent
to CV Reit's obligations to fund under the Advance Note except that
the above Advance Note Funding Limit (and not the "Funding Limit"
set forth in Paragraph D of Article 4 of the Restated Loan
Agreement) applies to the Advance Note.
(e) The terms and provisions of Paragraph A (including,
without limitation, subparagraphs 1 through 7, both inclusive, of
said Paragraph A) and Paragraph C of that certain letter dated
November 30, 1992 from Hilcoast Development Corp. ("Hilcoast") to
Alvin Wilensky, President of CV Reit, apply to the Advance Note,
the funds to be advanced thereunder and the payment of interest
and/or commitment fees, all as set forth in said Paragraphs A and
C of said letter.
(f) The Agreement to Use Best Reasonable Efforts to Obtain
Construction Financing dated September 18, 1992, by and among
Newcen, Hilcoast and CV Reit.
Further, CV Reit agrees that at such time as Newcen complies
with the requirements for a release of a "Unit(s)" from the lien of
the Prior Mortgages, CV Reit shall also release such Unit(s) from
the lien of the Mortgage for no additional consideration.
CV Reit recognizes that Newcen is relying upon this letter in
executing the Advance Note and the "Notice and Agreement of Future
Advance" (to be executed contemporaneously with the execution of
the Advance Note) and that Hilcoast is relying upon this letter in
guaranteeing the Advance Note.
Please have Newcen confirm its agreement with, and have
Hilcoast confirm its consent to, the terms and provisions hereof by
having such entities execute the copy of this letter which has been
provided and return same to me. By Hilcoast's execution of that
copy of this letter, Hilcoast will further be confirming that it is
the sole shareholder of Newcen; that, as such shareholder, Hilcoast
will be benefiting from the Two Million Five Hundred Thousand
Dollar ($2,500,000.00) loan to be evidenced by the Advance Note;
and that Hilcoast desires to induce CV Reit to extend said Two
Million Five Hundred Thousand Dollar ($2,500,000.00) loan to
Newcen. Of course, CV Reit will be relying upon Newcen and
Hilcoast executing such copy of this letter in making that Two
Million Five Hundred Thousand Dollar ($2,500,000.00) loan.
Very truly yours,
CV REIT, INC.
By: /s/ Alvin Wilensky, President
THE FOREGOING IS HEREBY CONFIRMED
AS OF THE DATE OF THE FOREGOING
LETTER:
NEWCEN COMMUNITIES, INC.
By: /s/ Jack Jaiven
Title: Vice President
HILCOAST DEVELOPMENT CORP.
By: /s/ Jack Jaiven
Title: Vice President
September 15, 1994
Newcen Communities, Inc.
Century Village Administration Building
100 Century Boulevard
West Palm Beach, Florida 33417
Attention: Mr. Michael S. Rubin, President
RE: Mortgage ("Mortgage") including the Rider ("Rider") thereto
from Newcen Communities, Inc. ("Newcen") to CV Reit, Inc. ("CV
Reit") recorded in Official Records Book 21247, at Page 768 of
the Public Records of Broward County, Florida securing that
certain Promissory Note ("Note") in the original principal
amount of $3,000,000.00/Future Advance Promissory Note
("Advance Note") from Newcen to CV Reit in the original
principal amount of $2,500,000.00 secured by the
Mortgage/"Restated Loan Agreement" as referred to in that
certain Second Modification of Existing Notes and Mortgages
recorded in Official Records Book 19737, at Page 647 of the
Public Records of Broward County, Florida
Dear Michael:
In connection with the Note and Mortgage I sent you a letter
dated September 30, 1993 ("1993 Letter") which was confirmed and
agreed to on behalf of Newcen by Jack Jaiven, Vice President. In
connection with the Advance Note, I sent you a letter dated
September 15, 1994 ("l994 Letter") which was confirmed and agreed
to on behalf of Newcen by Jack Jaiven, Vice President.
Paragraph (c) of the 1993 Letter begins "The amount of funds
available ("Note Funding Limit") to be drawn pursuant to the Note
...". Similarly, Paragraph (c) of the 1994 Letter begins "The
amount of funds available ("Advance Note Funding Limit") to be
drawn pursuant to the Advance Note ...". Further, Paragraph D of
Article 4 of the Restated Loan Agreement entitled "Funds Available"
begins "The amount of funds available ("Funding Limit") to be drawn
pursuant to the Construction Note ...".
By way of clarification, this letter will confirm the
understanding of Newcen, CV Reit and Hilcoast Development Corp.
("Hilcoast") that in each instance just mentioned the reference to
"the amount of funds available ... to be drawn ..." means net of
the principal sums then outstanding under the promissory note in
question. By way of example, if the Advance Note Funding Limit was
$500,000 and if the outstanding principal amount of the Advance
Note was $400,000, Newcen would only be entitled to draw an
additional $100,000 at that time.
Please confirm your agreement with the foregoing by signing
the copy of this letter which is enclosed herewith; having Hilcoast
do likewise; and returning same to me.
Very truly yours,
CV REIT, INC.
By: /s/ Alvin Wilensky
Alvin Wilensky, President
THE FOREGOING IS HEREBY CONFIRMED
AS OF THE DATE OF THE FOREGOING
LETTER:
NEWCEN COMMUNITIES, INC.
By: /s/ Jack Jaiven
Title:Vice President
HILCOAST DEVELOPMENT CORP.
By: /s/ Jack Jaiven
Title:Vice President
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